Biotech stocks were mostly higher Tuesday, as a buyout in the space and general positive sentiment outweighed several negative earnings reports.

CollaGenex ( CGPI) surged after Galderma Pharma agreed to buy the company for $420 million. Galderma will pay $16.60 a share, a 30% premium to the stock's Monday closing price. The deal is expected to close before the end of the second quarter.

CollaGenex shares surged $3.53, or 28%, to $16.33. The stock was among the top movers of the Nasdaq biotechnology index, which was up 16.74, or 2.1%, to 806.83.

Also up was hospital owner Tenet Healthcare ( THC), which posted a sharply narrowed fourth-quarter loss . The company reported a loss of $75 million, or 16 cents a share, narrowed from $386 million, or 82 cents a share in the year-ago period. Excluding items, the company would've reported a loss of 2 cents a share. Analysts polled by Thomson Financial expected a los of 3 cents a share.

The company also posted improved hospital admissions and offered a stronger-than-expected guidance. Shares advanced 53 cents, or 12.4%, to $4.81.

Heading the opposite direction, Healthways ( HWAY) plummeted 34% after the health care programs company scaled back its estimates for 2008. The company now expects earnings of $1.50 to $1.55 a share, on revenue of $720 million to $740 million. Healthways had previously predicted a profit of $1.77 to $1.86 a share and revenue of $782 million to $815 million.

The cut is due to slower-than-projected enrollment in a new health support program, the company said, based on issues with one large health plan customer and the expectation that two previously anticipated contracts will not materialize during this fiscal year.

Friedman Billings lowered its price target for Healthways to $45 from $65 following the company's announcement. Shares fell $14.36 to $30.99.

Human Genome Sciences ( HGSI) shares fell 9% after the company reported a steeper-than-expected quarterly loss. The biotech outfit posted a loss of $92.9 million, or 69 cents a share, compared with a loss of $66.9 million, or 50 cents a share, a year earlier. The loss in the recent quarter included $16.9 million, or 13 cents a share, in expenses related to the licensing and collaboration agreement with Aegera Therapeutics.

Revenue rose 25% to $12.5 million from $10 million. Analysts polled by Thomson Financial expected a loss of 49 cents a share on revenue of $11.4 million.

Looking ahead, Human Genome Sciences expects full-year revenue of $160 million or higher, in line with analysts expectations. Shares were down 61 cents to $5.91.

Shares of Natus Medical ( BABY) also were hurting after the company's fourth-quarter report. The maker of medical products for babies reported earnings of $2.8 million, or 12 cents a share, up from $512,000, or 2 cents a share, in the prior-year period.

Excluding acquisition-related charges, Natus' profit was $3.8 million, or 17 cents a share, compared with 2.9 million, or 13 cents a share, in the year-ago quarter. Revenue climbed 19% to $34.2 million. Analysts anticipated earnings of 18 cents a share on revenue of $33.8 million. Shares of Natus lost 63 cents, or 3.3%, to $18.55.

Elsewhere, Onyx Pharmaceuticals ( ONXX) shares slipped after the drugmaker said that Hollings Renton will officially step down as president, CEO and chairman at the end of next month. Renton, who announced in October that he planned to retire, will be replaced by N. Anthony Coles the current CEO of NPS Pharmaceuticals ( NPSP), effective March 31.

Onyx shares gave up 99 cents, or 3.3%, to 29.01, and NPS shares dropped 9 cents, or 2.2%, to $3.98.

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