Health stocks sagged with the broader market Tuesday despite better-than-expected earnings from biotech and pharmaceutical companies. Biogen Idec ( BIIB) became the latest big biotech, following Genentech ( DNA) and Gilead ( GILD), to post solid third-quarter product sales. On an adjusted basis, Biogen earned 98 cents a share, up from 58 cents in the year-ago quarter, on revenue of $1.09 billion. Analysts, on average, were expecting 89 cents a share on $1 billion in revenue, according to Thomson Reuters. However, shares declined 2.4% to $46.35 as investors weighed comments by management regarding Biogen's goal for patients on the MS drug Tysabri. The company said growth would have to accelerate in order to reach 100,000 patients on the drug by 2010, although it is sticking to the target. Pfizer ( PFE) also reported a quarterly profit beat, but the drugmaker lowered the upper end of its earnings guidance for the year as it continues to work on its cost-cutting initiatives. On an adjusted basis, the company earned 62 cents a share in the latest quarter and had revenue of $11.97 billion. Analysts had predicted a profit of 60 cents a share on $12.01 billion in revenue. Shares were gaining 1.6% at $17.61. Elsewhere, Schering-Plough ( SGP) reported a 23% drop in third-quarter earnings in part due to a continuing decline in its cholesterol drug joint venture sales. But the results surpassed expectations on the top and bottom line. Shares rose 1.7% to $14.75. Pfizer and Schering-Plough are both components of the Amex Pharmaceutical index, which was down 1.9% at 265.72.
Aside from earnings, there were a few upgrades in the biotech space on Tuesday. UBS upped its rating for Invitrogen ( IVGN) to buy from neutral. The company is set to report its third-quarter results after the close. Shares were up 19 cents, or 0.6%, at $30.69 ahead of the release. Also, Leerink Swann upgraded AMAG Pharmaceuticals ( AMAG) to outperform from market perform. AMAG's shares were up $1.69, or 5.2%, at $33.93.