Health Winners & Losers: Amylin

Health stocks took a small dip at the start of the week amid clinical news and a few deals Monday.

The Amex Pharmaceutical index fell back 0.5% to 289.96, with its biggest gainers adding less than 0.4% apiece. Those included GlaxoSmithKline(GSK Quote) and Pfizer(PFE Quote), which ticked up just 7 and 6 cents apiece.

Meanwhile, the Amex and Nasdaq biotechnology indices gave up 1.4% and 1.2%, respectively. Big biotechs Biogen Idec(BIIB Quote) and Genzyme(GENZ Quote) fell 1.8% and 1.3%.

One biotech on the rise: Vertex (VRTX Quote) gave positive interim results from an ongoing phase IIb trial, dubbed PROVE 3, evaluating a telaprevir-based treatment in patients with chronic hepatitis C virus (HCV) who tried at least one other treatment unsuccessfully. Telaprevir reduced levels of the hepatitis C virus to undetectable levels in 52% of so called non-responder or relapse patients. Shares climbed 82 cents, or 2.5%, to $33.06 Monday.

Elsewhere a few deals were unveiled. Allergan (AGN Quote) said Monday that it will buy Aczone gel 5% from QLT (QLTI Quote) for roughly $150 million. The company expects to close the deal in the third quarter and launch Aczone Gel 5% to dermatologists in the U.S. and Canada during the fourth quarter of 2008. Allergan estimates the product could reach peak-year revenue of more than $75 million. The company's 2008 guidance remains unchanged.

QLT gained 3.4% to $3.93. Allergan was traded up 0.2% to $57.54.

Also, Hologic (HOLX Quote) said Monday that it will acquire Third Wave Technologies(TWTI Quote) for $11.25 a share, or roughly $580 million. The price is a 24% premium to Third Wave's average trading price over the last three months. The transaction is expected to close in the third quarter and has been approved by both boards.

Hologic shares were off by 22 cents, or 1%, at $23.19, while Third Wave added 64 cents, or 6.1%, to $11.14.

In analyst actions, Jeffries downgraded Amylin (AMLN Quote) to hold from buy and slashed its price target to $33 from $47. Data presented at the American Diabetes Association annual meeting in San Francisco prompted some to rethink competitive threats to the company's diabetes drug Byetta. Shares fell $3.09, or 10.3%, to $26.84 Monday.