FDA Asks Removal of Endo Pharmaceuticals’ Opana from the Market

FDA requested that Endo Pharmaceuticals remove its opioid pain medication from the market

This is the first time the FDA has taken steps to remove a currently marketed opioid pain medication

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The U.S. Food and Drug Administration requested that Endo Pharmaceuticals remove its opioid pain medication, reformulated Opana ER (oxymorphone hydrochloride), from the market. After careful consideration, the agency is seeking removal based on its concern that the benefits of the drug may no longer outweigh its risks. This is the first time the agency has taken steps to remove a currently marketed opioid pain medication from sale due to the public health consequences of abuse.

“We are facing an opioid epidemic – a public health crisis, and we must take all necessary steps to reduce the scope of opioid misuse and abuse,” said FDA Commissioner Scott #Gottlieb, M.D. “We will continue to take regulatory steps when we see situations where an opioid product’s risks outweigh its benefits, not only for its intended patient population but also in regard to its potential for misuse and abuse.”

Endo said it is reviewing the request and is evaluating the full range of potential options as we determine the appropriate path forward.

“While the benefits of opioids in treating and managing pain are widely recognized, the misuse and abuse of these products have increased greatly in the U.S.,” the company said in a statement.

“As a pharmaceutical company with a demonstrated commitment to the improvement of pain management, Endo feels a strong sense of responsibility to improve the care of pain for patients while at the same time taking comprehensive steps to minimize the potential misuse of its products. Despite the FDA’s request to withdraw OPANA ER from the market, this request does not indicate uncertainty with the product’s safety or efficacy when taken as prescribed. Endo remains confident in the body of evidence established through clinical research demonstrating that OPANA ER has a favorable risk-benefit profile when used as intended in appropriate patients.”

Other Stocks to Watch

Shares of pain treatment makers Depomed (DEPO) and Insys Therapeutics (INSY) are weaker in extended trading.

Collegium Pharmaceuticals (COLL), shares are up  due to its competing drug. It last traded at $10.50. COLL has a 52-week trading range of $7.37 – $20.55.

ENDP last traded at $12.80. ENDP has a 52-weeks trading range of $9.70 – $24.92.

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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.

Tivity Health is For Sale

Tivity Health provides fitness and health improvement programs in the United States

Going private would accelerate Tivity Health’s ongoing transformation

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Reuters reports that Tivity Health (TVTY) is in discussion to go private. Going private would accelerate Tivity Health’s ongoing transformation, that included changing its name from Healthways earlier this year and divesting its total population health division, which uses coaching and clinical protocols to improve the overall health of employees and insurance plan members.

#TivityHealth, Inc.  ($TVTY) provides fitness and health improvement programs in the United States. It offers #SilverSneakers senior fitness program to the members of #Medicare advantage, Medicare supplement, and group retiree plans; and Prime fitness, a fitness facility access program through commercial health plans, employers, and insurance exchanges. The company also provides access to its WholeHealth Living network primarily to commercial health plans.

Following a strategic review, Tivity Health last year decided against an outright sale, instead opting to divest its population health unit to Sharecare Inc, a U.S. health and wellness online platform co-founded by TV personality Dr. Oz.

TVTY closed at $37.80. Shares have a 52-week trading range of $20.600 – $40.00.

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Bottle-Maker Shares Crack as Beer Sales Fizz Out

2017 is shaping up to be the worst year for beer volumes since 2009

Owens-Illinois is trying to build out its non-beer segments to compensate for the continued weakness in beer

Shares of beverage can and bottle makers are underperforming broader market measures after beer maker Molson Coors Brewing (TAP) gave uninspiring guidance at its investor day on Wednesday.https://stockwinners.com/blog

COORS INVESTOR DAY:

At its investor day on Wednesday, the brewer said its underlying marketing, general and administrative spending will increase this year and CapEx will remain at elevated levels for 2018.

As a result of these expenses, the brewer said it sees underlying EBITDA margins rising 50-60 bps per year for next three years.

Separately, Molson Coors Brewing said it bought the remainder of the MillersCoors joint venture it didn’t own two years ago, making it the third largest beer maker.

Molson Coors’ shares declined sharply during the presentation and ended the day down over 6%. Shares are falling further today.

BEER SALES SLIDE:

For the U.S. market, “2017 is shaping up to be the worst year for beer volumes since 2009, when total industry volumes were down 2%,” said Bernstein analyst Trevor #Stirling, according to a Financial Times.

Last month, the U.S. trade association for larger brewers, said that for the three months from February to April, beer volumes fell 5%, according to the FT report.

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OWENS-ILLINOIS:

Speaking at the Deutsche Bank Global Industrials and Materials Conference Presentation on Wednesday, Jan #Bertisch, the CFO of the world’s largest maker of glass bottles, Owens-Illinois, said the company is trying to build out its non-beer segments to compensate for the continued weakness in beer.

PRICE ACTION:

Can and bottle makers Owens-Illinois (OI), Crown Holdings (CCK), and Ball Corp. (BLL) are all down in afternoon trading, missing out on a broad market rally.

Large beer makers are also missing out on the rally, with Molson Coors down again, along with Anheuser Busch Inbev (BUD), and Boston Beer Company (SAM).

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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.

Morgan Stanley Cuts U.S. Auto Sales

Morgan Stanley cuts 2017 US auto industry sales forecast to 17.3M units from 18.3M units

In Q1 2017, 10.2 million vehicles were sold in the used market, a decrease of 1.3% versus the previous year

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New Car Sales

The US auto industry has witnessed high demand for heavyweight vehicles in the past few years. In 2016, auto sales in the US were at their highest, with about 17.6 million vehicles sold during the year.

However, weakness in the first four months of 2017 also ignited the debate whether US auto sales have already peaked.  US Vehicle Sales at May reported at 16.96M, down from 17.21M last month and down from 17.52M one year ago. This is a change of -1.43% from last month and -3.16% from one year ago.

Used Autos

In Q1 2017, 10.2 million vehicles were sold in the used market, a decrease of 1.3% versus the previous year. Franchise used sales also showed a reduced number of units sold, with a 0.3% decrease versus 2016. Fewer consumers trading in their existing vehicle upon their new purchase could be sidestepping inventory from dealers. The average vehicle on American roads is nearly 12 years old.

The average retail used vehicle sold for $19,227 in Q1 2017, an increase of 2.1% year over year. This record-breaking high can partially be attributed to a higher mix of vehicles being sold that are only 3 years old or newer (53% of sales in Q1 2017) and these 3-year-old vehicles began with much higher MSRPs versus years prior. One caveat is that, while the MSRPs are up and so is the share, these vehicles aren’t retaining nearly as much value as before.

Cautious Comments

Morgan Stanley analyst Adam Jonas made “big” cuts to his US auto industry sales  forecast, reducing his 2017 US #SAAR forecast to 17.3M units from 18.3M units, 2018 to 16.4M units from 18.9M units, 2019 to 15M units from 19.2M units, and 2020 to 15M units from 18.7M units.

Jonas believes the auto cycle may be hitting a point of diminishing returns following 8 years into the biggest cycle on record as used car values erode, pressuring conditions for selling new vehicles, and said new vehicle inventory levels continue to rise.

Additionally, the analyst expects electrical margins to face increasing competition from new entrants and higher development costs.

#SAAR = seasonally adjusted annual rate

He lowered his price targets on 15 companies, cutting his targets for the following companies by 10% or more: Adient (ADNT), Ford (F), Group 1 Automotive (GPI). Specifically, he cut his target on Adient to $85 from $95, on Ford to $9 from $10, and on Group 1 Automotive to $53 from $60. Jonas kept an Overweight rating on Adient, and Underweight ratings on Ford and Group 1. LEAR: Jonas downgraded Lear to Underweight from Equal Weight and reduced its price target to $134 from $149. He expects Lear’s earnings to peak this year and to fall by 20% by 2021.

He also expects its Electrical business margins to disappoint investors due to higher development costs, increased competition, and potential lost market share.

Stocks to Watch:

GM, F, HMC, TM, LEA, TSLA, AN, FCAU, and GPI

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Sarepta seen as a take-over target

Sarepta Therapeutics’ current valuation does not reflect the company’s FY17 guidance for Exondys 51, its treatment for Duchenne muscular dystrophy

Exondys 51 has a worldwide sales potential of $750M

 

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#Sarepta Therapeutics, Inc. (SPRT) is a biopharmaceutical company. The company focuses on the discovery and development of RNA-based therapeutics for the treatment of rare neuromuscular diseases. The company offers EXONDYS 51, a disease-modifying therapy for the treatment of duchenne muscular dystrophy #DMD , which is a rare genetic muscle-wasting disease caused by the absence of dystrophin. It also develops SRP-4045 and SRP-4053, which are exon skipping clinical product candidates for the treatment of DMD.

While approval for Sarepta Therapeutic’s (SRPT) Exondys 51 in the U.S. was controversial, Oppenheimer said it has resulted in a “high level” of short interest and the company would be a “bargain” if it is acquired. As of May 15th, a total of 11,210,759 shares have been shorted, giving it about 7 days to cover the short positions.

BARGAIN SHOPPING:

Oppenheimer analyst Hartaj Singh said he thinks Sarepta Therapeutics’ current valuation does not reflect the company’s FY17 guidance for Exondys 51, its treatment for Duchenne muscular dystrophy, and long-term data on slowing progression of the disease. He added an announcement by CEO Ed Kaye saying the company would return focus to the regulatory and scientific side of the business has fueled speculation of a potential deal.

If an acquirer were to target Sarepta, recent biotech deals imply that the company “would be a bargain” just on Exondys 51 worldwide sales potential of $750M and without other exon mutations the company is exploring, the analyst contends.

Singh added that he believes a larger company could achieve return on investment at current valuations solely from the global Exondys 51 franchise.

In addition, he said investors will be able to gain more visibility on the stock through the company’s ongoing earnings update, the release of data on the PPMO platform, and the potential EU approval of Exondys 51 in the first half of 2018. He keeps an Outperform rating on Sarepta with a $76 price target.

COMPARABLE DEALS:

Singh notes Sarepta shares are currently trading at a 50%-75% discount to recent takeouts in the biotech space, namely Medivation, Ariad and Actelion (ALIOF). Pfizer (PFE) bought Medivation for $14B in 2016, and earlier this year, Takeda Pharma (TKPYY) acquired Ariad Pharmaceuticals for $5.2B, while Johnson & Johnson (JNJ) purchased Actelion and its rare disease-focused business for $30B.

NOTABLE:

In May, the Wall Street Journal reported that a Sarepta consultant had worked with parents of sick boys to prepare testimony to convince the Food and Drug Administration to approve #Exondys 51, or #eteplirsen, after trial data for the Duchenne muscular dystrophy treatment proved inconclusive.

An FDA advisory committee, the majority of which didn’t know Sarepta’s involvement with the families, voted against approval 7-6 last year, however that advice was not followed when the agency granted the drug accelerated approval in September, 2016.

PRICE ACTION:

Sarepta Therapeutics SRPT rose 0.4% to $31.53 in morning trading. Since September 19, 2016, the date when the FDA granted approval to Exondys 51, Sarepta shares are up about 12%. The stock has a 52-week trading range of $16.52 – $63.73.

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Nordstrom Shares Jump on Going Private

Nordstrom Family members have formed a group to explore the possibility of acquiring 100% of the shares outstanding

Shares of department store operators Macy’s, J.C. Penney and Kohl’s are all rising on the news

 

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Shares of Nordstrom Inc. $JWN are higher after the high-end department store said it was exploring a “going private” deal.

Nordstrom, Inc. (JWN) is a leading fashion specialty retailer based in the U.S. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 354 stores in 40 states, including 122 full-line stores in the United States, Canada and Puerto Rico; 221 Nordstrom Rack stores; two Jeffrey boutiques; and two clearance stores. Additionally, customers are served online through Nordstrom.com, Nordstromrack.com and HauteLook. The Company also owns Trunk Club, a personalized clothing service serving customers online at TrunkClub.com and its seven clubhouses.

The company said member of the Nordstrom family, including Co-Presidents Blake Nordstrom, Peter Nordstrom and Erik Nordstrom; Chairman Emeritus Bruce Nordstrom; President of Stores James Nordstrom and Anne Gittinger, have formed a group to explore the possibility of acquiring 100% of the shares outstanding. Bruce Nordstrom owned 15% of the shares outstanding as of March 17, and Gittinger owned 9.2% of the outstanding shares.

The filing states that prior to agreeing to form the group, Blake Nordstrom and Peter Nordstrom requested that the independent members of the company’s board consider and approve the formation of the group for purposes of a Washington state statute, which, subject to certain exceptions, prohibits a “significant business transaction” between a Washington publicly traded corporation and a 10% or greater group or a corporation affiliated with such a group over a five-year period from formation of the group.

On June 7, a special committee of the board comprised of the independent members of the board approved in advance the formation of the group for purposes of the Moratorium Statute.

In connection with the approval of the Moratorium Statute Waiver, the special committee required that the members of the Nordstrom family who are part of the group enter into a letter agreement with the company containing certain non-disclosure, non-use and standstill provisions.

The standstill provisions of the letter agreement prevent the members of the group from taking certain actions from the date of the letter agreement until January 31, 2019. The letter agreement provides that, after January 31, 2019, the group automatically disbands and may no longer rely on the Moratorium Statute Waiver.

Shares of department store operators Macy’s (M), J.C. Penney (JCP) and Kohl’s (KSS) are all rising on the news.

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SciClone sold for $605 Million

SciClone Pharmaceuticals provides therapies for oncology, infectious diseases, and cardiovascular disorders

It’s lead product is ZADAXIN, which is used for the treatment of hepatitis B and hepatitis C viruses

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#SciClone Pharmaceuticals $SCLN and a consortium consisting of entities affiliated with GL Capital Management GP Limited, Bank of China Group Investment Limited, or BOCGI, CDH Investments, Ascendent Capital Partners and Boying announced that they have entered into a definitive merger agreement under which the Buyer Consortium will acquire all the outstanding shares of SciClone for $11.18 per share in cash.

SciClone Pharmaceuticals, Inc. provides therapies for oncology, infectious diseases, and cardiovascular disorders in the People’s Republic of China, the United States, and Hong Kong. Its lead product is #ZADAXIN, which is used for the treatment of hepatitis B and hepatitis C viruses, and certain cancers, as well as for use as an immune system enhancer.

The transaction will be funded by the Buyer Consortium through a combination of equity financing to be provided by the Buyer Consortium and debt financing, and is not subject to a financing condition.

The transaction, which was unanimously approved by SciClone’s board, values the company at approximately $605M, on a fully diluted basis, and represents a premium of 11% over SciClone’s closing stock price on June 7, 2017 and a premium of 16% over its ten-day volume-weighted average closing stock price.

The transaction, which is expected to close this calendar year, is subject to approval by SciClone stockholders and other customary closing conditions.

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