Arena Pharmaceuticals Reports Positive Ralinepag Results, Shares Rise!

Arena reports successful primary efficacy analysis in Phase 2 trial of ralinepag

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Arena Pharmaceuticals (ARNA) announced Phase 2 results for ralinepag, an investigational, long-acting, orally administered prostacyclin receptor agonist under development for the treatment of pulmonary arterial hypertension, or #PAH.

In this 61-patient study, the primary efficacy analysis demonstrated a statistically significant absolute change from baseline in pulmonary vascular resistance compared to placebo.

#Ralinepag also demonstrated numerical improvement in 6-minute walk distance.

Ralinepag improved median PVR by 163.9 dyn.s.cm-5 from baseline compared to a 0.7 dyn.s.cm-5 worsening from baseline in the placebo arm. Patients treated with ralinepag had a 29.8% improvement in PVR compared to the placebo arm and a 20.1% improvement in PVR compared to baseline.

Additionally, adverse events observed in the study were consistent with other prostacyclin treatments for the management of PAH, with headache, nausea, diarrhea, jaw pain and flushing being the most commonly reported adverse events.

“The positive outcome of this Phase 2 trial in a contemporary PAH patient population is an important milestone in the development of ralinepag for the treatment of patients suffering from this grievous illness. It is exciting to see the positive nonclinical pharmacological profile translating into potentially the first oral prostacyclin therapy that may approach consistent therapeutic levels without the complexity of parenteral therapy. These data give us confidence to move expeditiously toward a Phase 3 clinical program,” said Preston Klassen, Chief Medical Officer of Arena.

ARNA closed at $18.39 on Monday, shares last traded at $25.50.

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Abercrombie & Fitch Terminates Sale Talks, Shares Tumble

Abercrombie & Fitch terminates discussions regarding potential transaction

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Abercrombie & Fitch (ANF) announced that it has terminated discussions regarding a potential transaction.

The company reported on May 10, 2017 that, after receiving expressions of interest, it had commenced preliminary discussions with several parties regarding a potential transaction.

Arthur Martinez, Executive Chairman of the Board of Abercrombie & Fitch Co. said: “After a comprehensive review of all relevant factors, with the assistance of our financial advisor, the A&F Board of Directors determined that the best path to enhance value for stockholders is the rigorous execution of our business plan. We believe in the prospects for our business and the opportunities for our brands. We are generating solid comp store sales momentum at Hollister and continue to refine and implement strategies to position the Abercrombie brand for revitalized performance. Our strong management team and dedicated people, the investments we have made in marketing, omnichannel and other strategies to drive sales, together with our relentless focus on operational efficiencies, all contribute to our expectation for improved trends beginning in the second half of the year, compared to the prior year period.”

“We are committed to taking sound, aggressive action to deliver enhanced performance and long-term stockholder value,” concluded Mr. Martinez.

The company said it does not intend to comment any further on the above noted discussions.

ANF closed at $12.16, last traded at $10.75.

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Nektar Therapeutics Announces Positive Results

Nektar presents new ‘positive’ preclinical results for NKTR-358

 

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Nektar Therapeutics (NKTR) announced positive preclinical results for NKTR-358, a first-in-class resolution therapeutic for autoimmune disease.

The new preclinical data demonstrate that treatment with NKTR-358 induces profound regulatory T cell effects and suppresses inflammation in multiple preclinical models.

The data were highlighted in an oral presentation at the 13th Annual World Congress on Inflammation on July 9, 2017.

“These studies show that NKTR-358 increases the suppressive capacity and prolongs activation and proliferation of regulatory T cells with limited effects on conventional T cells in order to address the imbalance found in many autoimmune diseases,” said Jonathan Zalevsky, PhD, Senior Vice President, Biology and Preclinical Development at Nektar Therapeutics. “NKTR-358 also demonstrated suppression of antigen-driven inflammation in multiple preclinical models including systemic lupus erythematosus.

We are very excited about NKTR-358’s potential as a resolution therapy in autoimmune disease.”

Autoimmune diseases cause the immune system to mistakenly attack healthy cells in a person’s body.iv A failure of the body’s self-tolerance mechanisms enables the formation of the pathogenic auto-reactive T lymphocytes that conduct this attack. NKTR-358 works by optimally targeting the interleukin-2 (IL-2) receptor complex in order to stimulate proliferation and activation of regulatory T cells. By increasing the number of regulatory T cells, the pathogenic auto-reactive T cells can be controlled and the proper balance of effector and regulatory T cells can be achieved to restore the body’s self-tolerance mechanisms.

In preclinical studies, #NKTR-358 demonstrates attenuated and optimized affinity for human IL-2 receptors to promote biological activity favoring activation of regulatory T cells over conventional T cells. This preferential activity combined with prolonged exposure in vivo led to significant Treg mobilization in blood and spleen following a single subcutaneous administration in rodents.

Increases in regulatory T cells were sustained for 7 to 10 days, and were concomitant with increases in cytometric markers of activation and increased suppressive capacity.

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International Oil Rig Count Rises

Baker Hughes Announces June International Rig Count of 960, up 3

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Baker Hughes (BHI) reports that the international rig count for June 2017 was 960, up 3 from the 957 counted in May 2017, and up 33 from the 927 counted in June 2016.

The international offshore rig count for June 2017 was 197, down 5 from the 202 counted in May 2017, and down 26 from the 223 counted in June 2016.

The average U.S. rig count for June 2017 was 931, up 38 from the 893 counted in May 2017, and up 514 from the 417 counted in June 2016.

The average Canadian rig count for June 2017 was 150, up 65 from the 85 counted in May 2017, and up 87 from the 63 counted in June 2016.

The worldwide rig count for June 2017 was 2,041, up 106 from the 1,935 counted in May 2017, and up 634 from the 1,407 counted in June 2016.

The Baker Hughes Rig Counts are an important business barometer for the drilling industry and its suppliers. When drilling rigs are active they consume products and services produced by the oil service industry.

The active rig count acts as a leading indicator of demand for products used in drilling, completing, producing and processing hydrocarbons.

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Great Plains and Westar Energy Merge

Great Plains Energy, Westar Energy agree to merger of equals for a $14 Billion Deal

Westar Energy (WR) and Great Plains Energy (GXP) announced that both companies’ boards of directors have unanimously approved a revised transaction that involves no premium paid or received with respect to either company, no transaction debt, no exchange of cash, and is a stock-for-stock merger of equals, creating a company with a combined equity value of approximately $14B.

The new, combined company will provide electric utility service to approximately one million Kansas customers and nearly 600,000 customers in Missouri.

The combined company will have a new name, yet to be established. Westar Energy and Great Plains Energy will merge to form a new holding company, which will operate regulated electric utilities in Kansas and Missouri.

Operating headquarters will be in both Topeka, Kansas, and Kansas City, Missouri. Corporate headquarters will be in Kansas City, Missouri.

Under the terms of the agreement, Westar Energy shareholders will exchange each share of Westar Energy common stock for a share in the new holding company.

Great Plains Energy shareholders will receive .5981 shares of common stock in the new holding company for each Great Plains Energy share.

The transaction has a total equity value of approximately $14B.

It is structured to permit a tax-free exchange of shares.

No transaction debt will be incurred. The exchange ratio reflects the agreed-upon ownership split between the two companies.

Following completion of the merger, Westar Energy shareholders will own approximately 52.5% and Great Plains Energy shareholders will own approximately 47.5% of the combined company.

The agreement provides that, upon closing, the new holding company expects to set its initial common dividend at a level which maintains the current dividend for Great Plains Energy shareholders.

This will result in approximately a 15 percent dividend increase for Westar Energy shareholders.

In connection with the agreement, Great Plains Energy will redeem all of the previously issued debt and convertible preferred stock it issued in contemplation of the previous plan to acquire Westar Energy.

Due to the revised nature of this transaction, Great Plains Energy and the Ontario Municipal Employees Retirement System have agreed to terminate their preferred convertible equity commitment.

After these financial transactions are completed, the companies anticipate that Great Plains Energy will have not less than $1.25B in cash on its balance sheet.

After the closing of the merger, the combined company anticipates repurchasing common stock to return excess cash to shareholders and maintain a balanced consolidated capital structure. With the Kansas Corporation Commission’s encouragement in its order, the companies continue to work with Kansas regulatory staff and the other parties. They will continue working directly with regulatory staff in both Kansas and Missouri as well as other parties to gain necessary approvals as expeditiously as possible.

The transaction is expected to close in the first half of 2018, subject to the satisfaction of customary closing conditions, including approval by Great Plains Energy’s shareholders and Westar Energy’s shareholders and the receipt of regulatory approvals, including the Federal Energy Regulatory Commission, the Missouri Public Service Commission, the KCC, the Nuclear Regulatory Commission and clearance under the Hart-Scott-Rodino Act.

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Hawaiian Telcom Sold for $650 Million

Cincinnati Bell enters merger agreements with Hawaiian Telcom for $$30.75 a share

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Cincinnati Bell (CBB) announced it has entered into separate definitive merger agreements with Hawaiian Telcom (HCOM) and OnX Enterprise Solutions, adding meaningful scale and expanded service offerings to its combined network and enterprise IT services businesses.

Cincinnati Bell has signed a definitive agreement to combine with Hawaiian Telcom, the leading integrated communications provider serving the state of Hawai’i, for a total consideration of approximately $650M, representing a 23.7% premium to HCOM’s trailing 20-day calendar VWAP.

Under the agreement, Hawaiian Telcom shareholders will have the option to elect either $30.75 in cash, 1.6305 shares of Cincinnati Bell common stock, or a mix of $18.45 in cash and 0.6522 shares of Cincinnati Bell common stock for each share of Hawaiian Telcom, subject to proration such that the aggregate consideration to be paid to Hawaiian Telcom shareholders will be 60 percent cash and 40% Cincinnati Bell common stock.

Cincinnati Bell has also signed a definitive agreement to acquire OnX Enterprise Solutions, a technology services and solutions provider in North America and the United Kingdom, for a total consideration of approximately $201M in cash on a cash-free, debt-free basis.

Both transactions are subject to customary regulatory approvals and other customary closing conditions for each transaction.

In particular, the Hawaiian Telcom combination is subject to certain federal, state, and local regulatory approvals and approval by Hawaiian Telcom’s shareholders.

The Company anticipates the OnX transaction will close in the beginning of the fourth quarter 2017, while the Hawaiian Telcom transaction is expected to close in the second half of 2018.

The transactions are not conditioned on each other. For the full year 2016, Hawaiian Telcom generated revenue of $393 million and adjusted EBITDA of $116 million.1 For the fiscal year ended 4/30/17, OnX’s revenue was $614 million and adjusted EBITDA was $29 million.2 Cincinnati Bell expects the combinations to be accretive to free cash flow per share for CBB shareholders.

Cincinnati Bell is targeting run rate combined synergies of approximately $21 million, substantially all of which will be realized within two years post-close.

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