Health indices were relatively flat ahead of the weekend -- downgrades and a regulatory investigation suppressed some stocks while business updates fluffed up others.

For a second day, shares of NPS Pharmaceuticals ( NPSP) were on the decline. The company on Thursday reported disappointing results for its short bowel syndrome drug Gattex. Two analysts subsequently downgraded NPS on Friday.

Jefferies analyst Adam Walsh reduced his rating to hold from buy, and reduced his price target to $4.50 from $7. Oppenheimer analyst Jack Hu downgraded the stock to neutral from buy and reduced his price target to $6 from $12. NPS fell another 3.8% to $4.05 on Friday.

Then, a Bear Stearns analyst downgraded Momenta Pharmaceuticals ( MNTA) to underperform from peer perform. In light of a new Food and Drug Administration policy, the analyst said the launch of the company's drug candidate M-enoxaparin could be delayed until mid-2008. Momenta gave up 71 cents, or 5.4%, to $12.39.

Momenta and NPS are both components of the Nasdaq biotechnology index, which was up nearly 1% at 895.51.

Also before the weekend, Stryker ( SYK), Zimmer Holdings ( ZMH), Smith & Nephew ( SNN) and Medtronic ( MDT) said Friday that the Securities and Exchange Commission is conducting an informal inquiry into possible company violations of the Foreign Corrupt Practices Act, which outlaws bribing foreign officials to obtain or retain business.

All firms said they would cooperate with the probe and do not believe they broke the law. (In September, federal prosecutors settled with five medical-device companies for a combined $311 million after an investigation regarding shady recompense structures for product preference.)

Stryker was trading 1.1% higher at $73.92; Zimmer lost 2% at $82.95; Smith & Nephew edged down 0.3% to $62.17; and Medtronic gave up just 0.2%, to $56.33.

Elsewhere, Obagi Medical Products ( OMPI) said Friday its public stock offering (expected to close on Oct. 17) has priced at $20. The company, which makes prescription skin care products, plans to offer 800,000 shares, and a group of stockholders will sell 5.5 million shares. Obagi Medical Products expects to raise about $14.3 million from its portion of the offering. A selling stockholder has also granted the underwriters an option to buy up to 945,000 additional shares to cover any overallotments. Shares rose 1.8% to $20.95.

Last, Trimeris' ( TRMS) chief operating officer, E. Lawrence Hill, and chief financial officer, Daniel Ratto, who joined as temporary consultants to turn the company around after its previous executives left, will leave Jan. 2. They were brought on to prepare the company for the studies of its AIDS drug, T-1144. Trimeris will file for permission to start trials on T-1144 in the first half of 2008. A 19% shareholder, investment firm HealthCor wants Trimeris to reconsider plans to develop T-1144, and look into selling the company. Trimeris has made no decision on who will lead the company after Jan. 2. Shares gained 4.6% to $7.90.

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