Monday's Health Winners & Losers
Deals and business news rocked a few health stocks Monday on an overall flat start to the week for the sector.
Novartis
(NVS) - Get Novartis AG Report
said it will pay Swiss company
Nestle
$11 billion for a 25% stake -- or 74 million shares -- of eye-care product company
Alcon
(ACL)
and exclusive rights to buy Nestle's remaining 52% stake in the company for roughly $28 billion between January 2010 and July 2011. Alcon shares rose 1% to $150, while Novartis fell 4.3% to $49.86.
Novartis' pharma peers
Eli Lilly
(LLY) - Get Eli Lilly and Company Report
and
Merck
(MRK) - Get Merck & Company Inc. Report
were both up more than 1.3%, and
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Wyeth
(WYE)
shares climbed 6.4% to $44.23 on Monday. All three stocks support the Amex Pharmaceutical index, which added 0.5% to 305.98, to start the week.
In other deal news,
Kinetic Concepts
(KCI)
said Monday that it would acquire Branchburg, N.J.-based
LifeCell
(LIFC)
for $51 a share, or $1.7 billion in cash. The price is an 18% premium to LifeCell's closing price on April 4. Upon the close of the transaction, LifeCell will operate as a new global biosurgery division within KCI. LifeCell shares shot up about 17% to $50.42, while KCI's added 6.2% to $49.91.
LifeCell is a component of the Nasdaq biotechnology index, but wasn't enough to push it into the green. The index edged down 0.3% to 805.91.
Meanwhile, shares of medical device company
Ev3
(EVVV)
slid 12.9% to $7.53, after the company reined in first-quarter guidance to $101.3 million from the $107 million estimate it announced on Jan. 7. Analysts surveyed by Thomson Financial were looking for $104.4 million.
The company, which pointed to struggles integrating its sales forces with recently acquired FoxHollow Technologies, also said that Chief Executive James Corbett has resigned. Ev3 didn't give a reason for the resignation, but said that Robert Palmisano, former CEO of laser eye surgery company IntraLase, will take on the role of CEO and president.
Better luck graced shares of specialty drug developer
Sepracor
(SEPR)
, which rose 9.5% to $22. AmTech research upgraded the stock to buy from neutral on Monday.
And elsewhere, small Israeli biotech company
Pluristem Therapeutics
(PSTI) - Get Pluristem Therapeutics Inc. Report
said Monday that its experimental ischemic stroke treatment showed positive results in rats. Its shares surged nearly 100% to $4.09 on lower-than-average volume off the very early-stage results.
Elsewhere, micro-cap
Targeted Genetics
(TGEN) - Get Tecogen Inc Report
said it acquired full exclusive rights to its preclinical program for Huntington's disease from Merck sudsidiary Sirna Therapeutics. Targeted Genetics also took over a licensing agreement the Merck subsidiary had with the University of Iowa. In exchange, Targeted Genetics said it will pay Sirna an undisclosed royalty on future sales. Targeted Genetics shares edged down 6.3% to 89 cents on low volume.
