Healthcare Sector Review: Firms Upbeat On Gilead, Infant Tylenol Recall

VIVUS, Inc. (NASDAQ:VVUS): In briefing documents posted by the FDA in advance of a review meeting for the weight loss drug Qnexa, the FDA stated that in three studies conducted to address the risk of major congenital malformations and oral clefts with use of the drug, that, “depending on the analysis, topiramate monotherapy exposure in pregnancy is likely to be associated with a two to five-fold increased prevalence of oral clefts.” Also, the FDA said regarding cardiovascular risk that, “It is unknown what the clinical significance of PHEN/TPM’s cardiovascular effects and metabolic effects will be in a higher-risk cardiovascular population with chronic treatment.” A long-term, cardiovascular outcome trial was potentially suggested in the briefing.

The shares closed at $11.99, up $0.81, or 7.25%, on the day. Its market capitalization is $1.07 billion.

ArthroCare Corporation (NASDAQ:ARTC) disclosed that on February 8, it received a Civil Investigative Demand from the Department of Justice, requesting information related to its marketing of radio-frequency ablation devices, which could implicate the False Claims Act. The company said, “We are cooperating fully with the investigation, although we can give no assurances regarding the duration of the investigation or whether proceedings will be instituted against us. We intend to represent the Company’s interests vigorously in this matter. At this stage of the investigation, however, we cannot predict the ultimate outcome of the investigation or any potential liability we may incur.”

The shares closed at $25.00, down $5.77, or 18.75%, on the day. Its market capitalization is $687.82 million.

Gilead Sciences, Inc. (NASDAQ:GILD):¬†After Gilead¬†reported that the combination of its GS-7977 and RBV drugs had failed to cure a majority of the most difficult to treat hepatitis C genotype 1 patients enrolled in a study, a number of research firms remained upbeat on Gilead. In a note to investors, Citigroup said that the trial results will force all companies to treat patients in this category with an additional antiviral drug. The firm recommends buying Gilead’s stock at current levels, since all companies will face the same hurdles and Gilead already has another drug that could be added to the treatment regiment.

Citi still expects Gilead to be the first to market with a highly effective, all oral treatment for hepatitis C genotype 1 patients. Meanwhile, Morgan Stanley is still optimistic that the potential efficacy of Gilead’s 7977 as a treatment for HCV will be validated and it maintains an Overweight rating on the stock. In mid-morning trading, Gilead sank $8.17, or 14.90%, to $46.65. Several companies that make competing treatments for hepatitis C genotype 1 patients climbed, with Achillion (NASDAQ:ACHN) gaining, Vertex (NASDAQ:VRTX) advancing, and Idenix (NASDAQ:IDIX) gaining.

The shares closed at $46.82, down $7.99, or 14.58%, on the day. Its market capitalization is $35.26 billion.

Pfizer Inc. (NYSE:PFE): Nestle (NSRGY) and Danone (DANOY) submitted preliminary bids of around $10B for Pfizer’s (NYSE:PFE) baby-food unit, according to Bloomberg, citing two people with knowledge of the matter. Both companies are planning anti-trust strategies — Nestle is considering conducting an auction to sell what it can’t keep because of regulatory concerns, according to a source, and Danone is considering a joint bid with Mead Johnson Nutrition (NYSE:MJN) and splitting the business along geographies or brands.

The shares closed at $21.19, down $0.14, or 0.66%, on the day. Its market capitalization is $162.89 billion.

Bristol Myers Squibb Co. (NYSE:BMY) disclosed early this morning in a regulatory filing that In January, the company received a subpoena from the United States Attorney’s Office for the Southern District of New York requesting information related to the sales and marketing of ABILIFY. Bristol-Myers said it is not possible at this time to assess the outcome of the matter or the potential impact on the company.

The shares closed at $33.12, up $1.08, or 3.37%, on the day. Its market capitalization is $56.12 billion.

Johnson & Johnson (NYSE:JNJ): McNeil Consumer Healthcare, Division of McNEIL-PPC is voluntarily recalling, at the wholesale and retail levels, seven lots, approximately 574,000 bottles, of Infants’ TYLENOL Oral Suspension, 1 oz. Grape distributed nationwide in the United States. McNeil is initiating this voluntary recall as a precaution after receiving a small number of complaints from consumers who reported difficulty using the Infants’ TYLENOL SimpleMeasure dosing system.

The shares closed at $64.99, up $0.07, or 0.11%, on the day. Its market capitalization is $177.48 billion.

Want news like this in real-time so you can get an edge? Click here for Wall St. Cheat Sheet Pro.