Health Winners & Losers: Kosan

Health indices slightly outpaced the broader markets Thursday, while individual stocks in the sector moved on buyouts, verdicts and analyst speculation.

The Nasdaq and Amex biotechnology indices popped 2.1% and 2.9%, respectively, marking an upturn for the week.

A component of the Nasdaq index, Kosan BioSciences (KOSN Quote) surged $3.78, or 230%, to $5.43 after Bristol-Myers Squibb (BMY Quote) said it would buy the biotech company for $5.50 a share.

Bristol traded up 36 cents, or 1.6%, at $22.45.

Fellow Big Pharma Merck (MRK Quote) continued on its streak of favorably reversed decisions in Vioxx cases on Thursday. Two courts -- one in New Jersey and one in Texas -- reversed prior decisions to award $9 million and $26 million. Merck's shares were up 0.8%, at $38.96.

Elsewhere, Eli Lilly's (LLY Quote) CEO John Lechleiter said Thursday that based on recent meetings with the Food and Drug Administration, a long-acting injection of schizophrenia drug Zyprexa may be available in the U.S. in the near future, Reuters reported. The FDA has issued a not approvable letter requesting more data about excessive sedation that was reported in about 1% of the patients in clinical trials.

Separately, on Thursday, Eli Lilly said Thursday that it submitted its supplemental application for expanded approval of Cymbalta for the management of chronic pain. Lilly's shares rose 1.6% to $48.59.

The stock is a component of the Amex pharmaceutical index, which was up 1.1% at 300.55.

Other stocks driving the pharmaceutical index higher were Abbott(ABT Quote), Forest Laboratories(FRX Quote) and Johnson & Johnson(JNJ Quote), which gained 3.4%, 2.4% and 2.2%, respectively.