California Resources on the verge of bankruptcy!

The oil driller is preparing near-term bankruptcy filing, WSJ reports

California Resources Corporation (CRC) operates as an oil and natural gas exploration and production company in the State of California.

The company sells crude oil, natural gas, and natural gas liquids to marketers, California refineries, and other purchasers that have access to transportation and storage facilities. It holds interests in approximately 2.2 million net acres of mineral acreage. As of December 31, 2019, the company had net proved reserves of 644 million barrels of oil equivalent.

Interest Payment

California Resources skipped an interest payment to lenders and could file for bankruptcy as soon as next week, The Wall Street Journal’s Alexander Gladstone reports, citing people familiar with the matter.

The company said in an 8-K filing that it entered into forbearance agreements most of its lenders, who have agreed not to exercise “remedies” under the credit agreements. 

The oil driller said Monday it has entered into an agreement with a majority of its senior lenders to wait until Sunday before they can declare a default, the author notes.

2-Year price chart for CRC

The company has suffered from a sharp selloff in crude oil futures prices to start this year, as a result of the drop in demand from the COVID-19 pandemic and the price war between Saudia Arabia and Russia.

CRC is up 67 cents to $2.68.

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Watch shares of Alnylam Pharmaceuticals

Alnylam presents Phase 3 results from ILLUMINATE-A study of Lumasiran

Alnylam Pharmaceuticals (ALNY) announced Phase 3 results from the ILLUMINATE-A study of lumasiran, an investigational RNAi therapeutic targeting hydroxyacid oxidase 1 – the gene encoding glycolate oxidase – in development for the treatment of primary hyperoxaluria type 1.

The clinical data were presented at a late-breaking session at the European Renal Association-European Dialysis and Transplant Association International Congress being held as a virtual event on June 6-9.

Lumasiran achieved the ILLUMINATE-A primary endpoint with a 53.5% mean reduction in urinary oxalate relative to placebo and showed a 65.4% mean reduction in urinary oxalate relative to baseline.

All tested study secondary endpoints were met, including the proportion of patients achieving near-normalization or normalization of urinary oxalate, compared with zero percent in the placebo group.

Lumasiran administration was associated with an encouraging safety and tolerability profile, with no serious or severe adverse events and with mild injection site reactions as the most common drug-related AE.

Primary hyperoxaluria (PH) constitutes a group of rare inherited disorders of the liver characterized by the overproduction of oxalate, an end-product of metabolism. High levels of oxalate are toxic because oxalate cannot be broken down by the human body and accumulates in the kidneys.

PH1 is an ultra-rare orphan disease caused by excessive oxalate production, and elevated urinary oxalate levels are associated with progression to end-stage kidney disease and other systemic complications.

Based on the ILLUMINATE-A results, Alnylam filed a New Drug Application with the U.S. Food and Drug Administration.

The FDA has granted a Priority Review for the NDA and has set an action date of December 3, 2020 under the Prescription Drug User Fee Act.

In addition, the Marketing Authorisation Application for lumasiran has been submitted to and validated by the European Medicines Agency, and has received Accelerated Assessment designation.

Stifel

Stifel analyst Paul Matteis believes full Alnylam’s Lumasiran data presented at ERA-EDTA reflect a relatively derisked clinical profile that’s very likely to attain regulatory approval.

Lumasiran treatment led to robust and durable reductions in urinary oxalate, which based on the well described biology in PH1 should ultimately lead to clinical benefit on renal outcomes, he contends.

The analyst notes that for the stock, lumasiran is already mostly priced-in here, though there’s some investment debate surrounding the market opportunity which is generally perceived to be ultra-orphan/small.

While he is also somewhat conservative in how he models revenues for lumasiran, there could be upside to numbers should approval/launch increase the PH1 diagnosis rate. Matteis has a Buy rating and a $159 price target on the shares.

ALNY closed at $127.59.

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