Health stocks sputtered Tuesday, with a few exceptions including buyout target ViaCell ( VIAC). The biotech company bounded $2.41, or 50.5%, to $7.18, after announcing Monday that it will be acquired by PerkinElmer ( PKI) in a transaction worth about $300 million. Waltham, Mass.-based PerkinElmer dropped 95 cents, or 3.2%, to $28.91. After aggressive pushing by shareholders, PDL BioPharma ( PDLI) finally caved and said its board will actively seek offers to sell the company. Also, CEO Mark McDade, who had previously resigned effective Jan. 1, is now stepping down immediately. The board's Patrick Gage will be taking over in the interim. The board elected Karen Dawes to serve as chair, replacing Gage. Last week, Highland Capital Management, which owns a 4.7% stake in PDL BioPharma, followed in fellow shareholder Third Point's footsteps and called for PDL's board to sell the company and Gage and McDade to resign immediately. Investors seemed enthusiastic with the progress, sending the stock up $1.87, or 8.8%, to $23.24. The stock is a component of the Amex Biopharmaceutical Index, which was down 2.20 points, or 0.3%, to 828.89. Also, AngioDynamics ( ANGO) rose 59 cents, or 3%, to $20.40. The company reaffirmed its fiscal 2008 outlook after Monday's close and said net income was up 25% year-over-year to $2.38 million in the first quarter of 2008. Sales climbed 85% compared to the year-ago quarter to $3.8 million. Elsewhere, Isis Pharmaceuticals ( ISIS) received approval from antitrust regulators for a previously announced collaboration with Johnson & Johnson ( JNJ) unit Ortho-McNeil for joint discovery of new treatments for metabolic diseases. Separately, Isis received a $5 million milestone payment from Johnson & Johnson for initiation of a phase I study on ISIS 325568. Isis edged up 23 cents, or 1.5%, to $15.49, while J&J was down 9 cents, or 0.1%, to $66.05. In the other direction, Onyx Pharmaceuticals ( ONXX) was downgraded by Bear Stearns to peer perform from outperform Tuesday. The analyst has a price target of $45 for Onyx, which receded $1.20, or 2.7%, to $42.71. "While we expect solid off-label use of Nexavar in HCC liver cancer into year-end and a strong launch in HCC in 2008, we believe that near-term upside may be limited for new investors," the analyst writes. Additionally, Credit Suisse analyst Michael Aberman downgraded Biogen ( BIIB) to underperform from neutral. Shares were trading down $2.28, or 3.4%, to $65.66 after closing at $67.94 Monday. Aberman said rumors that have driven up the stock's share price are unlikely to be validated. He also said Biogen's management may be unrealistic about sales expectations. Aberman did raise his price target to $59 from $53.
Stocks soar as the gross domestic product rises at an annualized rate of 3.5% in the third quarter and continuing jobless claims fall. Gregg Greenberg recaps the action in The Real Story video (above).