Wednesday's Health Winners & Losers

Health stocks were apathetic midweek, save for a few bigger players slinging news and earnings into the fray.

Israeli generic-drug maker Teva Pharmaceutical(TEVA Quote) and Wyeth(WYE Quote) ended the standstill agreement for patent litigation on a generic version of acid-reflux treatment Protonix. Wyeth and partner Nycomed said after Tuesday's market close that it immediately would begin marketing its own generic version of the drug, which was due to see patent expiration in 2010. The move gives Teva the freedom to resume sales of its generic form of Protonix, which it originally introduced in December.

Despite the decision to market a generic version of the drug itself, Wyeth said the battle brews on. "Going forward, we will continue to seek an injunction against any infringement of this patent, as well as monetary damages, including lost profits, from Teva."

Wyeth, which generated $1.45 billion in sales from the drug in the first nine months of last year, saw shares edge down 3% to $39.84. Teva's shares, meanwhile, were up 1.3% at $44.98.

Both stocks are components of the Amex Pharmaceutical index, which was down 1.5% at 313.72.

In earnings, Allergan(AGN Quote) reported fourth-quarter profit of $160.3 million, or 52 cents a share, vs. $136.8 million, or 45 cents a share in the year-ago quarter.

On an adjusted basis, the company reported earning $185.1 million, or 60 cents a share, vs. $156.5 million, or 51 cents a share in the same quarter last year. Allergan reported revenue of $1.075 billion. Analysts surveyed by Thomson Financial were looking for 58 cents a share on revenue of $1.006 billion.

For the year, the aesthetics and device company earned $499 million, or $1.62 a share -- $173 million on an adjusted basis -- on revenue of $3.93 billion. Analysts were looking for revenue of $3.86 billion.

Allergan said first-quarter profit will likely be in a range of 44 to 45 cents a share (between 50 and 51 cents a share on an adjusted basis), shy of the Thomson Financial consensus target of 57 cents a share on an adjusted basis. For 2008, the company expects profit between $2.54 and $2.58 a share, while analysts are predicting $2.58 a share.

Shares were down 0.5% at $64.69.

Then there's Merck(MRK Quote), which saw shares fall $1.70, or 3.5%, to $46.31. On a GAAP basis, the company reported a fourth-quarter net loss of $1.63 million, or 75 cents share, including charges ($4.85 billion) related to the Vioxx settlement agreement. Excluding those charges, the company earned 80 cents a share in the fourth quarter, on sales of $6.2 billion, a 3% year-over-year increase.

Analysts surveyed by Thomson Financial were looking for 74 cents a share on revenue of $6.29 billion.

For the year, Merck reported earnings of $3.27 billion, a 26% decline from 2006. Before specific items, the company reported earning $3.20 a share, on worldwide sales of $24.2 billion, a 7% rise over 2006. Analysts had predicted $3.15 a share on revenue of $24.3 billion.

Merck reported quarterly sales of $1.5 billion from the partnership with Schering-Plough(SGP Quote) for its now controversy-ridden cholesterol drugs Zetia and Vytorin, a 34% increase vs. the comparable 2006 quarter. For the year, combined annual sales of the drugs totaled $5.2 billion. Click here for more on Merck's earnings and the executive's comments regarding the Enhance trial.

Merck shares fell 3.7% to $46.25, while Schering rose 1.8% to $19.39.

Away from earnings, analysts picked up coverage of a few healthcare companies midweek. Canaccord Adams initiated coverage on Iris International(IRIS Quote), which makes in vitro diagnostics systems and other medical supplies, with a buy rating. Shares were 2.9% at $18.08 on lighter-than-normal volume.

Cannacord also initiated coverage on biotechnology company AspenBio Pharma(APPY Quote) with a buy rating. Shares rose 2.2% to $6, also on light volume.