Updated from 2:59 p.m. EST

Shares of

Depomed

(DEPO)

were among the best-performing health-related stocks Tuesday, after the company and its partner,

Biovail

(BVF)

, received an approvable letter from the Food and Drug Administration for their type II diabetes drug.

The approval of Glumetza is contingent upon the finalization of one manufacturing specification. Biovail expects to submit its response to the manufacturing issue during the coming weeks. No clinical or labeling issues were identified in the approvable letter, according to the companies. Biovail, which holds the commercialization rights for Glumetza in the U.S. and Canada, is currently negotiating with several possible partners to market the drug in the U.S. and expects to reach an agreement with a marketing partner some time during the first half of 2005.

Depomed has entered into an agreement with LG Life Sciences for the commercialization of Glumetza in Korea. Depomed is negotiating with other potential partners who will commercialize the product in other territories. Shares of Depomed traded up 48 cents, or 11.8%, to $4.56, while Biovail traded up 78 cents, or 4.9%, to $16.82.

Point Therapeutics

(POTP)

fell 12.3% after the company said it plans to sell 3.65 million shares of stock for $4.50 apiece, resulting in proceeds of $16.4 million. The stock is being sold as part of an existing shelf registration filed with the

Securities and Exchange Commission

. The stock sale represents a 15% discount to Point Therapeutics' closing price of $5.30 on Monday. Shares traded down 65 cents to $4.65.

Shares of

Discovery Partners International

(DPII)

fell 22.2% after the company posted fourth-quarter sales that fell below expectations. The company, which provides research services and products to the pharmaceutical industry, posted earnings of $1.4 million, or 5 cents a share, on sales of $14.2 million. Analysts polled by Thomson First Call were expecting earnings of 5 cents a share on sales of $15.6 million. A year ago the company earned $1.5 million, or 6 cents a share, on sales of $14.5 million.

Discovery's fourth-quarter sales shortfall occurred despite the company exercising its right under an agreement with

Pfizer

(PFE) - Get Report

to deliver additional compounds during the fourth quarter instead of during the first quarter of 2005. As a result, the company booked sales of $4.2 million during the fourth quarter that will not be recognized during the first quarter.

Looking ahead, Discovery Partners said that it could see a further significant decline in its Pfizer business, which will only be partially offset by increased NIH sales. For all of 2005, the company expects to post a loss of $2 million to $6 million on total sales of $44 million to $54 million. The sales estimate doesn't include sales from two Universal Store Systems that will be deployed as part of the NIH contract, since sales will be recognized over the life of the contract, nor does the sales estimate include any significant contribution from its acquisition of Biofrontera Discovery. Shares traded down $1 to $3.50.

Hanger Orthopedic Group

(HGR)

rose 12.7% after the company posted fourth-quarter earnings that beat expectations. The provider of orthotic and prosthetic patient-care services posted earnings of $2.6 million, or 12 cents a share, on sales of $145.9 million. Analysts were expecting earnings of 11 cents a share on sales of $148.5 million. Shares traded up 77 cents to $6.85.

Shares of

Eon Labs

(ELAB)

traded actively after the company posted fourth-quarter results. The company, which agreed to be acquired by

Novartis

(NVS) - Get Report

on Feb. 21, earned $30.1 million, or 33 cents a share, on sales of $110 million. Analysts were expecting earnings of 31 cents a share on sales of $111.8 million. A year ago the company earned $19.2 million, or 21 cents a share, on sales of $95 million. Shares traded down 5 cents to $30.31 on volume of 2.1 million shares.

Other health care movers included

Elan

(ELN)

, down 3 cents to $7.97;

Biogen Idec

(BIIB) - Get Report

, up $2.61 to $41.26;

Pfizer

(PFE) - Get Report

, up 32 cents to $26.61;

Merck

(MRK) - Get Report

, up 43 cents to $32.13;

Teva Pharmaceutical Industries

(TEVA) - Get Report

, down 24 cents to $29.87; and

Amgen

(AMGN) - Get Report

, up 63 cents to $62.24.