By Val Brickates Kennedy
Drug stocks fell in early action Monday as the broader market
reacted negatively to a warning issued by Bank of America (BAC)
that credit markets were continuing to deteriorate.
The Amex Pharmaceutical Index and the Amex Biotechnology Index
were both off by about 1% at 239.43 and 632.90, respectively.
The Dow Jones Industrial Average lost about 160 points, or
almost 2%, to rest at 7,974.
One bright spot was Amylin Pharmaceuticals (AMLN), up 3% at
$10.43.
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 up 1% at $33.93, after the
drugmaker unveiled a better-than-expected first-quarter earnings
report.
Despite the solid performance, Lilly affirmed its 2009 financial
forecast.
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 11% to $19.95 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.
-Val Brickates Kennedy; 415-439-6400;
AskNewswires@dowjones.com
