On Friday sullen health indices proved immune to a compelling deluge of post-close earnings the day prior and yet another job slashing.
King Pharmaceuticals (KG) said Thursday after close that it's cutting its workforce by 20% in light of challenges to its Altace franchise and to refocus on neuroscience and hospital/acute care.
In September, the U.S. Court of Appeals ruled against the continued validity of the patent covering blood-pressure drug Altace. (King filed a petition with the court seeking reconsideration of the decision.)
King will incur special charges in 2007 of about $150 million to recognize the impaired value of its intangible assets associated with Altace and about $90 million primarily related to the impaired value of raw material inventory and related contracts associated with Altace. The company estimated that it will also incur a one-time charge of around $70 million during 2007 related to the restructuring, and predicts 2008 savings between $75 million and $90 million from the cut.Shares edged up 13 cents, or 1.2%, at $10.85. The stock is a component of the Amex pharmaceutical index, which was down 92 cents, or 0.3%, to $347.33. Intuitive Surgical (ISRG - Get Report) reported Thursday after close that quarterly net income rose to $40.9 million, or $1.04 a share, from $17.3 million, or 45 cents a share, in the prior-year quarter. Revenue rose 64% to $156.9 million from $95.8 million in the third quarter of 2006. Revenue was boosted by a 63% increase in sales of the company's da Vinci Surgical System. Analysts surveyed by Thomson Financial expected 80 cents a share on revenue of $143.5 million. On Friday HSBC Securities upped its price target for the company to $325 from $198. Shares climbed $22.06, or 8.6%, to $278.50. Also up was Ventana Medical (VMSI), which late Thursday reported earning $263,000, or a penny a share, compared with $7.8 million, or 22 cents a share, in the year-ago quarter. Excluding special charges and one-time items, the company reported earning $7.9 million, or 22 cents a share. The Thomson Financial consensus target was 19 cents a share on revenue of $73 million. The company raised its expectations for 2007 adjusted income to around $1.34 a share, compared to its previous prediction of $1.31 a share, and now expects revenue in the range of $296 million to $300 million, up from a previously discussed range of $292 million to $296 million. Shares rose 99 cents, or 1.1%, to $89.30. In another postclose earnings release Thursday, Gilead (GILD - Get Report) reported net income of $398.3 million, or 42 cents a diluted share, including after-tax stock-based compensation expenses of $31.8 million, compared to a loss of 3 cents in the year-ago quarter. The consensus was 39 cents a share on revenue of $1 billion. Gilead also named Caroline Dorsa senior vice president and chief financial officer, effective in November to replace John Milligan appointed chief operating officer in March. Rodman & Renshaw upped its price target for the stock to $56 from $43, but the stock fell $1.32, or 3%, to $42.41 on Friday. And on Friday morning, Boston Scientific (BSX - Get Report)