After a strong run from September to November the Biotech HOLDRS Index (IBH) has pulled back significantly. The index may be poised to test support at the 200 day moving average. If support at 180 can hold the index should attempt another ascent toward the previous highs.

Biotechnology company MedImmune Inc. said Thursday it plans to develop a monoclonal antibody to treat inflammatory diseases as part of a license agreement with Japan Tobacco Inc. -- maker of tobacco products, food and pharmaceuticals.

MedImmune's initial focus will be on an antibody to inhibit receptors controlling immune responses. The aim of the program is to develop treatments for inflammatory diseases and autoimmune disorders, such as rheumatoid arthritis.

Japan Tobacco will receive an upfront payment, milestone payments and royalties on future marketed products. MedImmune did not disclose the amount of the upfront payment or details on possible future payment arrangements. Japan Tobacco will have exclusive development and marketing rights for in Japan, while MedImmune will have exclusive rights worldwide for this antibody and others that may be developed under the agreement.

MedImmune shares fell 11 cents to $32.24 in morning trading on the Nasdaq.

Biopharmaceutical company Oxigene Inc. said Wednesday its antitumor drug candidate passed a midstage study aimed at identifying the dose necessary to cut off blood flow to tumors.

The drug candidate, called CA4P, also proved safe and effective in the randomized, open-label Phase II study involving 13 patients, the company said. It was given in doses of 45 milligrams or 63 milligrams, followed by chemotherapy drugs paclitaxel and carboplatin.

The company said imaging confirmed that blood flow shutdown was observed in a wide variety of malignancies and safety was in line with expectations.

The results will be presented at an upcoming scientific meeting.

Shares of Oxigene rose 33 cents, or 7.1 percent, to $4.95 on the Nasdaq. The stock has traded between $2.82 and $5.88 over the last 52 weeks.

Biotechnology company ImmunoGen Inc. said Tuesday it agreed to give French drug maker Sanofi-Aventis SA expanded access to its tumor-activated prodrug technology, earning $500,000.

Sanofi-Aventis already had the right to use the technology, which is used to produce antibody based cancer-cell killers, for targets included in an existing research collaboration between the companies.

The new agreement gives Sanofi-Aventis the option to extend the agreement beyond the scope of the existing collaboration and license the right to use the technology to develop new products.

Financial details of the agreement were not disclosed.

Shares of ImmunoGen rose 7 cents to $5.27 in morning trading on the Nasdaq.

Praecis Pharmaceuticals Inc. said Thursday the company has entered in an agreement to be acquired by GlaxoSmithKline plc for approximately $58.4 million.

Waltham, Mass.-based Praecis and U.K.-headquartered GlaxoSmithKline said in a joint statement that GSK will acquire all outstanding shares of Praecis' common stock for a cash purchase price of $5.00 per share.

Praecis' PPI-2458 compound is in an early stage human clinical trial to treat non-Hodgkin's lymphoma and solid tumors.

"Praecis has created novel therapeutic programs and innovative chemical-synthesis and screening technology that will complement our own discovery capabilities," said Allen Oliff, Senior Vice President, Molecular Discovery Research, GSK.

Biotech drug developer Kosan Biosciences Inc. said Wednesday that Pfizer Inc., the world's largest drugmaker, agreed to help develop a compound to treat gastrointestinal diseases.

Shares of Kosan rose 17.8 percent, to $5.75 in premarket electronic activity, after closing Tuesday at $4.88 on the Nasdaq. Shares have traded between $2.88 and $6.19 over the past 52 weeks.

Under the agreement, Pfizer will pay Kosan $12.5 million upfront and Kosan can receive milestone payments of up to $72.5 million. The agreement gives Pfizer worldwide rights to the compound. Kosan stands to make up to $250 million including royalties if the compound makes it to market for one indication. Kosan booked revenue of $13.4 million in 2005.

The companies will develop KOS-2187, a compound that stimulates the production of motilin, a hormone that is secreted by the small intestine and helps with movement in the gastrointestinal tract. Both companies will collaborate on filing regulatory paperwork to begin early stage clinical trials for the drug.

The compound has been shown in lab tests to be a good candidate as a treatment for gastro-esophageal reflux disease, or chronic heartburn, and diabetic gastroparesis, a condition when the stomach takes too long to empty its contents.

Kosan is entitled to other payments and milestones should Pfizer develop the compound for a second use.

Wall Street analysts are largely shrugging off a recent disclosure of deaths from unapproved use of a drug developed and marketed by Genentech Inc. and Biogen Idec Inc.

Late Monday, the Food and Drug Administration said it wants more information on the cancer treatment Rituxan after Genentech and Biogen said two people died while using the treatment for an off-label condition.

The patients were using Rituxan to treat Systemic Lupus Erythematosus, an autoimmune condition, and died from a viral disorder called progressive multifocal leuklencephalopathy, or PML, according to the companies. The drug is approved for treating non-Hodgkins lymphoma and other conditions.

Analysts noted that the drug's association with PML is already listed on its label, and that PML could be caused by other conditions.

"In our view, there is little proof of cause-and-effect as a result of these two reported cases of PML," wrote Rodman & Renshaw's Michael G. King Jr. in a client note. He kept a "Market Outperform" rating and an $87 target price on shares of Genentech.

Credit Suisse's Michael Aberman, meanwhile, said the news could cause delays in approvals for other uses of Rituxan. He kept a "Neutral" rating on Genentech and trimmed his target price to $84 from $85.

"While we do not think this announcement will have an impact on oncology sales, we believe it will change physician perception (whether deserved or not) on the safety of Rituxan in autoimmune disease," wrote Aberman.

But May-Kin Ho of Goldman Sachs sees little impact on Genentech, and said doctors are comfortable with risks associated with the drug.

Baird Equity Research's Christopher J. Raymond likewise said he does not expect the news to have much of an impact. He reiterated a "Neutral" rating and $55 target price on the stock.

Genentech fell 62 cents to $80.34 in premarket trading after closing at $80.96 Monday on the New York Stock Exchange.

Shares of Biogen dropped $2.53, or 5 percent, to $47.70 in early activity after closing at $50.23 Monday on the Nasdaq.

Encysive Pharmaceuticals Inc. said Friday it responded to a Food and Drug Administration request to reformat data in its marketing application for the hypertension drug Thelin.

Shares of Encysive rose 36 cents, or 6.5 percent, to $5.89 in premarket activity, after shedding about 7 percent on Thursday when the company announced it had to reformat the data. Shares have traded between $3.29 and $10 in the last 52 weeks.

The FDA began asking for more data back in July, when many had expected the drug to be approved. Shares dropped about 40 percent in one day to close at $3.69, when Thelin's approval was delayed.

In November, the company responded to FDA's July request.

Thelin is designed to treat pulmonary arterial hypertension, or chronic high blood pressure in the blood vessel that carries oxygen-poor blood to the lungs. The condition causes shortness of breath, decreased activity, and eventually death unless treated with a transplant of the heart, lungs, or both.

Biotech drug maker BioPure (NASDAQ BPUR) said its fiscal fourth-quarter net loss narrowed to $6.3 million, or 13 cents a share, from $8.2 million, or 34 cents a share a year ago. Revenue for the quarter rose 31.4% to $431,000. Biopure also said it has closed its previously announced public offering of stock and warrants raising around $16.6 million for the company. Biopure said it had $6.6 million in cash at the end of October, which, combined with its stock offering, should be enough to fund the company through August 2007.

Savient Pharmaceuticals Inc. said late Tuesday that a federal appeals court ordered Novartis AG unit Sandoz Pharmaceuticals and privately held Upsher-Smith Laboratories not to sell generic versions of Oxandrin until the court can review the case.

A temporary restraining order issued by U.S. District Court for the District of New Jersey against Sandoz and Upsher-Smith was to expire on Tuesday at 5:00 p.m. Savient appealed to the U.S. Court of Appeals for the Federal Circuit in Washington to keep the generic forms of the drug off the market for now.

Oxandrin is an oral anabolic steroid agent that helps patients gain weight after weight loss from surgery, infection or severe trauma. The lawsuit involves five Savient patents on the drug.

Representatives from Novartis and Upsher-Smith were not available for immediate comment.

Peregrine Pharmaceuticals Inc. said Tuesday results from a preclinical study showed a developing cancer treatment decreased tumor growth in mice.

The study involved a mouse equivalent of the company's anti-phospholipid agent bavituximab. Preclinical results showed it reduced tumor growth by as much as 94 percent when used in combination with the chemotherapy drug docetaxel.

Bavituximab binds to a phospholipid, a type of fat normally located inside a cell but which becomes exposed on the outside of the cells that line blood vessels on tumors. The drug candidate is currently in Phase Ia clinical trials to test its safety as a stand-alone treatment and in Phase Ib clinical trials to test its safety when combined with cancer chemotherapy agents.

Shares of Peregrine rose 7 cents, or 5.8 percent, to $1.27 on the Nasdaq in midday trading. The stock has traded between 88 cents and $1.99 over the last 52 weeks.

Indevus Pharmaceuticals Inc. Tuesday said it agreed to acquire Valera Pharmaceuticals Inc. in a stock swap worth about $120 million, plus potential contingent payments.

The two companies also entered into a co-promotion agreement under which Indevus' sales force will co-promote Vantas, a treatment for advanced prostate cancer, in the United States.

Indevus said it will pay $7.75 per share for Valera, a 43 percent premium to its Monday closing price. Valera has traded between $4.49 and $12 over the past 52 weeks and was recently up $2.34 in premarket trading, to $7.75.

The company has also agreed to make contingent payments of up to $3.50 per share based on the achievement of future product milestones.

Indevus said the purchase of Cranberry, N.J.-based Valera, which focuses on urology and endocrinology products, will add to its earnings within two years.

"Upon closing, Indevus' robust product portfolio will include three marketed products, and the combined company anticipates five new product launches within two years, including three products from Valera," said Glenn L. Cooper, chairman and chief executive of Indevus.

Under the co-promotion agreement, Indevus will get royalties of 13.5 percent on sales of Vantas up to a specified unit level and increases to 30 percent above the specified level. For sales of Vantas to specified specialty pharmacy accounts, Indevus will receive royalties of 35 percent. Indevus anticipates beginning to co-promote Vantas in January 2007.

Third-quarter sales of Vantas declined 21 percent to $2.9 million, reflecting decreases in Medicare reimbursement rates plus pressure on unit shipments because of price discounting of a competitive product, Valera said last month.

Indevus shares closed Monday at $7.86 on the Nasdaq, where they have traded in a 52-week range of $3.35 to $8.06.

Biopharmaceutical company NeoPharm Inc. said Monday that in a clinical trial its experimental treatment for malignant tumors of the central nervous system didn't prove to be more effective than an existing treatment.

Shares of the company tumbled on the news, shedding $4.69, or 69.7 percent, to $2.03 in morning trading on the Nasdaq. Earlier in the session, the stock slumped to a fresh 52-week low of $1.80, well below its prior trough of $4.32.

The company said it was evaluating cintredekin besudotox for the treatment of recurrent glioblastoma mulitforme against Gliadel Wafer, which is implanted in the cavity the tumor once occupied after surgery. The wafer is made by MGI Pharma Inc.

Neopharm said its drug didn't show a statistically significant difference in the overall survival cures of patients with the tumors in a Phase III trial.

The company said it would work with its scientists and regulators to decided the best path forward for the drug.

Biotech drug developer Acorda Therapeutics Inc. said Friday it will conduct an additional late-stage trial of its multiple sclerosis treatment based on feedback it received from a meeting with the Food and Drug Administration.

In September 2006, the company said its Fampridine-SR MS drug improved the walking speed in significantly more patients than a placebo in a late-stage clinical trial.

The trial was completed under a Special Protocol Assessment with the FDA, meaning Acorda sat down with officials to design a study that was most likely to yield the best results.

The FDA typically requires two well-controlled studies providing convincing results to substantially prove a drug is effective, according to the company.

Acorda said it will work with the agency to design the second study with a same or shorter duration than its previous late-stage trial.

MannKind Corp., a developer of therapies for diabetes and cancer, on Thursday said it plans a public sale of 20 million common shares priced at $17.42 apiece.

Also, MannKind has agreed to sell $100 million aggregate principal amount of 3.75 percent senior convertible notes due 2013 in an underwritten public offering. The underwriters have a 13-day option to purchase up to $15 million in additional notes to cover overallotments.

Certain officers and directors, including the company's principal stockholder, Chairman and Chief Executive Alfred E. Mann, will purchase about 5.8 million shares in the offering. The underwriters have a 30-day option to buy up to another 3 million shares to cover overallotments.

JPMorgan Securities Inc. and Merrill Lynch & Co. are the joint lead managers and joint bookrunners of both offerings.

MannKind shares rose 39 cents, or 2.2 percent, in premarket activity. The stock closed at $17.42 Wednesday on the Nasdaq.

Biopharmaceutical company Cerus Corp. said Wednesday it is selling $26.1 million in stock to selected institutional investors.

3.9 million shares are being sold at $6.68 apiece. Cerus expects to net $24.3 million from the deal.

The stock is being offered under a shelf registration previously filed with the Securities and Exchange Commission

Banc of America Securities LLC led the deal and Robert W. Baird & Co. was co-lead.

MedImmune, which makes the FluMist influenza vaccine, on Wednesday reaffirmed its financial guidance for the current year and beyond.

The biotechnology company expects to post a 2006 profit -- excluding stock option expenses -- of 17 cents to 22 cents per share on revenue of $1.3 billion. Analysts polled by Thomson Financial, who also exclude stock option expenses, forecast earnings of 19 cents per share on sales of $1.3 billion.

For 2007, MedImmune expects earnings per share of 90 cents to 95 cents on sales of $1.5 billion. Analysts expect a profit of 85 cents per share and sales of $1.45 billion.

The company also confirmed its 2009 financial targets of $2 billion in revenue and net income of $2.00 per share.

StemCells Inc. said Tuesday it promoted Ann Tsukamoto to the newly created job of chief operating officer.

She was previously vice president of research and development at the Palo Alto biopharmaceutical company, which has about 45 workers.

StemCells (NASDAQ STEM) seeks treatments for nervous system and other disorders using human stem cells.

The company also named Stephen Huhn, M.D., as the new boss of its neural program. He's a professor on leave from Stanford University School of Medicine. Maria Millan, M.D., another Stanford medical professor on leave, was promoted to vice president of the company. She's head of StemCells' liver program and its chief medical officer.

Chief Financial Officer Rodney Young was put in charge of the company's administrative functions, including personnel and information technology.

Before Christmas Dinner.....Perform A Background Check
On Your Daughter's Boyfriend

Onyx Pharmaceuticals Inc.'s (NASDAQ ONXX) shares slid 30 percent Monday, the most since October 2004, after the company and partner Bayer AG reported that the cancer drug Nexavar failed to help save lives of patients with advanced melanoma.

The shares fell $5.32 to $12.18 in Nasdaq Stock Market composite trading Monday, after earlier sinking to $11.96. The last time the Emeryville-based company's shares dropped more was on Oct. 25, 2004, when they fell 33 percent.

Nexavar, Onyx's lead product, won U.S. regulatory approval last December for kidney cancer.

Bayer, based in Leverkusen, Germany, previously said Nexavar may bring in more than $1 billion in annual sales if the drug is approved to treat a range of malignancies. The companies are also testing the drug on patients with liver and lung cancers.

Investors had expected robust financial returns because of the size of the skin-cancer market, which is larger than that for kidney cancer, said Jim Reddoch, an analyst with Friedman Billings Ramsey & Co. in Arlington, Va.

"People were holding out for statistical significance," Reddoch said Monday. "There was no evidence that the drug was doing anything on top of the chemotherapy regimen."

Monday's news might limit the number of new uses sought for Nexavar, said Reddoch, who lowered worldwide sales estimates through 2010 to $551 million from $728 million.

The companies plan to continue research on the drug for melanoma even after Monday's results, Arthur Higgins, chief executive officer of Bayer HealthCare, said on a conference call with analysts and investors. Bayer doesn't expect the results to hurt recruitment to Nexavar trials, Higgins said.


Nexavar targets proteins involved in both tumor cell production and the formation of new blood vessels that support cancer cell growth, Onyx's Web site said.

Shares of biopharmaceutical company Gilead Sciences Inc. jumped Monday after a Rodman & Renshaw analyst said Gilead is poised to benefit from a government recommendation that HIV testing become routine.

Analyst Michael G. King Jr. upgraded Gilead's stock to "Market Outperform" from "Market Perform" and set a $76 price target, saying Gilead is best poised to benefit from more testing and identification of HIV and that physicians expect the pool of patients receiving therapy for HIV to increase over the next few years.

Gilead's stock gained $2.17, or 3.3 percent, to $67.39 on the Nasdaq in morning trading. Shares have traded between $50.13 and $70 over the last 52 weeks.

In September, the Centers for Disease Control and Prevention released guidelines recommending that all Americans between the ages of 13 and 64 receive testing for HIV as part of a normal visit to the doctor. The recommendations were made as part of an effort to identify the estimated 250,000 to 300,000 Americans who have the virus and don't know it.

Foster City, Calif.-based Gilead makes several HIV treatments, including Viread, Emtriva and Truvada. Gilead contributes two of three components of a once-a-day HIV treatment the company markets called Atripla, which was cleared by the Food and Drug Administration in July. Bristol-Myers Squibb contributes the third component.

"We are significantly increasing our expectations for sales of Atripla on the basis of our analysis of prescription drug trends since (Atripla's) launch," he wrote in a note to investors.

Health officials place the number of new HIV cases at 40,000 each year, King said. He raised his fourth-quarter sales estimate for Atripla to $172 million from $96 million and full-year estimate to $240 million from $164 million.

The number is expected to rise sharply in 2007, with a forecast of $1.12 billion in revenue.

Shares of biotech company Micromet (MITI) more than doubled on Monday after the biotech got a $10 million milestone payment from Serono on the company's adecatumumab treatment in metastatic breast cancer and prostate cancer.

The Carlsbad, Calif., company said it got the milestone payment on the completion of two Phase 2 clinical trials using the drug.

Adecatumumab is a human monoclonal antibody targeting tumor cells overexpressing the epithelial cell adhesion molecule. Micromet and Serono reported final data for the two Phase 2 studies on Oct. 2. The compound originated at Micromet and is being developed in collaboration between the companies.

Shares rose $2.94 to $4.96.

Dutch biotechnology company Crucell N.V. said Friday it received $230 million in contracts from supranational organizations for its Quinvaxem and Hepavax-Gene pediatric vaccines.

The company did not name the organizations. A supranational organization often involves a group of nations, with one example being the European Union.

Quinvaxem, codeveloped with Novartis, protects against several childhood diseases including diphtheria, tetanus, whooping cough, hepatitis B, and a type of influenza. Hepavax-Gene protects against hepatitis B. The contracts cover the next three years.

American depository shares of Crucell rose 26 cents to $24.40 on the Nasdaq in morning trading.