Health indices were flat midweek after an array of team-ups, regulatory actions and analyst opinions. Bristol-Myers Squibb ( BMY) and ImClone ( IMCL) announced an agreement with Merck KGaA to codevelop and comarket Erbitux in Japan for the treatment of metastatic colorectal cancer (as well as any other cancers the parties agree to pursue.) According to the agreement, Merck KGaA will receive 50% of the profit/loss from sales in Japan, and ImClone and Bristol-Myers will each receive 25%. In addition to its percentage of profits, ImClone will receive from Merck KGaA a royalty equal to 4.75% of total net sales in Japan. Bristol-Myers shares climbed 2% to $29.83, and ImClone rose 2.3% to $46.81. The Food and Drug Administration approved Merck's ( MRK) expanded labeling for Januvia for type II diabetes, indicated as an adjunct to diet and exercise to improve blood-sugar control, however, the agency had the Warnings and Precautions on the expanded labeling updated to include post-marketing reports of hypersensitivity reactions in patients treated with Januvia. Merck rose 0.7% to $53.42. Also, the FDA issued a warning to Exact Sciences ( EXAS) on Wednesday saying the company needs to apply for approval of its colorectal cancer screening technology. Exact Sciences said the agency's office of In Vitro Diagnostic Device Evaluation and Safety sent the company a warning letter, but that it was surprised to receive it because it has been in discussions with the FDA. It plans to file an application for approval once it has more details on regulatory requirements.
Exact Sciences sells the commercial stool-based DNA test in collaboration with Laboratory Corp. of America Holdings ( LH). Exact Sciences shares fell 21.6%, to $4.72, while Laboratory Corp. was trading down just 0.2% at $76.27. On the earnings side, Abbott Laboratories ( ABT) reported
beating estimates by a penny , before items, at 67 cents a share. Charges took some of the oomph out of the GAAP numbers, however. The company earned 46 cents a share, after items -- flat with the previous year. Shares were down 77 cents, or 1.5%, at $51.20. Forest Labs ( FRX), which reported an earnings miss on Tuesday, declined another $1.23, or 3.2%, to $37.34 on Wednesday. Deutsche Securities changed its price target for the stock to $42 from $45, and BMO Capital Markets lowered its price target to $43 from $51. In the other direction, Lehman Brothers upped its price target for Illumina ( ILMN) to $60 from $55. Nonetheless, the stock was down 2.5% at $58.80. Abbott, Forest Labs and Merck are all components of the Amex Pharmaceutical index, which was down 0.1% at 347.58.