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.
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).