Gene Logic ( GLGC) entered an agreement with Eli Lilly ( LLY - Get Report) to reposition some of the experimental treatments Lilly shelved or put on the back burner.

Under the agreement, Gene Logic will have the option to receive an exclusive license to any drug candidate that Lilly chooses not to pursue, and it would pay Lilly milestone and royalty payments. Gene Logic shares were up 10.6% to $1.67. Lilly's shares were up 1% to $57.61.

Shares of Merck ( MRK - Get Report) rose 1.2% to $42.68 after the company announced an agreement with Ambrilia Biopharma to develop drugs for cancer and infectious diseases. The agreement grants Merck exclusive licensing rights to Ambrilia's HIV and AIDS treatment candidates.

Generic drugmaker Teva Pharmaceutical ( TEVA - Get Report) announced that the Food and Drug Administration gave tentative approval for the company's application to market its generic version of Johnson & Johnson's ( JNJ - Get Report) Risperdal. Teva expects to receive final approval when the Janssen patent expires in December 2007. Shares were up 22 cents, or 0.6%, to $35.83.

Discovery Laboratories' ( DSCO) shares were boosted 16.4% to $2.48 following encouraging clinical trial results on its proposed lung disease drug Surfaxin. The drug was effective in preventing and treating bronchopulmonary dysplasia, a condition commonly occurring in premature infants with respiratory distress.

GeoPharma's ( GORX) shares fell 4.6% to $3.53 after the company said its subsidiary Belcher Pharmaceuticals has finished the initial phase of its pharmaceutical manufacturing and R&D expansion plans.

Among other health care stocks moving were Shire ( SHPGY), down 1.2% to $53.09, ImmuCell ( ICCC), off 5.6% to $4.72, Valera Pharmaceuticals ( VLRX), 3.4% lower to $6.01, and Advancis Pharmaceutical ( AVNC), down 2.8% to $5.20.

Schering-Plough ( SGP) was 1.2% higher to $22.36, Pharmaxis ( PXSL) rose 7.6% to $28.50, Alkermes ( ALKS) was gaining 2% to $15.85, Rigel Pharmaceuticals ( RIGL) was 2.7% higher to $11.33, and Integrated Biopharma ( INB) gained 10.4% to $9.95.