Monday's Health Winners & Losers

Deals and business news rocked a few health stocks Monday on an overall flat start to the week for the sector.

Novartis (NVS) said it will pay Swiss company Nestle $11 billion for a 25% stake -- or 74 million shares -- of eye-care product company Alcon (ACL) and exclusive rights to buy Nestle's remaining 52% stake in the company for roughly $28 billion between January 2010 and July 2011. Alcon shares rose 1% to $150, while Novartis fell 4.3% to $49.86.

Novartis' pharma peers Eli Lilly (LLY) and Merck (MRK) were both up more than 1.3%, and Wyeth (WYE) shares climbed 6.4% to $44.23 on Monday. All three stocks support the Amex Pharmaceutical index, which added 0.5% to 305.98, to start the week.

In other deal news, Kinetic Concepts (KCI) said Monday that it would acquire Branchburg, N.J.-based LifeCell (LIFC) for $51 a share, or $1.7 billion in cash. The price is an 18% premium to LifeCell's closing price on April 4. Upon the close of the transaction, LifeCell will operate as a new global biosurgery division within KCI. LifeCell shares shot up about 17% to $50.42, while KCI's added 6.2% to $49.91.

LifeCell is a component of the Nasdaq biotechnology index, but wasn't enough to push it into the green. The index edged down 0.3% to 805.91.

Meanwhile, shares of medical device company Ev3 (EVVV) slid 12.9% to $7.53, after the company reined in first-quarter guidance to $101.3 million from the $107 million estimate it announced on Jan. 7. Analysts surveyed by Thomson Financial were looking for $104.4 million.

The company, which pointed to struggles integrating its sales forces with recently acquired FoxHollow Technologies, also said that Chief Executive James Corbett has resigned. Ev3 didn't give a reason for the resignation, but said that Robert Palmisano, former CEO of laser eye surgery company IntraLase, will take on the role of CEO and president.

Better luck graced shares of specialty drug developer Sepracor (SEPR), which rose 9.5% to $22. AmTech research upgraded the stock to buy from neutral on Monday.

And elsewhere, small Israeli biotech company Pluristem Therapeutics (PSTI) said Monday that its experimental ischemic stroke treatment showed positive results in rats. Its shares surged nearly 100% to $4.09 on lower-than-average volume off the very early-stage results.

Elsewhere, micro-cap Targeted Genetics (TGEN) said it acquired full exclusive rights to its preclinical program for Huntington's disease from Merck sudsidiary Sirna Therapeutics. Targeted Genetics also took over a licensing agreement the Merck subsidiary had with the University of Iowa. In exchange, Targeted Genetics said it will pay Sirna an undisclosed royalty on future sales. Targeted Genetics shares edged down 6.3% to 89 cents on low volume.

>To order reprints of this article, click here: Reprints