General Commentary: Today was a relatively light news day for the healthcare sector, however, a number of companies reported quarterly earnings last night and this morning. Wellpoint (WLP) reported second quarter earnings of $2.04 per share, excluding non-recurring items, $0.03 worse than the Capital IQ consensus of $2.07, while revenues rose 2.0% year over year to $15.17 billion versus the $15.3 billion consensus. While these results weren't bad, it was the company's cautious outlook for the remainder of the year that has driven shares down over 10%. The company lowered its full year EPS guidance to $7.30-7.40 from prior guidance of at least $7.57, excluding non-recurring items, versus a consensus estimate of $7.76. Angela F. Braly, Chair, President, and CEO said, "While our second quarter EPS results improved from the prior year and are ahead of our plan through the first six months, the combination of lower enrollment and slightly higher medical cost trends are driving a reduction in our full year 2012 outlook. We are disappointed with the need to lower our guidance, but believe it is the right action to take, given the challenging market we see, our commitment to maintaining pricing discipline and our intention to continue investing for the strong future growth opportunities ahead of us."

Gainers on news: CytRx (CYTR +15.73%) Announced the initiation of a Phase 1b clinical trial to determine the maximum tolerated dose and to evaluate the preliminary efficacy of aldoxorubicin (formerly INNO-206) administered in combination with chemotherapeutic agent doxorubicin in patients with advanced solid tumors who have failed other therapies. Novavax (NVAX +7.56%) Reported positive top-line results from its Phase 2 clinical trial of its quadrivalent season influenza virus-like particle vaccine candidate NuPathe (PATH +6.07%) Announced the appointment of Armando Anido as CEO, effective immediately. Decliners on news: Sarepta Therapeutics (SRPT -6.81%) Reversal following yesterdays 100%+ gain due to positive results in the treatment of muscular dystrophy UnitedHealth Group (UNH -5.68%) Trading down following poor quarterly results from Wellpoint (see below); CVH, AET also lower Gainers on earnings: Healthways (HWAY +19.11%) Beat quarterly EPS by $0.09 ($0.15 vs $0.06 estimate), revenues rose 0.4% yoy to $170.2 mln vs $168.85 mln estimate; reaffirmed FY12 EPS guidance of $0.42-0.52, ex items, vs $0.44 estimate, sees FY12 revs of $665-705 mln vs $86.4 mln estimate The Medicines Company (MDCO +11.99%) Beat quarterly EPS by $0.24 ($0.46 vs $0.22 estimate), revenues rose 13.5% yoy to $135.7 mln vs $131.73 mln estimate Vascular Solutions (VASC +5.22%) Beat quarterly EPS by $0.02 ($0.15 vs $0.13 estimate), revenues rose 10.8% yoy to $24.7 mln vs $24.21 mln estimate; raised FY12 EPS and revenue guidance TMO +6.35%, QGEN +4.04%, EW +3.03%, LLY +3.03%, ILMN +1.57%, ALXN +1.41%, REGN +1.15%, EXAS +0.3 dcliners on earnings: WellPoint (WLP -10.79%) Missed quarterly EPS by $0.03 ($2.04 vs $2.07 estimate), revenues rose 2.0% yoy to $15.17 bln vs $15.13 bln estimate; lowered FY12 EPS guidance to $7.30-7.40 vs $7.76 estimate Questcor Pharmaceuticals (QCOR -5.02%) Reported Q2 EPS of $0.65 vs $0.63 estimate, revenues rose 144.6% yoy to $112.5 mln vs $108.41 mln estimate AmSurg (AMSG -3.94%) Guided for Q3 EPS of $0.47-0.49 vs $0.50 estimate; sees FY12 EPS of $1.97-2.01 vs $2.00 estimate, FY12 revs of $905-925 mln vs $923 mln estimate OCR -1.56%, OMI -1.55%, ELN -1.09%, BMY -0.62%

Upgrades/Downgrades: InVivo Therapeutics (NVIV +6.09%) Initiated with a Buy at Aegis Capital, target $5 Hi-Tech Pharmacal (HITK +5.88%) Upgraded to Buy from Fair Value at CRT Capital MWI Veterinary Supply (MWIV -3.18%) Downgraded to Neutral from Overweight at Piper Jaffray.