Health stocks generally mirrored the action in the rising broader-market indices Friday. Leading the sector's winners was Panacos Pharmaceuticals ( PANC).

The biotech company late Thursday posted a narrower than-expected third-quarter loss of 15 cents a share. It also announced preliminary results from a phase IIb trial of oral HIV therapy bevirimat in HIV patients that have grown resistant to drugs. The results of the 300-mg study support increasing the amount used to determine the type of dose levels to be used in pivotal clinical trials in 2008.

Today, Caris & Co. upgraded Panacos from average to buy with a $3.50 price target. Shares, which opened Friday on a gap higher, were up 69 cents, or 36.5%, at $2.58.

OSI Pharmaceuticals ( OSIP) gained 11.6% after the biotech company swung to a third-quarter profit. OSI late Thursday reported net income of $29.6 million, or 49 cents a share, compared to a loss of $21.3 million, or 37 cents a share, a year ago. Revenue surged 77% to $100.4 million from $56.8 million last year. Shares, which opened Friday on a gap higher, continued climbing $4.32, to $40.98.

On the losing side in earnings was Cardica ( CRDC), which posted a fiscal first-quarter net loss of $3.7 million, or 27 cents a share, narrower than the loss of $3.6 million, or 37 cents a share, it posted a year ago. Revenue climbed to $1.3 million from $471,000 last year. Cardica reiterated its full-year fiscal 2008 guidance of a net loss of $16 million to $18 million on revenue of $6 million to $8 million. Shares were trading down $1.79, or 13.6%, at $11.36.

Also trading lower Friday was Immucor ( BLUD), which is under investigation by the Federal Trade Commission to determine whether the company violated federal antitrust laws. The lab-equipment maker said it received a letter from the FTC requesting certain documents and information related to three acquisitions Immucor made between 1996 and 1999 and "concerning Immucor's product pricing activities since then." Share were down $3.17, or 9%, at $32.08.

A smattering of buy ratings from Wall Street also played a large role in the success of the day's health winners.

Theravance ( THRX), which posted a narrowed third-quarter loss late Thursday, was upgraded Friday by Stanford Research from hold to buy with a $34 price target. The stock was up 52 cents, or 2.3%, at $23.58.

Also climbing higher on raised analyst ratings were Alexion Pharmaceuticals ( ALXN), which was upgraded by Credit Suisse from neutral to outperform; as well as Five Star Quality Care ( FVE) and Kindred Healthcare ( KND), both of which Jefferies & Co. upgraded from hold to buy.

Not all analyst action lent itself to the upside. Banc of America downgraded Eli Lilly ( LLY) from buy to neutral with a $56 price target. As reported Thursday, Lilly halted two trials of blood clot preventive Prasugrel that sent shares of the drugmaker lower. The latest downgrade kept the stock in the red Friday, down 0.3% at $52.25.

Covance ( CVD), which posted a rise in third-quarter profits Thursday only to lose some ground Friday after First Analysis Securities lowered the stock from overweight to equal-weight. The stock was trading down 0.8% at $82.81.

The Nasdaq Biotechnology index was up 1.2% at 888.77; the Amex Biotechnology index was 1.2% higher at 836.53; and the Amex Pharmaceutical index was lately 0.2% higher at 346.55.

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