Shares of America Service Group ( ASGR) were among the worst-performing health-related stocks Monday, falling 31% after the provider of prison health care services said it is conducting an internal investigation into accounting issues at its Secure Pharmacy Plus subsidiary.

America Service said it is specifically looking into whether "SPP provided pricing of pharmaceuticals in accordance with applicable client contract terms and whether some of the accruals and reserves maintained by SPP were established and utilized in accordance with generally accepted accounting principles."

America Service said the investigation is still in the early stages, so it doesn't know whether it will record any charges related to the probe. "We take allegations of impropriety very seriously, and we are conducting a thorough investigative process to determine if the issues described in this press release, as well as any other issues which may be identified as a result of the investigation, will impact the company's previously reported financial results," the company said. America Service said it has reported the accounting issues being investigated to the Securities and Exchange Commission.

America Service also said its previous full-year earnings guidance shouldn't be relied upon. In August, the company projected that it would earn $1.43 to $1.50 a share on sales of $640 million to $660 million during 2005. Analysts polled by Thomson First Call had forecast earnings of $1.46 a share and sales of $648.3 million. Shares recently were down $5.67 to $12.49.

United Natural Foods ( UNFI) tumbled 10% after the distributor and retailer of natural foods announced the immediate resignation and retirement of its chief executive. The company said Steven Townsend is leaving United Natural to "devote more time to his other investments and business interests." Townsend, 52, will remain with the company as chairman during a transitional period. Director Michael Funk, meanwhile, will succeed Townsend. Funk served as CEO of the company from 1999 to 2002. Shares dropped $3.37 to $30.09.

Shares of Diagnostic Products ( DP) fell 12% after the maker of pregnancy-detection kits posted third-quarter results that fell short of Wall Street expectations. The company earned $17.1 million, or 56 cents a share, on sales of $116.3 million. Analysts expected earnings of 64 cents a share on sales of $122 million. A year earlier, the company earned $16.5 million, or 55 cents a share, on sales of $109 million. "We were disappointed in the reagent flow this quarter which is a reflection of the limited number of tests released over the last year," the company said. Shares recently fell $5.59 to $42.42.

Regeneration Technologies ( RTIX) rose 6% after the company posted third-quarter earnings per share that beat expectations by a penny. The company, which processes allograft tissue into shaped implants for use in surgeries, reported a loss of $1.6 million, or 6 cents a share, on sales of $22.5 million. Excluding a charge, the company would have posted earnings of 2 cents a share. Analysts were expecting earnings of 1 cent a share and sales of $22.4 million. A year earlier, the company earned $1.7 million, or 6 cents a share, on sales of $22.8 million. Shares were trading up 41 cents to $7.50.

Shares of Schering-Plough ( SGP) rose modestly after the company posted better-than-expected third-quarter results. The drugmaker earned $43 million, or 3 cents a share, on sales of $2.28 billion. Excluding one-time charges and gains, the company would have earned 8 cents a share. Analysts projected earnings of 6 cents a share, before items, on sales of $2.27 billion. A year earlier, the company earned $14 million, or 1 cent a share, on sales of $1.98 billion. "We achieved solid growth across a broad front in the recent quarter," the company said in a press release. "In addition to our cholesterol franchise, seven of our top 10 prescription products recorded double-digit sales increases in the third quarter." Shares were recently trading up 7 cents to $21.18.

Merck ( MRK) shares rose after the embattled drugmaker posted better-than-expected earnings. Merck earned $1.42 billion, or 65 cents a share, in the third quarter, up from $1.33 billion, or 60 cents a share, a year ago. Analysts, on average, expected earnings of 62 cents a share. Sales fell 2% to $5.42 billion, narrowly missing Wall Street's expectation of $5.45 billion. For the full year, the company projects earnings of $2.47 to $2.51 a share, excluding a 29-cent charge related to repatriation. Analysts forecast 2005 earnings of $2.49 a share. Merck shares recently gained 56 cents, or 2.1%, to $26.74.

Other health care volume movers included Pfizer ( PFE), down 14 cents to $21.11; Novavax ( NVAX), up 61 cents to $4.34; Amgen ( AMGN), up 67 cents to $74.04; Johnson & Johnson ( JNJ), down 47 cents to $63.60; Bristol-Myers Squibb ( BMY), up 5 cents to $21.50; and BioCryst Pharmaceuticals ( BCRX), up 12 cents to $15.45.

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