Safety concerns and legal settlements triggered the biotech blues for a few health stocks Friday.
is reversing out of a 2004 merger agreement in which it acquired Advanced Bionics. The company will take complete control of the pain management business and will sell the auditory and drug-pump development program to principals of Advanced Bionics for $150 million.
The deals, expected to close in January, would also put an end to pending litigation between the company and former Advanced Bionics owner Alfred Mann, who sued the company on allegations that it had plotted to violate their management agreement and force him out of the company.
Boston Scientific, which noted this action, is part of an aforementioned effort to sell non-strategic assets, fell 4.5% to $13.13 Friday.
On the litigation topic,
( GENZ) said it reached an agreement to settle a class action lawsuit brought by a group of shareholders following the consolidation of Genzyme's tracking stock structure in 2003. The company will pay a total of $64 million to a class of shareholders who held Genzyme Biosurgery stock on May 8, 2003.
The terms of the settlement are subject to court approval. If approved, the case would be dismissed in U.S. District Court for the Southern District of New York, which, in turn, Genzyme said it believes will result in the dismissal of a related case in the Massachusetts Superior Court.
Shares of the biotechnology company declined 95 cents, or 1.6% on Friday. Genzyme is a component of the Amex biotechnology index, which was down 12.22, or 1.6%, to 759.29.
( WYE) gave up $2.73, or 5.5%, to $46.85 on Friday after a
tough day of announcements --the FDA withheld approval of one drug and safety concerns halted another.
First, Wyeth and Solvay Pharmaceuticals said the FDA issued a letter saying schizophrenia treatment bifeprunox wasn't approvable. The agency said the drug wasn't efficacious enough when compared to reference drugs in the short-term studies for approval and requested more information on a case of a patient who died while participating in a trial.
The companies said the FDA did feel the drug was effective enough in the long-term maintenance study, and a second positive maintenance study could support a maintenance claim for the drug. They plan to meet with the agency to discuss the potential study and a maintenance indication for bifeprunox.
Also Friday, Wyeth and development partner
said that after a safety committee review they decided to discontinue dosing of its HCV-796, a Hepatitis C candidate, in combination with pegylated interferon and ribavirin in the current phase II study because of issues with liver toxicity.
About 8% of patients receiving the combination that included ViroPharma's candidate had clinically significant elevation in liver enzymes compared to about 1% of those taking just the pegylated interferon and ribavirin. Two of the patients taking the combination with HCV-796 experienced serious adverse events and had to withdrawal from the treatment.
ViroPharma's Vancocin is on the market for bacterial infections in the lower digestive tract. HCV-796 was the company's lead candidate in development in addition to Maribavir, which is in phase III development for cytomegalovirus disease, the most common infection after solid organ transplants. ViroPharma's stock sank 14.5% to $8.70 Friday.
More news before the weekend,
( SGP) priced a public offering of 50 million common shares at $27.50 apiece, a 2-cent discount to Thursday's closing price. Underwriters have to option to purchase up to an additional 7.5 million shares.
Schering Plough also priced a10-million share offering of its 6% mandatory convertible preferred stock at $250 a share. The company expects the offerings close on August 15 and will generate about $3.8 billion in net proceeds.
Shares were down 0.3%, at $27.43.