Insmed ( INSM) lost nearly half its value after the Virginia-based biotech settled a patent infringement lawsuit brought by California's Tercica ( TRCA) (which soared more than 22% on the news) and Genentech ( DNA) regarding Insmed's Iplex drug, which is indicated for short-stature conditions. In December, a U.S. District Court found Insmed had violated Tercica's patents.

Insmed no longer needs to pay any damages to the two companies, but it is still barred from developing the drug for short-stature indications. If Insmed develops Iplex for certain other permitted indications, Tercica or Genentech can opt in for a 50-50 cut of the profits while paying half the development costs. Insmed needs to pay Genentech royalties on any and all future Iplex products, and at a higher rate if Tercica chooses to opt in.

Insmed is restructuring as a result of the settlement. The company is eliminating its sales and marketing group and scaling back production at its Boulder, Colo., manufacturing site. It will reduce its 150-person workforce by 34%. Insmed shares were losing 75 cents, to trade around 80 cents. Tercica was soaring $1.11, to $5.99. Genentech was off 36 cents to $81.92.

BPZ Energy ( BZP) shares were leaping after the Houston-based driller reported positive testing from its well off the coast of northwest Peru. Natural gas flowed at a rate of 40 million cubic feet per day and crude oil at 3,150 barrels a day, the company said. Shares were up 67 cents, or 13.5%, to $5.65.

SmartPros ( PED), which develops training materials for finance and engineering professionals and the general corporate market, more than doubled its 2006 income to $1.5 million, or 30 cents a share, from 2005's $669,000, or 13 cents a share. Sales jumped 19.5% to $12.5 million. Shares of the Hawthorne, N.Y., company were adding 56 cents, or 12.6%, to $5.

Restaurant chain Friendly Ice Cream ( FRN) swung to a modest profit of $100,000, or 2 cents a share, in the fourth quarter, compared with losses of $30.2 million, or $3.82 a share, a year ago. Total revenue slipped slightly to $122.4 million from last year, but comparable sales were up 1.8% for company-owned restaurants and 0.5% for franchises. The Wilbraham, Mass., company also announced that it may sell itself and that it retained advisors from Goldman Sachs and Weil Gotshal & Manges in order to explore this and other "strategic alternatives." Shares were rising $1.74, or 14.7%, to $13.58.

Rocky Brands ( RCKY) plummeted 19% after posting a penny-a-share loss in the fourth quarter, including a 9-cent charge for impairment to intangible assets. Last year, the Ohio-based footwear maker had a 46-cent profit. Sales were down 6% year over year to $70.6 million. Shares were sinking $2.61 to $11.15.

Jupitermedia ( JUPM) lost all of February's gains, and then some after announcing it had ended buyout talks with Getty Images ( GYI). Rumors of the discussions leaked out in late February, initially sending Jupitermedia's stock skyrocketing. Today, its shares were off $1.42, or 16.5%, to $7.21. Getty Images was down 86 cents, or 1.7%, to $49.76.

Neenah Paper ( NP) slipped after announcing it will incur a roughly $3 million charge in order to close one of the Massachusetts fine-paper plants it acquired through its just-closed purchase of Fox River Paper. The Georgia-based company says the plant wasn't profitable and that the closure should ultimately save the company $5 million a year. Shares were losing 82 cents, or 2.2%, to $37.18.

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