The New York Times reports that Altria Group (NYSE: MO) "is in advanced talks to buy UST (NYSE: UST), the maker of the popular Skoal and Copenhagen smokeless tobacco brands, for more than $10 billion." Investors are reacting positively to the news, sending Altria shares over 1% higher.

Since spinning off Philip Morris International (NYSE: PMI) in March, Altria expected to experience sales decline. U.S. cigarette industry has been on the decline for years and Phillip Morris USA indeed saw an adjusted 3.6% drop in sales last year. The company has projected the trend will continue and cigarette sales volume to fall between 2.5% to 3% in the U.S. over the next few years. The reasons are knows: concerns about health, smoking bans and price increases. Altria has tried and failed to create its Marlboro brand smokeless tobacco products and has also pulled the plug on Marlboro Ultra Smooth, which despite using better filters didn't see higher consumer acceptance.

In news that shows how dangerous investing in small-cap biotechs can be, Sonus Pharmaceuticals (NASDAQ: SNUS) said that its late-stage trials of breast cancer drug Tocosol Paclitaxel have failed.

Sonus shares are down 85%, and are the most actively traded on any US exchange. The stock changes hands at $0.70 down from a 52-week high of $6.32.

Sonus has been something of a one-trick pony. Its revenue has been in the $3 million to $5 million range over each of the last four quarters when it lost $25 million.

With $42 million in cash on the balance sheet, at least the company has some time.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Sonus Pharmaceuticals, Inc. (NASDAQ: SNUS) is the top speculative pick for 2007 from John McCamant. The editor of The Medical Technology Stock Letter says, "Sonus is one of the more exciting companies in the biotech investment arena.

"The firm is intently focused on the development of superior versions of existing cancer drug treatments that not only offer potentially improved efficacy, but also significantly more attractive safety profiles. Their lead product candidate, TOCOSOL Paclitaxel, is a reformulated version of paclitaxel, which belongs to the taxane class of chemotherapeutics -- which are among the most successful and frequently used.

"However, existing treatments have unattractive safety profiles; Sonus's treatment may be a significant improvement, and we will not have to wait much longer to find out. SNUS just recently completed enrollment in their over 800-patient Phase III trial for metastatic breast cancer treatment. We can expect results in the second half of next year, and if positive, the company will file for approval by the end of 2007.