Buyout fever launched biotech stocks higher Thursday, pushing earnings to the back burner for a day.

The Amex biotechnology index rallied 4.1% to 864.14. The rally got started early when Bristol-Myers Squibb ( BMY) announced a $60-a-share bid to buy ImClone ( IMCL), valuing the biotech company at $5.2 billion.

Shares of ImClone, a component of the Nasdaq biotech index, soared $17.49, or 37.7%, to $63.93 while Bristol shares gave up 39 cents, or 1.8%, to $63.93.

The buyout enthusiasm spilled over to other stocks as investors pondered the possibility other such Big Pharma-biotech mergers. Amylin ( AMLN) and Onyx ( ONXX) gained 14.8% and 10%, respectively.

In clinical and regulatory news, Genmab and GlaxoSmithKline ( GSK) reported positive preliminary results from a late-stage trial on ofatumumab for patients with chronic lymphocytic leukaemia, or CLL, and said they plan to file for U.S. and European regulatory approval by the end of the year.

If approved, the drug could compete with Genentech ( DNA) and Biogen Idec's ( BIIB) Rituxan.

Glaxo shares ended essentially flat, while Biogen Idec fell $1.51, or 2%, to $69.76 and Genentech edged up 25 cents, or 0.3%, to $95.25.

A legal and regulatory item, generic-drug maker Barr Pharmaceuticals ( BRL) is striking again. The company said it is challenging a patent held by Belgian drug maker UCB Inc. for 5-mg tablets of hay fever treatment Xyzal. UCB filed a patent infringement lawsuit against Barr on Wednesday. The drug was developed by Sepracor ( SEPR) and licensed to UCB. Sanofi-Aventis ( SNY) markets it in the U.S.

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