Health Stocks in Motion

Updated from 2:30 p.m. EDT

Shares of aaiPharma (AAII Quote) were among the worst-performing health and pharmaceutical stocks Friday, falling 18.1% after the company said it would not be able to make its $10 million interest payment scheduled for today.

Lenders have granted the drugmaker a 30-day grace period, but if the company fails to make the payment by Oct. 31 it will be in default. The company said there is a likelihood that it will be in default of certain covenants under its senior credit facility; the company is seeking waivers and consents for these defaults. Shares traded down 28 cents to $1.27.

Cyberonics(CYBX Quote) fell 7.9% after Advanced Neuromodulation Systems(ANSI Quote) dropped its $22-a-share offer for the company. "We are disappointed that the Cyberonics board of directors has chosen to reject our invitation to discuss a business combination," ANSI said. ANSI, which owns about 14.7% of Cyberonics, will continue to manage its investment as a shareholder, saying "we genuinely wish Cyberonics the best as it works toward fulfilling its mission." Shares of Cyberonics traded down $1.61 to $18.85. Shares of ANSI traded up 52 cents to $30.87. ...