BOSTON ( TheStreet) -- KV Pharmaceuticals ( KV) was the best-performing drug/biotech stock in the third quarter. The troubled drugmaker's stock price rose 185%, sparked by U.S. regulatory approval to re-launch products that had been pulled from the market earlier due to manufacturing problems. Bookending KV Pharma's resurgence was the poor performance of Icagen ( ICGND), which lost 59% of its value in the third quarter after an experimental epilepsy drug encountered safety problems during a clinical trial. Overall, the Nasdaq Biotechnology Index rose 12% in the third quarter, matching the performance of the Nasdaq and beating slightly the 11% gain made by the S&P 500. Like the market overall, August and September were especially good months for biotech and drug stocks. Acquisitions helped two other drug stocks run to the top the quarter's best-performance list. Zymogenetics ( ZGEN) closed the quarter up 141% due to Bristol-Myer Squibb's ( BMY) $885 million, or $9.75-a-share, takeover offer in September. Likewise, Osteotech ( OSTE) shares were up 126% on a $6.50-a-share buyout from Medtronic ( MDT) in August. Rounding out the top 10 best-performing biotech/drug stocks in the third quarter, according to CapitalIQ: Nile Therapeutics ( NLTX) (+110%), Ista Pharmaceuticals ( ISTA) (+94%), Medicines Co. ( MDCO)(+94%), Savient Pharmaceuticals ( SVNT) (+83%), Amicus Therapeutics ( FOLD) (+78%), Oncolytics Biotech ( ONCY) (+77%) and Cypress BioSciences ( CYPB) (+76%). Arena Pharmaceuticals ( ARNA - Get Report) was the second-most damaging stock for drug and biotech investors in the just-closed quarter, losing 56% after a U.S. advisory panel voted down the company's weight-loss drug lorcaserin. Vermillion ( VRML - Get Report) shares fell 56% in the quarter on the poor launch of its ovarian cancer test. Rounding out the quarter's worst biotech and drug stocks, according to CapitalIQ: Molecular Insight Pharmaceuticals ( MIPI) (-50%), Xoma ( XOMA)(-50%), AMAG Pharmaceuticals ( AMAG) (-49%), AspenBio Pharma ( APPY) (-47%), Idenix Pharmaceuticals ( IDIX) (-36%), Epicept ( EPCT) (-36%) and DARA BioSciences ( DARA) (-34%). --Written by Adam Feuerstein in Boston. >To contact the writer of this article, click here: Adam Feuerstein. >To follow the writer on Twitter, go to http://twitter.com/adamfeuerstein. >To submit a news tip, send an email to: firstname.lastname@example.org.