Category: Stock Research

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Acorn International sold for $21 per share

Acorn International enters merger agreement for going private transaction

Acorn International (ATV) announced that it has entered into a definitive agreement and plan of merger with First Ostia Port, a Cayman Islands exempted company and its wholly owned subsidiary Second Actium Coin, a Cayman Islands exempted company, pursuant to which, the merger sub will merge with and into the company thereby becoming a wholly-owned subsidiary of the controlling shareholder.

Acorn taken private

Acorn International, Inc. develops, promotes, and sells a portfolio of proprietary-branded products in the People’s Republic of China. The company operates through two segments, Direct Sales and Distribution Sales.

The company will be acquired in an all-cash transaction by the controlling shareholder.

Pursuant to the terms of the merger agreement, each ordinary share, par value 1c per share, of the company, including shares represented by American Depositary Shares, each representing twenty shares, issued and outstanding immediately prior to the effective time, other than the excluded shares shall be cancelled in exchange for the right to receive $1.05 in cash per share without interest.

As each ADS represents twenty shares, each ADS issued and outstanding immediately prior to the effective time, other than ADSs representing excluded shares, shall represent the right to receive $21.00 in cash without interest pursuant to the terms and conditions set forth in the merger agreement.

The per share merger consideration represents a premium of 44.1% over the company’s closing price of $14.57 per ADS as quoted on the New York Stock Exchange, or NYSE, on August 17, the last trading day prior to the day when the company received a non-binding “going private” proposal from the controlling shareholder.

The merger consideration also represents an increase of approximately 38.0% over the $15.22 per ADS offered by the controlling shareholder in its revised going-private proposal on August 18 and a premium of approximately 39.4% over the company’s closing price of $15.07 per ADS on October 9, the last trading day prior to issuance of this press release.

The controlling shareholder intends to fund a substantial portion of the consideration for the merger in the form of debt funding from a third-party lender and has delivered to the company duly executed copies of the loan and security agreement.

The board, acting upon the unanimous recommendation of a committee of independent directors established by the board, approved the merger agreement and the merger.

The special committee negotiated the terms of the merger agreement with the assistance of its independent financial and legal advisors.

The merger, which is currently expected to close during the last quarter of 2020, is subject to customary closing conditions, including the approval of the merger agreement by a requisite company vote of shares representing at least two-thirds of the voting power of the shares present and voting in person or by proxy at a meeting of the company’s shareholders which will be convened to consider the approval of the merger agreement and the merger. 

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Arm Holdings sold for $40 billion

Nvidia to buy Arm Holdings from Softbank

Nvidia (NVDA) confirmed that it intends to buy chip design giant Arm Holdings for a total of up to $40 billion from existing owner SoftBank (SFTBY), which bought the company for $32 billion in 2016.

Arm Holdings chips power smart phones

SoftBank  will immediately receive $2 billion in cash for signing the deal. Then, it will receive another $10 billion in cash and $21.5 billion of stock in Nvidia at closing. That stake will be likely just a bit shy of 10% of the company.

Softbank bought Arm in 2016 for $32 billion

In addition, SoftBank is slated to earn $5 billion in a mix of cash and stock as a performance-based earn-out. Conditions or timing for that earn-out were not disclosed.

Nvidia buys Arm Holdings for $40 billion

Analysts’ Comments

Should Nvidia’s (NVDA) acquisition of SoftBank’s (SFTBY) ARM be allowed to proceed, it would create a “landscape-changing entity” that would combine two leading GPU and CPU architectures into a “single powerful ecosystem,” Deutsche Bank analyst Ross Seymore tells investors in a research note.

However, it this point that is likely to create the pushback from competitors and customers, says the analyst. Seymore questions whether ARM licensees would support an Nvidia acquisition saying “there could be a myriad of conflict of interest issues” whereby Nvidia could have access to competitor strategies and technologies in a variety of Nvidia-targeted markets. Seymore keeps a Hold rating on Nvidia shares.

Jefferies analyst Mark Lipacis raised the firm’s price target on Nvidia (NVDA) to $680 from $570 and keeps a Buy rating on the shares after the company announced an agreement to acquire ARM Holdings, subject to regulatory approvals. He views the deal as one that is “transformative” as it should position Nvidia to capture 80% of the ecosystem value in the data center and also unify the compute ecosystem between the edge and data center, Lipacis tells investors. Assuming the deal with Softbank (SFTBY) goes through, he thinks the merged company has a five-year EPS power of $50, said Lipacis, who also raised his “bull-case” target on Nvidia shares to $1,000.

RBC Capital analyst Mitch Steves keeps his Outperform rating on Nvidia (NVDA) after the company confirmed its acquisition of ARM Holdings last night, saying the transaction would be a positive if it can close amid the likely regulatory challenges to its completion. Steves adds that if the transaction closes, it would also be a “notable negative” for Intel (INTC), stating that Nvidia’s research and development funding would compete against Intel’s currently dominant x86 market share.

Wedbush analyst Matt Bryson made no change to his Outperform rating or $525 price target for Nvidia (NVDA) after the company and SoftBank (SFTBY) finalized an agreement whereby Nvidia will purchase ARM Holdings. While Bryson views the deal terms and expected synergies as favorable for Nvidia, the analyst believes it most likely will never be consummated unless the U.S./China relationship dynamic shifts considerably.

NVDA is up 5.8% to $514 while SFTBY is up 8.7% to $29.87.

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Virtusa sold for $2 billion

Virtusa to be acquired by BPEA for $51.35 per share in cash deal valued at $2B

Baring Private Equity Asia, or BPEA, and Virtusa (VRTU) announced the companies have entered into a definitive merger agreement under which funds affiliated with BPEA will acquire all outstanding shares of common stock of Virtusa for $51.35 per share in an all-cash transaction valued at approximately $2B.

Virtusa Corporation provides digital engineering and information technology (IT) outsourcing services primarily in North America, Europe, and Asia.

Virtusa sold for $2B

The companies said in a release, “The price per share to be paid in the transaction, which was unanimously approved by the Virtusa Board of Directors, represents a premium of approximately 27 percent to the closing price of Virtusa common stock on September 9, 2020, the last trading day prior to the transaction announcement, and premiums of approximately 29 percent and 46 percent to Virtusa’s volume-weighted average prices, or VWAP, for the last 30 and 60 trading days, respectively.

In addition, the price paid implies a valuation of 16.2x Firm Value / Last Twelve Months EBITDA as of June 30, 2020. On July 20, 2020, the Virtusa Board of Directors received an unsolicited proposal from an interested party to acquire Virtusa.

BPEA buys Virtusa for $2 billion

Following receipt of the offer, consistent with the Board’s fiduciary duties to maximize shareholder value, the Board authorized the Company and its financial advisors to engage with other potential strategic buyers and financial sponsors regarding a potential acquisition of Virtusa.

As part of this process, the Company signed non-disclosure agreements with five parties and engaged with two others.

After an independent review of the alternatives available, including the value creation opportunity through continued execution of the Company’s strategic plan, the Virtusa Board unanimously determined that the all-cash premium transaction with BPEA for $51.35 per share in cash maximizes value for Virtusa’s shareholders.

The transaction, which is expected to close in the first half of 2021, is subject to the approval of Virtusa’s shareholders, customary regulatory requirements, including approval from The Committee on Foreign Investment in the United States, or CFIUS, and customary closing conditions.

The transaction is not subject to a financing condition.

The Orogen Group, which holds 108,000 shares of Virtusa Convertible Preferred Stock and whose CEO is Vikram Pandit, an independent member of the Board, has entered into a voting agreement under which it has agreed to vote all of Orogen’s Convertible Preferred Stock in favor of the transaction.

Orogen Group is a major shareholder of Virtusa

Orogen’s shares of preferred stock are convertible into 3,000,000 shares of Virtusa common stock and represent approximately 10 percent of the voting power in the Company.

The directors and executive officers of Virtusa have also entered into this voting agreement, and hold an additional approximate 5.7% of the voting power of the Company.”

VRTU closed at $40.50, last traded at $50.45.

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Intra-Cellular sharply higher on it’s Bipolar drug

Intra-Cellular says lumateperone 42 mg met primary endpoint in Study 402

Intra-Cellular Therapies (ITCI) announced positive topline results from its Phase 3 clinical trial evaluating lumateperone as adjunctive therapy to lithium or valproate in the treatment of major depressive episodes associated with Bipolar I or Bipolar II disorder.

Intra-Cellular sharply higher on its bi-polar drug

In Study 402, once daily lumateperone 42 mg met the primary endpoint for improvement in depression as measured by change from baseline versus placebo on the MADRS total score.

Lumateperone 42 mg also met the key secondary endpoint, the CGI-BP-S Depression Score.

The lower lumateperone dose, 28 mg, showed a trend for a dose-related improvement in symptoms of depression but the results did not reach statistical significance.

Lumateperone demonstrated a favorable safety profile and was generally well-tolerated in the trial.

Lumateperone was successful in treating bipolar disorders

The most commonly reported adverse events that were observed at a rate greater than or equal to 5% and at least twice the rate of placebo were somnolence, dizziness, and nausea.

Rates of akathisia, restlessness, extrapyramidal symptoms, and changes in weight were similar to placebo.

This trial, in conjunction with our previously reported positive Phase 3 monotherapy study, Study 404, forms the basis for our sNDA for the treatment of bipolar depression in patients with Bipolar I or II disorder as monotherapy and adjunctive therapy which we expect to submit to the FDA in late 2020 or early 2021.

Study 402 was conducted globally in five countries including in the U.S. A total of 529 patients with moderate to severe major depressive episodes associated with either Bipolar I or Bipolar II disorder were randomized 1:1:1 to lumateperone 42 mg, 28 mg or placebo, while being maintained on lithium or valproate as mood stabilizers.

Lumateperone 42 mg met the primary endpoint by demonstrating a statistically significant improvement compared to placebo at week 6, as measured by change from baseline on the MADRS total score.

In the intent-to-treat study population, the least squares mean reduction from baseline for lumateperone 42 mg was 16.9 points, versus 14.5 points for placebo. Lumateperone 42 mg also met the key secondary endpoint of statistically significant improvement on the CGI-BP-S Depression Score.

Lumateperone 28 mg showed a trend for a dose-related improvement in symptoms of depression.

Though not formally tested against placebo since it did not separate on the primary endpoint, lumateperone 28 mg demonstrated a statistically significant improvement versus placebo on the CGI-BP-S. Lumateperone was generally well-tolerated with a favorable safety profile in the trial.

Adverse events were mostly mild to moderate and similar to those seen in prior studies in bipolar depression and schizophrenia, with no new adverse events observed. These findings provide further evidence supporting lumateperone’s favorable safety and tolerability profile across different patient populations.

 Importantly, lumateperone was generally safe and well tolerated in the study, adds the analyst. Hazlett believes that if approved in this indication, lumateperone would be differentiated as a potential first-line treatment option in depressive episodes associated with both bipolar I and bipolar II disorders.

ITCI is up 76% to $32.51

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Walmart to partner with Microsoft on TikTok deal

Walmart backs TikTok U.S. partnership with Microsoft

Walmart (WMT), which was previously said to have been working with SoftBank (SFTBY) on a potential acquisition of TikTok’s U.S. business, has now confirmed its involvement in a potential TikTok deal in partnership with Microsoft (MSFT), according to CNBC’s Alex Sherman.

“The way TikTok has integrated e-commerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets.

We believe a potential relationship with TikTok U.S. in partnership with Microsoft could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses.

We are confident that a Walmart and Microsoft partnership would meet both the expectations of U.S. TikTok users while satisfying the concerns of US government regulators,” a Walmart spokesperson told CNBC.

TikTok is nearing an agreement to sell its U.S., Canadian, Australian and New Zealand operations in a deal that could be announced as soon as next week, sources say. The deal is likely to be in the $25 billion to $30 billion range, sources say.

Earlier this week, TikTok filed a lawsuit against Trump Administration claiming that the Executive Order issued by the Administration on August 6, 2020 has the potential to strip the rights of that community without any evidence to justify such an extreme action, and without any due process.

WMT shares are up 5% on the news while MSFT is better by 3.5%.

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U.S. sues Teva Pharmaceuticals for kickbacks

Justice Department files False Claims Act against Teva Pharmaceuticals

The U.S. Attorney’s Office has filed a complaint under the False Claims Act against Teva Pharmaceuticals USA. and Teva Neuroscience (TEVA), the maker of Copaxone, a drug for multiple sclerosis.

The government alleges that Teva conspired with a specialty pharmacy, Advanced Care Scripts, and two purportedly independent foundations, Chronic Disease Fund and The Assistance Fund, to violate the Anti-Kickback Statute and False Claims Act by using the foundations as conduits to subsidize Medicare co-pays for Copaxone, all while steadily raising Copaxone’s price, the Justice Department said in a statement.

Teva Pharma. is accused of offering kickbacks

The government alleges that, from 2006 through at least 2015, Teva paid the two foundations well over $300M with the intent and understanding that the foundations would use Teva’s money to cover the Medicare co-pays of patients taking Copaxone. During the same period, Teva raised the price of Copaxone from approximately $17,000 per year to over $73,000 per year, according to the DOJ.

Copaxone is used to treat multiple sclerosis

Copaxone is a brand-name prescription drug. It’s approved to treat certain forms of multiple sclerosis (MS) in adults.

Chronic Disease Fund is accused of being part of the scheme

With MS, the immune system mistakenly attacks the nerves. The damaged nerves then have trouble communicating with brain. This condition can cause a wide variety of symptoms, such as muscle weakness and fatigue (lack of energy).

The Assistance Fund is accused of being part of the price kickback

Copaxone contains the active drug glatiramer acetate. It’s a disease-modifying therapy for MS. Copaxone helps to stop the immune system from attacking the nerves. The drug can reduce the number of MS relapses and also slow worsening of the disease.

Copaxone comes as a solution that’s given by subcutaneous injection (an injection under your skin).

Teva Pharmaceutical Industries Limited is an Israeli pharmaceutical company. The firm develops, manufactures, markets, and distributes generic medicines, specialty medicines, and biopharmaceutical products in North America, Europe, and internationally. It is one of the largest generic drugmakers in the world.

Shares of Teva are down 9% to $10.52 in morning trading. 

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Stein Mart files for Chapter 11 bankruptcy

Stein Mart voluntarily files Chapter 11 bankruptcy protection

Stein Mart (SMRT) announced that it and its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Middle District of Florida – Jacksonville Division.

Stein Mart files for bankruptcy protection

Stein Mart offers designer and name-brand fashion apparels, home decor merchandise, accessories, and shoes at everyday discount prices in the United States. As of June 3, 2020, it operated 281 stores in 30 states. The company was founded in 1908 and is headquartered in Jacksonville, Florida.

The Company has filed customary motions with the Bankruptcy Court that will authorize, upon Bankruptcy Court approval, the Company’s ability to maintain operations in the ordinary course of business, including, among other things, the payment of employee wages and benefits without interruption, payment of suppliers and vendors in the normal course of business, and the use of cash collateral.

Too much savings caused Stein Mart’s demise

These motions are typical in the Chapter 11 process and the Company anticipates that they will be approved shortly after the commencement of its Chapter 11 case.

Details on the Company’s Chapter 11 process and go-forward strategy are as follows:

The Company expects to close a significant portion, if not all, of its brick-and-mortar stores and, in connection therewith, the Company has launched a store closing and liquidation process.

The Company, however, will continue to operate its business in the ordinary course in the near term; and the Company is evaluating any and all strategic alternatives, including the potential sale of its eCommerce business and related intellectual property. 

SMRT last traded at $0.18.

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Gilead submits New Drug Application for Covid-19 Treatment

Gilead submits NDA to FDA for Veklury for COVID-19 treatment

Gilead Sciences (GILD) announced that it has submitted a New Drug Application to the U.S. Food and Drug Administration for  Veklury® (remdesivir), an investigational antiviral for the treatment of patients with COVID-19.

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Gilead files for NDA for Veklury

#Veklury is currently available in the U.S. under an Emergency Use Authorization for the treatment of hospitalized patients with severe COVID-19.

The filing is the final tier of the rolling NDA submission that was initiated on April 8, 2020.

The filing is supported by data from two randomized, open-label, multi-center Phase 3 clinical studies of Veklury conducted by Gilead and the Phase 3 randomized, placebo-controlled study of Veklury conducted by the National Institute of Allergy and Infectious Diseases.

These studies demonstrated that treatment with Veklury led to faster time to recovery compared with placebo and that a 5-day or 10-day treatment duration led to similar clinical improvement.

Across studies, Veklury was generally well-tolerated in both the 5-day and 10-day treatment groups, with no new safety signals identified. Veklury has been approved by multiple regulatory authorities around the world, including in the European Union and Japan.

In countries where Veklury has not been approved, including the United States, Veklury is an investigational drug and the safety and efficacy of remdesivir have not been established.

Veklury has not been approved by the U.S. Food and Drug Administration (FDA) for any use.

In the United States, the FDA granted Veklury an Emergency Use Authorization (EUA) for the treatment of hospitalized patients with severe COVID-19. This authorization is temporary and may be revoked, and it does not take the place of the formal new drug application submission, review and approval process.

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Fulgent Genetics shares soar on Covid-19 testing

Fulgent Genetics surges after ‘record’ Q2 results

Shares of Fulgent Genetics (FLGT) have surged during Wednesday’s session after the company reported second quarter results after the market close last night.

The company noted that it had “record” figures for quarterly revenue, billable tests, adjusted earnings, and adjusted EBITDA, as it has commercially launched several tests for COVID-19 since March 2020.

EARNINGS

In its latest report, Fulgent Genetics reported Q2 adjusted EPS of 17c on revenue of $17.3M, compared to analysts’ estimates of (5c) and $10.05M.

The company delivered 180,513 billable tests in the quarter, an increase of 1003% year-over-year, and gross margin for the quarter improved roughly eight percentage points from the previous quarter and roughly 81% year-over-year.

Commenting on the results, chairman and CEO Ming Hsieh said, “The global COVID-19 pandemic has tested who we are as a company, and now more than ever we have demonstrated that Fulgent is a technology company with a proprietary platform built for massive scale.

Our technology is the cornerstone for all facets of our business, including cloud computing, pipeline services, record management, web portal services, clinical workflow, sequencing as a service and automated lab services.

Covid-19 Test Kit

Our second quarter results illustrate how we quickly applied our technology to the needs of today, organically developing and launching multiple tests to detect COVID-19 with Emergency Use Authorization from the FDA, including an at-home test offered through Picture Genetics, our patient-initiated product.

These offerings have attracted major new customer accounts, resulting in an inflection point in our business and outlook.”

GUIDANCE:

On Fulgent’s quarterly conference call, CFO Paul Kim said that based on the “explosive” demand the company is seeing from the market and the quality of its customers, he continues to see the upward trajectory and transformation of the business continuing for the balance of 2020.

Fulgent now projects test volumes for 2020 to be over 1.3M, which translates to into over $120M in revenues. Kim added that he sees adjusted net income of $25M, or about $1.00 per share in FY20.

Analysts had expected the company to report FY20 EPS of 12c on revenue of $45.02M.

Analysts Comments:

Following the results, Piper Sandler analyst Steven Mah maintained an Overweight rating on Fulgent Genetics and raised his price target on the stock to $68 from $31.

Mah, who continues to believe COVID-19 testing is durable for the coming years, said he is encouraged by Fulgent’s early success in test volume, adding that his higher revenue estimates are due to increased COVID-19 expectations.

PRICE ACTION:

In afternoon trading, Fulgent Genetics shares are up nearly 23%, trading at $36.46.

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FDA approves Exact Sciences’ COVID-19 test

Exact Sciences receives revised EUA for COVID-19 test

A letter to Exact Sciences Laboratories (EXAS), dated August 3, posted to the site of the FDA states:

“On May 22, 2020, based on your request, the Food and Drug Administration issued a letter determining that your product met the criteria for issuance under section 564(c) of the Act to be eligible for authorization under the March 31, 2020, Emergency Use Authorization – EUA – for Molecular-based Laboratory Developed Tests for Detection of Nucleic Acid from SARS-CoV-2 for the qualitative detection of nucleic acid from SARS-CoV-2 in respiratory specimens collected from individuals suspected of COVID-19 by their healthcare provider…

On July 17, 2020, FDA received a request from you to revise the Scope of Authorization, and thus the test’s intended use as originally specified by the High Complexity LDT Umbrella EUA, to include self-collection of nasal swab specimens that are self-collected at home or in a healthcare setting by individuals using an authorized home-collection kit specified in this EUA’s authorized labeling when determined to be appropriate by a healthcare provider, and to specify that testing is limited to Exact Sciences Laboratories at two locations..

Having concluded that the criteria for issuance of this authorization under Section 564(c) of the Act are met, I am authorizing the emergency use of your product, as described in the Scope of Authorization of this letter (Section II), subject to the terms of this authorization.”

Exact Sciences is known for it’s Cologuard, colon cancer detection test

The COVID-19 test is offered through US physicians and authorized healthcare providers. The test is intended for use with patients who meet the CDC’s current guidance for evaluation of COVID-19 infection.

EXAS last traded at $92.76.

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FTC to fine Twitter over misuse of data

Twitter faces FTC fine of up to $250M over alleged misuse of email, phone data

On July 28, 2020, Twitter (TWTR) received a draft complaint from the Federal Trade Commission alleging violations of the company’s 2011 consent order with the FTC and the FTC Act, the company said in a regulatory filing.

Twitter books a $150M charge., Stockwinners

The allegations relate to the company’s use of phone number and/or email address data provided for safety and security purposes for targeted advertising during periods between 2013 and 2019.

The company estimates that the range of probable loss in this matter is $150M to $250M and has recorded an accrual of $150M.

The accrual is included in accrued and other current liabilities in the consolidated balance sheet and in general and administrative expenses in the consolidated statements of operations.

FTC complaint relates to misuse of phone number and email addresses

The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.

The company is also currently involved in, and may in the future be involved in, legal proceedings, claims, investigations, and government inquiries and investigations arising in the ordinary course of business.

These proceedings, which include both individual and class action litigation and administrative proceedings, have included, but are not limited to matters involving content on the platform, intellectual property, privacy, data protection, securities, employment and contractual rights.

Class Action suits have been filed against Twitter

Legal fees and other costs associated with such actions are expensed as incurred.

The company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and contingencies.

Litigation accruals are recorded when and if it is determined that a loss related matter is both probable and reasonably estimable.

Material loss contingencies that are reasonably possible of occurrence, if any, are subject to disclosure.

Twitter used customer phone numbers for marketing purposes, Stockwinners

As of June 30, 2020, except for the referenced class actions, derivative actions and FTC matter, there was no litigation or contingency with at least a reasonable possibility of a material loss.

Except for the aforementioned accrual of $150M recorded in relation to the FTC matter, no other material losses were recorded during the three and six months ended June 30, 2020 and 2019 with respect to litigation or loss contingencies.

TWTR closed at $36.39.

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Sangamo signs deal with Novartis, shares jump

Sangamo executes global licensing agreement with Novartis for genomic medicines

Sangamo (SGMO) announced that it has executed a global licensing collaboration agreement with Novartis (NVS) to develop and commercialize gene regulation therapies to address three neurodevelopmental targets, including autism spectrum disorder, or ASD, and other neurodevelopmental disorders.

Sangamo signs distribution agreement with Novartis

The collaboration will leverage Sangamo’s propriety genome regulation technology, zinc finger protein transcription factors, or ZFP-TFs, to aim to upregulate the expression of key genes involved in neurodevelopmental disorders.

Zinc-finger protein transcription factors (ZFP TFs) can be designed to control the expression of any desired target gene, and thus provide potential therapeutic tools for the study and treatment of disease. 

Novartis receives positive CHMP opinion for Kymriah, Stockwinners
Novartis to use Sangamo to expand its markets

The collaboration will leverage ZFP-TFs engineered by Sangamo scientists in an effort to upregulate, or activate, the expression of genes that are inadequately expressed in individuals with certain types of neurodevelopmental disorders.

Under the terms of the agreement, over a three-year collaboration period, Novartis has exclusive rights to ZFP-TFs targeted to three undisclosed genes which are associated with neurodevelopmental disorders, including ASD and intellectual disability.

Novartis also has the option to license Sangamo’s proprietary AAVs.

Sangamo’s proprietary AAVs

Sangamo is responsible for certain research and associated manufacturing activities, all of which will be funded by Novartis, and Novartis assumes responsibility for additional research activities, investigational new drug-enabling studies, clinical development, related regulatory interactions, manufacturing and global commercialization.

Under the collaboration agreement, Novartis will pay Sangamo a $75 million upfront license fee payment within thirty days.

In addition, Sangamo is eligible to earn up to $720 million in other development and commercial milestone payments, including up to $420 million in development milestones and up to $300 million in commercial milestones.

Sangamo is also eligible to receive from Novartis tiered high single-digit to sub-teen double-digit royalties on potential net commercial sales of products arising from the collaboration.

SGMO is up 15% to $11.40. NVS is down 22 cents to $84.19.

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U.S. orders 600M doses of Covid-19 vaccine candidate for $1.95B

Pfizer, BioNTech to supply U.S. government up to 600M doses of vaccine candidate

Pfizer Inc. (PFE) and BioNTech SE (BNTX) announced the execution of an agreement with the U.S. Department of Health and Human Services and the Department of Defense to meet the U.S. government’s Operation Warp Speed program goal to begin delivering 300 million doses of a vaccine for COVID-19 in 2021.

Pfizer to provide 600M doses of its vaccine candidate

Under the agreement, the U.S. government will receive 100 million doses of BNT162, the COVID-19 vaccine candidate jointly developed by Pfizer and BioNTech, after Pfizer successfully manufactures and obtains approval or emergency use authorization from U.S. Food and Drug Administration.

The U.S. government will pay the companies $1.95B upon the receipt of the first 100 million doses, following FDA authorization or approval. The U.S. government also can acquire up to an additional 500 million doses.

Americans will receive the vaccine for free consistent with U.S. government’s commitment for free access for COVID-19 vaccines. The BNT162 program is based on BioNTech’s proprietary mRNA technology and supported by Pfizer’s global vaccine development and manufacturing capabilities.

The BNT162 vaccine candidates are undergoing clinical studies and are not currently approved for distribution anywhere in the world. BioNTech is the market authorization holder worldwide and will hold all trademarks for the potential product.

Both collaborators are committed to developing these novel vaccines with pre-clinical and clinical data at the forefront of all their decision-making.

Covid19 vaccine path to defeat the virus

The Pfizer/BioNTech vaccine development program is evaluating at least four experimental vaccines, each of which represents a unique combination of messenger RNA format and target antigen.

On July 1st, Pfizer and BioNTech announced preliminary data from BNT162b1, the most advanced of the four mRNA formulations. The early data demonstrates that BNT162b1 is able to produce neutralizing antibodies in humans at or above the levels observed in the plasma from patients who have recovered from COVID-19, and this was shown at relatively low dose levels.

Local reactions and systemic events were dose-dependent, generally mild to moderate, and transient. No serious adverse events were reported.

On July 20th, the companies announced early positive update from German Phase 1/2 COVID-19 vaccine study, including first T Cell response data.

Recently, two of the companies’ four investigational vaccine candidates received Fast Track designation from the U.S. Food and Drug Administration.

This designation was granted based on preliminary data from Phase 1/2 studies that are currently ongoing in the United States and Germany as well as animal immunogenicity studies.

Further data from the ongoing Phase 1/2 clinical trials of the four vaccine candidates will enable the selection of a lead candidate and dose level for an anticipated large, global Phase 2b/3 safety and efficacy study that may begin as early as later this month, pending regulatory approval.

If the ongoing studies are successful, Pfizer and BioNTech expect to be ready to seek Emergency Use Authorization or some form of regulatory approval as early as October 2020.

The companies currently expect to manufacture globally up to 100 million doses by the end of 2020 and potentially more than 1.3 billion doses by the end of 2021, subject to final dose selection from their clinical trial.

In addition to engagements with governments, Pfizer and BioNTech have provided an expression of interest for possible supply to the COVAX Facility, a mechanism established by Gavi, the Vaccine Alliance, the Coalition for Epidemic Preparedness Innovations and World Health Organization that aims to provide governments with early access to a large portfolio of COVID-19 candidate vaccines using a range of technology platforms, produced by multiple manufacturers across the world.

PFE closed at $36.69, last traded at $38.45. BNTX closed at $91.60, it last traded at $97.60.

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Lexicon shares jump on it’s type 2 diabetes drug

Lexicon says all four Phase 3 sotagliflozin studies met primary objectives

Lexicon Pharmaceuticals (LXRX) announced topline data from four Phase 3 sotagliflozin studies in type 2 diabetes: SOTA-MONO, SOTA-SU, SOTA-GLIM and SOTA-INS.

All four Phase 3 sotagliflozin studies met their primary objectives of lowering A1C in patients with type 2 diabetes.

The observed safety profile of sotagliflozin in these studies was generally consistent with that of approved SGLT2 inhibitors.

Diarrhea, an event consistent with gastrointestinal SGLT1 inhibition, was generally more common on sotagliflozin than placebo, although it was not a meaningful cause of treatment discontinuation.

Genital mycotic infections were dose-related.

The absolute increase in the incidence of genital mycotic infections over placebo ranged from 0% to 3.7% in studies of the 200 mg dose and from 3.2% to 6.3% in studies of the 400 mg dose.

In one study, sotagliflozin showed less hypoglycemia than glimepiride, and in the other three studies, the incidences of hypoglycemia in patients on sotagliflozin were similar to those on placebo.

Lexicon does not intend to pursue any regulatory approvals of sotagliflozin for type 2 diabetes in the absence of a strategic partnership for the commercialization of sotagliflozin in such indication.

In the Phase 3, multicenter, randomized, double-blind, placebo-controlled SOTA-MONO study, sotagliflozin 400 mg and 200 mg as monotherapy was tested for superiority versus placebo in reducing A1C after 26 weeks of treatment in patients with type 2 diabetes and inadequate glycemic control.

The study enrolled 142 patients on sotagliflozin 400 mg, 107 patients on sotagliflozin 200 mg and 150 patients on placebo. The study met its primary endpoint, demonstrating that sotagliflozin 400 mg and 200 mg significantly reduced A1C in patients with type 2 diabetes and inadequate glycemic control on diet and exercise alone.

Safety results were similar to those in other studies of sotagliflozin in type 2 diabetes, with similar incidences of hypoglycemia on sotagliflozin and placebo.

SOTA-SU was a 507-patient, randomized, double-blind, placebo-controlled, parallel group, multicenter Phase 3 study that evaluated the efficacy and safety of sotagliflozin 400 mg added to a sulfonylurea, alone or in combination with metformin, in patients with type 2 diabetes who had inadequate glycemic control on a sulfonylurea or metformin alone.

The primary endpoint was the change in A1C from baseline to Week 26. Patients were followed for a total of 79 weeks. The study met its primary endpoint, demonstrating that sotagliflozin 400 mg significantly reduced A1C in patients with type 2 diabetes who were on sulfonylurea alone or in combination with metformin with inadequate glycemic control on a sulfonylurea or metformin alone at Week 26.

Importantly, A1C reduction persisted through 79 weeks. Safety results were similar to those in other studies of sotagliflozin in type 2 diabetes.

Mean estimated glomerular filtration rate was estimated at Week 79, and was similar for sotagliflozin and placebo. Despite the presence of sulfonylurea background therapy, the incidences of hypoglycemia were similar on sotagliflozin and placebo.

SOTA-GLIM was a 954-patient, randomized, double-blind, double-dummy, active- and placebo-controlled, parallel group, multicenter Phase 3 study that evaluated the efficacy and safety of sotagliflozin 400 mg compared to glimepiride or placebo added to metformin in patients with type 2 diabetes who had inadequate glycemic control with metformin therapy.

The primary objective of the study was to demonstrate the non-inferiority of sotagliflozin 400 mg compared to glimepiride on A1C at Week 52.

Patients were followed for a total of 52 weeks. The study met its primary objective, as the change from baseline in A1C reduction to Week 52 was the same on sotagliflozin 400 mg and glimepiride, and the 95% confidence interval excluded the pre-specified margin of non-inferiority.

Safety results were similar to those in other studies of sotagliflozin in type 2 diabetes, with less hypoglycemia on sotagliflozin than glimepiride. SOTA-INS was a 571-patient, randomized, double-blind, placebo-controlled, parallel group, multicenter, 52-week Phase 3 study that evaluated the efficacy and safety of sotagliflozin 400 mg and 200 mg or placebo in patients with type 2 diabetes who had inadequate glycemic control on basal insulin alone or in addition to oral antidiabetic agents.

The primary endpoint was a change in A1C from baseline to Week 18. Patients were followed for a total of 52 weeks. The study met its primary endpoint, demonstrating that sotagliflozin 400 mg and 200 mg significantly reduced A1C in patients with type 2 diabetes who had inadequate glycemic control on basal insulin alone or in addition to oral antidiabetic agents.

Importantly, A1C reduction persisted at the same magnitude at 52 weeks.

Safety results were similar to those in other studies of sotagliflozin in type 2 diabetes. Despite the presence of background insulin therapy, the incidences of hypoglycemia were similar on sotagliflozin and placebo.

LXRX closed at $2.10, last traded at $3.25.

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Rig counts continue to decline!

Baker Hughes reports U.S. rig count down 5 to 258 rigs

Baker Hughes (BKR) reports that the U.S. rig count is down 5 rigs from last week to 258 with oil rigs down 4 to 181, gas rigs down 1 to 75, and miscellaneous rigs unchanged at 2.

The U.S. Rig Count is down 700 rigs from last year’s count of 958, with oil rigs down 603, gas rigs down 97, and miscellaneous rigs unchanged at 2.

The U.S. Offshore Rig Count is unchanged at 12 and down 14 year-over-year.

The Canada Rig Count is up 8 rigs from last week to 26, with oil rigs unchanged at 6 and gas rigs up 8 to 20.

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Rig Counts Decline- See Stockwinners.com Market Radar to read more

The Canada Rig Count is down 91 rigs from last year’s count of 117, with oil rigs down 79 and gas rigs down 12.

The international offshore rig count for April 2018 was 194. Stockwinners

WTI crude is up $1.06 to $40.67 per barrel. Brent is up 99 cents to $43.34 per barrel.

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