Deutsche Bank Fined $41 million by the Feds

The Federal Reserve Board announced a $41 million penalty against Deutsche Bank AG for anti-money laundering deficiencies

Deutsche Bank CEO encourages Europeans not to follow U.S. Mortgage Regulations

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The Federal Reserve Board announced a $41M penalty and consent cease and desist order against the U.S. operations of #DeutscheBank $DB for anti-money laundering deficiencies. “The actions were taken by the Board to address unsafe and unsound practices at the firm’s domestic banking operations.

The Board identified failures by Deutsche Bank’s U.S. banking operations to maintain an effective program to comply with the Bank Secrecy Act and anti-money laundering laws,” the Federal Reserve said.

The consent order requires Deutsche Bank to improve its senior management oversight and controls related to compliance by the U.S. banking operations with anti-money #laundering laws.

Meanwhile, Deutsche Bank CEO John #Cryan pressured regulators in Europe to dismiss the same kind of rules for lenders’ mortgage holdings that have been adopted by their U.S.-based counterparts, Bloomberg reports, citing comments from Cryan at an investor conference in New York.

“By and large, Germans pay their debts” and aren’t close to as a risky as U.S. banks and home-buyers have been in the past, Cryan said, according to Bloomberg.

“For Europe to surrender, to accept U.S. mortgage capitalization rules, I think would be inappropriate,” the Deutsche Bank CEO said. “So to price them as though they were Californian subprime mortgages from 10 years ago is not appropriate.”

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Gilead HIV Success Shields it Against Patent Loss, Competition

The bictegravir combination was “well tolerated and no patients discontinued study medication due to renal events”

Analyst expects Gilead to use one of its priority review vouchers to obtain an accelerated six month regulatory timeline

 

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#Gilead (GILD) announced Tuesday that its latest #HIV treatment candidate met its primary goal in four late-stage studies, showing “non-inferiority” against existing regimens, including a competitor from GlaxoSmithKline (GSK).

By definition, a #non-inferiority trial aims to demonstrate that the test product is not worse than the comparator by more than a small pre-specified amount. This amount is known as the non-inferiority margin, or delta.

Wall Street analysts largely cheered the news and said it could be key in preserving Gilead’s spot in the HIV treatment arena.

BACKGROUND: Gilead announced Tuesday morning that four Phase 3 studies evaluating its #bictegravir in combination with the already-approved emtricitabine/tenofovir in HIV patients met their primary goals of “non-inferiority” against existing regimens, including GlaxoSmithKline’s #Tivicay.

On the safety front, the bictegravir combination was “well tolerated and no patients discontinued study medication due to renal events.” The company noted that it plans an New Drug Application (NDA) submission in Q2, with a Marketing Authorization Approval (MAA) filing in Europe following in Q3.

CITI SEES POTENTIAL FIRST CHOICE FOR PHYSICIANS: #Citi analyst Robyn #Karnauskas says today’s data are “key” to the long-term health of Gilead’s HIV franchise and could make the bictegravir regimen the first choice among physicians, adding that a 1Q18 launch of the bictegravir regimen looks “likely” now. While cautioning that Gilead’s announcement did not include comment on drug superiority or detailed efficacy metrics, Karnauskas’ base case estimates about 25% of patients switching to the bictegravir combo, contributing roughly $6 per share to her discounted cash flow modeling.

JPMORGAN SAYS KEY TO HIV FRANCHISE: #JPMorgan analyst Cory #Kasimov is “generally encouraged” by Gilead’s announcement but “not entirely surprised” given the previous Phase 2 data. Kasimov thinks a 2018 launch, potentially with accelerated FDA review using one of the company’s priority vouchers, could be “key” to help the company maintain market share in the face of pending patent expirations as well as continued growth in GlaxoSmithKline’s Tivicay. Kasimov adds that he expects sales of the bictegravir product to peak around $5B by 2022.

LEERINK SEES POTENTIAL YEAR-END LAUNCH: #Leerink’s Geoffrey #Porges says the bictegravir news looks “in line” with both his and the company’s expectations: While the trials “do not appear to have shown statistical superiority,” they also didn’t bring new safety concerns. The analyst expects Gilead to use one of its priority review vouchers to obtain an accelerated six month regulatory timeline, potentially allowing for year-end approval and launch, adding that his forecast for the regimen eventually ramps to over $10B in global sales.

PRICE ACTION: Shares of Gilead showed volatility Tuesday, reaching highs near $64.75 before paring those gains into session close at $64.50. Meanwhile, GlaxoSmithKline $GSK gained 1.8% to $43.43.

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Blackstone to sell Logicor to China Investment

China Investment Corporation (CIC) is in advanced negotiations to acquire Blackstone’s European logistics platform for over $13.4 billion.

Blackstone originally considered steering Logicor to an IPO, Deal could be announced this week

If completed, the transaction would mark Europe’s largest-ever real estate deal. 

 

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China Investment Corporation (CIC) is in advanced negotiations to acquire Blackstone’s European logistics platform for over $13.4 billion.

China’s sovereign wealth fund has reportedly moved ahead of rivals in the pursuit of the Logicor warehouse portfolio, after formal bids having been submitted by last Thursday.

CIC is now said to be scheduled to sign a deal for Blackstone’s (BX) giant’s 630 European distribution centers within the next two to three days. If completed, the transaction would mark Europe’s largest-ever real estate deal.

In March, Blackstone began shopping Logicor to institutional investors including CIC, #Singaporean warehouse group Global Logistics Properties (GLP), and a joint venture between Singapore’s #Mapletree Investments and #Temasek Holdings. The sale of the 146.4 million square foot warehouse platform would mark the biggest logistics property deal in history.

CIC is said to benefit from its close relationship with #Blackstone.  In January 2014, CIC purchased London’s Chiswick Park office complex from Blackstone for over $1.28  billion.

Blackstone originally considered steering Logicor to an IPO, but is reported to have shelved that option in favor of a trade sale, aggressively driving the bidding process forward over the past few weeks. A trade sale would potentially achieve a higher price while allowing Blackstone to dispose of the business in a faster and more efficient manner than an #IPO.

Logicor was founded by Blackstone’s real estate business in 2012 and has rapidly grown into one of Europe’s largest warehousing specialists, with modern logistics facilities in 17 countries across the continent. Investors continue to pile into the logistics real estate sector amidst a boom in online retail, soaring prices and relatively high yields compared to other property asset classes.

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Ensco to buy Atwood Oceanics

Offshore driller Ensco to buy is rival Oceanis for $10.72 per shares

The combined company will have a market cap just shy of $7 billion

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Offshore driller Ensco Plc $ESV said it would buy smaller rival Atwood Oceanics Inc $ATW in an all-stock deal valued at about $839 million.

Atwood shareholders will receive 1.6 Ensco shares for each Atwood share.

The deal, which values each Atwood share at $10.72, represents a premium of 32.6 percent to the company’s Friday close.

Ensco expects to realize annual pre-tax expense synergies of approximately $65 million for full year 2019 and beyond. The combination is expected to be accretive on a discounted cash flow basis.

The transaction will join two leading offshore drillers – combining long-established histories of operational, safety and technical expertise with high-quality assets that cover the world`s most prolific offshore drilling basins.

The acquisition will strengthen Ensco`s position as the leading offshore driller with exposure to deep- and shallow-water markets that span six continents.  Upon closing, Ensco will add six ultra-deepwater floaters, including four of the most capable drillships in the industry, and five high-specification jackups. The combined company will have a fleet of 63 rigs, comprised of ultra-deepwater drillships, versatile deep- and mid-water semisubmersibles and shallow-water jackups, along with a diverse customer base of 27 national oil companies, supermajors and independents.

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Novartis could sell $50 billion of Assets

Novartis investors are concerned that assets sales that could raise roughly $50B may be used in another “unsuccessful mega deal”

A list of potential take over targets could also emerge from ASCO meeting being held in Chicago from June 2-June 6. We will keep an eye on CHRS, PBYI, ICPT, CLVS and NKTR

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#Novartis $NVS investors are concerned that assets sales that could raise roughly $50B may be used in another “unsuccessful mega deal,” like that of eye care giant Alcon, which the company bought for $52B in 2011, as Novartis seeks to fill holes in its cancer portfolio, Reuters reports, citing shareholders.

Novartis CEO Joe Jimenez said he is currently reviewing a sale of Alcon’s surgical devices and contact lens units, valuing the businesses at $25B-$35B, as well as disposing of a roughly $14B stake in Roche (RHHBY) and an over-the-counter venture with GlaxoSmithKline (GSK), worth $10B.

The American CEO is also considering disposal of a roughly $14 billion stake in cross-town rival Roche, as well as his over-the-counter (OTC) drugs venture with GlaxoSmithKline , worth some $10 billion.

To be sure, Jimenez has said Novartis’s M&A focus remains on smaller transactions, including lower-risk drug licensing deals, ranging up to $5 billion.

When Jimenez began his strategic review this year, he said “all options were on the table”. Sales have fallen nine quarters, necessitating a costly programme to arrest the fall.

Where rivals including Roche, Merck and Bristol-Myers Squibb have immuno-oncology drugs on the market for a range of cancers, Novartis has only investigational molecules in this hot new therapy area.

Speculation that Novartis might buy AstraZeneca $AZN sparked a brief jump in the AZN’s stock last year. There has also been talk of its interest in Bristol-Myers $BMY .

A list of potential take over targets could also emerge from ASCO meeting being held in Chicago from June 2-June 6. We will keep an eye on CHRS, PBYI, ICPT, CLVS and NKTR.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.