Sector Update: Healthcare

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Healthcare stocks were solidly ahead Friday afternoon, with the NYSE Healthcare Sector Index climbing about 1.2% and shares of healthcare companies in the S&P 500 rising 1.6% as a group.

In company news, Cytokinetics ( CYTK ) shares rallied Friday after the biopharmaceutical company posted a surprise Q4 profit as revenue soared.

The company working to develop small-molecule therapeutics to modulate muscle control recorded net income of $6.5 million during the three months ended Dec. 31, 2013, reversing an $11.5 net loss in the year-ago period. On a per-share basis, CYTK earned $0.21 compared with a $0.48 per share loss last year and easily trumping the $0.19 per share loss analysts polled by Capital IQ were expecting.

Revenue jumped more than 11 times over year-ago levels to $24.3 million, topping the analyst consensus by $5.2 million, supported by a $19 million surge in license and technology fees while revenue from research and development activities more than doubled compared with the same quarter last year.

For FY14, CYTK is expecting cash revenue in a range of $19 million to $21 million, not including around $10 million in deferred revenue from last year into the current fiscal period. The guidance also does not reflect potential milestone payments from the company's partnered projects. Analysts, on average, are expecting $40.4 million in total revenue for CYTK during the 12 months ending in December.

Shares were up more than 29% in recent afternoon trading, earlier climbing nearly 34% to an intra-day high of $9.24 each - recouping nearly all of their losses since Jan. 16 when shares topped out a few days after the company said it was beginning to recruit volunteer patients in Japan for additional testing of its omecamtiv mecarbil drug candidate to prevent heart failure.

In other sector news,

(+) LCI, (+12.1%) Q2 earnings of $0.46 per share top Street view by $0.11. Revenue advances 84.1% over year-ago levels to $67.33 mln, beating consensus estimates by $1.12 mln. Sees FY14 revs of $275 mln to $285 mln, topping expectations by at least $26.36 mln.

(-) LH, (-2.7%) Adjusted Q4 net income rises $0.07 over year-ago levels to $1.61 per share but still falls $0.04 short of analysts forecasts. Revenue climbs 2.3% year over year to $1.43 bln, largely matching Street projections looking for $1.4 bln. Guides FY14 EPS, revenue in-line with Capital IQ consensus.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities

Referenced Stocks: CYTK

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