Health Care Sector Update for 01/25/2017: AST,GTHP,VIVO

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Health care stocks were reversing several days of declines today, with the NYSE Health Care Index rising over 0.8% while shares of health care companies in the S&P 500 were up more than 0.9% as a group.

In company news, shares of Asterias Biotherapeutics ( AST ) have turned lower Wednesday despite the regenerative medicine company today saying it expects to begin a late-stage clinical trial of its AST-OPC1 drug candidate early next year after observing improved motor function in patients with complete cervical spinal cord injuries following treatment with 10 million of the oligodendrocyte progenitor cells.

Five of the six patients enrolled and dosed during a recent phase I/IIa trial have now completed six-month follow-ups while three of the patients also have completed their nine-month follow-ups. All five saw early increases in their motor-use scores after three months and have either maintained or continued to improve through their most recent follow-ups, the company said yesterday.

Based on those results, Asterias executives Wednesday said they expect to begin discussions with U.S. Food and Drug Administration officials later this year about ongoing clinical development of AST-OPC1 as well as possibly designating it as a "breakthrough" therapy. They expect to complete those talks during the July-to-September quarter, the company said.

AST shares were down nearly 3% at $4.76 each, giving back all of yesterday's advance that followed the company's initial mid-morning announcement and falling as low as $4.50 a share during Wednesday trade.

In other sector news,

(+) GTHP, (+148.8%) Signs manufacturing, sales and distribution agreement for its LuViva advanced cervical scan in China, Taiwan, Hong Kong and Macau with Shandong Yaohua Medical Instrument Corp.

(-) VIVO, (-17.9%) Q1 EPS of $0.15 misses by $0.05 per share. Revenue declines 0.8% to $46.8 mln, also lagging $51.15 consensus. Lowers FY17 earnings and revenue guidance below Street views. Slashes dividend this year by 37.5% to $0.50 per share.

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

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

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