Health indices dabbled in green Thursday as a variety of companies reported encouraging earnings and optimistic outlooks. First, the exception: The Food and Drug Administration refused to accept Medicis Pharmaceutical's ( MRX) application for anti-wrinkle treatment Reloxin, requesting more information. The company, which intends for the product to compete with the likes of Allergan's ( AGN) Botox, saw shares fall $1.06, or 4.9%, to $20.73. Shares of competitor Allergan were up $3.10, or 4.8%, to $67.47. Post-news Medicis suffered a downgrade from JP Morgan analyst Adam Greene, who changed his rating for the stock to neutral from overweight. In earnings, Accuray ( ARAY) dove $5.48, or 36.6%, to $9.50 Thursday after the company gave second-quarter results shy of expectations and cut its full-year sales outlook. Accuray said that because of credit market issues fewer customers ordered its CyberKnife robotic surgery system, used to aim radiation at tumors in difficult-to-target parts of the body. The company reported fiscal second-quarter earnings of $2.3 million, or 4 cents a share, vs. a loss of $7.3 million, or 45 cents a share, a year ago. (The recent quarter includes stock-based compensation costs of 7 cents a share.) Revenue rose to $52 million from $26.3 million in the fiscal 2007 quarter, but still fell short of analysts' estimates as the Thomson Financial consensus target was for 9 cents per share on revenue of $58.2 million. Looking ahead, Accuray now expects $210 million to $230 million in sales for the year ending in June, down from $250 million to $270 million. With shares moving in the opposite direction, Celgene ( CELG) reported earning $75.4 million, or 18 cents a share, vs. $22.9 million, or 6 cents a share, in the year-ago quarter. On an adjusted basis, the company earned $132.8 million, or 31 cents a share, on revenue of $414.6 million, a 51% rise over the year-ago quarter. Analysts were looking for 31 cents a share on $390.9 million in revenue. Celgene's revenue was bolstered by sales of multiple myeloma drug Revlimid, which doubled year over year to $247.4 million. Looking ahead, the company said it expects 2008 earnings-per-share growth of about 45% to between $1.50 and $1.55 on revenue of about $1.8 billion, not taking into account contributions from its $2.9 billion acquisition of Pharmion Corp. Analysts expect full-year earnings of $1.54 a share on revenue of $2.03 billion. Celgene was trading up $1.95, or 3.6%, to $55.92. Also on the uptick was ImClone Systems ( IMCL), which suffered litigation charges but still managed to beat estimates. The company reported a loss of $19.9 million, or 23 cents a share, compared with a profit of $46.6 million, or 53 cents a share, in the 2006 period. Excluding patent litigation settlement charges and other items that translated to 45 cents a share, the company said it earned 41 cents a share. Revenue increased 14.5% to $151.4 million, helped by sales of cancer drug Erbitux totaling $371 million. Analysts polled by Thomson Financial expected earnings of 27 cents a share on revenue of $146.9 million. On Thursday, shares added $1.63, or 3.9%, to $55.92. Celgene and ImClone are both components of the Amex biotechnology index, which was up 6.57, or 0.9%, at 748.38. Meanwhile, Bristol-Myers Squibb ( BMY) reported a fourth-quarter loss of $133 million, or 7 cents a share, vs. a loss of $170 million, or 9 cents a share, in the year-ago quarter. On an adjusted basis, the company reported earning $654 million, or 33 cents a share, vs. $344 million, or 18 cents a share, in the year-ago quarter, on sales of $5.4 billion. Analysts surveyed by Thomson Financial were expecting 34 cents a share on revenue of $5.24 billion.
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).