Critical Therapeutics to merge with N.C. company

Critical Therapeutics Inc.'s stock fell 23.4 percent to 48 cents after the Lexington biotech said it will merge with privately held Cornerstone BioPharma Holdings Inc. The combined company will be called Cornerstone Therapeutics Inc., be based at Cornerstone's offices in Cary, N.C., and run by Cornerstone's chief executive, Craig Collard. Cornerstone shareholders will also control 70 percent of the combined firm. Critical Therapeutics, which owns rights to two asthma drugs, Zyflo and Zyflo CR, had $12.9 million in revenue last year, but lost $37 million, forcing it to consider a sale or merger. After yesterday's stock decline, Critical had a market value of roughly $21 million, suggesting the combined firm will be worth about $70 million. (Todd Wallack)

Stryker Corp., the maker of artificial hips and knees, received a warning letter from the Food and Drug Administration alleging the company falsified documents and failed to control quality at a Hopkinton plant. Shares dropped $2.02, or 3.1 percent, to $63.66, the most in almost two months. The letter is the third warning Stryker has received from the FDA in 14 months. The allegation of falsified documents refers to material submitted to hospital ethics boards by Stryker sales representatives, said a company spokesman. The documents were required to gain approvals by the boards for experimental products made in Stryker's Massachusetts facility to be implanted in patients, he said. (Bloomberg)

Palomar Medical Technologies Inc. shares fell to a four-year low after the Burlington laser company posted a first-quarter loss and an analyst downgraded its stock. The company, which makes cosmetic lasers to zap wrinkles and hair follicles, said Thursday it lost $1 million compared with a profit of $5.9 million in the year-ago period. Revenue fell 27 percent, to $23 million. Yesterday, the research firm Lazard Capital Markets downgraded the stock to "hold" from "buy." In a conference call with analysts, Palomar chief executive Joseph P. Caruso said sales were hurt by high turnover in its salesforce and a slowdown in the economy. Palomar shares dropped $1.18, or 9.8 percent, to $10.81, after falling 15 percent Thursday. (Todd Wallack)

Starting this week, travelers catching a Continental Airlines Inc. flight at Boston's Logan International Airport can get an electronic version of a boarding pass when checking in online using any kind of cellphone or PDA that receives e-mail and opens Web pages. Continental began testing at Houston's George Bush Intercontinental Airport in December, expanded the program to Reagan Washington National Airport last week, and will introduce it at the Newark International Airport this month. It is only available to those leaving for a domestic destination who are the sole passengers on their reservation. (Nicole C. Wong)

Linens-N-Things, the bedding- and home-furnishing retailer, filed a Chapter 11 petition in bankruptcy court in Delaware and said it would close 120 underperforming stores, almost a quarter of them in California. The company cited the decline in the housing market, tightening credit markets, and a downturn in consumer spending, particularly in the housewares and home furnishings sector, as leading to a "precipitous decline" in profitability and liquidity. (AP)

Washington Post Co., owner of the namesake newspaper, said fourth-quarter profit fell 39 percent after the company incurred costs to cut jobs at Newsweek. Shares fell $30.67, or 4.5 percent, to $652.83, the biggest drop in more than 2 1/2 years. Net income fell to $39.3 million, or $4.08 a share, from $64.4 million, or $6.70, a year earlier. Excluding the Newsweek costs, profit of $5.68 missed the $6.41 estimate of a Lehman Brothers analyst. Sales gained 7.9 percent to $1.06 billion. The results underscore the industry decline as readers and advertisers migrate to other media. (Bloomberg)