Health Winners & Losers: Cephalon

Earnings, regulatory developments, and business updates did little for health stocks Wednesday as they generally followed the broader markets lower.

Investors shrugged a day after a Food and Drug Administration advisory panel voted to recommend the regulatory body not approve Cephalon's (CEPH Quote) pain drug Fentora for expanded uses. After opening the session on a gap lower, the stock climbed 3% to end the day at $62.89.

JMP Securities lowered its price target for Cephalon's shares to $69 from $85, while UBS dropped its target more modestly to $82 from $84. Thomas Weisel's Donald Ellis, who has a $77 price target on the stock, said he expects the FDA will eventually approve expanded use of Fentora.

Elsewhere, Enzon Pharmaceuticals (ENZN Quote) said it will spin off its novel biotechnology business from its specialty pharmaceutical business, funding the new company with about $150 million in cash. The transaction will result in two independent companies. Enzon CFO Craig Tooman will assume the role of president and CEO of the specialty pharmaceutical business, while current Enzon CEO Jeffrey Buchalter will become the chief executive of the new biotechnology business.

Enzon also said on Wednesday that for its first quarter, the company reported profit of $1.5 million, or 3 cents a share, vs. a loss of $2.8 million, or 6 cents a share, a year prior. Enzon shares rose 1% to $9.26 Wednesday.

Cephalon and Enzon did little to help the Nasdaq biotechnology index, which was down 2.3% at 792.92.

One component tugging at the index, Onyx (ONXX Quote) said Tuesday post close that it turned a profit in the recent quarter. The company reported earning $15.4 million, or 27 cents a share, vs. a loss of 26 cents a share a year prior. Onyx reported net revenue from its joint venture business with German company Bayer for anti-cancer drug Nexavar, of $37.7 million, vs. $3 million a year earlier.