Inverness Medical Innovations ( IMA) launched a smaller health stock on acquisition news, while other stocks in the sector high-stepped through Tuesday on favorable earnings.

Inverness said Tuesday that it's acquiring HemoSense ( HEM), which makes handheld blood coagulation monitoring systems for patients taking anticoagulant warfarin, in an all-stock deal. Each share of HemoSense common stock will be reimbursed with 0.274192 shares of Inverness common stock, which the companies said represents a 37.5% premium based on the average trading prices of both companies over the last five trading days.

HemoSense bolted $2.68, or 29%, to $11.95, and Inverness gave up 98 cents, or 2.1%, to $45.46.

In earnings news, biopharmaceutical company Acadia ( ACAD) reported a net loss of $10.8 million, or 29 cents a share, compared to a loss of $11.9 million, or 43 cents a share, in the year-ago quarter. Analysts surveyed by Thomson Financial had expected a loss of 39 cents a share. Acadia gained $1.31, or 8.7%, to $16.56.

Also, Mentor's ( MNT) shares perked up from quarterly earnings supported by robust sales of its MemoryGel breast implants. Shares added $6.27, or 15.3%, to $47.26.

Epix Pharmaceuticals ( EPIX) reported a quarterly loss of $18 million, or 55 cents a share, compared to a loss of $3.2 million, or 20 cents a share, in the year-ago quarter. The Thomson Financial consensus target was a loss of 45 cents a share.

But the stock climbed on positive results from a phase IIa study on PRX-08066, a candidate for pulmonary arterial hypertension. The primary endpoints for the study were safety and tolerability. The company said the candidate was generally well tolerated and there were no serious adverse events considered to be related to it, the majority of adverse events being mild or moderate in nature.

Epix said the drug resulted in statistically significant reductions in systolic pulmonary artery pressure. In light of the results, the company plans to conduct a right-heart catheterization study to better define clinical parameters for responders, or data they'll use to narrow patient inclusion criteria in future trials. Shares climbed 29 cents, or 7.9%, to $3.98.

The Nasdaq biotechnology index, which includes Epix, gained 8.12, or 0.99%, to 802.69.

On the falling end, hospital operator Tenet Healthcare ( THC) gave up 94 cents, or 14%, to $4.24 after announcing a drop in admissions and a rise in uninsured patients in its second-quarter results. Tenet's net loss did narrow to $29 million, or 6 cents a share, vs. a loss of $447 million, or 95 cents a share, in the 2006 quarter when government fines pained the company.

Also moving lower on earnings was King Pharmaceuticals ( KG), which delivered an earnings beat but also charges that slashed overall profits. Excluding items, the company earned 48 cents a share, a penny better than Thomson Financial's consensus target. And revenue rose to $542.7 million from $499.6 million. Shares fell 83 cents, or 5%, to $15.77.

More from Investing

OMG, J.C. Penney! What CEO Ellison's Surprising Exit Means for Troubled Retailer

OMG, J.C. Penney! What CEO Ellison's Surprising Exit Means for Troubled Retailer

Micron Shares Soar; Chipmaker Is 'Managing for Profitability' Now, Says Analyst

Micron Shares Soar; Chipmaker Is 'Managing for Profitability' Now, Says Analyst

Facebook CEO Mark Zuckerberg Deflects Tough Questions From European Parliament

Facebook CEO Mark Zuckerberg Deflects Tough Questions From European Parliament

Legal Weed Sales in California Are Off to a Less Than Smokin' Start

Legal Weed Sales in California Are Off to a Less Than Smokin' Start

3 Must Reads on the Market From TheStreet's Top Columnists

3 Must Reads on the Market From TheStreet's Top Columnists