(Updates stock activity.)
By Val Brickates Kennedy
U.S. drug stocks fled with the broader market into negative
territory Monday as investors reacted negatively to a warning by
Bank of America Corp. (BAC) that credit markets were continuing to
deteriorate.
The Amex Pharmaceutical Index retracted 2% to 237.03 while the
Amex Biotechnology Index retrenched 3% to 619.44.
The Dow Jones Industrial Average tumbled about 240 points, or
3%, to 7,892.
Leading decliners among the large caps included Allergan Inc.
(AGN), Amgen Inc. (AMGN) and Pfizer Inc. (PFE), all down at least
3%.
One bright spot was Amylin Pharmaceuticals Inc. (AMLN), up 2% at
$10.39.
Early Monday, an Amylin director, James Wilson, accused Amylin
activist investor Carl Icahn of pushing for a sale of the company
to Eli Lilly & Co. (LLY), which co-markets Amylin's top-selling
product, Byetta.
Last year, Icahn was able to navigate a takeover deal between
another investment, ImClone Systems, and Lilly for $6.5 billion.
Icahn is currently engaged in a proxy battle with Amylin's board.
Wilson, who serves as Amylin's lead independent director, says a
deal with Lilly at this time would seriously undermine Amylin's
value.
Wilson made his comments in a proxy addendum filed Monday.
Meanwhile, Lilly shares were down 2% at $33.17, after the
drugmaker unveiled a better-than-expected first-quarter earnings
report.
Despite the solid performance, Lilly didn't raise its 2009
financial forecast, citing a strengthening U.S. dollar and
increasing generic competition.
Lilly reported first-quarter net income rose 23% on 5% higher
revenue, due largely to strong U.S. sales and improved gross
margins.
Lilly added that the change in foreign-exchange rates boosted
gross margins by almost 7 points to about 84%. U.S. revenue jumped
13% to $2.87 billion, while foreign revenue slid 4% to $2.18
billion due to a higher U.S. dollar.
Dendreon Corp. (DNDN) was the standout on the biotech side.
Shares of the cancer-vaccine developer shot up 7% to $19.25 after
the stock was upgraded to buy from hold by Lazard Capital.
On Sunday, Dendreon released additional positive data for its
prostate-cancer therapy, Provenge, which has had difficulty winning
U.S. regulatory clearance. Dendreon presented the data at the
annual meeting of the American Association for Cancer Research.
-By Val Brickates Kennedy, 415-439-6400;
AskNewswires@dowjones.com