Cephalon Inc. received an approvable letter from the Food and Drug Administration for Fentora, a treatment of breakthrough pain in patients with cancer. Breakthrough pain is a relatively brief but sharp burst of pain that isn't helped by daily pain medication.

The company's shares closed up 11 percent Friday at $60.10.

Fentora is a sugar-free tablet that contains fentanyl, the same active ingredient found in Actiq, Cephalon's cancer pain medicine made as a lozenge attached to a stick that resembles a lollipop.

The FDA issues approvable letters when it wants more information on drugs it believes can be approved.

The FDA indicated in its letter Thursday night that no additional safety or efficacy data for Fentora are required and that the labeling has been essentially finalized.

Cephalon (NASDAQ: CEPH - News) of Frazer, Pa., did not say exactly what information the agency is seeking. The biotechnology company did say it expects to respond to the FDA by the end of July.

"We are pleased with FDA's response and are working closely with the agency to secure final approval of this important new medication," said Dr. Paul Blake, the company's executive vice president of worldwide medical and regulatory operations.

Dendreon (DNDN) shares got a boost Friday after the biotech company announced plans to seek regulatory approval for its proposed prostate cancer drug, Provenge, later this year.

Results from a late-stage study of the drug are slated to be published in next month's Journal of Clinical Oncology, the company announced after Thursday's market close. Dendreon's drug application would be based on a phase III study of men with a type of asymptomatic, metastatic prostate cancer. According to the study, those receiving Provenge survived a median of 4.5 months longer than patients receiving a placebo. Dendreon shares were recently trading up 45 cents, or 10.4%, to $4.78.

Biotech giant Genentech (DNA) received regulatory approval for its vision-loss drug Lucentis.

The drug, intended to treat wet age-related macular degeneration, had been touted among some eye specialists based on a number of clinical trials showing the drug's efficacy, including one that was a head-to-head comparison with an already approved treatment for that indication, Novartis' (NVS) Visudyne. Genentech shares were recently up $2.74, or 3.4%, to $82.87.

Cephalon (CEPH) shares rose 10.8% Friday after the company announced it received an approvable letter from the Food and Drug Administration for the drug Fentora, a treatment for patients with moderate to severe cancer pain.

The FDA sends a company an approvable letter when a drug can be approved, pending the clarification of certain information or the submission of additional data. "FDA has indicated that no additional safety or efficacy data are required and that the labeling has been essentially finalized," Cephalon said. The company intends to submit a response to the agency by the end of July, and the FDA is expected to complete its review within 60 days. Shares were up $5.84, to $60.10.

Shares of cancer drug developer Onyx Pharmaceuticals (ONXX) rose 13% Friday after an upgrade by Banc of America Securities. Earlier this month, Onyx and its partner Bayer (BAY) received fast-track designation for its proposed liver cancer treatment Nexavar. Onyx shares were recently trading up $1.95, to $17.01.

Other big movers on Friday include managed care services company Q-Med (QMED) , down 6.7% to $4.05; and drug developer Barrier Therapeutics (BTRX) , whose shares fell 5.9% to $6.21.

Shares of specialty pharmaceutical company Intermune (ITMN) were up sharply, by 7.9% to $16.61; and Nucryst Pharmaceuticals (NCST) shares were up 9.4% to $12.78.

hares of drugmaker Cephalon Inc. rose 10 percent on Friday after its investigational cancer pain drug moved a step closer to U.S. regulatory approval.

Late Thursday the biotech company said it received an "approvable letter" from the U.S. Food and Drug Administration for Fentora, meaning the agency has requested additional information about the pain medication before it will approve the drug.

But the company said no new studies or data will be required for the treatment, called Fentora, and the labeling issues are mainly agreed upon. It also said the FDA will review Cephalon's response within 60 days.

Analysts called the news positive, given the relative lack of new information sought by the FDA.

The drug is intended to treat intense, rapid-onset pain, known as breakthrough pain, in cancer patients.

Shares of the company rose $5.59, or 10 percent, to $59.87 on Nasdaq in mid-morning trade.

Keryx Kidney Disease Treatment Shows Promising Results in Phase 2 Trial

NEW YORK -- Biotech company Keryx Biopharmaceuticals Inc. said Thursday its mid-stage trial of a kidney disease treatment showed positive results.

The company said the drug, Zerenex, was well tolerated, safe and effective in people with end-stage kidney disease at the optimum dose of 6 grams per day.

The patients were undergoing hemodialysis. None of the more than 100 patients in the 28-day study died or had serious adverse effects that could be definitely linked to Zerenex, the company said.

Keryx rose 36 cents, or 3 percent, to $13 in midday trading on the Nasdaq. In the past 52 weeks, the stock has traded between $12.27 and $19.35.

Shares of Tenet Healthcare (THC:NYSE) dipped 1.8% Thursday after the company reached a $900 million settlement with the Justice Department related to its alleged over-billing of Medicare.

Tenet agreed to pay $725 million to settle federal investigations into its transactions with the federal health insurance program before 2003, and will waive its right to pursue $175 million in past Medicare payments.

While the company did acknowledge that it "made mistakes in its conduct before 2003," the settlement means investigations will cease and no conclusion will be reached on whether Tenet broke the law. Shares of Tenet fell 13 cents to $7.11.

Pharmaceuticals giant Pfizer (PFE:NYSE) plans to introduce its own generic version of its branded antidepressant Zoloft. Shares of Pfizer gained 34 cents, or 1.5%, to $23.24.

Generic-drug maker Teva Pharmaceutical (TEVA:Nasdaq ADS) , which received Food and Drug Administration approval to market a generic version of Zoloft, fell $1.05, or 3.3%, to $31.29.

The company had already been dealing with Merck's (MRK:NYSE) decision to undercut Teva with its own generic version of the cholesterol drug Zocor and an ongoing patent infringement battle with Abbott (ABT:NYSE) over a generic version of the antibiotic Biaxin.

Bristol-Myers Squibb (BMY:NYSE) was up 1.8% following the company's announcement Wednesday that it received Food and Drug Administration approval to market its new drug Sprycel for a blood cancer known as Philadelphia chromosome-positive acute lymphoblastic leukemia in patients who did not adequately respond or could not tolerate other treatments. Bristol says the drug should be available for sale nationwide within days.

The FDA also granted Sprycel accelerated approval for the treatment of adults with the blood disease chronic myeloid leukemia with resistance or intolerance to prior therapy, including Novartis' (NVS:NYSE ADS) blockbuster drug Gleevec. Accelerated approval allows a company to submit its application for a drug's approval on a rolling basis instead of the traditional method of submitting it all at once. Bristol shares traded up 46 cents to $25.70.

Biogen Idec (BIIB:Nasdaq) and Elan (ELN:NYSE ADR) received European approval to market the multiple sclerosis drug Tysabri. The drug recently returned to the U.S. market after concerns about a link to a potentially deadly brain disease led to its withdrawal. Biogen shares rose 4.4% to $46.97, while Elan was up 1% to $16.49.

Shares of cancer drug developer Adventrx (ANX:Amex) spiked when the company released promising preliminary phase II data for its proposed drug for metastatic colorectal cancer, but sank 12.6% later in the day to close at $3.41.

According to data from the mid-stage trial in patients receiving chemotherapy with or without the cancer drug CoFactor, the median survival time for those receiving the drug was extended by two months compared with those on chemotherapy alone. Results were reported at the World Congress on Gastrointestinal Cancer meeting in Barcelona, Spain.

Drug developer Keryx Biopharmaceuticals (KERX:Nasdaq) also announced positive phase II results Thursday. Final analysis of a dosing study for its proposed kidney cancer drug Zerenex found that the drug was safe and well tolerated at three dosage levels. Keryx shares were up 8% to $13.65.

Diagnostics-device maker Abaxis (ABAX:Nasdaq) were boosted when the maker of blood-analyzing devices announced a marketing deal with Henry Schein (HSIC:Nasdaq) , a provider of health care products and services to medical offices in North American and Europe. Shares were up 7.3% to $22.

Andrx Corp.'s (Nasdaq ADRS) stockholders agreed to its purchase by Watson Pharmaceuticals Inc. (NYSE WPI), the companies said on Wednesday.

Upon closing, each outstanding Andrx common share will be converted into the right to receive $25 in cash, without interest, and Andrx will become a wholly owned subsidiary of Watson, the companies said in a joint statement.

Watson had agreed to buy Andrx for $1.9 billion in March.

EntreMed Shares Soar As Panzem Gets Additional FDA Orphan Status As a Brain Cancer Drug

ROCKVILLE, Md. -- Drug developer EntreMed Inc. said Wednesday that the Food and Drug Administration granted its cancer drug Panzem an orphan drug designation to treat an often fatal form of brain cancer.

Specifically, the agency granted the status to the drug for the treatment of glioblastoma multiforme. The drug already has orphan drug status from the FDA to treat ovarian cancer and multiple myeloma, a type of blood cancer.

Orphan drug status is given to treatments for diseases affecting fewer than 200,000 persons in the United States. The status, which often produces a potentially lucrative drug monopoly, gives the drug maker seven years of marketing exclusivity for the particular disease, along with tax breaks and development funds.

Panzem, which is not FDA-approved, is currently in mid-stage clinical trials testing the drug as a treatment for brain cancer and breast cancer.

Shares of EntreMed closed Tuesday at $1.62 on the Nasdaq, and shot up 28 cents, or 17.3 percent, in premarket electronic trading on the INET.

EntreMed (ENMD:Nasdaq) shares rose 6% Wednesday after the drug developer said it received a special rare-disease designation from regulators for its experimental brain cancer drug Panzem.

The designation, called orphan drug status, is granted by the Food and Drug Administration when the agency determines that a drug intended to treat a rare disease meets a significant unmet medical need but may not bring in enough revenue to make up for its development costs. The FDA designation allows a company certain tax breaks, marketing exclusivity and a possible extended patent life. Shares were up 10 cents to $1.72 in recent trading.

Shares of Biomet (BMET:Nasdaq) fell along with the orthopedic device company's fiscal fourth-quarter earnings, as it reported charges of $5.4 million due to restructuring and $9 million related to a severance package for its former CEO.

The effect of the charges may have been tempered, however, since earnings were in line with expectations and the company declared a cash dividend of 30 cents a share, payable July 21. After dipping early in the day, Biomet's shares were up 11 cents to $31.27.

Specialty pharmaceutical company Depomed (DEPO:Nasdaq) fell 5.3% to $5.85 Wednesday when the company said it entered an agreement with King Pharmaceuticals (KG:NYSE) to market its once-a-day type 2 diabetes drug Glumetza.

According to the agreement, the companies will share all marketing expenses. Depomed will book revenue and pay King a fee from the gross profits. Depomed will be responsible for the manufacture and distribution of the drug, while King will bear costs of using its sales force to promote the product.

"The structure of this partnership is ideal, and very important to us as we become a revenue-driven company, said Depomed CEO Dr. John Fara. "We have gained access to one of the leading pharmaceutical sales forces and commercial organizations in the U.S., while retaining copromotion rights that will allow us in the future to leverage our experience from this partnership to begin building our own sales team," the CEO said in a press release.

Express Scripts (ESRX:Nasdaq) shares rose Wednesday on an upgrade of the pharmacy-benefit manager's stock by Susquehanna Financial Group.

Susquehanna increased its 2006 earnings estimates for Express Scripts by 3 cents to $3.19 and notes that shares are down by almost one-third from a 52-week high of $95. Shares were recently up 2% to $68.36.

The research firm says the PBM industry as a whole is trading at a discount to the group's historical average and will likely benefit from Merck's (MRK:NYSE) Zocor patent expiration last week. The PBMs are also well-positioned to benefit from the expiration of Pfizer's (PFE:NYSE) patent on the popular antidepressant Zoloft on June 30, Susquehanna says.

For its part, Pfizer's shares rose 8 cents to $22.88 after a British court upheld the company's patent on the active ingredient in its cholesterol-lowering drug Lipitor. Lipitor is the top-selling drug in the world. The decision prevents generic-drug maker Ranbaxy Laboratories from selling its version before the general patent on the drug expires in 2011.

Other health care movers include surgical-device maker Lifecore Biomedical (LCBM:Nasdaq) , up $1.08, or 7.7%, to $15.19; specialty pharmaceutical company Pharmaxis (PXSL:Nasdaq) , up 80 cents, or 4%, to $20.80, NationsHealth (NHRX:Nasdaq) , up 32 cents, or 10.1%, to $3.26 and BioDelivery Sciences International (BDSI:Nasdaq) , up 23 cents, or 12%, to $2.15.

Shares of Nucryst Pharmaceuticals (NCST:Nasdaq) , a maker of anti-infective and anti-inflammatory treatments, fell $1.35, or 10.6%, to $11.39, and research-stage biopharmaceutical company Avalon Pharmaceuticals (AVRX:Nasdaq) fell 25 cents, or 6.2%, to $3.81.

British Court Upholds Ruling Protecting Key European Patent for Pfizer's Cholesterol Drug

LONDON -- Britain's Court of Appeal on Wednesday upheld a ruling protecting a key European patent for Pfizer Inc's best-selling cholesterol drug, Lipitor.

A panel of three judges rejected an appeal by Indian drug maker Ranbaxy Laboratories Ltd. against an October High Court decision upholding the patent, which expires in 2011.

Ranbaxy had wanted to release a generic version of the drug in Britain. The patent covers atorvastatin, the active ingredient in Lipitor.

The appeals court backed the lower court by ruling invalid a second Pfizer patent covering the calcium salt of atorvastatin, which expires in July 2010.

Pfizer Vice Chairman Jeffer B. Kindler welcomed the ruling, saying it was "consistent with the fundamental principle that patents exist to support the work of medical innovators pursuing discoveries that benefit current and future generations of patients around the world."

Ranbaxy said it was evaluating the court's decision.

Lipitor is world's best-selling drug and brings in more than $12 billion (euro9.42 billion) a year for Pfizer.

Swiss drug firm Roche said on Tuesday it had halted the clinical trial of Avastin, made by its U.S. unit Genentech , in combination with chemotherapy as a first-line treatment for advanced pancreatic cancer.

California-based Genentech, which is majority owned by Roche, said the late-phase study of the drug did not meet its primary endpoint for overall survival.

"We are disappointed in these results and will be evaluating the data to understand potential reasons why Avastin did not add a clinical benefit in this trial," said Hal Barron, chief medical officer for Genentech, in a statement.

Eduard Holdener, head of development at Roche, echoed his comments in a separate statement.

Pancreatic cancer is one of the most aggressive forms of cancer and one of the most difficult to treat.

Avastin is already one of the top sellers for Roche and Genentech and is one of their biggest new drug hopes. The companies are looking to widen its use into a range of other applications.

Genentech is investigating the use of potential blockbuster Avastin in 25 cancer types including colorectal, breast, lung, pancreatic, ovarian, renal cell carcinoma, and prostate cancer.

Roche shares were down 0.66 percent at 195.60 francs at 1215 GMT, in line with the European pharma shares <.SXDP>.

The Phase III trial was stopped on the recommendation of an independent monitoring board based on an interim analysis.

"The study was not stopped due to safety events, and no new safety concerns related to Avastin were observed in this trial," Roche said in a media statement.

Existing regulatory filings and approvals in colorectal, lung and breast cancer were not affected, the company said.

Analyst Denise Anderson at Kepler Equities in Zurich said this particular, potential use of Avastin represented only a fraction of the drug's potential.

TOO OPTIMISTIC?

"It doesn't mean that the drug doesn't work in pancreatic cancer, it just means that for that group, patients with that combination, it does not improve overall survival ... which is also a difficult -- the most challenging -- end-point to achieve," she said.

Equity analysts at Dresdner Kleinwort Wasserstein said the results could cause some investors to review their hopes for Avastin.

"It highlights the fact that Avastin is not likely to work in all cancers," Dresdner analysts said in a note. "We believe investors may start to reassess some of the very high long-term growth forecasts for the drug as potentially too optimistic."

In Europe, Avastin was approved in early 2005 and in the United States in 2004 for first-line treatment of patients with advanced colorectal cancer.

Avastin was filed in April this year in the United States for the most common form of lung cancer. In May, Avastin was filed in the U.S. for the treatment of women with advanced breast cancer, the company said.

Shares of medical-device maker EV3 (EVVV:Nasdaq) rose sharply Tuesday when the company announced that its vein-graft device was approved for a new indication by the Food and Drug Administration. The approval was based on a trial involving more than 700 patients comparing the EV3 product with three other embolic protection devices currently on the market. Shares of EV3 jumped 14.8% to $14.56.

The SpideRX Embolic Protection Device, which has already been approved for use in certain procedures involving the carotid artery, a major blood vessel in the neck, may now be used in some coronary artery operations. The coronary artery provides blood directly to the heart. The SpideRX device is used to contain and remove debris loosened during stenting procedures. The device will be marketed under the additional indication immediately, the company says.

Shares of big biotech Genentech (DNA:NYSE) dipped 96 cents, or 1.2% Tuesday to $78.15 after the company and its partner Roche announced that a trial involving the drug Avastin in pancreatic cancer patients was halted. Early results from the study showed that the drug wasn't extending the lives of patients with the disease. Cancer of the pancreas is one of the deadliest and most difficult to treat cancers.

Possibly feeling sympathy pains, shares of another cancer drugmaker, Biogen Idec (BIIB:Nasdaq) , were down 85 cents, or 1.9% to $44.15. Biogen Idec co-markets the lymphoma drug Rituxan with Genentech.

Health-services provider Healthways (HWAY:Nasdaq) got a lift after the company reported better-than-expected earnings for its fiscal third quarter. The company earned 26 cents a share for the quarter, while analysts were expecting 21 cents a share. Revenue increased 36% to $106.8 million.

Healthways also reaffirmed its fiscal-year revenue guidance of $415 million to $435 million and raised its earnings expectations to between $1.17 and $1.20 a share, up a penny from its previous forecast. Healthways was gaining 21 cents to $50.46.

Shares of Anadys Pharmaceuticals (ANDS:Nasdaq) fell another 9.5% to $3.34 Tuesday, a day after the company said it had a setback in a clinical trial. The company said Monday morning that it suspended dosing of its experimental hepatitis C treatment, dubbed ANA975.

The suspension is pending the company's analysis of toxicology studies in animals. Anadys, which partnered with pharma giant Novartis (NVS:NYSE ADR) in the drug's development, says it hasn't seen any serious side effects in humans. Novartis shares fell 90 cents, or 1.7% to $51.96.

Separately, Anadys shares were downgraded by research firms Piper Jaffray, Stifel Nicolaus, Montgomery & Co. and JMP Securities following its announcement. Barr Pharmaceuticals (BRL:NYSE) shares fell 98 cents, or 2% to $47.79 after the company disclosed plans to buy Croatian generic-drug maker Pliva for $2.2 billion.

Barr won a bidding contest among several companies, the most visible being Iceland's Actavis Group, which had been courting Pliva since mid-2005. The Actavis bid of $1.6 billion was deemed too low by Pliva's management.

Other movers included Medtronic (MDT:NYSE) , which saw its shares fall 2% to $47.30. Biogen Idec's MS drug partner Elan (ELN:NYSE ADR) fell 2.6% to $16.75. BioDelivery Sciences International (BDSI:Nasdaq) lost 5.9% to $1.90.

Shares of GenVec (GNVC:Nasdaq) , a developmental gene-based biopharmaceutical company, were up 6.7% to $1.44. Tapestry Pharmaceuticals (TPPH:Nasdaq) shares were up 5.1% to $3.09, and Targeted Genetics (TGEN:Nasdaq) was rose 5.1% to $2.39.

Anadys Pharmaceuticals Shares Plummet After Halting Drug Study Over Possible Safety Issues

SAN DIEGO -- Shares of Anadys Pharmaceuticals Inc. lost nearly half their value in midday trading Monday after the company said it suspended an early-stage study on its hepatitis C treatment candidate over safety concerns.

Shares shed $3.24, or 48.4 percent, slumping to $3.45. The stock tumbled as low as $2.98 at one point, setting a record low for the drug developer with trading volume surging to 20 times its average. The stock's all-time high of $16.60 came March 30.

The company halted a Phase 1b clinical trial of ANA975 involving 17 people, pending analysis from the drug's preclinical toxicology studies in animals. In a statement, the company said it has not seen any adverse effects in the clinical trials on people, but analysis of the preliminary study showed new observations "consistent with intense immune stimulation in animals."

The company, which is collaborating with Novartis on the drug, said it will work with the Swiss pharmaceutical company to determine the candidate's future. It did not provide any more detail on the preclinical findings.

"We continue to believe that ANA975 is an effective immunomodulator and therefore a potentially promising agent for patients infected with hepatitis C," said President and Chief Executive Dr. Kleanthis G. Xanthopoulos, in a statement.

The move prompted a series of analyst downgrades, with one citing that the developmental Hepatitis C drug is no longer a viable candidate.

Think Equity Partners LLC analyst Andrew McDonald reaffirmed a "Sell" rating and halved his price target to $3.50 from $7, citing the lack of "viable clinical candidates."

Another negative event sparking the downgrade is the recent announcement by Xanthopoulos that he will leave the company he founded by year's end to work for a venture capital firm. While McDonald does not think the two pieces of news are connected, they don't bode well for the company's outlook.

"We believe these two key negative events remove any compelling reason to place any technical value in this company," he wrote.

The company does have another candidate, ANA380, in a mid-stage study for hepatitis B, though McDonald does not view it as a future prospect. Anadys focuses on developing treatments, based on molecular therapeutics, for hepatitis.

Stifel Nicolaus analyst Edward H. Nash downgraded the stock to "Sell" from "Buy," based on the study's suspension.

"In our opinion, any halting of a trial this early, especially for a lead program, is highly negative," he wrote in a note to investors.

The majority of his outlook for the company was based on the hepatitis C program.

Deutsche Bank analyst Jennifer Chao downgraded the stock from "Buy" to "Sell" with a new price target of $3.35 from $18, citing the news and lack of further information on the preclinical results. Also cited is the recent resignation announcement by Xanthopoulos.

"While management explicitly states no knowledge of these preclinical toxicity data, timing of these events is likely to be viewed skeptically," she wrote in a note to investors.

Needham & Co. analyst George Fulop downgraded the stock to "Hold" from "Buy" and did not set a price target. He cited the partnership with Novartis, potentially worth $570 million, as proof of concept for the compound with ANA975 and in turn the drug's potential in the market. But the news "will weigh" on the stock price, as will the resignation of Xanthopoulos and partner Novartis' decision to in-license a possible future competitor to Anadys' hepatitis C treatment.

But, Fulop wrote, Novartis has said that decision doesn't reflect the future of the drug, rather it reflects a move to develop a hepatitis treatment strategy where a mix of drugs are used in conjunction.

Other downgrades Monday include Piper Jaffray moving the stock to "Underperform" from "Outperform," Montgomery & Co. moving the stock to "Hold" from "Buy" and JMP Securities downgrading from "Strong Buy" to "Market Perform."

Shares of Switzerland-based Novartis AG inched up 23 cents to $52.86 on the New York Stock Exchange.

Shares of Anadys Pharmaceuticals (ANDS:Nasdaq) were among the worst-performing health-related stocks Monday, plunging 48% after the drugmaker suspended dosing of its hepatitis C treatment. The company said it is suspending dosing in patients "pending analysis of recently obtained information from preclinical 13-week toxicology studies in animals." The company, which is developing the treatment with Novartis (NVS:NYSE ADR) , said that even though it hasn't seen any serious adverse events in its phase 1b clinical trial, it makes sense to suspend its current trial and analyze the recently obtained data. "We will work to determine the best path forward in future development, including dose-finding activities and potential modifications of clinical trial design," Anadys said. Shares of Anadys were recently trading down $3.19 to $3.50. Prestige Brands Holdings (PBH:NYSE) slumped 17% after the marketer and distributor of over-the-counter drugs and personal care products announced the resignation of its chief executive. Frank Palantoni, whose resignation is effective immediately, is leaving the company after serving less than three months as CEO. Chairman Peter Mann, who had served as CEO until April 1 of this year, will assume the CEO position on an interim basis until a permanent replacement is found. A permanent replacement is expected within the next six months. Shares were trading down $1.67 to $8.45. Shares of LifePoint Hospitals (LPNT:Nasdaq) fell 3% after the company named William F. Carpenter III as its new president and chief executive, effective immediately. Carpenter will replace Kenneth Donahey, who resigned after some five years as CEO. Carpenter has been with LifePoint since its inception in 1999 and most recently served as executive vice president, general counsel and secretary, chief development officer and corporate governance officer. "My priority as chief executive officer will be to continue LifePoint's long-standing focus on being a great operating company," Carpenter said in a press release. Shares were trading down 90 cents to $31.57. Neurocrine Biosciences (NBIX:Nasdaq) moved higher Monday. Shares in the company plunged Friday after the company said that Pfizer (PFE:NYSE) pulled the plug on its partnership to develop the insomnia drug Indiplon. Neurocrine, which now plans to seek approval for the drug on its own, said that Pfizer will support Indiplon for the next 180 days during a transition period. Shares, which lost 29% of their value on Friday, were recently trading up 84 cents, or 9%, to $10.69. Auxilium Pharmaceuticals (AUXL:Nasdaq) dropped following the announcement that Gerri Henwood will resign on July 17 as chief executive, interim president and a board member pursue other opportunities. She will continue to work with the company as a consultant. The pharmaceutical company named Armando Anido CEO and president and said he will also become a director. Anido previously served as executive vice president, sales and marketing, at MedImmune (MEDI:Nasdaq) . Shares of Auxilium were losing 51 cents, or 6%, to $7.99. Other health care volume movers included Boston Scientific (BSX:NYSE) , down $1.36 to $16.90; Pfizer (PFE:NYSE) , up 47 cents to $23.11; Johnson & Johnson (JNJ:NYSE) , down $1.44 to $59.88; Zimmer Holdings (ZMH:NYSE) , down $4.73 to $58.30. Biomet (BMET:Nasdaq) , down $1.52 to $33.46; Merck (MRK:NYSE) , up 19 cents to $35.13; Bristol-Myers Squibb (BMY:NYSE) , up 18 cents to $25.69; Teva Pharmaceutical Industries (TEVA:Nasdaq ADR) , up 9 cents to $32.28; and Amgen (AMGN:Nasdaq) , down 26 cents to $64.67.

New data show investigational migraine therapy demonstrates effective treatment of migraine-associated neck and sinus pain Pozen (Nasdaq POZN) 6.73 : POZN and GSK announce an investigational migraine treatment demonstrates effective treatment of migraine-associated neck pain/discomfort and sinus pain/pressure, according to new data presented at the Annual Meeting of the American Headache Society. In addition, use of the compound was statistically superior in producing pain-free rates as early as 30 minutes. Furthermore, significantly more patients reached pain-free status at two hours; this result was sustained for 24 hours without the use of additional medicine. This single tablet combination therapy, currently under review with the FDA under the proposed trade name Trexima, contains sumatriptan 85 mg, as the succinate salt, formulated with RT Technology, and naproxen sodium 500 mg.

POZN is trading up 5.65% to $7.11 on Nasdaq

Nastech, Amylin ink exenatide nasal spray development deal


NEW YORK -- Nastech Pharmaceutical(Nasdaq NSTK)Co Monday reached an agreement to partner with Amylin Pharmaceuticals (Nasdaq AMLN) on the development of a nasal spray formulation of exenatide. The deal calls for Nastech to receive milestone payments and royalties on product sales, and Nastech said that if feasibility is successful and the program moves forward, its milestone payments could reach as much as $89 million. Further financial terms weren't disclosed. Nastech is providing its proprietary nasal delivery technology to the partnership, and Amylin has overall responsibility for the development program.

Johnson & Johnson Reportedly Nearing $16 Billion Deal to Buy Pfizer's Consumer Products Unit

NEW YORK -- Drug maker Johnson & Johnson (NYSE STOCK SYMBOL JNJ) is nearing a deal to purchase Pfizer (NYSE STOCK SYMBOL PFE) Inc.'s consumer products unit, a move that would cost over $16 billion, The New York Times reported on its Web site Sunday evening.

An official announcement was expected Sunday night or Monday.

According to the Times, which attributed its report to anonymous sources involved in the deal, several bidders vied for the unit, which was put up for sale in February.

Analysts had predicted a $14 billion sale price, and GlaxoSmithKline PLC was the original favorite.

The New York-based Pfizer pursued the sale of the consumer products unit because it reportedly wanted to focus on its core, more profitable business of prescription drugs.

Jeffrey Leebaw, spokesman for the New Brunswick, N.J.-based Johnson & Johnson, declined to comment about the report to The Associated Press on Sunday night. Pfizer officials did not immediately return phone messages.

The Pfizer consumer unit includes Listerine and Sudafed. Johnson & Johnson brands include Tylenol and Neutrogena.

Pfizer also hopes to bolster its stock price through the sale, and analysts have said such a move would make Wall Street happy.

The consumer unit brought in $3.9 billion in sales in 2005, less than 8 percent of Pfizer's $52 billion in sales.

The $3.9 billion was up 10 percent from 2004. The unit also had an operating profit of $670 million, about 4 percent of Pfizer's operating profit.

Teva, Ranbaxy Win Approval to Market Generic Zocor After Judge Throws Out Challenge

NEW YORK -- Consumers will soon have access to cheaper versions of the popular cholesterol medicine Zocor as federal regulators approved products for sale from two companies after a federal judge threw out a motion from a rival drug maker.

Teva Pharmaceuticals Industries Inc., an Israeli company, has already started shipping its versions of the four different dose strengths it has been approved to sell. Indian drug maker Ranbaxy Laboratories Ltd. won approval to sell the highest dosage of the pill, which isn't commonly prescribed.

Judge Royce C. Lamberth of the U.S. District Court for the District of Columbia denied a motion for a temporary restraining order filed by another generic manufacturer, Sandoz Inc., to block the FDA from approving generic forms of Zocor made by Teva or Ranbaxy. The denial of the motion cannot be appealed.

Merck & Co.'s Zocor lost patent protection on Friday. It generated $4.4 billion last year and Merck has forecast sales of $2.3 billion to $2.6 billion in 2006.

In a statement, Sandoz, owned by Switzerland-based Novartis AG, said it was disappointed in the ruling.

Teva said it had been granted 180 days of market exclusivity. Under federal law, the first generic company to file a patent challenge against the brand name manufacturer can win 180 days as the sole generic marketer of drug.

Sandoz sought the restraining order because, it said, Teva and Ranbaxy had unfairly received exclusivity.

The bulk of a generic company's profit on a product comes during the 180-day exclusivity period because the lack of competition means it doesn't have to slash prices deeply. Often, they only price at a 25 percent discount to the brand. That discount can fall to 90 percent once numerous competitors enter a market.

Managed care companies have been aggressively promoting the use of generic Zocor in their efforts to lower drug costs. Typically, sales of the brand name shrivel as generic competition enters the market but Merck has been trying to salvage some of its market share. It cut Zocor's price so low that UnitedHealth Care Group Inc. customers will pay less for the brand than for the generic.

Merck also granted a license to Indian manufacturer Dr. Reddy's Laboratories Ltd. to sell a generic version of Zocor.

Novartis filed another motion on Thursday that would block Teva and Ranbaxy from selling the drug. The companies have five days to file opposition to the motion. Lamberth is expected to make a ruling on this motion, which can be appealed, within 10 days.

Meanwhile, the FDA is appealing a federal judge's ruling that bestowed exclusivity on Teva and Ranbaxy. The appeal is expected to be heard sometime this summer, and the outcome could affect how soon other companies are allowed to sell generic Zocor.

U.S.-traded shares of Teva rose 94 cents, or 3 percent, to close at $32.19 Friday on the Nasdaq Stock Market at above average volume. Dr. Reddy's shares added 60 cents, or more than 2 percent, to close at $27.53 on the New York Stock Exchange, while those of Novartis climbed 34 cents, or nearly 1 percent, to close at $52.63.

Vanda Pharma insomnia agent shows promise in Phase II trial

Vanda Pharmaceuticals Incsaid Friday results from a Phase II study demonstrated that its investigational agent VEC-162 improved key sleep measures in adults with transient insomnia. The primary objectives of the study were to evaluate the efficacy of VEC-162 in shifting patients' circadian rhythm, Rockville, Md.-based Vanda said. The data were presented this week at the 20th Anniversary Meeting of the Associated Professional Sleep Societies

The Food and Drug Administration granted final approval Friday to Endo Pharmaceuticals Inc.'s new drug applications for its Opana ER and Opana pain tablets.

Endo shares closed up 10 percent Friday at $31.50.

Opana ER is an extended-release pain medicine. Opana is an immediate-release formulation of the same drug. Both contain oxymorphone hydrochloride and are designed to provide relief of moderate-to-severe pain.

Over the next few weeks, Endo plans to expand its current 370-person sales force by about 220 sales representatives to promote all formulations of Opana as well as its existing portfolio of branded pain relief products, including Lidoderm and Frova.

Peter A. Lankau, Endo's president and CEO, said the two drugs are the company's first internally developed new drug applications to be granted FDA approval.

Endo of Chadds Ford, Pa., also said Friday it is revising its guidance for 2006 and now expects net sales to be about $880 to $910 million. Guidance had been in the $860 million to $880 million range. Combined net sales of Opana ER and Opana are expected to be about $20 to $30 million.

The company also said costs associated with the launch of Opana ER and Opana are expected to reduce Endo's 2006 adjusted diluted earnings per share by about 20 cents per share. Endo now estimates adjusted diluted earnings per share for 2006 to be about $1.55 to $1.60 per share.

Endo Pharmaceuticals Inc. is a wholly owned subsidiary of Endo Pharmaceuticals Holdings Inc. (NASDAQ ENDP)

Shares of Neurocrine Biosciences (NBIX:Nasdaq) were among the worst-performing health-related stocks Friday, plunging 29% after Pfizer (PFE:NYSE) pulled the plugged on its partnership with the company to develop Indiplon.

Neurocrine said it will seek approval for the insomnia drug on its own. "While we are disappointed that we will not be working with Pfizer for the commercialization of Indiplon, Neurocrine is fully committed and prepared to develop and commercialize this product," the company said in a press release. Pfizer will continue to support Indiplon for the next 180 days for a transition period, Neurocrine said. Shares of Neurocrine were trading down $4.07 to $9.74.

Penwest Pharmaceuticals (PPCO:Nasdaq) and Endo Pharmaceuticals (ENDP:Nasdaq) moved sharply higher Friday after the Food and Drug Administration approved their painkiller Opana in two forms. "The FDA's final approval of Opana ER is good news for physicians and patients, and it is a key milestone for Penwest," Penwest said. "This represents a major step in advancing our strategy of building a specialty pharmaceutical company with a focus on developing compounds targeted at disorders of the nervous system." Endo said it expects to start selling the drug in the U.S. during the coming weeks. Shares of Penwest surged $6.08, or 38%, to $22.17, while shares of Endo were up $2.60, or 9%, to $31.35.

Shares of Health Management Associates (HMA:NYSE) fell 5% after the hospital operator cut its full-year earnings outlook for the second time in three months. The company now sees full-year earnings of $1.30 to $1.34 a share, down from an earlier view of $1.43 to $1.49 a share. Analysts polled by Thomson First Call project earnings of $1.43 a share. For the second quarter, Health Management anticipates earnings of 31 cents to 34 cents a share, below the 36 cents a share that analysts project. "Patient volumes and uncompensated care continue to be the two most significant issues for the hospital industry, including HMA," the company said. Separately, the company announced a $250 million stock buyback program. Shares were down 99 cents to $19.64.

Bradley Pharmaceuticals (BDY:NYSE) fell 6% after the company's first-quarter revenue missed Wall Street's target. The company reported a loss of $352,642, or 2 cents a share, on revenue of about $34.8 million. The results included a payment of $2.9 million, or 18 cents a share, related to a licensing agreement and stock-based compensation costs of 5 cents a share. Analysts expected earnings of 18 cents a share and revenue of $36.5 million. Last year, Bradley posted a first-quarter profit of $2.2 million, or 13 cents a share, on revenue of $33.2 million. Shares were trading down 79 cents to $12.21.

Other health care volume movers included Pfizer, up 8 cents to $22.73; Teva Pharmaceutical Industries (TEVA:Nasdaq) , up 85 cents to $32.10; Boston Scientific (BSX:NYSE) , down 23 cents to $18.38; Merck (MRK:NYSE) , down 35 cents to $34.90; Johnson & Johnson (JNJ:NYSE) , up 37 cents to $61.55; Amgen (AMGN:Nasdaq) , up 53 cents to $65.50; Millennium Pharmaceuticals (MLNM:Nasdaq) , up 19 cents to $9.94; Elan (ELN:NYSE ADR) , up 29 cents to $16.97; UnitedHealth Group (UNH:NYSE) , up $1.06 to $45.49; Bristol-Myers Squibb (BMY:NYSE) , down 5 cents to $25.58; Schering-Plough (SGP:NYSE) , up 1 cent to $19.18.

Endo, Penwest Shares Rise on FDA Approval of Opana Pain Killer; Endo Cuts 2006 Outlook

NEW YORK -- Shares of drug maker Endo Pharmaceuticals Holdings Inc. and development partner Penwest Pharmaceuticals Co. surged Friday after they announced the Food and Drug Administration approved two forms of the painkiller Opana.

Endo shares rose even though the company cut its 2006 outlook, now that it will shoulder product launch costs without Penwest's help. Endo's share price jumped $1.72, or 6 percent, to $30.47 in midday trading on the Nasdaq on more than four times their average volume. Shares have traded between $21.06 and $33.96 over the past 52 weeks.

Penwest saw shares skyrocket $6.61, or 41 percent, to $22.70 on the Nasdaq on more than 13 times their average volume, approaching their 52-week high of $23.70.

The FDA approved an extended-release and immediate-release form of the opiate painkiller oxymorphone hydrochloride, which Endo will market as Opana ER tablets and Opana tablets, respectively. Both are indicated for the treatment of moderate-to-severe pain with Opana ER designed for chronic pain and Opana for acute pain.

Chadds Ford, Pa.-based Endo cut its adjusted earnings per share forecast for the year by 20 cents to a range of $1.55 to $1.60, but raised its projected revenue range to $880 million to $910 million from a previous $860 million to $880 million range. Estimates exclude stock option expenses and other charges.

Analysts surveyed by Thomson Financial currently expect earnings per share of $1.75 on revenue of $883.4 million. Estimates do not reflect the adoption of accounting rules for stock option expenses and treat them as a charge.

Peter A. Lankau, Endo's president and chief executive, said in an interview that Penwest hasn't indicated they will opt back into an arrangement -- originally included in their 1997 agreement -- in which Penwest could help with launch costs in exchange for a 60 percent cap on Endo's share of Opana ER's profits. Danbury, Conn.-based Penwest developed the controlled-release drug delivery technology for Opana ER.

While there is no deadline for Penwest to opt back in, Lankau said the closer the drug gets to seeing an operating profit, the more Penwest will have to make up in launch costs to get the cap.

Lankau said the company began recruiting 220 additional sales reps last month and will send out offer letters today. The company currently has a 370-person sales force. The new reps, which will not be dedicated exclusively to Opana, are expected to start in about two weeks and will be trained into August.

The company plans to release both forms of the drug in the coming weeks.

Jefferies & Co. analyst David Windley reiterated his "Buy" rating and $35 price target on Endo in a research note. The analyst said he plans to increase earnings per share estimates to reflect Endo's "aggressive sales force expansion in 2006."

Hologic Shares Up on News That Federal Reimbursements for Mammographies Seen Remaining Stable

BEDFORD, Mass. -- Shares of Hologic surged Thursday after investors reacted to the federal government's move to leave mammography reimbursement levels mostly unchanged.

Mammography imaging equipment is a key market for the medical imaging device maker, comprising 49 percent of the company's revenue in its last fiscal year. The company's stock has been trading lower recently over concerns that the Centers for Medicare & Medicaid Services would cut reimbursements for digital mammography, according to an analyst report.

Shares of the company were up $6.56, or 15.9 percent, at $47.85 in afternoon trading on the Nasdaq at more than five times their daily volume. Shares hit a 52-week high of $56.71 April 7 and are down 27 percent since then.

Jefferies & Co. analyst Ryan A. Rauch, who reaffirmed a "Buy" rating with a price target of $62, said the government's methodology for physician fees, released Wednesday, were not substantially changed, despite Street expectations that they would be.

Reimbursements for the most common test actually increased by 1 percent.

"At these (trading) levels, we believe there is considerable upside to our estimates (on Hologic)," he wrote in a note to investors.

Final regulations for the reimbursement schedules will be announced in October.

George Soros Boosts Stake in NPS Pharmaceuticals to 7.1 Percent

NEW YORK -- Billionaire financier George Soros has boosted his stake in drug developer NPS Pharmaceuticals Inc. to 7.1 percent from 6.8 percent, according to filings made with regulators Wednesday.

Soros controls almost 3.3 million of the company's shares through Quantum Partners LDC, an affiliate of Soros Fund Management LLC, according to the filing with the Securities and Exchange Commission. It's an increase from the 3.1 million shares he said he controlled as of May 17, according to previous filings.

Shares of Salt Lake City-based NPS Pharmaceuticals hit a 52-week low of $4.52 last week, after the company announced a restructuring plan that included cutting half its staff.

Shares of the company rose 15 cents, or 3.1 percent, to $4.95 in after-hours trading on the INET electronic exchange. They closed down 2 cents at $4.80 on the Nasdaq.

MedImmune (MEDI:Nasdaq) slipped after the Gaithersburg, Md.-based biotechnology company said it intends to sell $1 billion in convertible senior notes to qualified institutional buyers. The company said it plans to offer $500 million in convertible senior notes due 2011 and $500 million in convertible senior notes due 2013. The notes will be convertible, in certain circumstances, into a combination of cash and MedImmune common stock. MedImmune said it expects to use about $500 million of the proceeds to fund the repurchase of the 1% convertible senior notes on July 15. Also, the company expects to use up to $150 million of the net proceeds to buy shares of its common stock in privately negotiated transactions concurrently with the offering of the notes. Shares dropped $1.05, or 3.59%, to $28.18.

NPS Pharmaceuticals (NPSP:Nasdaq) gained on news that billionaire investor George Soros had increased his stake in the Salt Lake City-based company, according to a filing with the Securities and Exchange Commission, to 7.1% from 6.8%. Soros controls nearly 3.3 million shares of the company through Quantum Partners, which is an affiliate of Soros Fund Management. Shares gained 15 cents, or 3.13%, to $4.95.

La Jolla Pharmaceutical Says European Medicines Agency to Review Application for Lupus Drug

SAN DIEGO-- La Jolla Pharmaceutical Co., a developer of autoimmune disease therapies, said Thursday that the European Medicines Agency has accepted and will review the company's marketing application for its lupus renal disease drug candidate.

If approved, La Jolla would be allowed to market Riquent in all 25 European Union states, Norway, Iceland and Liechtenstein. The drug candidate already has orphan medicinal product status in Europe, which provides 10 years of market exclusivity from the date of EU authorization. Riquent also has orphan drug status and fast track status in the United States.

The company said Riquent is the first drug candidate specifically developed for the treatment of lupus renal disease, a leading cause of sickness and death in lupus patients. Lupus is a chronic autoimmune disorder characterized by periodic episodes of inflammation of and damage to the joints, tendons and other connective tissues, and organs including the heart, lungs, brain and kidneys.

The company expects to receive the agency's initial response to the application later this year, with a final decision coming in 2007.

Shares of La Jolla Pharmaceutical gained 14 cents, or 3.9 percent, to $3.74 in morning trading on the Nasdaq. The stock has traded in a 52-week range of $2.60 to $5.65.

Cell Therapeutics to Sell Up to $72 Million Shares to Societe Generale in Financing Deal

SEATTLE -- Biotech drug maker Cell Therapeutics Inc. said Wednesday it signed a financing agreement with Societe Generale Group in which the French banking firm will purchase up to $72 million in new company shares to sell on the Italian market.

The company entered a step-up equity financing agreement, a Societe Generale financing product that is much like a capital increase offering the flexibility of a line of credit line.

Under terms of the agreement, Societe Generale will buy up to 45 million euros ($55 million) of Cell Therapeutics new common shares over the next 24 months, with the option to increase the amount to 60 million euros ($72 million).

Cell Therapeutics said the total amount of any capital raised will depend on actual financing needs over the lifetime of the agreement, and will reflect the market performance and trading volume of CTI shares.

Shares of Cell Therapeutics (CTIC:Nasdaq) were among the best-performing health-related stocks Wednesday, rising 6% after the drugmaker signed an equity financing agreement with Societe Generale Group.

The step-up equity financing agreement will consist of Societe Generale buying up to $55 million worth of newly issued stock over the next 24 months, with an option to ultimately buy up to $72 million worth of stock. The French banking firm will then sell the shares into the Italian market. "The total amount of any capital raised will depend on the actual financing needs over the lifetime of the agreement and other considerations and will reflect the market performance and trading volume of CTI shares," Cell Therapeutics said. Shares were recently up 8 cents to $1.47.

DJO (DJO:NYSE) rose 1% after the medical device maker backed its full-year revenue outlook and said that second-quarter revenue would be strong. The company expects second-quarter revenue of $103 million to $106 million, including contributions from Aircast, which was acquired in April. Analysts project revenue of $104 million. During the year-earlier period, the company posted revenue of $68.8 million.

For the full year, DJO continues to see revenue of $395 million to $400 million, including a contribution of about $70 million to $75 million from Aircast. Analysts, meanwhile, project revenue of $400.1 million. DJO said that Aircast will be accretive to earnings by the fourth quarter, but it will have a slightly dilutive effect on full-year results. Previously, the company said that it would post full-year pro forma earnings of $1.55 a share. Shares were trading up 40 cents to $37.10.

Shares of Praecis (PRCS:Nasdaq) continued to fall Wednesday, a day after the company said it would halt plans to sell its prostate cancer drug Plenaxis. On Tuesday the company said it wouldn't be able to reach a sale or license deal related to Plenaxis, and will discontinue all of its Plenaxis-related activities. The company expects to take charges totaling about $7.5 million during the second quarter related to the Plenaxis decision. While Praecis believes that its cash and investments will be sufficient to cover working capital and capital expenditure needs through 2007, the company plans to explore financing and strategic alternatives. Shares were recently trading down 27 cents, or 8%, to $3.16.

Celera Genomics (CRA:NYSE) rose 4% after the company agreed to sell its cathepsin S inhibitor small molecule drug program to Schering for $5 million and up to $360 million in possible milestone payments. "This is a significant step for us as it completes our planned exit from small molecule development, allowing us to now focus our resources on our core business of molecular diagnostics and proteomics discovery," Celera said. In addition to possible milestone payments, Celera will be eligible to receive royalty payments that are tied to any drug sales that result from the program. Shares were trading up 42 cents to $11.17.

Other health care volume movers included Pfizer (PFE:NYSE) , unchanged at $22.95; Teva (TEVA:Nasdaq) , down $3.20 to $32.47; Boston Scientific (BSX:NYSE) , up 2 cents to $19.20; Johnson & Johnson (JNJ:NYSE) , up 20 cents to $61.73; Amgen (AMGN:Nasdaq) , up 98 cents to $65.94; Millennium Pharmaceuticals (MLNM:Nasdaq) , up 22 cents to $10.09; Elan (ELN:NYSE ADR) , up 35 cents to $16.89; Merck (MRK:NYSE) , up 44 cents to $35.36; UnitedHealth Group (UNH:NYSE) , up 69 cents to $44.40; and Bristol-Myers Squibb (BMY:NYSE) , up 21 cents to $25.77.

Teva Pharmaceutical Shares Fall on Confirmation of Merck's Lower Competitive Zocor Prices

NEW YORK -- American depositary shares of Teva Pharmaceutical Industries Ltd. fell Wednesday as investors reacted to reports that drug maker Merck & Co. will cut prices of cholesterol treatment Zocor to compete with generic versions with patent protection set to expire.

ADS of the Israeli drug maker fell $1.33, or 3.7 percent, to $34.34 in early morning trading on the Nasdaq. Shares have traded between $29.50 and $45.91 over the past 52 weeks.

On Wednesday, the Wall Street Journal confirmed that health care insurer UnitedHealth Group will move Zocor to a reimbursement tier making it cheaper than Teva's generic version of the drug after negotiating lower prices with Merck.

On Tuesday, Sen. Charles Schumer accused Merck of conspiring with health insurance companies to undercut Teva's generic version of Zocor days before the patent expires.

Zocor's product patent expires on Friday. Merck reported Zocor sales of $4.4 billion in 2005, and has forecast sales of $2.3 billion to $2.6 billion in 2006.

Teva shares also felt pressure from Indian drug maker Dr. Reddy's Laboratories Ltd., which not only plans to sell a generic version of Zocor also, but has started selling a version of Merck's enlarged prostate treatment, Proscar. The patent for Proscar expired Monday, the same day the Food and Drug Administration approved Teva's version of the drug. U.S. sales of Proscar totaled about $406 million in the 12 months ended in March.

Merck shares rose 9 cents to $35.01 on the New York Stock Exchange.

Drug stocks advanced early Wednesday but shares of Teva Pharmaceutical Industries declined on concerns that its soon-to-be launched generic version of Merck's Zocor may end up being more expensive for consumers than the original product.
The Amex Pharmaceutical Index crept up 0.3% to 325.68 points and the Amex Biotechnology Index edged up 0.5% to 635.96.

Teva (NASDAQ TEVA ) slid 9% to $32.23, following reports that Merck was negotiating with major health insurers to set Zocor's co-payment below that of Teva's planned generic version of the product. Teva is the first drugmaker to receive regulatory approval to put out a generic version of Zocor. Zocor is slated to lose its patent protection later this month. Merck has already signed a deal to allow Indian generic drugmaker Dr. Reddy's Laboratories (STOCK SYMBOL RDY) to put out an "authorized" generic version of Zocor.
U.S.-traded shares of Dr. Reddy's jumped 5% to $28.70

Discovery Labs Shares Rise As Company Retains Investment Firm Jefferies to Explore Options

WARRINGTON, Pa. -- Shares of Discovery Laboratories Inc. skyrocketed Tuesday after the biotech drug maker said it retained an investment firm to explore strategies designed to improve the company's value.

Discovery Labs shares rose 34 cents, or 25 percent, to $1.68 in morning trading on the Nasdaq. Over the past 52 weeks, shares have dropped to a recent low of $1.16 from a year-ago high of $9.15.

The company hired Jefferies & Co. to explore potential alliances or partnerships, financing options, business combinations and other opportunities. Discovery Labs said it would not comment further unless there was a material development.

In the meantime, the company will focus on trying to get its lead product candidate Surfaxin approved by the Food and Drug Administration. Surfaxin is a synthetic surfactant, a substance that reduces surface tension, allowing lung tissue to absorb oxygen. The agency has already indicated the drug is approvable for premature infants who are born with little to no surfactant in their lungs.

However, the company has been plagued with delays and manufacturing difficulties. In April, the FDA further delayed a decision on Surfaxin, saying the company needed to address issues on how long the treatment can be stored before it degrades. Similar issues caused Discovery Labs to withdraw its marketing application for the treatment in Europe earlier this month.

Shares of Praecis Pharmaceuticals (PRCS:Nasdaq) were among the worst-performing health-related stocks Tuesday, plunging 33% after the company said it will halt plans to sell its prostate cancer drug Plenaxis.

Praecis said it won't be able to reach a sale or license deal related to Plenaxis, and will discontinue all of its Plenaxis-related activities. "During this wind-down, the company will continue to evaluate potential opportunities for these assets to the extent such opportunities arise," the company said. The company expects to take charges totaling about $7.5 million during the second quarter related to the Plenaxis decision.

While Praecis believes that its cash and investments will be sufficient to cover working capital and capital expenditure needs through 2007, the company plans to explore financing and strategic alternatives. Shares were trading down $1.71 to $3.44.

Discovery Labs (DSCO:Nasdaq) soared 22% after the biotech company said it hired Jefferies & Co. to help explore strategic alternatives. The company said that seeking alternatives, is "intended to enhance the future growth potential of the company's surfactant replacement therapy pipeline and maximize shareholder value." Discovery Labs said it is exploring all of its options, including potential business alliances, commercial and development partnerships, financings, business combinations and other opportunities. "The management and board of directors continuously evaluate our business to identify and develop opportunities for maximizing value for all shareholders. We look forward to working with Jefferies in this regard," the company said. Shares were trading up 30 cents to $1.64.

Shares of Corgentech (CGTK:Nasdaq) fell 3% after the drugmaker said it received a commitment for up to $30 million in equity financing from Azimuth Opportunity. During the next two years, Corgentech may sell registered shares of its stock to Azimuth at a small discount to market price, it said. "This equity commitment facility provides us with the flexibility to opportunistically raise additional capital over the next 24 months to pursue our business plan, including the potential product launch of 3268 next year," the company said. Shares were trading down 26 cents to $7.98.

Human Genome Sciences (HGSI:Nasdaq) rose 2% after the company said the U.S. Government will buy 20,000 doses of the company's anthrax treatment for $165 million. "We believe that ABthrax offers a significant step forward in the treatment of inhalational anthrax disease," the company said. The company expects to deliver the vaccine to the Strategic National Stockpile in 2008 as part of Project BioShield. Shares were up 18 cents to $9.98.

Other health care volume movers included Pfizer (PFE:NYSE) , down 17 cents to $22.89; Boston Scientific (BSX:NYSE) , down 51 cents to $19.19; Johnson & Johnson (JNJ:NYSE) , up 18 cents to $61.53; Amgen (AMGN:Nasdaq) , down 54 cents to $65.21; Millennium Pharmaceuticals (MLNM:Nasdaq) , unchanged at $9.97; Elan (ELN:NYSE ADR) , down 18 cents to $16.41; Merck (MRK:NYSE) , up 44 cents to $34.90; UnitedHealth Group (UNH:NYSE) , up 39 cents to $43.89; and Bristol-Myers Squibb (BMY:NYSE) , up 14 cents to $25.56.

Federal Government to Buy 20,000 Doses of Anthrax Drug

COLLEGE PARK, Md. -- The federal government will order 20,000 doses of a drug designed to block the lethal effects of anthrax spores in the body, a deal worth $165 million to its maker Human Genome Sciences, Inc.

The deal is also the first product sale for HGS, a 14-year-old Rockville-based biotechnology drug developer.

"Today's announcement is an important milestone in Human Genome Science's progress toward commercialization," said company CEO H. Thomas Watkins in a statement.

The purchase of ABthrax doses, announced Tuesday by HGS, comes under the federal government's $5.6 billion Project Bioshield initiative that stockpiles drugs and vaccines to use in case of a release of biological or chemical weapons. HGS expects to deliver the ABthrax doses to the stockpile by 2008.

HGS gave the Department of Health and Human Services 10 grams of ABthrax last year for testing under a contract HGS signed with the federal health agency that could have led to the purchase of up to 100,000 doses of the drug.

While the actual order was much smaller, some analysts said the value of the contract still approached the $200 million figure that analysts forecast when the deal was announced last year.

"It is a much smaller number of doses, so the price point is significantly higher than we anticipated," said Edward Tenthoff of Piper Jaffray. "The profitability from this contract is going to be a lot better than we were expecting."

Anthrax spores can be inhaled or absorbed through abrasions in the skin, and is often deadly if left untreated. Anthrax can be treated with vaccines and antibiotics, but ABthrax is designed to block the toxins that are released by the drug once it enters the body.

HGS began work on ABthrax shortly after anthrax spores were sent through the mail to Capitol Hill in Washington in 2001, about 20 miles away from the company's headquarters. But while the drug was given fast track status by the Food and Drug Administration, the company still had a lengthy wait for a decision on whether the government would buy it.

The company has already done safety testing on roughly 100 people, but it must still be approved by the FDA before it can be used.

Shares of HGS rose 14 cents to $9.94 each in morning trading on the Nasdaq stock market.

Sinovac Biotech Reports 'Encouraging' Early-Stage Trial Results From Bird Flu Vaccine

NEW YORK -- Sinovac Biotech Ltd., a biotechnology firm based in Beijing, reported "encouraging" preliminary results from an early-stage clinical test of a bird flu vaccine under development.

Early results of Sinovac's inactivated pandemic influenza vaccine, or Panflu, in Phase I clinical trials showed good immunogenicity with a seropositive rate of 78.3 percent, above the criteria for assessment of vaccines set by the European Union's Committee for Proprietary Medicinal Products.

The study enrolled 120 volunteers.

Sinovac said it will start the application process to start mid-stage, or Phase II, clinical trials. The company will submit its summary report of the Phase I clinical trial, plan and protocol for Phase II Clinical trial and other relevant documents, it said.

Sinovac shares edged up 3 cents to $2.73 on the American Stock Exchange.

Generex Biotechnology (GNBT:Nasdaq) was sharply higher on word the company is scheduled to join the Russell Microcap Index later this month. The company's addition will take place when Russell Investment Group reconstitutes its family of U.S. indices on June 30, according to a preliminary membership list posted Friday.

"We believe that our inclusion in the Russell Microcap Index reflects the significant progress we have made in the past year in the development of drug delivery systems for the treatment and prevention of diabetes and avian influenza," the company said in a statement. Shares of Generex were gaining 27 cents, or 18.4%, to $1.74.

Dov Pharmaceutical's (DOVP:Nasdaq) shares continued to slump in the wake of last week's announcement that Neurocrine Biosciences (NBIX:Nasdaq) could need to hold more trials before it can get approval in the U.S. for its insomnia drug Indiplon. Dov licenses Indiplon to Neurocrine. Shares of Dov were dropping 22 cents, or 9%, to $2.21 Monday.

Israel's Teva Pharmaceutical Industries (TEVA:Nasdaq ADR) said the Food and Drug Administration granted final approval for the company's abbreviated new drug application to market a generic version of Merck's (MRK:NYSE) Proscar. Shipments will begin immediately. Teva has been awarded 180 days of marketing exclusivity.

Known generically as finasteride, the drug is prescribed for treating benign prostatic hyperplasia in men with enlarged prostates. The drug is meant to improve symptoms and to reduce the need for prostate surgery. Still, shares of Teva were lower, slipping 16 cents, or 0.5%, to $35.73.

Sinovac Biotech (SVA:Amex) rose after reporting positive results from an early-stage trial of its experimental avian-flu vaccine. The preliminary results of the Panflu study showed the vaccine had the ability to provoke an immune response, with antibodies found in 78.3% of tested blood samples.

The purpose of the phase I test was to evaluate the vaccine's safety and immune response and to determine the appropriate dosage level for a phase II study. Shares of Sinovac, a Beijing-based biotech company, were up 18 cents, or 6.7%, to $2.88.

Peregrine Pharmaceuticals to Sell 9.3 Million Shares to Double U Master Fund for $13 Million

TUSTIN, Calif. -- Biopharmaceutical company Peregrine Pharmaceuticals Inc. said Monday it signed a deal to sell about 9.3 million shares of common stock to institutional investor the Double U Master Fund LP for $13 million.

As part of the agreement, Peregrine has agreed it will not offer or sell its common stock in any private placements priced below $2.50 per share for the rest of the year.

The shares are being sold under a shelf registration statement effective April 12. There were no warrants issued or commissions paid in conjunction with the transaction.

Net proceeds will be used to advance lead clinical programs, including a Phase Ib repeat dose study of bavituximab for the treatment of hepatitis C virus infection; a Phase I study of bavituximab for the treatment of solid tumor cancer and a Phase II/III study of Cotara for the treatment of brain cancer.

Peregrine will also use part of the proceeds to speed the clinical progress of these lead drug candidates by adding additional clinical programs in the U.S. or abroad. Proceeds will also be given to further fund preclinical programs that are assessing the potential utility of bavituximab for the treatment of influenza, HIV, cytomegalovirus and other lethal viruses.

Peregrine shares fell 1 cent to $1.64 in afternoon trading on the Nasdaq. The stock has traded in a 52-week range of 88 cents to $1.99.

Novacea Shares Rise As Analysts Begin Coverage With Unanimous Positive Ratings

NEW YORK -- Shares of Novacea Inc. rose Monday after a group of analysts initiated positive coverage on the biotech drug developer based on its experimental cancer treatments.

Novacea shares rose 41 cents, or 6.6 percent, to $6.61 in late morning trading on the Nasdaq. The stock began trading on May 11 priced at $6.50, and have traded between $6.01 and $7.37.

Investment firms Bear Stearns, Pacific Growth Equities, Cowen & Co., and HSBC all initiated coverage of the South San Francisco, Calif.-based company with Buy-grade ratings.

Analysts all pointed to mid-stage clinical data showing DN-101, when used along with Sanofi-Aventis SA's Taxotere, significantly lowering the risk of death and adverse events in advanced-stage prostate cancer patients.

In a note, Bear Stearns analyst Akhtar Samad fixed a target price of $10 and said that Novacea set itself apart from other small biotechs by conducting a large, controlled mid-stage clinical trial on the drug with Taxotere versus Taxotere alone. The analyst called the 49 percent improvement in survival time with both drugs "impressive," and forecast U.S. sales to peak at about $180 million in 2012.

Pacific Growth Equities analyst Gregory Wade took an even more optimistic view of the drug and set his sales forecast nearly four times higher. Wade estimates DN-101 sales of $647 million by 2011, with those approaching $1 billion by 2015.

Cowen & Co. analyst Eric Schmidt, who rates the company an "Outperform," said the treatment could transform the prostate cancer market.

HSBC analyst Gene Mack set a $12 price target, and estimated DN-101 would generate $149 million in first year sales after a 2010 launch with sales peaking between $540 million and $720 million.

Novacea is also developing a treatment for breast and lung cancer called vinorelbine, and a brain cancer treatment called AQ4N.

Biotech startup VLST gets $55 million


VLST Corp., a tiny Seattle biotechnology company that was formed by two former Amgen researchers, has scored $55 million in venture capital that it will use to develop experimental treatments for diseases such as lupus, psoriasis and multiple sclerosis.

The financing -- the 16th-biggest venture capital deal in the country this year and the largest in Washington state -- is a major boost for a 12-person startup that is still years away from selling its first product.

Typically, early-stage biotechnology companies like VLST don't raise rounds of this size. But Chief Executive Martin Simonetti, a former Dendreon executive who joined VLST in January, said the money will allow the company to focus on cutting-edge science rather than fundraising.

"The bottom line is we can build the company and move things forward, without having to raise money annually," said Simonetti. "And that's huge."

The money should carry VLST for about three to four years, at which time it hopes to have a lead product candidate moved through the "proof-of-concept" phase.

Texas Pacific Group Ventures led the round, which also included new investors MedImmune Ventures and WRF Capital. MPM Capital, Arch Venture Partners, OVP Venture Partners and Amgen Ventures -- existing investors who committed $4.5 million to the startup in May 2004 -- also participated.

Not all of the money is flowing into the company's bank account at once. The structure of the deal calls for a $20 million upfront investment, with the remainder of the money tied to two specific milestones. Simonetti declined to discuss those milestones or the time frame in which they must be met.

By tying the money to preset goals, Simonetti said that the company can stay focused on the tasks at hand while investors receive a little protection on such a large investment. The $55 million investment is more than all Washington biotechnology companies raised in venture capital in the first half of last year, according to Dow Jones VentureOne.

VLST, whose name stands for Viral Logic Systems Technology, is attempting to study how viruses attack immune systems in order to create drugs that are targeted to certain diseases.

"When you have the immune system reacting inappropriately, the goal is then to modulate it back to normal if you will, or back to a situation where the patient is not having severe outbreaks whether it is lupus, multiple sclerosis, psoriasis, rheumatoid arthritis or any of a number of different things," Simonetti said. "If you can identify targets that you can modulate back to normal, then, in fact you can help these patients."

So far, VLST has identified 70 "virulence factors" -- virus secretions that alter a person's immune system. VLST hopes to create drugs that mimic the virus secretions in order to make an immune system less vulnerable to attack. VLST has about eight possible programs in development.

Texas Pacific Group's Heather Preston, who is joining the company's board, said the technology holds promise because it could allow researchers to more quickly and efficiently identify drug candidates.

Simonetti added that the virulence factors are "outstanding predictors of potential therapeutics." That's because viruses have small genomes that they use efficiently to reproduce or change a host's immune system. And because the DNA makeup is so small and singularly focused, Simonetti said they could help researchers identify appropriate therapies. That could mean "fewer clinical failures," he said.

Amgen researchers Craig Smith and Steven Wiley -- both of whom studied molecular biology at the University of Wisconsin -- founded VLST in May 2004. Smith played a key role in developing Enbrel, the rheumatoid arthritis drug now marketed by Amgen. Wiley, who serves as chief technical officer at VLST, worked on a program at Immunex and Amgen that kills cancer cells while keeping normal cells intact.

For the past two years, the company has been housed at Accelerator Corp., the biotechnology incubator located in Seattle's South Lake Union neighborhood. With the new funding and plans to more than double its staff in the next year, VLST will move to new offices on the Seattle waterfront north of downtown next month.

While Simonetti said the scientific platform has promise, the 48-year-old biotech executive said the biggest challenge for the young company is staying focused on the near-term milestones.

"Everybody always says cash is king, and I always say focus is queen," he said. "With this financing, we have the cash part dealt with and now the real challenge for us is focusing and staying the course with our programs."

AMEX Approves Listing of Biotechnology Driven Ethanol Company Xethanol

Xethanol Corporation, a biotechnology driven ethanol company, has been notified by the American Stock Exchange (AMEX) that its common shares have been approved for listing on the Exchange. This approval is contingent upon the Company being in compliance with all applicable listing standards on the date it begins trading on the Exchange, and may be rescinded if the Company is not in compliance with such standards.

Xethanol Corporation's goal is to be the leader in the emerging biomass-to-ethanol industry. Xethanol's mission is to optimize the use of biomass in the renewable energy field and convert biomass that is currently being abandoned or land filled into ethanol and other valuable co-products. Xethanol's strategy is to deploy proprietary biotechnologies that will extract and ferment the sugars trapped in these biomass waste concentrations. Xethanol's strategic value proposition is to produce ethanol and valuable co-products cost effectively with ethanol plants located closer to biomass sources. In Iowa, Xethanol owns two ethanol production facilities, where it is deploying these technologies.

Xethanol Corporation (OTCBB:XTHN)

Orthovita Hits 52-Week High on FDA OK
Friday June 16, 2:15 pm ET
Orthovita Shares Reach 52-Week High on FDA Approval of Vitagel Bleeding Control Product

MALVERN, Pa. -- Shares of Orthovita Inc. jumped to a 52-week high Friday after the orthopedic biomaterial developer said the Food and Drug Administration approved its product for controlling bleeding during surgeries.

Orthovita shares rose 56 cents, or 13.5 percent, to $4.70 in afternoon activity on the Nasdaq at more than three times their average volume. Earlier in the session, the stock hit $5.05, above a previous 52-week high of $4.63 from January.

The company said the agency approved its Vitagel product for use in surgeries in combination with other methods to control bleeding when conventional methods are not effective or practical.

Orthovita said it will release Vitagel immediately, adding that it has already manufactured three lots of the product.

Shares of Neurocrine Biosciences (NBIX:Nasdaq) were among the worst-performing health-related stocks Friday, plunging 23% after the drug development company said it might need to conduct more tests on its Indiplon sleeping pill before it can be approved.

In mid-May, shares Neurocrine plunged after the Food and Drug Administration gave conditional approval to the company's Indiplon capsules in 5-milligram and 10-milligram doses, but rejected the tablets in a 15-milligram dose strength. Since then, the company has been working on a briefing document that will be submitted to the FDA. "This briefing document will assist the company in articulating its understanding of the issues communicated by the FDA in the May 15 action letters," the company said late Thursday.

The "not approvable" letter for the 15-milligram tablets requested that the company reanalyze certain safety issues and efficacy data. As a result, the company said that additional clinical would likely be required. "On May 17, we notified the FDA that we intend to further amend both applications to respond to the deficiencies raised by the FDA," Neurocrine said. "Our immediate focus is to meet with the FDA to determine the nature and scope of any additional preclinical and/or clinical work the agency may require for approval." Further, the company said it expects to adjust its financial guidance when it reports second-quarter results. Shares were trading down $4.48 to $14.89.

Orthovita (VITA:Nasdaq) jumped 15% after the developer of orthopedic biomaterials received pre-marketing approval from the FDA to sell its Vitagel surgical hemostat. The company, which has already manufactured three lots of Vitagel, said it will begin shipping and selling the product immediately. "A high level of coordination and performance was required throughout our organization to manage existing Vitagel supply and obtain the pre-market approval within a short time frame," Orthovita said. Shares were trading up 64 cents to $4.78.

Shares of Neurobiological Technologies (NTII:Nasdaq) fell 3% after the drugmaker announced the resignation of its chief financial officer. The company said that Jonathan Wolter, who is leaving to "pursue other professional opportunities," would continue to work with the company as a consultant over the next year so that he can aid in Sarbanes-Oxley compliance and other financial reporting issues. In the meantime, Neurobiological Technologies will conduct a search for Wolter's replacement. Shares were trading down 7 cents to $2.65.

Medarex (MEDX:Nasdaq) fell 6% after the biotech company said it received a grand jury subpoena from the U.S. Attorney's Office in the District of New Jersey related to past stock option grant practices. The company, which had previously received notification from the Securities and Exchange Commission that it was conducting an informal inquiry into the stock option grants, said its board has launched its own investigation into the matter.

In addition, Medarex received notification that it is being sued by investors as part of two derivative shareholder lawsuits in New Jersey. The suits name a number of current and former directors and officers as defendants, the company said. The lawsuits allege breach of fiduciary duty associated with the company's stock-option grant practices. Shares were recently down 59 cents to $9.22.

Shares of Sangamo BioSciences (SGMO:Nasdaq) slid 9% after the developer of genetic therapies priced 3.1 million shares of stock at $6.75 a share. The company, which expects nearly $20.2 million from the offering, plans to use the proceeds for product development and research programs as well as for general corporate purposes. "As we prepare to enter our first Phase 2 clinical trial, this $20.15 million of additional capital puts us in a stronger position to accelerate this program and to simultaneously bring additional ZFP Therapeutic programs into the clinic," the company said. The proceeds of the offering will leave the company with about $50 million in cash at the end of its fiscal year, instead of the $30 million that it originally expected. Shares were trading down 67 cents to $6.68.

Other health care volume movers included Pfizer (PFE:NYSE) , down 23 cents to $23.30; Boston Scientific (BSX:NYSE) , up 48 cents to $20; Johnson & Johnson (JNJ:NYSE) , up 17 cents to $61.64; Amgen (AMGN:Nasdaq) , down 44 cents to $67; Millennium Pharmaceuticals (MLNM:Nasdaq) , down 1 cent to $10.08; Elan (ELN:NYSE ADR) , up 9 cnets to $16.74; Merck (MRK:NYSE) , up 1 cent to $34.34; UnitedHealth Group (UNH:NYSE) , down 35 cents to $44.40; and Bristol-Myers Squibb (BMY:NYSE) , down 9 cents to $25.18.

Sangamo Prices Share Offer at $6.50 Each
Friday June 16, 10:26 am ET
Sangamo BioSciences Prices Offering of 3.1 Million Shares at $6.50 Per Share

RICHMOND, Calif. -- Sangamo BioSciences Inc. (NASDAQ SGMO), a genetic therapy development company, said Friday it priced an offering of 3.1 million shares at $6.50 apiece.

The company received about $20.2 million in net proceeds and plans to use the funds to continue the development of its ZFP Therapeutic product candidates and research programs and for other general corporate purposes.

Piper Jaffray was the sole underwriter of the offering and has been granted a 30-day option to buy up to 465,000 additional shares to cover any overallotments.

"As we prepare to enter into our first Phase 2 clinical trial, this $20.15 million of additional capital puts us in a stronger position to accelerate this program and to simultaneously bring additional ZFP Therapeutic programs into the clinic. As a result of this financing, we now project ending fiscal year 2006 with approximately $50 million in cash and cash equivalents, instead of $30 million as previously projected," President and Chief Executive Edward Lanphier said in a statement.

The securities were offered pursuant to an existing shelf registration statement.

Shares of Sangamo plugned 61 cents, or 8.3 percent, to $6.74 in morning trading on the Nasdaq, where they have traded in a 52-week range of $3.52 to $8.28.

Millennium Pharma turns down takeover offer
Thu Jun 15, 2006 3:52 PM ET

June 15 - Millennium Pharmaceuticals Inc.(Nasdaq Stock Symbol MLNM) said on Thursday that it has turned down an offer to be acquired.

Shares of the Cambridge, Massachusetts-based biotechnology company had risen $1.46, or 15.6 percent, to $10.83 on Nasdaq before being halted, but the gain slipped to about 8 percent shortly before the close of trading with the shares at $10.10.

"We had an unsolicited offer. Every public company has a fiduciary duty to explore strategic opportunities," said Millennium spokeswoman Theresa McNeely, who did not name the potential buyer.

The company said it had ended the process of exploring a sale and will continue to focus on increasing sales of its cancer drug Velcade and on its drug development pipeline.

"Our strategy hasn't changed. We are still building for the long term," McNeely said.

She declined to comment on reports that Millennium has hired investment banking firm Morgan Stanley.

Earlier on Thursday, Lehman Brothers analyst Craig Parker had upgraded the company's stock to "overweight," from "equal weight," and raised his 12-month price target to $14 from $10 a share, citing sales trends for Velcade and the company's research into new drugs.

David Witzke, an analyst at Bank of America, said he expected the stock to give back Thursday's gains.

"We continue to believe management's 2006 U.S. Velcade sales guidance of $225 million to $250 million is aggressive," he said in a report.

The company has been a target of takeover speculation since last year, triggered in part by Pfizer Inc.'s (NYSE Stock Symbol PFE) announcement in June 2005 that it would acquire biotechnology company Vicuron Pharmaceuticals Inc. for about $1.9 billion.

That deal sparked renewed confidence that big pharmaceutical companies would invest in smaller-capitalized biotechs.

Chris Raymond, an analyst at Robert W. Baird, said on Thursday that he would expect biotech stocks overall to rally.

"Any time you see rumors of a takeout and/or a takeout there tends to be a spillover effect," Raymond said.

The American Stock Exchange Biotech Index was up 2.9 percent shortly before the close of trading.

Raymond said he didn't think Millennium was a target.

"I don't think it's in play. I don't think there's a bidding war," Raymond said. "This specific instance seems to have come and gone."

Raymond said the most likely candidate to have been the suitor is Johnson & Johnson (NYSE Stock Symbol JNJ), which owns the European rights to Velcade and may be on the prowl for an acquisition after failing in its bid to acquire medical devices company Guidant.

FDA accepts Encysive's Thelin response.........stock soars
Thu Jun 15, 2006 2:47 PM ET


NEW YORK, June 15- Encysive Pharmaceuticals Inc. on Thursday said U.S. regulators accepted the company's response regarding its application for its Thelin drug, and will decide whether to approve the product by July 24, sending the company's shares soaring by as much as 43 percent.

Thelin is under review as a treatment for pulmonary arterial hypertension, a serious lung condition. The U.S. Food and Drug Administration in March deemed Thelin "approvable." The specter of new clinical trials and a potentially extensive delay to the drug had crippled the stock.

"It is a surprise," Rodman & Renshaw analyst Navdeep Jaikaria said of the speedy decision on Thelin. "Nobody was expecting it."

Shares of Encysive jumped $1.84, or 36 percent, to $6.89 in afternoon Nasdaq trade, after earlier hitting $7.24.

An FDA spokeswoman said in March the drug could be cleared should certain conditions be met, but did not specify what those conditions were.

Encysive said then that the FDA's approvable letter contained "a request for additional clinical trial work."

The company expects European regulators to make a decision within the next three months on Thelin, after the drug won a positive recommendation from a panel of experts earlier this month.

Thursday's news of the accepted response on Thelin may be viewed as a negative for Swiss biotechnology company Actelion (NASDAQ ATLN ), which relies on its PAH treatment Tracleer to sustain growth.

Jaikaria, who projects peak annual sales of Thelin at $200 million, said by getting to market sooner, Thelin would gain an edge against another PAH drug being developed by biotechnology company Myogen Inc. (Nasdaq MYOG)

"It positions Encysive favorably as they will be coming to market earlier than expected," Jaikaria said.

Shares of Anadys Pharmaceuticals (ANDS:Nasdaq) were among the worst-performing health-related stocks Thursday, tumbling 17% after the biopharmaceutical company said its chief executive is planning to leave the company by the end of the year.

Anadys said that Kleanthis Xanthopoulos is resigning so that he can join Enterprise Partners Venture Capital, a San Diego firm. Xanthopoulos, who will serve as a managing director at the venture capital firm, could leave Anadys before the end of the year if a successor is found sooner. The company will initiate a search for a new president and CEO shortly. Xanthopoulos will continue to serve on Anadys' board. The company's shares were trading down $1.46 to $7.02.

Encysive Pharmaceuticals (ENCY:Nasdaq) soared 36% after the drugmaker said the Food and Drug Administration accepted for review its response to a March 24 approvable letter related the company's new drug application for Thelin, a treatment used by patients who suffer from pulmonary arterial hypertension. The FDA is expected to make a decision on the drug on or around July 24. Encysive shares were trading at $6.88, up $1.83.

Shares of Discovery Labs (DSCO:Nasdaq) jumped 16% after the biotech company's Surfaxin product received orphan drug status from the FDA for the prevention of bronchopulmonary dysplasia, also known as chronic lung disease, in premature infants. Surfaxin previously received fast-track status from the FDA for the same indication. Shares were trading up 19 cents to $1.40.

Panacos Pharmaceuticals (PANC:Nasdaq) shares fell modestly after the death of the company's chief executive. Samuel "Skip" Ackerman, 58, suffered an apparent heart attack Wednesday afternoon during a presentation at a conference. "This tragic event comes as a great shock to all of us associated with Panacos and our thoughts are first and foremost with Skip's family at this difficult time," the company said in a press release. Peyton Marshall, the company's chief financial officer, has been named as acting CEO until a permanent replacement is found. Shares were trading down 2 cents to $5.50.

Shares of Volcano (VOLC:Nasdaq) jumped 12% on their first day of trading. The company, which makes ultrasound and measurement products used to enhance the diagnosis and treatment of heart disease, priced 6.8 million shares at $8 apiece, raising about $54 million. The pricing came in below the projected range of $10 to $12 a share. The company plans to use proceeds from the offering for marketing, research and development, debt repayment and for general corporate purposes. JP Morgan Securities and Piper Jaffray led the underwriting syndicate. Volcano shares recently changed hands at $8.95, up 95 cents.

Other health care volume movers included Pfizer (PFE:NYSE) , up 11 cents to $23.22; Millennium Pharmaceuticals (MLNM:Nasdaq) , up $1.84 to $11.21; Johnson & Johnson (JNJ:NYSE) , down 14 cents to $61.11; Boston Scientific (BSX:NYSE) , up 19 cents to $19.19; Amgen (AMGN:Nasdaq) , down 38 cents to $66.97; Elan (ELN:NYSE ADR) , up $1.21 to $16.46; Merck (MRK:NYSE) , up 48 cents to $33.97; UnitedHealth Group (UNH:NYSE) , down 24 cents to $44.74; and Bristol-Myers Squibb (BMY:NYSE) , up 20 cents to $24.95.

Indevus says bladder drug meets goals, shares jump
Thu Jun 15, 2006 11:57 AM ET

CHICAGO, June 15 - Biopharmaceutical company Indevus Pharmaceuticals Inc. (Nasdaq stock symbol IDEV ) on Thursday said its once-daily treatment for overactive bladder met its key goals in the first of two clinical trials, sending its shares up more than 6 percent.

Lexington, Massachusetts-based Indevus said the drug, Sanctura XR for overactive bladder, is the once-daily formulation of Sanctura, which is currently marketed for overactive bladder.

The data from the recently completed trial showed that the once-daily drug reduced frequency of urination and reduced the the urge to urinate, meeting the trial's two primary goals.

"We have taken a very good drug in Sanctura and, with advanced technology, made it better," said Glenn Cooper, chairman, president and chief executive officer of Indevus, in a statement.

The company said results of its second trial will be announced in July, and the company hopes to seek U.S. regulatory approval before the end of the calendar year.

Indevus shares were up 28 cents at $4.93 in early Nasdaq trading, after rising as high as $5.04.

Amylin seeks to limit Byetta prescriptions


June 15 2006

San Diego-based Amylin Pharmaceuticals (Nasdaq stock symbol AMLN) is suffering from an anxiety that many struggling biotechnology companies would envy.

There's fear that the manufacturer of the cartridge containing the company's diabetes drug, Byetta, won't be able to keep up with demand.

Because of the cartridge crunch, Amylin and its Byetta marketing partner, Eli Lilly and Co., are asking doctors to limit the number of new prescriptions for the type 2 diabetes treatment.

Company officials began making the request of top-prescribing doctors this week, said Jamaison Schuler, a spokesman for Indianapolis-based Lilly. In April, the companies stopped providing samples and vouchers for the drug.

There's not really a shortage of the drug, an Eli Lilly spokesman said, but the companies want to be sure that current patients can continue to renew their prescriptions.

The cartridges are made by a division of the U.K. company, Wockhardt. Schuler said the limitations are temporary.

Bloomington, Ind.-based Baxter Pharmaceutical Solutions is expected to begin producing the cartridges in the second half of this year, which should ease fears of a crunch, Schuler said.

The synthetic design of Byetta is derived from a protein found in the spit of the poisonous Gila monster lizard. Approved for market in April 2005 and launched for sale that June, Byetta mimics an insulin controlling hormone produced naturally in the body.

About 1 million prescriptions of the drug have been filled since then by about 200,000 patients, Schuler said.

The announcement sent shares of Amylin down $2.81, or 6.6 percent, to $42.81 at the close of trading yesterday. Shares continued to dip slightly in after-hours trading.

“I'd say the Byetta news is very nice and positive for the big picture,” said John McCamant, editor of the Medical Technology Stock Letter in Berkeley.

“Consider that we were at $17 (a share) a year and a half ago, and (other analysts) were saying diabetics were completely well served and there was no need for new medicines, and physicians were crying about patients having to use needles...and now they can't meet demand,” McCamant said.

The company also has made a series of positive announcements about Byetta in recent days.

Last weekend at the American Diabetes Association meeting in Washington, Amylin and Lilly showed that the results of a two-year study on diabetics using Byetta injections showed a sustained reduction in blood sugar level and an average weight loss of 10 pounds, versus a five pound average loss in people taking the drug for 30 weeks.

Patients receiving Byetta therapy also showed an improvement in the function of their insulin-producing beta cells.

The companies also announced that a study of patients taking a once-weekly dose of the drug were able to achieve recommended levels of blood sugar control, with an average improvement of about two percent compared to placebo.

The study was conducted with 45 type 2 diabetes patients unable to control their blood sugar with the drug metformin or a diet and exercise regimen.

Results of another study presented by the companies showed that even a small percentage of weight loss could lower health care costs among people with type 2 diabetes. The study, which included data from HMO claims databases, showed diabetics who experienced a 1 percent weight loss decreased their average health care costs by 3.6 percent over a year, or about $256.

“The benefit of controlling blood sugar levels and the associated weight reduction demonstrated by patients taking Byetta is significant since these are important clinical goals that many patients have difficulty achieving longer term,” said Dr. Robert Henry, lead investigators and Chair of the Veterans Medical Research Foundation Advisory Research Committee.

Left unchecked, the buzz created about Byetta at the diabetes conference cold cause an even further acceleration in the growth of its sales in coming weeks, Piper Jaffray & Co. analyst Thomas Wei wrote in a research note.

Based on management comments during the first-quarter 2006 earnings conference call, Wei said he estimated that Byetta demand would have to be in excess of $500 million on an annualized basis before there were a near-term supply issue.

The weekly data continue to show growth and currently annual projections are $436 million in sales, he wrote. Attempts to temporarily slow down Byetta prescriptions should not hurt the long-term trajectory of its sales, he said.

Deutsche Bank analyst Barbara Ryan wrote in a research note that she's concerned about Byetta's short-term growth prospects because of the cartridge shortage.

Amylin had some other good news at the diabetes conference.

Pre-clinical testing of Leptin, a compound it bought the rights to recently, given in combination with the company's hormone symlin, showed a sustained weight loss and a reduction in food intake in obese rats.

Although these are very early results, they are interesting because of Leptin's long history and repeated failure when used alone as a weight control therapy.

Leptin, a neurohormone produced by fatty tissue, was big news in the 1990s as a potential weight-loss wonder. It plays a role in regulating the body's energy intake and expenditure. Obese people have high levels of it and are believed to be resistant to its effects.

In May 1996, the biotech company Amgen began human clinical trials on leptin, but studies eventually showed it to be ineffective except at the highest dose levels. In March, Amylin bought the rights to leptin from Amgen.

Amylin's drug symlin, which is approved by the Food and Drug Administration to help people with type 1 diabetes, who are already taking insulin, to better control the harmful ups and downs in their blood sugar.

And Phase 2 trials in which people, without diabetes, used Symlin to lose weight show promise.

Add the leptin and long-acting-release Byetta data to the picture and you get a sense of a company “that's really coming along,” McCamant said.

“I think it has transitioned itself to be one of the leaders in the biotech space,” he said. “It's certainly become a world leader in diabetes innovation. What other company has brought two effective new diabetes treatments to market?”

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Millennium Pharmaceuticals Shares Edge Higher on Upgrade by Lehman on Strong Sales, Pipeline

CAMBRIDGE, Mass. -- Shares of Millennium Pharmaceuticals Inc. rose during afternoon trading after a Lehman Brothers analyst upgraded the stock, citing strong sales of the company's cancer treatment and its drug development pipeline.

The stock moved 26 cents higher, or nearly 3 percent, to $9.36 on the Nasdaq. Lehman analyst Craig C. Parker upgraded the stock from "Equal Weight" to "Overweight" and raised his target price from $10 to $14. The move comes after the company's Friday announcement that it filed a supplemental drug application with the U.S. Food and Drug Administration to expand Velcade's use in treating myeloma patients.

Myeloma is a form of cancer that develops in plasma cells, a type of white blood cell.

"We see Velcade's positive attributes maintaining competitiveness in the myeloma market in 2006 and accelerating into 2007 with a front-line label," Parker wrote in a report to investors.

The drug was approved to treat multiple myeloma patients who have received at least one prior therapy. The latest FDA application requests that Velcade be considered for front-line use in relapsed or refractory mantle cell lymphoma, a subtype of non-Hodgkins lymphoma, the most common type of hematological cancer. There are about 10,000 patients with Mantle cell lymphoma, which currently has no cure and low life expectancy.

Ultimately, Parker wrote, he foresees Velcade as component of combination chemotherapy, which could translate to sales of $421 million in 2008.

Millenium Pharmaceuticals has a series of other developing treatments within its pipeline at various stages, he said, which points to the company's long-term growth potential.