Genentech Soars on Cancer Trial Results

Drug makers fall on Supreme Court ruling; Qualcomm reiterates growth targets; plus more of today's stocks to watch

Shares of Genentech (DNA ) surged after a Phase III study of the company's Avastin plus chemotherapy in metastatic colorectal cancer patients met its primary endpoint of improving overall survival; the benefit of treatment in study far exceeded expectations. WR Hambrecht upgraded the shares to buy from hold, while Banc of America reportedly downgraded its rating to sell.

Shares of Pfizer (PFE ) and other pharmaceutical makers were lower on a Supreme Court ruling that the pharmaceutical industry was unlikely to succeed in its challenge to a pioneering Maine law designed to lower prescription drug prices for the poor and uninsured, according to the Washington Post.

Britol-Myers Squibb (BMY ) shares fell on a May 18 New York Times report of a federal probe into company's financial statements is deeper than the company revealed.

Campbell Soup (CPB ) shares rose after it reported third-quarter EPS of 31 cents, vs. 23 cents, (including costs and expenses) on a 17% sales rise. It sees 15 cents to 17 cents fourth-quarter EPS. It raised its fiscal year 2003 EPS guidance to $1.49 to $1.51. S&P upgraded the shares to hold from sell.

Roxio (ROXI ) agreed to acquire pressplay, the online music operation owned by the music units of Vivendi Universal (V ) and Sony Corp. (SNE ), and turn it into a new service that would operate under the name of the defunct file-swapping network Napster. Based on Roxio's closing stock price on Friday, the purchase price is about $39 million, excluding transaction costs estimated at about $1 million.

Lowe's Cos. (LOW ) shares fell Monday after the company posted 53 cents, vs. 44 cents a year ago, first-quarter earnings per share on an 11% sales increase and flat same-store sales growth. The home-improvment retailer sees earnings per share of 68 cents to 70 cents in the second quarter and $2.16 to $2.20 for fiscal 2004. Lehman Bros. says the same-store sales figure was "disappointing."

Chiron (CHIR ) offered to acquire Britain-based PowderJet Pharmaceuticals (PJP ). Terms of the deal call for Chiron to pay 550 pence per share, or about $878 million. RBC Capital says the deal results in Chiron becoming the world's second-largest provider of flu vaccines.

Regeneron Pharmaceutical (REGN ) shares rose after it says recently completed Phase III trial suggests early weight loss identifies patients that are likely to benefit most from its Axokine treatment.

Raymond James downgraded Advanced Fibre (AFCI ) to market perform from strong buy on valuation. The company was unavailable for comment.

Legg Mason downgrades Providian Financial (AFCI ) to hold from buy. The company was unavailable for comment.

Qualcomm (QCOM ) reiterated its financial guidance. The company sees revenue growth of 27% in the third quarter and 30% to 33% for fiscal 2003 (excluding its QSI segment). Qualcomm also expects earnings per share of 30 cents to 31 cents in the third quarter and $1.38 to $1.41 for fiscal 2003 (excluding QSI).

Toys 'R' Us (TOY ) posted first-quarter loss of 3 cents per share, vs. 2 cents loss per share a year ago. Excluding the impact of EITF 02-16, the toy retailer posted 1-cent EPS, vs. 2-cent loss. It says it is comfortable with $1.15 fiscal year 2004 consensus EPS estimate (excluding EITF 02-16). S&P reiterates accumulate.

Elizabeth Arden (RDEN ) sees a wider than expected 92-cent to 94-cent first-quarter loss per share on $133 million to $135 million in sales.

Prudential upgraded Foundry Networks (FDRY ) to buy from hold.

Limited Brands (LTD ) posted 9 cents, vs. 14 cents, first-quarter adjusted earnings per share on a 1% same-store sales decline. The company says it is comfortable with the 16-cent First Call second-quarter earnings per share estimate and 0%-5% fiscal 2004 earnings per share growth estimate.

Credence Systems (CMOS ) set a cost reduction program, which will include elimination of about 14% of its employee base.

PETCO Animal Supplies (PETC ) lowered its 19 cents to 20 cents first-quarter earnings per share guidance to 18 cents to 19 cents, and its guidance for fiscal 2004 from $1.09-$1.11 to $1.02-$1.04. The company cited adoption of a new accounting standard.

Bradley Pharmaceuticals (BDY ) raised its $47.5 million to $48.5 million 2003 revenue guidance to $50 million to $56 million and its 83 cents to 86 cents earnings per share guidance to 86 cents to 91 cents .

Consolidated Edison (ED ) will offer 8.7 million shares for gross proceeds of $345 million. As a result of dilution, the company lowered its $2.90 to $3.05 2003 earnings per share guidance to $2.82 to $2.97.

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