Health stocks sluggishly started out the week with regulatory approvals but light volume and relatively flat indices. Of the approvals, Biogen Idec ( BIIB) said Monday that the Food and Drug Administration cleared its Tysabri for moderate to severe Crohn's disease. The drug, which is also used to treat multiple sclerosis, is now indicated as a treatment for patients who've unsuccessfully tried conventional treatment for the disease and will be available by the end of February, according to the company. About 500,000 people in the U.S. have the disease. Biogen was trading up $1.07, or 1.8%, at $60.09. Then King Pharmaceuticals ( KG) said it received FDA approval for revised labeling for its Thrombin JMI product, which is used to control surgical bleeding. The new labeling recognizes new manufacturing processes that reduce a protein, bovine factor V, which can cross react with the human counterpart and cause clinically significant bleeding. Shares rose 57 cents, or 5.1%, to $11.74. Teva ( TEVA) also received tentative FDA approval on Monday, but shares were headed in the other direction. The agency tentatively approved Teva's generic version of Eisai's Alzheimer's treatment Aricept. The company is currently involved in patent litigation with the product, but anticipates full approval by April 26. Separately, the company said it is considering selling its animal health business and has retained Bear Stearns as a financial adviser. The company also suffered a downgrade; HSBC Securities lowered its rating for the stock to neutral from overweight. Shares were trading down 61 cents, or 1.3%, at $47.37.
Schering-Plough ( SGP) and Merck ( MRK) were both on the decline after the companies' ENHANCE study showed no difference in Vytorin, or Zetia plus a statin, to reduce buildup in arteries compared with a statin alone. Schering gave up $2.20, or 7.9%, to $25.53, while Merck gave up 72 cents, or 1.2%, to $59.83. Both stocks are components of the Amex pharmaceutical index, which was down 2.5, or 0.7%, at 351.92. Also on the decline, Seattle Genetics ( SGEN) said Monday that it plans to sell 10 million shares to raise cash, although it didn't say how much cash or what it would be used for. J.P. Morgan Securities and UBS Investment Bank are underwriting the offering, and the company intends to allow the banks to buy an additional 1.5 million to the banks to cover over-allotments. Shares were trading down $1.40, or 12%, at $10.29. WellCare Health Plans ( WCG) added $9.40, or 20%, to $56.39, after the managed health care company disclosed post-close Friday in a Securities and Exchange Commission filing new contracts with the Centers for Medicare and Medicaid Services for several states, including Connecticut, Georgia, Florida, Illinois and Louisiana. WellCare anticipates 11,000 more members, vs. an expected loss of 5,000 members.