U.S. stocks ended the day mixed as concerns grew that a six-month old rally has gone ahead of any economic recovery.  A drop in crude prices on global demand concerns sent energy shares lower.  Also, investors appeared jittery ahead of the two-day policy meet and Friday's key post of August durable goods, and refrained from adding to their holdings.  Defensive areas like healthcare rose.  Technology shares also found some favor with investors after Dell announced plans to acquire Perot Systems in a $3.9 billion deal.

This morning’s stock futures indicate Wall Street is headed for a higher opening, helped by a rally in global stocks.  Ahead of the market’s open, Dow Jones industrial average futures rose 48, or 0.5%, to 9,766.  Standard & Poor's 500 index futures were up 6.20, or 0.6%, to 1,066.60, while Nasdaq 100 index futures rose 10.75, or 0.6%, to 1,738.50.  Ahead of the FOMC

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div style="text-align: justify;"My favourite call today comes from Cowen. They are downgrading span style="font-weight: bold;"Celgene (NASDAQ:CELG) /spanto Underperform from Neutral based on based upon concerns over 1) valuation, 2) the company’s ability to meet consensus revenue and earnings expectations and, 3) the potential for patent challenges to create an overhang on the stock. span style="font-weight: bold;"They expect CELG to underperform the market by 20%+ over the next 12 month/spanbr /br /span style="font-weight: bold;"Can Revlimid Be A $5B+ Drug? /spanCelgene’s small molecule franchises have finite patent lives and its pipeline appears immature. Cowen's NPV analysis of the company’s oncology franchises suggests CELG shares are worth $45 assuming Revlimid sales reach $5B+ and the drug’s 2026 U.S. polymorph patent holds up to scrutiny. Sensitivity analyses indicate CELG might beworth between $22/share and $61/share depending on one’s assumptions for Revlimid’s peak sales potential ($2-8B) and patent life (2016-2026).br /br /span style="font-weight: bold;"How Much ...

U.S. stocks are continuing their upward march on growing belief that the economy is turning a corner as better-than-expected earnings from companies continue to impress investors.  After a four-week retreat, benchmark gauges have leapt forward as the appetite to assume risk has grown significantly.  Safe-havens like treasuries have come under pressure as investors have committed more money into stocks. 

On Thursday, the Dow Jones industrial average gained 188 points, or 2.1%, and closed at its highest point since November 5; the broad-based S&P 500 index rose to its highest in eight months, jumping 22 points, or 2.5% and the Nasdaq surged 47 points or 2.5%, closing higher for the twelfth consecutive session.  The tech-heavy index recorded its best performance since 1992.  Treasuries declined, with the 10-year off 31/32 and the corresponding yield up to 3.665%.

Although much of the earnings growth has been driven by cost-cutting measures, it has

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When Arena Pharmaceuticals (Nasdaq: ARNA) released positive Phase III data on its obesity drug, Lorcaserin, many people expected shares to take off. After all, the company’s press release on Monday confirmed that the drug had proven to be safe and effective.

Why I Did Not Recommend Arena Pharmaceuticals

But in a classic example of just how volatile and unpredictable the biotech sector can be, the stock slumped 28% instead. While the news was good on the surface, the problem was that Lorcaserin didn’t help patients lose 5% more of their body weight than placebo. The 5% figure is a guideline that the FDA uses for approvability - and investors punished the stock for not meeting that requirement.

Let’s dig into the story and apply the lessons from it to investing in the biotech sector…

Investing in the Biotech Sector Is Not Easy

Investing in the biotech sector is not easy.

In fact, I’d argue

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The FDA has published a table with the names of products and potential signals of serious risks and/or new safety information identified for these products during 1Q08 in the AERS database. The FDA notes that patients should not stop taking these medications and should consult their prescriber with any questions as the agency will investigate each of the claims further before taking action or issuing more definitive statements on the reported concerns. Some highlights from this table of products that are sold by public-traded pharma and biotech companies are listed below in the following format: active ingredient (brand name) - company(ies) - new safety information reported. Duloxetine (Cymbalta) - Eli Lilly (LLY) - Urinary retention Heparin - Baxter (BAX) & APP Pharma (APPX) - Anaphylactic-type reactions Lapatinib (Tykerb) - GlaxoSmithKline (GSK) – Liver toxicity Lenalidomide (Revlimid) - Celgene (CELG) – ...

Checking on the biotechnology sector, we spoke with Zacks senior analyst Grant Zeng, CFA about recent developments among these companies. We discussed M&A [mergers and acquisitions] activity as well as top Buy recommendations.

How has earnings season gone this quarter? Any major surprises?

As you know, most of the companies covered by me are small-cap biotech companies which usually report their quarterly earnings quite late. I just finished updating all my companies last week and I have both positive and negative surprises.

On the positive side, Celgene’s (CELG) Revlimid beat our estimate by $15.8 million; Vidaza sales beat our estimate by $7.2 million. Total product sales beat our estimate by $16.5 million with quarterly sales of $542 million. Celgene’s adjusted EPS also beat our estimate by 6 cents. We have a Hold rating on Celgene due to valuation concerns.

For BioMarin (BMRN), sales for all three

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