Health Winners & Losers: Amylin - TheStreet

Health stocks rose Thursday in a countdown to the Labor Day holiday weekend.

The Nasdaq and Amex biotechnology indices were up 1% and 1.5%, respectively, while a few of Wednesday's losers managed to change course.

Amylin

( AMLN), which had dropped 40% over the last two weeks on pancreatitis concerns in patients taking diabetes drug Byetta,

rose

$1.40, or 6.8%, to $21.88 on Thursday. Shares of

Eli Lilly

(LLY) - Get Report

, Amylin's partner for the drug, rose 4 cents.

Cell Genesys

( CEGE), which had given up some 75% after it stopped a late stage study on prostate cancer vaccine GVAX on Wednesday, turned into positive territory on Thursday.

Cell Genesys said the trial was halted because a routine safety check found more deaths had occurred in the GVAX arm of the trial than in the placebo arm. Cantor Fitzgerald downgraded the stock to hold from buy on Thursday, slashing its price target to $2 from $10. The stock did muster some energy, though, adding back 23 cents, or 30%, to $1.02.

Valeant Pharmaceuticals

(VRX)

sold the rights to the development and commercialization of its epilepsy drug retigabine to

GlaxoSmithKline

(GSK) - Get Report

in a deal worth up to $820 million. Glaxo will make an upfront payment of $125 million for the drug and for the rights to VRX698 and the other back-up compounds.

The companies plan to co-commercialize retigabine in the U.S., Canada, Australia, New Zealand, and Puerto Rico, and split those profits in half. Valeant will receive up to a 20% royalty on sales in other regions. Valeant shares fell $1.31, or 6.5%, to $18.79, while Glaxo shares were up 50 cents, or 1.1%, to $47.09.

Big pharmaceutical companies, like Glaxo, have turned to acquisitions and licensing deals to combat generic competition and other pressures that have and will continue to clip sales of some their key revenue producers.

Generic drug maker

Barr Pharmaceuticals

( BRL) said Thursday that a subsidiary received final approval from the Food and Drug Administration to manufacture and market a generic of Ortho McNeil Janssen's Alzheimer's drug Razadyne. Ortho McNeil is a unit of

Johnson & Johnson

(JNJ) - Get Report

.

Barr said earlier Thursday that the District Court of Delaware ruled in its favor regarding the invalidity of Ortho McNeil's patent. The Johnson & Johnson unit, which plans to appeal the decision, also was denied a restraining order to keep Barr from selling the generic Razadyne tablets. Barr said it plans to launch the product immediately.

Barr shares traded up 29 cents, or 0.4%, to $67.87, while Johnson & Johnson shares added 20 cents, or 0.3%, to $71.41.

In regulatory news, small-cap stock

BioDelivery Sciences

(BDSI) - Get Report

said Thursday it received a complete response letter from the FDA regarding its application for Bema Fentanyl, a dissolvable film applied to the inner lining of the cheek for breakthrough pain. The company said regulators requested modifications to the submitted risk management program, and BioDelivery now anticipates approval in the first half of 2009.

Shares of the company, which said there were no deficiencies noted in other areas, rose 60 cents, or 26%, to $2.90.

Lehman Brothers cut its rating on

Gilead

(GILD) - Get Report

to equal weight from overweight and lowered its price target to $50 from $58. Gilead shares were off by 54 cents, or 1%, to $53.21.