Strong Rebound for Healthcare Stocks Tuesday; Medivation, UCLA In Legal Fight Over Royalty Payments
Top Healthcare Stocks
Healthcare stocks were higher in late trade with the NYSE Healthcare Sector Index turning around earlier declines with a 0.5% gain and shares of healthcare companies in the S&P 500 adding 1.1% as a group.
In company news, Medivation ( MDVN ) shares shook off a mid-day slump and were trading higher shortly before the closing bell Tuesday and the biotech company late yesterday disclosing a legal challenge by the University of California, Los Angeles, claiming the company hasn't paid the proper royalties for products using UCLA-patented technology.
Specifically, the suit filed in California Superior Court charges MDVN has failed to 10% of the operating profits the company has received from Astellas Pharma Inc. through a 2009 collaboration agreement, according to a company regulatory filing.
A second allegation accuses MDVN of breaching its fiduciary duties to UCLA as a minority shareholder. Despite the disagreement with the company, the UCLA complaint does not seek to scuttle the exclusive licensing agreement between MDVN and the college.
MDVN shares retreated from early gains to brief trade underwater around mid-day, only to rebound ahead of the closing bell, recently fetching $57.80 each, up 3.6%. The stock has a 52-week range of $44.51 to $88.20 a share, rising about 9% over the past 12 months.
In other sector news,
(+) JNJ, Adjusted Q1 earnings of $1.54 per share beat the Capital IQ consensus by $0.06. Revenue climbs 3.5% year over year to $18.11 bln, also topping Street view by around $10 mln.
(-) TRXC, Prices underwritten offering of 12.5 mln shares of its common stock at $4 each - a 53.4% discount to Monday's closing price. Deal generates $46.2 mln in gross proceeds, which will be used to commercialize its SurgiBot robotic surgery tool.