UPDATE: US Drug Sector Rises After Bernanke Comments

   (Updates share activity.) 

By Val Brickates Kennedy

Drug stocks moved higher Monday, solidifying early gains in the wake of comments made by U.S. Federal Reserve chief Ben Bernanke that the recession could end later this year.

The Amex Pharmaceutical Index (DRG) advanced 0.4% to 240.67 in mid-afternoon trading, while the Amex Biotechnology Index (BTK) edged up 0.2 to 604.05. The Dow Jones Industrial Average rose 1.5%, extending a four-session winning streak from last week.

Big Pharma made gains on both sides of the Atlantic.

Shares of Johnson & Johnson (JNJ), Abbott Laboratories (ABT), and Eli Lilly & Co. (LLY) helped set the upward pace among U.S. drugmakers%.

Meanwhile, AstraZeneca (AZN), GlaxoSmithKline (GSK), Novartis (NVS) and Sanofi-Aventis (SNY) were the biggest winners on the European side, with their U.S.-listed shares all up at least 2%.

United Therapeutics (UTHR) was the notable loser among the larger-cap biotechs, with shares tumbling 8.5% to $60.58.

Earlier, United Therapeutics said the Food and Drug Administration may not approve its Tyvaso by the application's April 30 deadline because of lingering questions about the product's delivery system.

The company said it hopes to resolve any delay within "a few months." A version of the drug is already marketed under the name Remodulin.

Shares of CV Therapeutics (CVTX) also fell, dragged 5% lower to $19.67 after Japan's Astellas Pharma (ALPMY) said it was dropping its $16-a-share acquisition bid.

Last week, Gilead Sciences (GILD) struck a friendly deal with CV to acquire the company for $1.4 billion, or $20 a share. Shares of CV had trended higher late last week in anticipation of a possible counterbid by Astellas.

-Val Brickates Kennedy; 415-439-6400; [e-mail]