Health Winners & Losers: Nuvelo
09/25/08 - 05:26 PM EDT
Elizabeth Trotta
Health stocks followed the broader markets higher Thursday on overall light news in the sector. The Nasdaq and Amex biotechnology indices added 1.6% and 1.2%, respectively.
Small-cap stock Nuvelo (NUVO Quote - Cramer on NUVO - Stock Picks) and privately held ARCA biopharma said Thursday they entered into a merger agreement to create a late-stage biotechnology company. ARCA develops genetically targeted therapies for heart failure and other cardiovascular diseases. Among other things, Nuvelo will gain Gencaro, a genetically engineered beta blocker to treat heart failure. The Food and Drug Administration is expected to make an approval decision on Gencaro by May 31, 2009. Arca will become a wholly owned subsidiary of Nuvelo. Under the agreement, ARCA stockholders will get roughly 67% of the common stock of the merged company. Current Nuvelo shareholders are expected to own the other 33%. Nuvelo shares rose two pennies, or 5%, at 42 cents. A couple of analyst actions boosted some stocks in the space. Lazard analyst Joel Sendek upgraded Biogen Idec (BIIB Quote - Cramer on BIIB - Stock Picks) to buy from hold, projecting continued sales growth in multiple sclerosis drugs Tysabri and Avonex. Sendek says the current share price may present an entry point. Biogen shares climbed $2.11, or 4.5%, to $48.83. Meanwhile, Jeffries & Co. analyst Adam Walsh reiterated a buy rating for Cypress BioSciences (CY Quote - Cramer on CY - Stock Picks), saying it is likely the company will receive a positive decision from the FDA on its lead product, milnacipran, for patients with fibromyalgia. Forest Laboratories (FRX Quote - Cramer on FRX - Stock Picks) licenses Cypress' drug in the U.S. and Canada. Cypress shares rose 73 cents, or 12%, to $6.70. Forest added 14 cents, or 0.5%, at $28.10.
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