Health stocks were largely stale on Tuesday amid disappointing earnings and guidance from a few biotech and pharma players.
The major health indices were flat to down, with the Amex biotechnology index lagging the most, down 1.6% at 753.31. One culprit, component
plummeted 33% to $10.95, after the company preannounced first-quarter revenue and scaled back its full-year revenue guidance to a range of $490 million to $510 million, vs. a prior forecast of $505 million to $525 million.
The company said new guidance accounts for expected lower research spending by pharmaceutical and industrial customers. Affymetrix said it's looking for ways to further reduce operating expenses to offset the loss of expected revenue.
Cowen and Co., Leerink Swann and Bear Stearns downgraded the stock from outperform to neutral, market perform and underperform, respectively.
In other analyst action, Lehman Brothers upped its price target for
to $80 from $75, but it did nothing for the stock. Illumina traded down 6.3% to $71.35.
fell after airing its fourth-quarter and fiscal 2008 results and 2009 outlook. The company earned 55 cents a share -- including a 35-cent per-share charge for a licensing payment -- on revenue of $990 million, in the latest quarter.
In fiscal 2009, Forest Labs it expects to earn between $3.10 and $3.20 a share on revenue of $3.9 billion, while analysts surveyed by Thomson Financial had predicted $3.54 share on revenue of $4.15 billion, on average. Shares gave up 9.2% to $36.13.
Johnson & Johnson
$3.6 billion, or $1.26 a share, on revenue of $16.2 billion in the first quarter. Not including an after-tax, in-process R&D charge of $807 million, the company said earnings in the recent quarter increased 6.4% -- or 8.6% on a per-share basis -- compared to the 2007 quarter.
Results beat the expectations of analysts surveyed by Thomson Financial who were looking for earnings of $1.20 a share on $15.8 billion in revenue. But a rise in first quarter stocking revenue from over the counter allergy drug Zyrtec and also Remicade, suggest the surge may not be sustained.
For full-year 2008, J&J guided to a range of $4.40 to $4.45 a share, before items, up from the company's previous forecast of $4.38 to $4.44 a share. While analysts had pegged $4.44 a share on roughly $63.75 billion in revenue. J&J shares edged down 0.1% to $65.65.
On the clinical side: Monday post-market close
said that according to results from a late-stage trial,
Rituxan isn't effective
in primary progressive multiple sclerosis (PPMS).
The drug is already approved for blood cancer non-Hodgkin's lymphoma and rheumatoid arthritis, but investors weren't expecting success in hard to treat PPMS. Biotech behemoth Genentech traded down 0.8% to $74.06, while Biogen shares rose 1.9% to $64.93.
For Wednesday, watch for quarterly results from