FPA Shares Rally on PacifiCare Accord

Shares of San Diego-based FPA Medical Management Inc. soared 63% on hopes that the company will return to profitability as Santa Ana-based PacifiCare Health Systems Inc. agreed to pay more to FPA to care for its HMO members. PacifiCare agreed to boost the percentage of member premiums it gives FPA for its patients in Nevada, effective in the third quarter, according to FPA, which did not disclose the size of the increase. Combined with “aggressive cost-cutting,” FPA’s Nevada unit should return to profitability in the “very near future,” the company added. The stock lost three-quarters of its value after FPA reported first-quarter earnings far below estimates on Friday. The company’s shares rose $1.78 to close at $4.59 on Nasdaq.