Fogo De Chao sold for $560 million

Fogo De Chao to be acquired by Rhone for $15.75 per share in cash

Fogo De Chao to be acquired by Rhone for $15.75 per share in cash. Stockwinners.com
Fogo De Chao to be acquired by Rhone for $15.75 per share in cash.

Fogo de Chao (FOGO) announced an agreement to be acquired by investment entities affiliated with Rhone Capital.

Under the terms of the agreement, Rhone will acquire the Company in an all cash transaction valued at $560M.

The Company’s stockholders will receive $15.75 per share, representing a 25.5% premium to the closing share price of the Company’s shares on February 16, 2018.

The transaction is the result of a comprehensive strategic alternatives review process taken by the Company’s Board of Directors.

The transaction has been unanimously approved by Fogo’s Board of Directors. Funds affiliated with Thomas H. Lee Partners, L.P. and certain of Fogo’s directors and executive officers, which collectively hold more than 60 percent of Fogo’s shares, have approved the transaction by written consent.

The acquisition is expected to be completed during the second calendar quarter of 2018, subject to regulatory approvals and other customary closing conditions.


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MiMedx tumbles on questionable “sales practices”

MiMedx sinks after announcing internal investigation into sales practices

MiMedx tumbles on questionable "sales practices". Stockwinners.com
MiMedx tumbles on questionable “sales practices”

Shares of MiMedx (MDXG) are sinking after the company delayed its Q4 results to conduct an internal investigation.

The biopharmaceutical company said earlier that its Audit Committee has engaged independent legal and accounting advisors to conduct an internal investigation into current and prior-period matters relating to allegations regarding certain sales and distribution practices.

Company executives are also reviewing, among other items, the accounting treatment of certain distributor contracts.

MiMedx believes, however, that based on information available to date, the “outcome of such investigation should not have a material impact on revenue guidance for 2018.”

The company’s CEO Pete Petit stated, “”Our Board of Directors and executives believe it is in the best interests of our Company and shareholders for our Audit Committee to address these allegations in an internal investigation with the support of independent legal and accounting advisors. We look forward to releasing our 2017 financial results as soon as this process is complete.

MiMedx has been experiencing rapid growth over the last few years as our product portfolio continues to meet significant, unmet needs in the marketplace. We are literally saving lives by saving limbs, and we expect to continue to deliver operational and clinical success in the months and years to come.”

MDXG closed at $14.47. It last traded at $11.50.


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Adamas Pharmaceuticals hit by patent challenge

Adamas Pharmaceuticals announces declaratory judgment action filed by Osmotica

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Adamas Pharmaceuticals announces declaratory judgment action filed by Osmotica

Adamas Pharmaceuticals (ADMS) announced that it has learned that Osmotica Pharmaceuticals LLC and Vertical Pharmaceuticals LLC filed an action in Delaware federal court on February 16, 2018 requesting a declaratory judgment that Osmotica’s newly-approved product OSMOLEX ER extended-release tablets does not infringe certain of Adamas’ patents.

Adamas has not received service of a summons and complaint.

The complaint does not allege patent infringement against Adamas or otherwise pertain to Adamas’ product GOCOVRI extended release capsules.

OSMOLEX ER was approved by the FDA on February 16, 2018 for the treatment of Parkinson’s disease and drug-induced extrapyramidal reactions in adult patients, indications approved for immediate release amantadine in 1972.

As Osmotica states in the complaint, drug-induced extrapyramidal reaction is a separate and distinct disorder from dyskinesia in Parkinson’s disease patients.

According to the package insert attached to the complaint, the approval was based on three bioavailability studies comparing OSMOLEX ER to immediate release amantadine syrup in healthy volunteers.

The package insert does not include any new clinical safety or efficacy data specific to OSMOLEX ER to support its use in the approved indications. Osmotica alleges that OSMOLEX ER does not infringe certain of Adamas’ patents covering compositions and uses of amantadine.

Adamas is evaluating Osmotica’s non-infringement assertions based on the limited information in the complaint.

Adamas’ approved product GOCOVRI is the first and only FDA-approved medicine for the treatment of dyskinesia in Parkinson’s disease patients on levodopa-based therapy, with or without concomitant dopaminergic medicines.

GOCOVRI is taken at bedtime with a pharmacokinetic (PK) profile that delivers low concentrations of amantadine in nighttime, slowly rising to high concentrations (1,500 ng/ml) before awakening, and throughout the day.

Use of GOCOVRI in this Parkinson’s disease patient population is supported by robust efficacy and safety data, required by the FDA for approval, that demonstrate statistically significant and clinically meaningful reductions in dyskinesia and OFF time in three controlled clinical studies and an ongoing two-year, open-label safety study.

Neither OSMOLEX ER nor any other therapy has been approved for the treatment of dyskinesia in Parkinson’s disease patients on levodopa-based therapy.

ADMS closed at $33.77. It last  traded  at $30.75.


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Albertsons and Rite Aid to merge

Rite Aid CEO to become CEO of combined Rite Aid, Albertsons

Albertsons and Rite Aid to merge

Albertsons Companies and Rite Aid Corporation (RAD) announced a definitive merger agreement under which privately held Albertsons Companies will merge with publicly traded Rite Aid.

Under the terms of the agreement, in exchange for every 10 shares of Rite Aid common stock, Rite Aid shareholders will have the right to elect to receive either (i) one share of Albertsons Companies common stock plus approximately $1.83 in cash or (ii) 1.079 shares of Albertsons Companies stock.

Depending upon the results of cash elections, upon closing of the merger, shareholders of Rite Aid will own a 28.0 percent to 29.6 percent stake in the combined company, and current Albertsons Companies shareholders will own a 70.4 percent to 72.0 percent stake in the combined company on a fully diluted basis.

Immediately following completion of the merger and assuming that all Rite Aid shareholders elect to receive shares plus cash, Albertsons Companies will have approximately 392.9 million shares outstanding on a pro forma and fully diluted basis.

Following the close of the transaction and the share exchange, Albertsons Companies’ shares are expected to trade on the New York Stock Exchange.

Albertsons Companies is backed by an investment consortium led by Cerberus Capital Management, L.P., which also includes Kimco Realty Corporation (KIM), Klaff Realty LP, Lubert-Adler Partners LP, and Schottenstein Stores Corporation.

Current Rite Aid Chairman and Chief Executive Officer John Standley will become CEO of the combined company, with current Albertsons Companies Chairman and CEO Bob Miller serving as Chairman.

The combined company is expected to be comprised of leadership from both companies and will be dual headquartered in Boise, Idaho, and Camp Hill, Pennsylvania.

The name of the combined company will be determined by transaction close.

The integrated company will operate approximately 4,900 locations, 4,350 pharmacy counters, and 320 clinics across 38 states and Washington, D.C., serving 40+ million customers per week.

Most Albertsons Companies pharmacies will be rebranded as Rite Aid, and the company will continue to operate Rite Aid stand-alone pharmacies.

The combined company expects to deliver annual run-rate cost synergies of $375 million in approximately three years and access potential annual revenue opportunities of $3.6 billion.

Over 60 percent of the cost synergies are expected to be realized within the first two years post-close. Identified revenue opportunities primarily include partnering with payors, including Rite Aid’s PBM, EnvisionRx, through preferred networks to drive additional high-value customers, connecting Rite Aid’s reliable pharmacy customer base to Albertsons Companies through loyalty programs and targeted marketing, leveraging Albertsons Companies’ grocery capabilities and Rite Aid’s pharmacy expertise to enhance the customer offering, and driving traffic through the omni-channel experience.

Cost synergies will be achieved primarily through procurement savings, leveraging efficiencies realized by a combined supply chain, combined distribution and fulfillment channels, and leveraging manufacturing capabilities.

The board of directors will be comprised of nine directors, four of whom will be named by Albertsons Companies, four of whom will be named by Rite Aid (including John Standley), and one of whom will be a jointly selected director. A majority of the Board will be independent. Lenard Tessler will serve as Lead Director.

Kimco Realty Corp (KIM) confirms its participation as an investor in connection with today’s announced execution of a definitive agreement under which Albertsons Companies will acquire all outstanding shares of Rite Aid Corporation (RAD).

RAD closed at $2.13. It last traded at $2.68.


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Aimmune Therapeutics reports positive peanut energy

Phase 3 Palisade trial of AR101 met primary endpoint in peanut allergy

 

Aimmune Therapeutics reports positive peanut energy. Stockwinners.com
Aimmune Therapeutics reports positive peanut energy.

Aimmune Therapeutics (AIMT) announced that its pivotal Phase 3 PALISADE efficacy trial of AR101 met the primary endpoint.

In the United States, AR101 has U.S. Food and Drug Administration Breakthrough Therapy Designation for peanut-allergic patients ages 4-17.

PALISADE enrolled 499 patients ages 4-17, 496 of whom received treatment.

After approximately one year of treatment, patients completed an exit double-blind, placebo-controlled food challenge. In the primary analysis of 496 patients ages 4-17, 67.2% of AR101 patients tolerated a single highest dose of at least 600 mg of peanut protein with no more than mild symptoms in the exit DBPCFC, compared to 4.0% of placebo patients.

The corresponding difference in response rates was 63.2%, and, at 53%, the lower bound of the 95% confidence interval greatly exceeded the pre-specified success criterion, which was 15%.

Additionally, 50.3% of AR101 patients tolerated a single highest dose of 1000 mg of peanut protein, compared to 2.4% of placebo patients.

In order to minimize the risk of assessment bias, the primary endpoint evaluations were conducted by independent, blinded assessors, who were not involved in patients’ ongoing care in the trial and who were blinded to treatment assignment and the sequence of the DBPCFCs.

AIMT closed at $37.20. It last traded at $43.49. Shares of DBV Technologies (DBVT) are down 10%, or $2.64, to $23.22. The latter has a competing drug.


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Qualcomm raises NXP Semiconductors offer to $127.50 a share

Qualcomm agrees with NXP Semiconductors to increase purchase price to $127.50/sh 

Qualcomm agrees with NXP Semiconductors to increase purchase price to $127.50/sh. Stockwinners.com
Qualcomm raises NXP Semiconductors offer  to $127.50/sh 

Qualcomm (QCOM) announced that Qualcomm River Holdings, an indirect wholly owned subsidiary of Qualcomm, has reached an agreement with NXP Semiconductors N.V. (NXPI) to increase to $127.50 per share its previously announced cash tender offer to purchase all outstanding shares of NXP.

The amended agreement, which was approved by the Qualcomm and NXP Boards of Directors, also lowers the minimum tender condition from 80% of NXP’s outstanding shares to 70%.

Qualcomm also announced that Qualcomm River Holdings B.V. has entered into binding agreements with nine NXP stockholders who collectively own more than 28% of NXP’s outstanding shares (excluding additional economic interests through derivatives) to tender their shares at $127.50 per share.

These stockholders include funds affiliated with Elliott Advisors Limited and Soroban Capital Partners LP. Under the terms of the revised agreement, the currently pending tender offer of Qualcomm River Holdings B.V. to acquire all of the issued and outstanding shares of NXP will be amended as described above and the expiration time for the offer will be extended to the end of day, one minute after 11:59 p.m. New York City time, on March 5, 2018.

Qualcomm intends to fund the additional consideration with cash on hand and new debt. The amended tender offer is not subject to any financing condition.

The offer is conditioned on at least 70% of the outstanding ordinary shares of NXP being validly tendered and not withdrawn prior to the expiration of the offer.

Qualcomm’s acquisition of NXP has received antitrust clearance from eight of the nine required government regulatory bodies around the world. The transaction remains contingent on clearance from the Ministry of Commerce in China. Qualcomm is optimistic it will receive MOFCOM clearance in the near term.


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Barron’s in bullish on Citi, bearish on GE

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:

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BULLISH   MENTIONS: 

Hovnanian (HOV) stock too cheap to ignore- Hovnanian Enterprises offers an interesting speculative bet, because more than a decade’s worth of problems are reflected in the price, Brett Arends writes in this week’s edition of Barron’s. A successful resolution of its legal issues, a corporate turnaround, a takeover, or a continued recovery in the U.S. real estate market are all potential catalysts, he adds.

JPMorgan, Walmart cash flow yields exceed dividend yields – The cash flow yields of JPMorgan (JPM), Johnson & Johnson (JNJ), Walmart (WMT), Pfizer (PFE), Cisco (CSCO), AbbVie (ABBV), PepsiCo (PEP), 3M (MMM), Bristol-Myers (BMY), United Technologies (UTX), Texas Instruments (TXN) and Abbott Laboratories (ABT) exceed their dividend yields, a good signal for dividend coverage and growth, Lawrence Strauss writes in this week’s edition of Barron’s.

Alphabet, Citi well positioned for later stages of market rally – It is time for investors to think about how and when bull markets end, Jack Hough writes in this week’s edition of Barron’s. Groups to favor now include financials, which benefit from rising interest rates, and industrials, he notes, adding that technology still looks attractive. Alphabet (GOOG; GOOGL), Lam Research (LRCX), Citigroup (C), and Cummins (CMI) are all well positioned for the later stages of a long market rally, Hough contends.

Bears, bulls battle over Under Armour – In a follow-up story, Barron’s says that Under Armour (UA) reported fourth quarter revenue that beat Wall Street’s estimate, but is difficult to tell whether the revenue upside represents a turning point for the business. Bulls and bears both found something to support their arguments, as revenue increased but gross margin declined while inventories swelled and store count rose 22%, the report notes.

BEARISH  MENTION:

General Electric stock could drop another 10% – General Electric (GE) lost $6B in 2017 after a series of charges and impairments, cut its dividend by 50%, and its accounting is under investigation by the Securities and Exchange Commission, but lately it has been attracting fresh attention from value-oriented investors, Andrew Bary writes in this week’s edition of Barron’s. Nonetheless, the stock is not a bargain and could drop another 10% or more, he contends


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Intel says 32 lawsuits have been filed against company

Intel says 32 lawsuits have been filed against company over security flaws

Intel says 32 lawsuits have been filed against company. Stockwinners.com
Intel says 32 lawsuits have been filed against company
In a regulatory filing, Intel (INTC) said that “On January 3, 2018, information on the security vulnerabilities was publicly reported, before software and firmware updates to address the vulnerabilities were made widely available.
Numerous lawsuits have been filed against Intel and, in certain cases, our executives and directors, in U.S. federal and state courts and in certain courts in other countries relating to the Spectre and Meltdown security vulnerabilities.
As of February 15, 2018, 30 customer class action lawsuits and two securities class action lawsuits have been filed.
The customer class action plaintiffs, who purport to represent various classes of end users of our products, generally claim to have been harmed by Intel’s actions and/or omissions in connection with the security vulnerabilities and assert a variety of common law and statutory claims seeking monetary damages and equitable relief.
The securities class action plaintiffs, who purport to represent classes of acquirers of Intel stock between July 27, 2017 and January 4, 2018, generally allege that Intel and certain officers violated securities laws by making statements about Intel’s products and internal controls that were revealed to be false or misleading by the disclosure of the security vulnerabilities.
Additional lawsuits and claims may be asserted on behalf of customers and shareholders seeking monetary damages or other related relief. We dispute the claims described above and intend to defend the lawsuits vigorously.
Given the procedural posture and the nature of these cases, including that the proceedings are in the early stages, that alleged damages have not been specified, that uncertainty exists as to the likelihood of a class or classes being certified or the ultimate size of any class or classes if certified, and that there are significant factual and legal issues to be resolved, we are unable to make a reasonable estimate of the potential loss or range of losses, if any, that might arise from these matters.
In addition to these lawsuits, in January 2018, Joseph Tola, Joanne Bicknese, and Michael Kellogg each filed a shareholder derivative action in the Superior Court of the State of California in San Mateo County against certain members of our Board of Directors and certain officers.
The complaints allege that the defendants breached their duties to Intel in connection with the disclosure of the security vulnerabilities and the failure to take action in relation to alleged insider trading.
The complaints seek to recover damages from the defendants on behalf of Intel.”


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Qualcomm calls Broadcom proposal unacceptable

Qualcomm: Current Broadcom proposal ‘unacceptable’ 

Qualcomm calls Broadcom proposal unacceptable

The Board of Directors of Qualcomm (QCOM) sent a letter to Broadcom (AVGO) regarding its February 14 meeting with Broadcom representatives.

Broadcom said “In our February 14 meeting, Broadcom reiterated that $82.00 per share is its best and final proposal. The Board remains unanimously of the view that this proposal materially undervalues Qualcomm and has an unacceptably high level of risk, and therefore is not in the best interests of Qualcomm stockholders.

That said, our Board found the meeting to be constructive in that the Broadcom representatives expressed a willingness to agree to certain potential antitrust-related divestitures beyond those contained in your publicly filed merger agreement.

At the same time, Broadcom continued to resist agreeing to other commitments that could be expected to be required by the FTC, the European Commission, MOFCOM and other government regulatory bodies.

Broadcom also declined to respond to any questions about its intentions for the future of Qualcomm’s licensing business, which makes it very difficult to predict the antitrust-related remedies that might be required.

In addition, Broadcom insists on controlling all material decisions regarding our valuable licensing business during the extended period between signing and a potential closing, which would be problematic and not permitted under antitrust laws.

Our Board is highly cognizant of the need to protect Qualcomm’s stockholders from the considerable risks of agreeing to a transaction that does not close.

A breakup fee in the range proposed by Broadcom does not come close to compensating for those risks.

While the current Broadcom proposal is unacceptable, our Board is intensely focused on maximizing value for Qualcomm stockholders, whether through executing on its growth strategy or by selling the Company.

Our Board is open to further discussions with Broadcom to see if a proposal that appropriately reflects the true value of Qualcomm shares, and ensures an appropriate level of deal certainty, can be obtained. If such a proposal cannot be obtained from Broadcom, our Board is highly confident in Qualcomm’s ability to deliver superior near- and long-term value to its stockholders by continuing to execute its growth strategy.”


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A. Schulman sold for $2.25B

LyondellBasell to acquire A. Schulman for $2.25B

LyondellBasell to acquire A. Schulman for $2.25B. Stockwinners.com
LyondellBasell to acquire A. Schulman for $2.25B.

LyondellBasell (LYB) and A. Schulman (SHLM) announced that they have entered into a definitive agreement under which LyondellBasell will acquire A. Schulman for a total consideration of $2.25B.

The acquisition builds upon LyondellBasell’s existing platform in this space to create a premier Advanced Polymer Solutions business with broad geographic reach, leading technologies and a diverse product portfolio.

Under the terms of the agreement, LyondellBasell will acquire A. Schulman for a total consideration of $2.25B.

LyondellBasell will purchase 100% of A. Schulman common stock for $42 per share in cash and one contingent value right per share and assume outstanding debt and certain other obligations.

In addition, the contingent value rights generally will provide a holder with an opportunity to receive certain net proceeds, if any are recovered, from certain ongoing litigation and government investigations relating to A. Schulman’s Citadel and Lucent acquisitions. LyondellBasell is using cash-on-hand to finance the acquisition.

LyondellBasell expects to achieve $150M in run-rate cost synergies within two years, primarily by leveraging its well-established approach to cost discipline and productivity, as well as its culture of operational, business and commercial excellence.

Further, the acquisition is expected to be accretive to earnings within the first full year following close.

The combined businesses had revenues of $4.6B and adjusted EBITDA of $446M over the last 12 months.

The proposed acquisition, which has been unanimously approved by the respective boards of LyondellBasell and A. Schulman, is subject to customary closing conditions, including regulatory approvals and approval by A. Schulman shareholders.

The acquisition is expected to close in the second half of 2018.


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Wyndham sells its European vacation business rental for $1.3B

Wyndham to sell European vacation rental business to Platinum Equity for $1.3B

 

Wyndham sells its European vacation rental for $1.3B. Stockwinners.com
Wyndham sells its European vacation rental for $1.3B

Wyndham (WYN) announced that it has entered into a definitive agreement for the sale of its European vacation rental business to Platinum Equity for approximately $1.3B.

In conjunction with the sale, the European vacation rental business has entered into a 20-year agreement under which it will pay a royalty fee of 1% of net revenue to Wyndham’s hotel business for the right to use the by Wyndham Vacation Rentals endorser brand.

The European vacation rentals operations will also participate as a redemption partner in the award-winning Wyndham Rewards loyalty program.

Wyndham’s industry-leading European vacation rental business is the largest manager of holiday rentals in Europe, with more than 110,000 units in over 600 destinations in more than 25 countries.

The business operates more than two dozen local brands, including cottages.com, James Villa Holidays, Landal GreenParks, Novasol and Hoseasons.

It generates approximately $750 million in annual revenue and approximately $130 million of EBITDA, including allocated costs.

Wyndham Worldwide originally announced its intent to explore strategic alternatives for its European rental brands in August 2017, in conjunction with the Company’s announcement of the planned separation of its hotel business from its vacation ownership and timeshare exchange businesses.

The transaction is expected to close in the second quarter of 2018, subject to customary closing conditions including works council consultation.


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McDonald’s announces changes to Happy Meals

McDonald’s announces changes to Happy Meals

No more Chocolate Milk or Cheeseburger in Happy Meals

McDonald's announces changes to Happy Meals, Stockwinners.com
McDonald’s announces changes to Happy Meals

McDonald’s (MCD) announced an expanded commitment to families, supporting the company’s long-term global growth plan by leveraging its reach to impact children’s meals, access to reading, and keeping families together through Ronald McDonald House Charities.

By 2022, McDonald’s will make improvements to the Happy Meal menu across 120 markets to offer more balanced meals, simplify ingredients, continue to be transparent with Happy Meal nutrition information, reinforce responsible marketing to children, and leverage innovative marketing to help impact the purchase of foods and beverages that contain recommended food groups in Happy Meals.

Using rigorous nutrition criteria grounded in science and nutrition policy, by the end of 2022, at least 50 percent or more of the Happy Meals listed on menus (restaurant menu boards, primary ordering screen of kiosks and owned mobile ordering applications) in each market will meet McDonald’s new Global Happy Meal Nutrition Criteria of less than or equal to 600 calories; 10 percent of calories from saturated fat; 650mg sodium; and 10 percent of calories from added sugar.

Currently, 28 percent of Happy Meal combinations offered on menu boards in 20 major markets meet these new nutrition criteria.

To reach the goal of 50 percent or more, markets will add new menu offerings, reformulate or remove menu offerings from the Happy Meal section of the menu board.

For example, last month McDonald’s Italy introduced a new Happy Meal entree called the “Junior Chicken,” a lean protein sandwich (grilled chicken).

McDonald’s Australia is currently exploring new vegetable and lean protein options and McDonald’s France is looking at new vegetable offerings.

As consumers’ tastes and preferences continue to evolve, markets will prioritize Happy Meals and simplify ingredients by removing artificial flavors, added colors from artificial sources, and reducing artificial preservatives where feasible.

The company has made a continuous effort to meet consumers’ desire for easy access to nutrition information for menu items it serves with a goal of ensuring that nutrition information for Happy Meals is available and accessible through all McDonald’s owned websites and mobile apps used for ordering where they exist.

Customers in the U.S. will see accelerated changes to the Happy Meal menu this year.

In June 2018, 100 percent of the meal combinations offered on Happy Meal menu boards in the U.S. will be 600 calories or fewer, and 100 percent of those meal combinations will be compliant with the new nutrition criteria for added sugar, saturated fat, and 78 percent compliant with the new sodium criteria. Listing only the following entree choices: Hamburger, 4-piece and 6-piece Chicken McNuggets.

The Cheeseburger will only be available at a customer’s request.

Replacing the small French fries with kids-sized fries in the 6-piece Chicken McNugget meal, which decreases the calories and sodium in the fries serving by half.

Reformulating chocolate milk to reduce the amount of added sugar.

During this period, chocolate milk will no longer be listed on the Happy Meal menu, but will be available at a customer’s request.

Later this year, bottled water will be added as a featured beverage choice on Happy Meal menu boards.

In December 2017, McDonald’s USA completed the transition to Honest Kids Appley Ever After organic juice drink, which has 45 less calories and half the total sugar than the prior 100 percent apple juice served in the U.S. With these planned menu updates, there will be average reductions of 20 percent in calories, 50 percent in added sugars,13 percent in saturated fat and/or 17 percent in sodium, depending on the customer’s specific meal selection.

These reductions reflect the average nutrition data of U.S. Happy Meal offerings on the menu last year compared to those planned for later this year.

Already, several of the Happy Meal combinations available on U.S. menu boards today meet the new nutrition criteria and will not be changing.

MCD closed at $160.00.


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Vertex reports positive acute pain control data

Vertex’s Phase 2 study of NaV1.8 inhibitor VX-150 meets primary endpoint

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Vertex reports positive Phase 2 results

Vertex Pharmaceuticals (VRTX) announced positive results of a Phase 2 study of the NaV1.8 inhibitor VX-150 in patients with acute pain following bunionectomy surgery.

Treatment with VX-150 showed statistically significant relief of acute pain compared to placebo, as determined by the time-weighted Sum of the Pain Intensity Difference over the first 24 hours of treatment, a standard measure of acute pain relief.

The study also included a standard-of-care reference arm of the commonly prescribed opioid medicine hydrocodone+acetaminophen to support the evaluation of a potential treatment effect for VX-150.

VX-150 was generally well tolerated, and there were no discontinuations for adverse events in any arm of the study.

This Phase 2 study is the second positive proof-of-concept study for VX-150 and provides further validation for the use of a NaV1.8 inhibitor for the treatment of pain.

A third Phase 2 study of VX-150 is currently ongoing in neuropathic pain with data expected in early 2019.

Vertex also recently initiated a Phase 1 study of a second NaV1.8 inhibitor, VX-128, in healthy volunteers.

The data announced were from a Phase 2 randomized, double-blind, placebo-controlled study that evaluated two days of treatment with VX-150, hydrocodone+acetaminophen or placebo in 243 patients with acute pain following bunionectomy surgery. 82 patients received placebo, 80 patients received VX-150 and 81 patients received hydrocodone+acetaminophen.

Hydrocodone+acetaminophen was included as a standard-of-care reference arm to enable better evaluation of a potential treatment effect for VX-150.

The reference arm was not included to make statistical comparisons to VX-150. VX-150 was dosed orally as 1500 mg for the first dose, followed by 750 mg every 12 hours over the 48-hour treatment period.

The primary endpoint of the study was the time-weighted Sum of the Pain Intensity Difference over the first 24 hours of treatment, as recorded on a Numeric Pain Rating Scale, for those treated with VX-150 compared to placebo.

Increases in SPID24 values represent improvements in pain relief. Secondary endpoints included safety and tolerability assessments as well as other efficacy measurements, including SPID over the first 48 hours of treatment for those treated with VX-150 compared to placebo.

Additional pre-specified analyses of other endpoints included SPID24 and SPID48 for hydrocodone+acetaminophen compared to placebo. The study met its primary endpoint, showing a statistically significant improvement in SPID24 for those treated with VX-150 compared to placebo.

The SPID24 values for those treated with VX-150 and placebo were 36.14 and 6.64, respectively. The SPID24 value for hydrocodone+acetaminophen was 40.16. In this study, VX-150 was generally well tolerated. More than 90 percent of patients in each arm of the study completed treatment.

There were no discontinuations due to adverse events and there were no serious adverse events in any arm of the study. The majority of adverse events were mild or moderate.

Adverse events were observed in 35 percent, 31 percent and 37 percent of patients who received placebo, VX-150 or hydrocodone+acetaminophen, respectively.

The most common adverse events were nausea, headache, vomiting and dizziness. Based on these data, Vertex plans to initiate a Phase 1 study of VX-150 using an intravenous formulation for the treatment of acute pain.

This study is planned to begin in the second half of 2018. An additional Phase 2 proof-of-concept study of VX-150 dosed orally is currently ongoing in patients with neuropathic pain caused by small fiber neuropathy.

Vertex expects to obtain data from the study in neuropathic pain in early 2019.

VRTX closed at $154.14.


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Nektar receives $1.85 billion from Bristol-Myers

Bristol-Myers to pay Nektar $1.85B in cash, stock as part of collaboration pact

 

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Bristol-Myers to pay Nektar $1.85B in cash

Bristol-Myers Squibb (BMY) and Nektar Therapeutics (NKTR) announced the companies have executed a global strategic development and commercialization collaboration for Nektar’s lead immuno-oncology program, NKTR-214.

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Bristol-Myers to pay Nektar $1.85B in cash

Under the collaboration, the companies will jointly develop and commercialize NKTR-214 in combination with Bristol-Myers Squibb’s Opdivo and Opdivo plus Yervoy in more than 20 indications across 9 tumor types, as well as potential combinations with other anti-cancer agents from either of the respective companies and/or third parties.

NKTR-214, a CD122-biased agonist, is an investigational immuno-stimulatory therapy designed to selectively expand cancer-fighting T cells and natural killer cells directly in the tumor micro-environment and increase PD-1 expression on those immune cells.

Bristol-Myers Squibb and Nektar have agreed to a joint clinical development plan to evaluate NKTR-214 with Opdivo and Opdivo plus Yervoy in registration-enabling clinical trials in more than 20 indications in 9 tumor types including melanoma, renal cell carcinoma, non-small cell lung cancer, bladder and triple negative breast cancer.

Pivotal studies in renal cell carcinoma and melanoma are expected to be initiated in mid-2018.

Under the terms of the agreement, Bristol-Myers Squibb will make an upfront cash payment of $1.0B and an equity investment of $850M, or 8,284,600 shares of Nektar’s common stock at $102.60 per share.

Bristol-Myers Squibb has agreed to certain lock-up, standstill and voting provisions on its share ownership for a period of five years subject to certain specified exceptions.

Nektar is also eligible to receive an additional $1.78B in milestones, of which $1.43B are development and regulatory milestones and the remainder are sales milestones.

Nektar will book revenue for worldwide sales of NKTR-214 and the companies will split global profits for NKTR-214 with Nektar receiving 65% and Bristol-Myers Squibb 35%.

Bristol-Myers Squibb will retain 100% of product revenues for its own medicines.

The parties also will share development costs relative to their ownership interest of medicines included in the trials. For trials in the joint clinical development plan that include NKTR-214 with Opdivo only, the parties will share development costs with 67.5% allocated to Bristol-Myers Squibb and 32.5% allocated to Nektar.

For trials in the joint clinical development plan that include NKTR-214 with Opdivo and Yervoy, the parties will share development costs with 78% allocated to Bristol-Myers Squibb and 22% allocated to Nektar.

Both Bristol-Myers Squibb and Nektar have agreed for a specified period of time to not commence development with overlapping mechanisms of action in the same indications as those included in the joint clinical development plan.

The parties are otherwise free to develop NKTR-214 with their own pipeline assets and/or any other third party compounds. Both parties have agreed to initiate registration-enabling studies in the joint clinical development plan within 14 months of the effective date of the agreement, subject to allowable delays.

Both parties will jointly commercialize NKTR-214 on a global basis. Bristol-Myers Squibb will lead global commercialization activities for NKTR-214 combinations with Bristol-Myers Squibb medicines and Nektar will co-commercialize such combinations in the US, major EU markets and Japan.

Nektar will lead global commercialization activities for NKTR-214 combinations with either Nektar medicines and/or other third-party medicines.

For Bristol-Myers Squibb, the transactions are expected to be dilutive in 2018 and 2019 to the company’s non-GAAP EPS by 2c and 10c, respectively.

Nektar and Bristol-Myers Squibb currently expect to complete the transaction during the second quarter of 2018, subject to the expiration or termination of applicable waiting periods under all applicable US antitrust laws and the satisfaction of other usual and customary closing conditions.

Further details of the agreement can be found in Nektar’s Form 8-K filed today with the Securities and Exchange Commission. Nektar and Bristol-Myers Squibb entered into a clinical collaboration in September of 2016 to evaluate the potential for the combination of Opdivo and NKTR-214 to show improved and sustained efficacy and tolerability above the current standard of care.

The Phase 1/2 PIVOT clinical study is ongoing in over 350 patients with melanoma, kidney, non-small cell lung cancer, bladder, and triple-negative breast cancers.

NKTR closed at $75.66, it last traded at $69.97. BMY closed at $63.87. It last traded at $62.51.


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Layne Christensen sold for $565M

Granite Construction to acquire Layne Christensen in $565M stock merger

Granite Construction to acquire Layne Christensen. Stockwinners.com
Granite Construction to acquire Layne Christensen 

Granite Construction Incorporated (GVA) and Layne Christensen Company (LAYN) announced that they have entered into a definitive agreement whereby Granite will acquire all of the outstanding shares of Layne in a stock-for-stock transaction valued at $565 million, including the assumption of net debt.

The transaction, which was unanimously approved by the Boards of Directors of both companies, is expected to close in the second quarter of 2018.

Granite Construction to acquire Layne Christensen. Stockwinners.com
Granite Construction to acquire Layne Christensen

Under the terms of the agreement, Layne shareholders will receive a fixed exchange ratio of 0.270 Granite shares for each share of Layne common stock they own. This represents $17.00 per Layne share, or a premium of 33%, based on the volume-weighted average prices for Granite and Layne shares over the past 90 trading days.

Following the close of the transaction, Layne shareholders will own approximately 12% of Granite shares on a fully diluted basis, and Granite’s Board will be expanded to include one additional director from Layne.

The transaction represents an enterprise value multiple of 8.2x 2018 expected EBITDA.

Granite expects to achieve approximately $20 million of annual run-rate cost savings by the third year following the close of the transaction, with approximately one-third realized in 2018.

Granite expects to incur approximately $11 million in one-time costs to achieve these savings.

The transaction is expected to be accretive to Granite’s adjusted earnings per share, and high single-digit accretive to Granite’s adjusted cash earnings per share in the first year after closing.

Granite expects to assume outstanding Layne convertible debt with principal value of $170 million and honor the terms and existing maturity date provisions of the indentures.

The transaction is not expected to trigger any change of control provisions under Layne’s indentures.

Granite also expects to fund the cash financing requirements of the transaction of approximately $70 million through a combination of existing cash on hand and availability under Granite’s revolving credit facility.

Following close, Granite will maintain an investment grade credit profile and significant financial flexibility.

The transaction, which is expected to close in the second quarter of 2018, is subject to the satisfaction of customary closing conditions, including applicable regulatory approvals and the approval of the shareholders of Layne.

Wynnefield Capital, which has an approximate 9% voting interest in Layne, has agreed to vote in favor of the transaction.

In connection with the transaction, Granite will issue approximately 5.4 million shares of Granite common stock to Layne common stockholders.

LAYN closed at $12.62. GVA closed at $60.08.


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