“Better Botox” data to move Allergan

Watch Allergan into Revance ‘better Botox’ trial data

Watch Allergan into better botox data. See Stockwinners.com
Watch Allergan into Revance ‘better Botox’ trial data

Shares of Allergan (AGN) are on the rise after Morgan Stanley analyst David Risinger upgraded the stock to Overweight, a buy-equivalent rating as he believes the shares can outperform over time and fears about a “better Botox” from a competitor may be overdone.

BACKGROUND

RT002 is a new injectable BoNTA product. This formulation limits the spread of BoNTA, potentially permitting safe administration of larger doses and possibly extending its duration of action.

Revance Therapeutics, Inc. (RVNC) is developing botulinum toxin products (RT002) for use in treating aesthetic and therapeutic conditions, today announced duration of effect of at least 24 week. The product is dubbed “better Botox” since it promises to last longer.

Botox is owned, manufactured and sold by Allergan. Botox had an annual sales of about $2.78 billion in 2016. Botox effect lasts anywhere from 12-16 weeks.

BUY ALLERGAN

In a research note this morning, Morgan Stanley’s Risinger upgraded Allergan to Overweight from Equal Weight while maintaining a $200 price target on the stock.

The analyst told investors that Allergan’s risk-reward looks favorable following a significant stock decline due to reductions in out-year estimates, pipeline concerns, competitive threats to Botox, and negative perception associated with licensing of Restasis patent to an Indian tribe.

#Risinger believes the negatives have largely been priced into the stock, and given investor concerns about the safety of new drug candidates for migraine and eye disease, he sees the risk-reward on 2018 Phase 3 pipeline news flow as skewed to the upside.

Additionally, the analyst pointed out that he thinks investor enthusiasm for rapastinel for severe depression will rise as three Phase 3 studies reach their conclusion at the end of 2018. Compelling Phase 2 data indicated that #rapastinel may be a blockbuster, he contended.

Meanwhile, Risinger believes fears about a “better Botox” may be overdone.

While Revance’s (RVNC) botulinum toxin RT002 Phase 3 data is expected “any day now,” he thinks it could be difficult for the company to demonstrate that RT002 is materially longer-lasting than Botox, which has been a concern for Allergan investors.

Further, the analyst pointed out that mechanistically it would be difficult to create a significantly longer-lasting Botox because botulinum toxin gradually loses efficacy over four months due to neuronal regeneration. If he is correct, Allergan shares could benefit, he said.

PRICE ACTION

In Wednesday’s trading, shares of Allergan have gained almost 4% to $178.14.


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Chipotle to name a new CEO

Chipotle forms search committee to identify new CEO

Chipotle Mexican Grill spokesman Chris Arnold says the company is aware of a "small number" of illnesses linked to a store in Sterling, Virginia
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Chipotle Mexican Grill  (CMG) announced that Steve Ells, chairman and CEO — and the founder of the company in 1993 — will become executive chairman following the completion of a search to identify a new CEO.

The Board has formed a search committee comprised of Directors Robin Hickenlooper and Ali Namvar, as well as Ells, to identify a new leader with demonstrated turnaround expertise to help address the challenges facing the company, improve execution, build customer trust, and drive sales.

Ells said, “Simply put, we need to execute better to ensure our future success.

The Board and I are committed to bringing in an experienced leader with a passion for driving excellence across every aspect of our business, including the customer experience, operations, marketing, technology, food safety, and training.

Bringing in a new CEO is the right thing to do for all our stakeholders. It will allow me to focus on my strengths, which include bringing innovation to the way we source and prepare our food. It will ultimately improve our ability to provide our guests with delicious food that is prepared with high quality ingredients that are raised responsibly and served in a way that is accessible to everyone. I am confident that this will allow us to deliver value for our shareholders, and provide rewarding opportunities for our employees. Chipotle has vast unrealized potential.

As we work hard to restore our brand, I believe we can capitalize on opportunities, including in areas such as the digital experience, menu innovation, delivery, catering, and domestic and international expansion, to deliver significant growth.”

ANALYST COMMENTS

Chipotle CEO change to be welcomed by investors, says SunTrust – After Chipotle announced it has started a search to identify a new CEO and that founder Steve Ells will become executive chairman when one is identified, SunTrust analyst Jake Bartlett said he views the news as positive for both the company’s turnaround efforts and the stock as he expects investors to welcome a CEO with a proven operational track record. Bartlett has a Buy rating and $355 price target on Chipotle shares.

William Blair downgraded the stock to Market Perform from Outperform. William Blair analyst Sharon Zackfia downgraded Chipotle Mexican Grill to Market Perform . While a new leader may accelerate the company’s turnaround longer term, today’s move likely signals that Chipotle’s trends remain under pressure and creates more near-term uncertainty, Zackfia tells investors in a research note. The analyst adds that transition years, in which costs accelerate before sales trends rebound, often follow new CEOs. As such, she’s more cautious on Chipotle’s earnings recovery trajectory following today’s announcement. The market, on the other hand, is applauding the company’s decision.

CMG closed at $285.86. It last traded at $300 in pre-market action.


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Watch Capricor Therapeutics

Capricor Therapeutics announces FDA clearance of IND for CAP-1002

Capricor Therapeutics reports ‘positive’ results from CAP-1002 trial. 

Capricor Therapeutics (CAPR) announced that the U.S. FDA has cleared its Investigational New Drug application to conduct a new clinical trial of CAP-1002, its lead investigational therapy, in boys and young men in advanced stages of Duchenne muscular dystrophy, a fatal genetic disorder for which there are limited treatment options.

This randomized, double-blind, placebo-controlled clinical trial will be called the HOPE-2 Trial and is designed to evaluate the safety and efficacy of intravenous, repeat doses of CAP-1002 in boys and young men whose ability to walk has been seriously impaired by the loss of muscle function that occurs as Duchenne muscular dystrophy progresses.

The primary efficacy endpoint will be the relative change in the mid-level dimension of the Performance of the Upper Limb test from baseline to Month 12.

The HOPE-2 Trial is expected to enroll approximately 84 patients and be conducted at 10-12 U.S. sites.

Capricor believes that if the primary endpoint is reached, the HOPE-2 Trial could serve as a registration trial, meaning that its results could support the submission of a Biologics License Application to obtain marketing approval of CAP-1002.

Capricor expects to initiate the HOPE-2 Trial in the first quarter of 2018.

Capricor plans to apply for the Regenerative Medicine Advanced Therapy (RMAT) Designation for CAP-1002 based on updated guidance recently issued by the FDA.

If granted, the RMAT Designation would be expected to facilitate CAP-1002’s path to potential registration.

CAPR closed at $1.92. It last traded at $2.40.


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Melinta buys infectious disease business from The Medicines Co.

Melinta to acquire infectious disease business from The Medicines Co.

Melinta to acquire infectious disease business from The Medicines Co.

Melinta Therapeutics (MLNT) announced that Melinta and The Medicines Company (MDCO) have entered into an agreement pursuant to which Melinta will acquire the infectious disease business from The Medicines Company.

This includes three marketed products: recently approved and launched Vabomere, and established commercial products Orbactiv and Minocin IV.

The acquisition was unanimously approved by Melinta’s board and is expected to close in Q1 of 2018, subject to satisfaction of customary closing conditions, including Melinta stockholder approval. The acquisition includes the purchase of global rights for three marketed products and the business supporting those products.

Recently launched Vabomere is a novel fixed-dose combination agent comprising vaborbactam, a beta-lactamase inhibitor, and meropenem, the leading carbapenem. Vabomere was approved by the FDA after priority review in August 2017 and is indicated for the treatment of adult patients with complicated urinary tract infections, or cUTI, including pyelonephritis caused by designated susceptible Enterobacteriaceae.

Vabomere’s Phase 3 TANGO II trial, a randomized trial comparing Vabomere to the best available therapy for the treatment of serious carbapenem-resistant Enterobacteriaceae, or CRE, infections, was stopped early by an Independent Data and Safety Monitoring Board following a risk-benefit analysis of available data which was in favor of Vabomere.

Vabomere’s Marketing Authorization Application is currently under regulatory review by the European Medicines Agency for cUTI. Orbactiv is an injectable product approved by the FDA and EMA for the treatment of adults with acute bacterial skin and skin structure infections, or ABSSSI, caused by susceptible designated gram-positive bacteria including methicillin-resistant Staphylococcus aureus, or MRSA.

Minocin IV, an injectable product, is a tetracycline derivative approved in the U.S. for the treatment of infections due to susceptible strains of several important designated gram-positive and gram-negative pathogens, including infections due to Acinetobacter species, which typically occur in hospitalized patients.

Under the terms of the acquisition agreement, the purchase price consists of a payment by Melinta to The Medicines Company of $165M in cash and the issuance to The Medicines Company of a number of shares of Melinta common stock equal to $50M, divided by 90% of the volume weighted average price for the trailing 10 trading day period ending 3 trading days prior to closing; a payment by Melinta to The Medicines Company of $25M following each of the twelve and eighteen month anniversaries of the closing date, and payment by Melinta to The Medicines Company of certain royalty payments, based on tiered net sales of the acquired products in certain jurisdictions.

Funding for this acquisition will be provided through both debt and equity. In conjunction with the closing of the acquisition, Melinta will enter into a Loan and Security Agreement with Deerfield Management Company, L.P.

Deerfield and certain funds managed by Deerfield will initially provide a total of $190M in debt and equity financing. An additional $50M of debt is available to Melinta within 24 months of the acquisition close upon the achievement of certain sales thresholds.

In addition to the funding from Deerfield, certain investors are committed to make a $30M equity investment at closing.

These funds will be used to fund the initial cash acquisition price of $165M and to retire existing company debt of $40M.

Additional information on the acquisition and related financing will be contained in the proxy statement related to the proposed transactions.

Melinta stockholders holding approximately 52% of the outstanding common stock have executed voting agreements agreeing to vote their shares in favor of the transaction.

MDCO closed at $30.21. MLNT closed at $15.00, it last traded at $16.10 in pre-market action.


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