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)
surged $3.78, or 230%, to $5.43 after
Bristol-Myers Squibb
(BMY) - Get Report
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) - Get Report
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) - Get Report
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) - Get Report
,
Forest Laboratories
(FRX)
and
Johnson & Johnson
(JNJ) - Get Report
, which gained 3.4%, 2.4% and 2.2%, respectively.
One stock on the decline,
Sangamo Biosciences
(SGMO) - Get Report
gave up $1.29, or 10.5%, to $11.04, after Brean Murray Carret & Co. analyst Jonathan Aschoff initiated coverage on the stock with a sell rating and a $5 price target. Aschoff expects trials on SB-509 -- which uses the company's zinc finger DNA-binding protein technology to modify genes -- in diabetic neuropathy will leave investors disappointed.
Meanwhile, Wachovia analyst Michael Tong downgraded
Vivus
(VVUS) - Get Report
to market perform from outperform, on Thursday, sparking a 79-cent, or 10.7%, turn lower in shares. The stock had added 29% between last Thursday, when positive interim data for a midstage study was published in an abstract, and Wednesday's close prior to the downgrade. Tong said shares were fairly valued between $7 and $8. Shares traded to $6.57 on Thursday.