Bristol-Myers, GE Face FDA Warning

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Includes: BMY, GE
by: Steven Towns

A spokeswoman for the U.S. Food and Drug Administration says the agency "has been investigating reports of deaths and serious cardiopulmonary reactions" in patients using drugs made by Bristol-Myers Squibb and General Electric for enhancing heart ultrasound imaging. Definity, made by Bristol-Myers, is said to be the main drug at issue, but Optison, made by GE, is also expected to receive a heightened risk warning from the FDA. The WSJ reports the warnings could come this week. Sources say the drugs are expected to have a black-box warning, the strictest level. Bristol-Myers confirmed it is talking with the FDA and will make an announcement when talks have finalized. Definity recorded $65M of sales in 2006, compared to total revenue of $17.9B for Bristol-Myers. GE's Optison has been off the market since late 2005 due to a manufacturing-related recall, but was expected to relaunch in Sept. or Oct., according to a notice posted on the company's website last month. Shares of Bristol-Myers Squibb gained 1.2% to $30.09 on Friday. GE rose 0.2% to $41.77.

Sources: Wall Street Journal
Commentary: GE Reiterates Earnings GuidanceBristol-Myers Settles Probe for $515 MillionBristol-Myers Shares Look Good Despite Analyst Skepticism -- Bloomberg
Stocks/ETFs to watch: BMY, GE. ETFs: PPH
Earnings call transcript: Bristol-Myers Squibb Q2 2007, General Electric Q2 2007

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