By Val Brickates Kennedy
News that U.S. drugmakers Merck & Co. (MRK) and
Schering-Plough Corp. (SGP) plan to merge did little to stoke
trading in the sector early Monday, as the benchmark sector indexes
appeared to shrug off news of the latest Big Pharma
mega-merger.
The Amex Pharmaceutical Index crept up 0.6% to 22.52 and the
Amex Biotechnology Index eased 0.4% to 561.71. The broader market
edged into positive territory after beginning the session in the
red.
Shares of Merck dived as Schering-Plough stock soared on news
that the business partners planned to merge in a deal valued at
just over $41 billion. Merck and Schering-Plough already co-market
the cholesterol-controlling drugs Zetia and Vytorin.
Merck shares dived 11% at one point, before settling at $22.07,
down 3%. Schering-Plough shares, meanwhile, soared 17% to
$20.91.
The announcement comes just a little over a month after sector
heavyweights Pfizer Inc. (PFE) and Wyeth (WYE) announced they
planned to merge in a deal worth about $68 billion.
Shares of Wyeth and Pfizer were both up about 1% earlier
Monday.
Shares of Genentech Inc. (DNA) were off about 1% at $90.18.
On Friday, Swiss drugmaker Roche upped its hostile tender offer
for the biotech giant to $93 a share from $86.50. Roche already
holds about 56% of Genentech's shares.
Genentech advised shareholders on Friday not to act on the bid
until its board has issued a recommendation. The company has said
it believes it is worth around $112 a share.
Shares of Johnson & Johnson (JNJ) were down almost 2%
earlier Monday at $47.12. The healthcare giant co-markets the
popular rheumatoid arthritis drug Remicade with Schering-Plough. On
the Merck/Schering-Plough conference call early Monday, analysts
questioned how the merger would affect the marketing rights of both
Remicade and a planned successor product, golimumab.
News that President Barack Obama plans to lift certain
restrictions on the federal funding of stem cells research fueled
trading amongst stem cell researchers.
Shares of Geron Corp. (GERN) jumped 20% to $4.69, while Aastrom
Biosciences (ASTM) rocketed 62% to 54 cents. StemCells Inc. (STEM)
shares shot up 36% to $1.88, as tiny Advanced Cell Technology
(ACTC) saw its shares soar 68% to 19 cents a share.
-Val Brickates Kennedy; 415-439-6400;
AskNewswires@dowjones.com