August 11, 2008 / 4:12 PM / 11 years ago

CORRECTED - UPDATE 1-Toronto stocks fall on commodities, Cardiome hit

(Corrects third bullet to show Cardiome shares fell 27.6 percent, not 9 percent) (Adds details)

*TSX index sinks as materials, energy sectors fall

*Oil drops to $114 a barrel; gold down at $840 an ounce

*Cardiome shares fall 27.6 percent after FDA letter

TORONTO, Aug 11 (Reuters) - Toronto Stock Exchange’s main index was sharply lower late on Monday morning, weighed down by lower commodity prices, while Cardiome Pharma Corp COM.TO was hit by FDA queries regarding its Kynapid heart treatment.

Leading the way down was the resource-laden materials sector, which sank 4.5 percent, falling along with a slump in metals prices. Yamana Gold (YRI.TO) fell 68 Canadian cents, or 6 percent, to C$10.41.

Gold was sliding due to a rally in the U.S. dollar, said Andrew Martyn, portfolio manager at Davis-Rea.

“People are trying to get their head around what to do, essentially, with the U.S. dollar,” Martyn said. “Is this just a one-time blip and we’re going to head back in the other direction, or is this a continuous trend?”

The S&P/TSX composite index .GSPTSE was down 137.39 points, or 1.03 percent, at 13,204.35, with six of its 10 main groups lower.

The key energy sector was down 1.8 percent due to a drop in crude oil prices.

Also weighing on the index was the health-care sector, down 9.4 percent. In the health sector, Cardiome fell 27.6 percent to C$9.30 after it and Astellas Pharma US Inc (4503.T) announced the receipt of an FDA letter for Kynapid.

Cardiome said the FDA requested additional information, including a safety update from ongoing or completed studies of vernakalant hydrochloride, which is used in the treatment of atrial fibrillation or abnormal heart rhythm.

Agrium Inc AGU.TO shares dropped C$3.52, or 4.2 percent, to C$80.28. It said on Monday it reached a share-swap deal for its Egyptian unit.

MISR Oil Processing Company, S.A.E. of Egypt (MOPCO), will acquire its EAgrium project through a share swap in which EAgrium will become a wholly-owned subsidiary of MOPCO and the shareholders of EAgrium will become shareholders in MOPCO, the company said. ($1=$1.07 Canadian) (Reporting by Jennifer Kwan; Editing by Peter Galloway)

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