Friday's Health Winners & Losers

Team-ups launched some health stocks such as Kyphon(KYPH Quote) higher, while earnings tugged at others Friday.

A $3.9 billion merger with Medtronic(MDT Quote) sent spinal treatment device company Kyphon soaring Friday. Medtronic will pay $71 each for Kyphon's outstanding shares. The deal, which prices Kyphon's stock at a 32% premium over its Thursday closing price, is expected to close in the first calendar quarter of 2008.

Kyphon rocketed $13.32, or 25%, to $67, while Medtronic edged down just 1 cent to $50.90.

Targacept(TRGT Quote), a biopharmaceutical company that was spun out of the research division of R.J. Reynolds Tobacco in 2000, climbed Friday on an alliance with GlaxoSmithKline(GSK Quote) to develop and market drugs that target nicotinic receptors in the brain to treat pain and possibly other indications including Alzheimer's disease and obesity.

GlaxoSmithKline will pay Targacept $35 million up front, which includes a $15 million investment in the company's stock. In the future, Targacept could receive milestone payments for development and royalties on sales, creating the potential for a grand sum of $1.5 billion.

Targacept added $1.92, or 21%, to $10.92, and GlaxoSmithKline lost $1.28, or 2.5%, to $49.93.

Ending the week in the red, Sepracor(SEPR Quote) took a 26% hit Friday after posting quarterly earnings that came in below expectations. The company also reduced full-year earnings guidance to a range of $1.28 to $1.58 a share, from its previous forecasts of $2.11 in April and $2.25 in January.