Repligen tumbles after losing largest customer

Repligen sliding after biggest customer launches new resin

Repligen tumbles after losing largest customer. See Stockwinners.com for details

Shares of Repligen (RGEN) are sliding after GE Healthcare (GE), its largest customer, announced plans to launch a new Protein A resin that will not use the former as the manufacturer of the associated Protein A ligand.

Commenting on the news, Jefferies analyst Brandon Couillard said while the near-term impact may be “negligible” to Repligen, the longer-term implications are negative. Meanwhile, his peer at Stephens told investors that he sees GE Healthcare’s resin as a niche product and he remains positive on Repligen.

NEW PROTEIN A RESIN

GE Healthcare has introduced a new Protein A chromatography resin, #MabSelect PrismA, which the company says will help biopharmaceutical manufacturers improve their monoclonal antibody purification capacity by up to 40%.

The resin is significantly more alkaline-stable, meaning that MabSelect PrismA can be cleaned with a higher concentration of sodium hydroxide to better control cross-contamination and bioburden risks, GE stated in its announcement yesterday.

MabSelect PrismA addresses a number of key challenges, including the increased upstream titers, the company said, adding that the new resin is highly efficient due to its excellent binding capacity.

MabSelect PrismA has been developed at the GE Healthcare Life Sciences site in Uppsala, Sweden, where the resin is also manufactured. Between 2017-2022 GE Healthcare is annually investing up to $70M in the production facility to significantly increase the factory’s capacity.

GE LAUNCH TO WEIGH ON VALUATION

Jefferies’ Couillard told investors that GE Healthcare will not utilize Repligen as the manufacturer of the associated protein A ligand for the new Protein A chromatography resin.

While the near-term financial impact appears negligible to Repligen given its long-term contracts and new Protein A resins’ typical long adoption cycle, the long-term implications are negative, as GE Healthcare’s move to in-source Protein A ligands diminishes the value of Repligen’s near-monopoly position and could weigh on its premium multiple.

GE Healthcare’s sizable planned investment outlay suggests it may eventually look to bring production of other protein A ligands in-house as part of a broader continuity plan once its long-term contracts expire in 2019/2021, the analyst added.

Moreover, #Couillard pointed out that the move also brings into question whether Millipore-Sigma may pursue a similar in-sourcing strategy down the road. The analyst reiterated a Hold rating and a $40 price target on Repligen shares.

GE RESIN A NICHE

In a research note of his own, Stephens analyst Drew Jones told investors that he is “not distracted” from his positive long-term outlook on Repligen after GE Healthcare’s plans.

The analyst believes this will be a niche resin that will not drive “meaningful” revenue for at least five to seven years.

Further, Jones noted that Repligen’s revenue from GE Healthcare will not be impacted due to long-term contracts. The analyst reiterated an Overweight rating and $50 price target on Repligen shares.

PRICE ACTION

In Tuesday’s  trading, shares of Repligen have dropped almost 13% to $37.69.


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Accenture, Microsoft expand strategic alliance

Accenture, Microsoft expand strategic alliance to offer cybersecurity solutions

 Accenture, Microsoft expand strategic alliance. See Stockwinners.com for details

Accenture (ACN), Microsoft (MSFT) and Avanade are collaborating through a multi-year, multi-million-dollar agreement to develop, integrate and bring to market enhanced cyber defense solutions to help clients better detect, investigate and respond to cyber threats.

The collaboration extends the companies’ longstanding strategic relationship, which began in 2000.

The cyber defense offerings will be infused with joint threat intelligence and initially span three core areas:

Managed Security Operations: enhancing existing Accenture managed security services with integration of the latest Microsoft security products and services to monitor, detect and quickly respond to security breaches – targeted for on-premises, cloud and hybrid systems.

Incident Response Support: a joint, global and collaborative teaming approach leveraging tools and integrated processes to help clients return to normal operations after a significant security breach.

Integrated Threat Hunting: leveraging the Incident Response experience of the three companies to actively locate previously undetected breaches. According to the Accenture Security Index, more than 70% of organizations globally cannot identify and fully protect their corporate high-value assets.

In addition, the associated costs of cyber attacks are having a growing financial impact on businesses.

In 2017, the average cost of cyber crime climbed to $11.7M per organization, a 23% increase from last year, according to a new study by Accenture and the Ponemon Institute.


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Axovant trial misses endpoint, shares tumble

Axovant Phase 3 Alzheimer’s study misses co-primary endpoints

 

Axovant Phase 3 Alzheimer's study misses co-primary endpoints. See Stockwinners.com

Axovant Sciences (AXON) announced that the Phase 3 Mindset clinical trial of its investigational drug intepirdine in patients with mild to moderate Alzheimer’s disease who were receiving background donepezil therapy did not meet its co-primary efficacy endpoints.

At 24 weeks, patients treated with 35 mg of intepirdine did not experience improvement in cognition or in measures of activities of daily living as measured by the Alzheimer’s Disease Assessment Scale-Cognitive Subscale and by the Alzheimer’s Disease Cooperative Study-Activities of Daily Living scale, respectively, compared to patients treated with placebo.

In the study, intepirdine was generally well tolerated, the company added.

After 24 weeks of treatment, change from baseline in cognition was non-significantly improved in the intepirdine arm versus the placebo arm.

In addition, there was essentially no difference between the intepirdine and placebo arms in change from baseline in activities of daily living.

Of the endpoints analyzed to date, the only endpoint in which any significant improvement was seen in the intepirdine arm versus the placebo arm was in the first key secondary endpoint, the Clinician Interview-Based Impression of Change plus caregiver interview, or CIBIC-plus.

Axovant said, “The Company will work with investigators to conclude the MINDSET open-label extension study. ” David Hung, CEO of Axovant, added, “While we are deeply disappointed by these trial results, we also are saddened for the millions of patients and families impacted by Alzheimer’s disease. However, we believe that the fight against Alzheimer’s and other important areas of unmet need in neurology is too important to be derailed by this setback…. We remain committed to advancing our pipeline.”

Axovant Sciences says the Headway trial studying intepirdine in patients with dementia with Lewy bodies remains on track to report topline results at the end of 2017. This study investigates two doses of intepirdine, 35 mg, the dose used in the failed Mindset trial, and 70 mg, a higher dose intended to engage both 5-HT6 and 5-HT2A receptors.

Intepirdine has received Fast Track designation from the FDA for the treatment of dementia with Lewy bodies.

PRICE  ACTION

Axovant (AXON) closed yesterday down 6c to $22.59. Shares last traded at $6.00 in pre-market trading.


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