Cubist Pharmaceuticals ( CBST) shares sank Thursday after the stock was downgraded by research firm JMP Securities to market outperform from buy, citing a lack of near-term catalysts.

Biotech analyst Adam Cutler says the stock is cheap, however, and that "sales trends have been healthy, and there should be plenty of growth left." Cutler lowered his price target on the stock to $24 from $28. Shares fell 3.2% to $17.62.

Shares of Quest Diagnostics ( DGX) lost 1.2% to $50.46 after the lab specialist guided lower for 2007.

The diagnostic test outfit earned $151 million, or 77 cents a share, in the fourth quarter, above analysts' estimates of 74 cents a share. Revenue grew 8.5% to $1.55 billion. Analysts expected revenue of $1.57 billion. For 2007, the company expects earnings of between $2.70 and $3 a share on $6 billion to $6.2 billion in revenue. Analysts were expecting earnings of $3.21 a share on sales of $6.4 billion for the year.

St. Jude Medical's ( STJ) shares rose 4.3% to $41.37 Thursday after the medical device maker reported an increase in fourth-quarter earnings and issued guidance for growth in 2007.

The company earned $155 million, or 42 cents a share, including a retroactive benefit of approximately 3 cents a share related to a research and development tax credit for the first nine months of 2006. Analysts were expecting the company to earn 39 cents a share. Sales were $864 million, up more than 9% from the fourth quarter of 2005 and exceeding analysts' estimates of $852.35 million.

Cytori Therapeutics ( CYTX) gained to 6.4% to $5.80 after the company announced that the Food and Drug Administration approved its fat tissue processing system for use with its Celase tissue processing reagent. The system is used for plastic and reconstructive, gastrointestinal, thoracic and other surgeries.

Among other health stock winners Thursday were Adams Respiratory Therapeutics ( ARXT), 1% higher to $45.47; Ligand Pharmaceuticals ( LGND),up 1.8% to $11.75; Kendle International ( KNDL), rising 2% to $36.55; and Tiens Biotech Group ( TBV), gaining 9.3% to 5.79.

Among the losers were Bristol-Myers Squibb ( BMY), down 2.1% to $26.42; Abbott Laboratories ( ABT), 1.6% lower to $52.70; Biogen Idec ( BIIB), falling 1.8% to $47.91; Genzyme ( GENZ), off 1.5% to $66.23; MedImmune ( MEDI), 1.5% lower to $34.19; Barr Pharmaceuticals ( BRL), down 1.1% to $54.88; and Vertex Pharmaceuticals ( VRTX), falling 3% to $35.18.

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