Health Winners & Losers: Genentech

Health stocks were a mixed read at the start of the week, with Genentech (DNA Quote) boosting biotech but sad Vytorin results weighing on Big Pharma names.

Genentech traded up Monday after majority shareholder Roche said it offered $89 a share, or nearly $44 billion, for the remaining stake of the company. The offer will go to an independent committee of Genentech's board, and possibly materialize into a merger proposal that the minority shareholders will vote upon.

Wall Street analysts overwhelmingly felt the price was too low, mostly in light of the potential value in Genentech's cancer drug Avastin. Genentech shares climbed 14.7% to $93.88.

Some other big biotech stocks got a lift on the M&A news. Genentech peer Biogen Idec (BIIB Quote) gained 3.4%, and Celgene (CELG Quote), Cephalon (CEPH Quote) and Genzyme (GENZ Quote) tacked on 0.9%, 1.4% and 2%, respectively.

The Amex biotechnology index added 2% to 811.15. The Amex pharma index, on the other hand, fell 1.3% to 302.61.

Two components that weighed on it were Merck (MRK Quote) and Schering Plough (SGP Quote) which postponed earnings to evaluate new study data related to Vytorin this afternoon. The cholesterol drug was no better than placebo in the SEAS trial at lowering the risk of major cardiovascular events in patients suffering from aortic stenosis, a condition that blocks blood flow to part of the heart. The drug also didn't improve aortic valve disease events, such as valve replacement surgery, hospitalization due to heart failure and death related to the heart.

Moreover, there were more cancer deaths in the Vytorin arm of the study than in the placebo -- although the companies said any relationship is inconclusive because of the small sample size in the study.