Health stocks came off the holiday weekend with modest gains, though Onyx Pharmaceuticals ( ONXX) was left choking on a clinical trial news.
Onyx and partner Bayer AG said Tuesday that they halted a late-stage trial of their drug Nexavar in lung cancer patients after an independent monitoring board concluded that the study had no chance to succeed. Onyx also said on a conference call that it is unable to forecast a profit for 2008. Shares shed $10.69, or 24%, to $34.25. Elsewhere, Medivation ( MDVN) said Tuesday its 2007 loss more than doubled due to an increase in operating expenses, though the results were better than Wall Street expectations. The biopharmaceutical company reported a loss of $31.7 million, or $1.14 a share, widened from a loss of $15.4 million, or 63 cents a share, in 2006. Analysts anticipated a loss of $1.17 a share. Shares of Medivation rose 76 cents, or 4.4%, to $17.86 on less-than-average volume. Onyx and Medivation are both components of the Nasdaq biotechnology index, which was up 1.65, or 0.2%, to 797.12. Elsewhere, UBS analyst Annabel Samimy downgraded Pharmasset ( VRUS) to neutral from buy, but raised her price target to $23 from $17 a share. She believes that the value of the company's hepatitis B and C drugs, clevudine and R7128, is now reflected in the stock price. Shares of Pharmasset fell $1.53, or 7.1%, at $19.97. Among upgrades, WR Hambrecht raised Watson Pharmaceuticals ( WPI) to buy from hold and BMO Capital Markets upgraded UnitedHealth ( UNH) to outperform from market perform. Watson tacked on 45 cents, or 1.7%, to 28.40, and UnitedHealth shares added 55 cents, or 1.1%, at 48.28. Also, Thomas Weisel upgraded Cephalon ( CEPH) to overweight from market-weight with a $77 price target. Shares advanced 97 cents, or 1.6%, at $61.59. Separately, Cephalon said the Food and Drug Administration accepted its new drug application for Treanda for injection to treat of patients with indolent B-cell non-Hodgkin's lymphoma who've progressed during or following standard treatment. An FDA decision is expected by Oct. 31. And last, on the falling end, Given Imaging ( GIVN) said late Monday that the FDA issued it a "not substantially equivalent" letter that indicated the agency will not approve the company's PillCam Colon imaging device. Given Imaging, which makes tiny diagnostic cameras, said the development isn't likely to affect 2008 revenue. The company said it is evaluating its options to bring PillCam Colon to the U.S. market as quickly as possible. Shares fell $2.15, or 13.9%, to $13.30. Given Imaging is 18.3% held by Israeli company Elron Electronic Industries ( ELRN). Elron was trading down $1.17, or 10.9%, at $9.53.
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).