Health stocks spent most of the day lower with the broader market Tuesday. The Amex pharmaceutical index fell 1% to 300.44; the Amex biotechnology index tracked 0.7% lower to 752.09; and the Nasdaq biotechnology index sank 0.9% to 802.39. Merck ( MRK) got the downward action started early Tuesday on news the Food and Drug Administration rejected MK-0524A, the drugmaker's proposed new cholesterol treatment. Merck shares sank 10.6% to $37.04 on heavy volume. More declines came from biotech companies Genentech ( DNA) and Biogen Idec ( BIIB), which disclosed negative study data for Rituxan. In a late-stage-study, patients with systemic lupus erythematosus (SLE), commonly called lupus, failed to respond any better to Rituxan vs. placebo after one year of treatment. None of the study's six secondary endpoints was successful, either. Genentech shares fell about 7% to $68.06, while Biogen lost about 5% to $61.45 on heavier-than-usual volume. Idenix Pharmaceuticals ( IDIX) also lost ground Tuesday, falling some 9% to $6.58. The biotech company posted a wider first-quarter loss of $20.5 million, or 36 cents a share, vs. a loss of $11.6 million, or 21 cents a share, in the prior-year quarter. Revenue came in at $2 million, a sharp decline from the $24.8 million the company generated a year ago. In addition, Susquehanna Financial downgraded Idenix shares from positive to neutral. The stock sank about 10% to $6.53. Also suffering from a downgrade Tuesday was Tenet Healthcare ( THC), which Deutsche revised from buy to hold with a $7.25 price target. Shares of the hospital operator fell 2.2% to $6.55.
Among the winners in the health sector Tuesday was Angiotech Pharmaceuticals ( ANPI), shares of which rose about 12%. The Vancouver-based drug and medical-device company, which last week halted patient enrollment in a study of its Vascular Wrap for artery disease due to safety issues, said Tuesday it is exploring "alternatives for the future funding and development" of the product, including potential partnerships. The company posted an adjusted net loss from continuing operations of $3.9 million, or 5 cents a share, in the first quarter. The stock, which took a hard hit last week, climbed 34 cents, or 12.8%, to $2.99. Another win came courtesy of Hanger Orthopedic Group ( HGR), shares of which climbed more than 8% on quarterly results and forward guidance. The Bethesda-based company, which distributes orthotic and prosthetic devices and operates related care centers, posted first-quarter net income of $3.6 million, or 12 cents a share, double the $1.8 million, or 6 cents a share, it posted a year ago. Hanger increased its full-year EPS guidance by a nickel to a range of 75 cents to 77 cents in light of more favorable interest rates. The stock traded up 8.7% to $11.58.