Healthcare Business Recap: Targacept Shares Slammed, Abbott Laboratories Chatter

A double blow for Targacept (NASDAQ:TRGT) causes shares to fall. Its clinical trial of TC-5214 depression treatment is discontinued, and disappointing results from a study of its TC-6987 diabetes treatment candidate are released.

Levadex, a med developed by MAP Pharmaceuticals (NASDAQ:MAPP) is in the spotlight after the FDA rejected a first attempt at approval, in a complete response letter issued after markets closing on Monday. With shares all over the place Tuesday, JPMorgan takes to the longer term, remarking that Levadex is an “attractive, approvable product” (despite its first-pass rejection).

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The ‘Two Birds with One Stone’ adage comes to mind regarding mounting interest in Abbott Laboratories (NYSE:ABT) imminent division into two companies. John Mylant predicts that shares will be hot, as investors will be able to buy into an income producer (Abbvie) and a growth stock (Abbott) with a single trade.

Riata wires, now recalled by St. Jude Medical (NYSE:STJ), are getting further heat from researchers. The wires were used to connect life-saving defibrillators to the heart, and are said to short circuit at times, which might have led to as many as 22 deaths. A soon-to-be published research study reports that Riata and Riata ST wires “are prone to high-voltage failures that have resulted in death”.

Topping a 52-week high, Arena Pharmaceuticals (NASDAQ:ARNA) shares are jumping again on Tuesday following double regulatory wins in the U.S. and in Europe, and a large Street gain on Monday as well.

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Supreme Court deliberations of the healthcare mandate began on Monday, but health insurer shares are already moving in concert with rumors regarding a possible decision which could come down in June. Paul Clement is watching swing Justice Anthony Kennedy, and after perceiving his ‘skeptical’ line of questioning, writes that “It appears that the mandate is in trouble”. Health insurers, such as Aetna (NYSE:AET), United Health Group (NYSE:UNH), and Wellpoint Inc. (NYSE:WLP) could indeed lose out on a bounty of new customers should the mandate not be upheld, and their shares duly fell in Tuesday trading.

In a session in which Affymax (NASDAQ:AFFY) shares are halted and then resumed following the good news that the company’s peginesatide anemia treatment was approved by the FDA, the stocks jump more than 10 percent. The med is approved for patients on dialysis for chronic kidney disease, and will be Affymax’ first marketed product. The news raised competitor Amgen (NASDAQ:AMGN) shares in sympathy.

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To contact the reporter on this story: Mark Lawson at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com