Headache for health stocks

REGULATORS have cast a shadow over the healthcare sector, wiping more than £230m off the value of Smith & Nephew, after it became embroiled in a US probe into agreements between joint implant makers and surgeons.

Analysts said the inquiry by the state attorney in Newark, New Jersey, was undoubtedly prompted by the steep rise in implant prices over recent years.

Fears that S&N may end up with a big fine sent shares tumbling 24½p to 497½p.

And it was another bad day for Irish drugs firm Elan, where 55% was wiped off its market value following the death of a third patient receiving its multiple sclerosis treatment, Tysabri.

Sales were suspended last month after two people taking the medication died of a rare central nervous system disease. Elan's shares fell €3.01 to €2.41 as analysts said Tysabri was unlikely to go back on sale.

But British rival Shire gained 42½p to 604½p after boss Matt Emmens revealed sales of its top-selling hyperactivity drug steadied following its surprise suspension in Canada.