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LONDO (MarketWatch) -- Swiss drug giant Novartis on Tuesday said it will buy the pulmonary business unit of Nektar Therapeutics for $115 million in cash. The unit develops medecines that can be delivered via the lungs. The transaction, however, excludes Nektar's inhalation programs for insulin, vancomycin, ciprofloxacin and amikacin. Novartis said it expects to complete the transaction, which is subject to customary regulatory approval, by the end of 2008.

LONDON (MarketWatch) -- Swiss pharmaceutical company Roche Holdings AG on Tuesday posted a 1.6% increase in third-quarter sales, helped by strong demand for its Avastin and Herceptin cancer drugs, and confirmed its outlook for the year.

U.S. stock futures weakened Tuesday ahead of a wave of earnings reports from the likes of DuPont, 3M and Pfizer that could sap the enthusiasm from signs of a thaw in money markets and a call for fresh fiscal stimulus.

LONDON (MarketWatch) -- Icon said Tuesday that its third-quarter net profit rose 47% to $21.4 million, or 35 cents a share, from $14.5 million, or 24 cents a share, a year earlier. The provider of outsourcing services to the pharmaceuticals industry said net revenue for the quarter rose 35% to $225.5 million. Analysts polled by FactSet had been expecting earnings of 32 cents a share. The group said its backlog is now over $1.74 billion and it is confident in the outlook for the remainder of 2008.

NEW YORK (MarketWatch) -- Pfizer Inc. said Tuesday its third-quarter earnings rose to $2.3 billion, or 34 cents a share, from $761 million, or 11 cents a share in the year-ago period. The New York pharmaceutical company said sales were virtually flat at nearly $12 billion. On an adjusted basis, Pfizer said it earned 62 cents a share, while analysts polled by FactSet Research expected 60 cents a share, on average. For the full year, the company forecast earnings in the range of $1.61 to $1.71 a share, or $2.36 to $2.41 a share on an adjusted basis. Wall Street was looking for 2009 earnings of $2.20 a share.

Pfizer said early Tuesday that its third-quarter profit more than tripled year-over-year, due largely to steep charges taken during last year's period for the discontinuation of its inhaled insulin product Exubera.

NEW YORK (MarketWatch) -- Eli Lilly and Co. said Tuesday that it is in advanced talks to resolve ongoing probes by the U.S. Attorney's office for the Eastern District of Pennsylvania related to past U.S. marketing and promotional practices for its antipsychotic drug Zyprexa. As a result, the pharmaceutical giant expects to record a third-quarter charge of $1.42 billion, or $1.29 a share.

NEW YORK (MarketWatch) -- Forest Laboratories Inc. said Tuesday that its third-quarter earnings rose to $244 million, or 80 cents a share, compared to $225 million, or 71 cents a share, in the same period a year ago. Revenue rose to $926 million compared to $842 million. Analysts polled by FactSet Research estimated, on average, earnings per share of 70 cents and sales of $975 million. Forest says its fiscal 2009 earnings per share will be in the range of $3.30 to $3.40.

Eli Lilly and Co. said Tuesday morning that it is in advanced discussions to resolve ongoing federal probes into its marketing of Zyprexa, a popular drug designed to treat bipolar disorder and schizophrenia.

BOSTON (MarketWatch) -- Drug stocks were trending downwards early Tuesday, but Pfizer Inc. and Schering-Plough Corp. managed to break from the pack, bouyed by better-than-expected third-quarter earnings reports. The Amex Pharmaceutical Index declined 0.9% to 268.48 and the Amex Biotechnology Index dipped 0.7% to 674.54, following the broader market into negative territory. Shares of Pfizer climbed 2% as Schering-Plough's stock jumped 3% on news that their respective earnings reports had either met or beat Wall Street estimates.