Genentech Sinks

Forest Labs jumps; Cisco slips; Biosite drops; plus more of today's stocks in the news

Lehman downgraded Genentech (DNA ) to equal-weight from overweight, based on valuation and possible too-high estimates of the commercial potential of Avastin.

An FDA panel is reviewing Forest Labs's (FRX ) leading product candidate Memantine for moderate to severe Alzheimer's disease.

FuelCell Energy (FCEL ) and Caterpillar announced the first joint sale of an ultra-low emissions fuel cell power generation plant in California.

Biosite (BSTE ) cut the 2003 earnings per share guidance to 75%-90% growth, and cut the revenue to 60%-65% growth, citing a shortfall in sales of its Triage BNP (b-type natriuretic peptide) blood test as the primary reason for the revision. Deutsche Bank downgraded to hold from buy.

Home builder Lennar (LEN ) raised the 5 cents annual dividend to $1.00 per share per year, and declared its first 35 cents quarterly cash dividend. Shares are higher on Wednesday.

Action Performance (ATN ) agreed to acquire Funline Merchandise, the maker of Muscle Machines, Jesse James West Coast Choppers, and other popular die-cast collectible vehicles, in a cash and stock transaction valued at $24 million, including $4 million in bank debt.

Needham initiated coverage of Level 3 Communications (LVLT ) with buy and an $8 12-month target.

American Pharmaceuticals (APPX ) announced results that exceeded expectations in a random, controlled Phase III clinical trial in 460 patients with metastatic breast cancer of Abraxane, vs. Cremophor solvent-based TAXOL.

Deutsche Bank upgraded J.M. Smucker (SJM ) to buy from hold.

UTStarcom (UTSI ) says current sales estimates indicate the company will achieve its highest revenue to date for handset shipments in the third quarter; the company expects handset shipments to exceed 4.5 million units in the current quarter.

Aeterna Laboratories (AELA ) says results from a Phase III trial in renal cell carcinoma, a form of kidney disease, showed that its antiangiogenic compound Neovastat did not achieve its targets of improving overall median survival time.

Viacom (VIA ) says the pace of recovery in local ad markets going into the fourth quarter is not as rapid as it had anticipated; Viacom now expects to deliver mid-to high-single digit growth in revenue and operating income for 2003.

Deutsche Bank upgraded J.M. Smucker (SJM ) to buy from hold.

KLM Royal Dutch (KLM ) is seen higher on reports that an allliance deal with Air France is "imminent."

Cell Therapeutic (CTIC ) says two presentations, both studies of Xyotax in combination with platinates in patients with solid tumors, reported preliminary data that showed an overall response rate of 68%.

ESS Technology (ESST ) raised the $37 million to $41 million third-quarter revenue guidance to $44 million to $48 million, and narrowed the 13 cents to 18 cents GAAP loss guidance to an 8 cents to 13 cents loss, citing strong demand in all product lines and market share gains.

Cisco Systems (CSCO ) said its board authorized up to $7 billion in additional repurchases of its common stock with no termination date.

The FDA requested additional data on Novartis' (NVS ) arthritis and pain drug, Prexige. Novartis ays ongoing clinical studies may in part address information requested by the FDA. The news will delay the painkiller's launch until 2006, prompting analysts to eliminate Prexige sales from earnings estimates.

Monterey Pasta (PSTA expects third-quarter results to be significantly below analysts' estimates, and now forecasts breakeven to a 2 cents loss. The maker of gourmet pastas cited a decline in orders from its largest and second largest customers.

Usana Health Sciences (USNA ) sees 54 cents earnings per share (of which about 3 cents would be from an adjustment of the effective tax rate for 2003), vs. the earlier guidance for 43 cents to 45 cents earnings per share. Usana maintains the 5$2 million third-quarter sales guidance.

Scholastic (SCHL ) posted a 63 cents first-quarter loss vs. a $1.14 loss on a 55% revenue rise.

International Paper (IP ) says it, Wyerhaeuser, and Georgia-Pacific agreed with plaintiffs to settle an antitrust federal class action suit. The three companies will pay a total of $68 million; International Paper's share is about $24 million, and the company will take a 2 cents charge in the third quarter.

Paychex (PAYX ) posted 21 cents vs. 20 cents first-quarter earnings per share on a 22% revenue rise.

Midland (MLAN ) estimates its losses from Hurricane Isabel will likely be in the range of $10 million to $15 million (pre-tax), which after the benefit of reinsurance, would impact earnings per share by 15 cents to 22 cents in the third quarter.

Express Scripts (ESRX ) will be added to the S&P 500 Index after the close of trading on Sep. 25, replacing Quintiles Transnational, which is being taken private.

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