Shares of

Kos Pharmaceuticals

(KOSP)

were among the best-performing health-related stocks Wednesday, rising 12% after the company and

Barr Pharmaceuticals

(BRL)

agreed to end their patent litigation surrounding Kos' cholesterol-reducing Niaspan drug.

As part of the settlement,

Duramed Pharmaceuticals

, a Barr subsidiary, and Kos will co-promote the current Niaspan and Advicor products. Under the seven-year deal, Kos will pay royalties based on quarterly and annual sales of the products. The settlement agreement also permits Barr to launch generic versions of Niaspan and Advicor under an exclusive license beginning on Sept. 20, 2013, about four years before Kos' last patent expires. Shares of Kos were trading up $5.34 to $49.78.

A federal judge will rule tomorrow in a patent challenge to the

Eli Lilly

(LLY) - Get Report

antipsychotic treatment Zyprexa, the company's best-selling drug. Lilly's patent is being challenged by three companies --

Ivax

(IVX)

,

Teva

(TEVA) - Get Report

and

Dr. Reddy's Laboratories

(RDY) - Get Report

-- that are trying to market generic equivalents. Shares of all four companies rose just after Lilly announced the judge will rule on the patent challenge.

Meridian Bioscience

(VIVO) - Get Report

rose 1% after the company said that second-quarter results would top forecasts. The company expects earnings of 19 cents to 20 cents a share on sales of $23.5 million. Analysts polled by Thomson First Call had been expecting earnings of 18 cents a share on sales of $22.7 million. Looking ahead, the company also backed its 2005 earnings guidance, saying that it would earn 66 cents to 70 cents a share on sales of $84 million to $88 million. Analysts are expecting earnings of 68 cents a share on sales of $87.7 million. Shares were trading up 13 cents to $15.21.

Shares of

Merck

(MRK) - Get Report

rose 3% after the company said that its first-quarter earnings would top expectations. The drugmaker now expects earnings of 62 cents a share, up from previous guidance of 54 cents to 58 cents a share. Analysts had been expecting earnings of 56 cents a share on sales of $5.21 billion. A year ago the company earned 73 cents a share. Favorable foreign currency translation, ongoing cost management efforts and overall sales performance led to the better-than-expected forecast. Merck said guidance excludes any potential liability reserve that it might have to take as a result of Vioxx litigation. Shares were trading up $1.03 to $34.84.

Wednesday's health care movers included

Elan

(ELN)

, up 46 cents to $4.23;

Pfizer

(PFE) - Get Report

, up 29 cents to $27.17;

Eli Lilly

(LLY) - Get Report

, up $2.62 to $56.44;

Johnson & Johnson

(JNJ) - Get Report

, up 13 cents to $68.77;

Amgen

(AMGN) - Get Report

, up 13 cents to $60.18;

Schering-Plough

(SGP)

, up 40 cents to $19.70; and

Aastrom Biosciences

(ASTM)

, down 19 cents to $2.26.