North American rail traffic fell 7.5% for the week ending April 16
The Association of American Railroads, AAR, reported U.S. rail traffic for the week ending April 16.
For this week, total U.S. weekly rail traffic was 489,801 carloads and intermodal units, down 8.1% compared with the same week last year.
Total carloads for the week ending April 16 were 221,228 carloads, down 6.8% compared with the same week in 2021, while U.S. weekly intermodal volume was 268,573 containers and trailers, down 9.2% compared to 2021. North American rail volume for the week ending April 16 on 12 reporting U.S., Canadian and Mexican railroads totaled 319,064 carloads, down 6.8% compared with the same week last year, and 354,060 intermodal units, down 8.1% compared with last year.
Total combined weekly rail traffic in North America was 673,124 carloads and intermodal units, down 7.5%.
North American rail volume for the first 15 weeks of 2022 was 9,987,458 carloads and intermodal units, down 3.9% compared with 2021.
Publicly traded companies in the space include CSX (CSX), Canadian National (CNI), Canadian Pacific (CP), Kansas City Southern (KSU), Norfolk Southern (NSC), Trinity Industries (TRN), Greenbrier (GBX), Wabtec (WAB), FreightCar America (RAIL), Union Pacific (UNP) and GATX (GATX).
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
B. Riley Financial proposes to acquire the retailer for $25.00 per share cash
In a letter to Lazydays CEO Robert DeVincenzi , Bryant Riley (RILY), Chairman, Co-CEO of B. Riley Financial stated, in part,
“This non-binding letter is intended to summarize the principal terms of a proposal by B. Riley Financial or a subsidiary thereof regarding its possible acquisition of Lazydays Holdings.
The possible acquisition of the outstanding capital stock of the company is referred to as the ‘Transaction’ and Buyer and the company are referred to collectively as the ‘Parties.’
As you know, we are one of the company’s largest investors holding over one million shares of common stock. First, we want to thank you for initially meeting with us in January and for taking the time to hear our thoughts on the company’s direction soon after the resignation of the company’s longtime CEO and Chairman.
We have also had constructive conversations with other board members. We acknowledge and support recent increases to the share buyback program, but note that the market continues to discount company’s ability to grow.
After significant analysis and diligence based on publicly available information, we have concluded that the company would be better served away from the glare of the public markets in an environment where the necessary investments in growth can be made without market fixation on short-term results.
We are proposing a take-private transaction at a healthy premium to the current share price. The purchase price would be $25.00 per share payable in cash.”
Lazydays Holdings, Inc. operates recreation vehicle (RV) dealerships under the Lazydays name in the United States. It provides RV sales, RV-repair and services, financing and insurance products, third-party protection plans, after-market parts and accessories, and RV camping facilities.
The company also operates the Lazydays RV resort at Tampa, Florida.
Lazydays Holdings, Inc. (LAZY) is up 22% to $21.90.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
SK Ecoplant to invest $500M in Bloom Energy through expanded partnership
Bloom Energy (BE) and SK Ecoplant, an affiliate of South Korean conglomerate SK Group (SKM), announced the companies are expanding their existing partnership.
The partnership includes purchasing a minimum of 500 megawatts, or MW, from Bloom Energy, representing a $4.5B revenue commitment; co-creating two hydrogen innovation centers; and targeting an equity investment of approximately $500M.
Since the start of their strategic partnership three years ago, Bloom Energy and SK ecoplant have transacted nearly 200 MW of projects together totaling more than $1.8B of equipment and expected service revenue.
Fuel Cells powered solely by Hydrogen
Over the next three years the companies will expand this existing business with contracts for at least an additional 500 MW of power between 2022 and 2025, representing approximately $4.5B in equipment and future service revenue.
Bloom Energy and SK ecoplant agreed to create Hydrogen Innovation Centers in the United States and South Korea.
The intent is to accelerate the global market expansion for Bloom Energy’s hydrogen fuel cell and hydrogen electrolyzer products.
The agreement also reflects both Bloom Energy and SK ecoplant’s enhanced commitment to a zero-carbon future and the further implementation of environmental, social and governance practices.
In addition, Bloom Energy and SK ecoplant agreed to strengthen their alliance through expanding business cooperation in global markets, which may include exclusive distribution rights in select new markets.
SK ecoplant will invest $255M in Bloom Energy by acquiring 10M shares of zero coupon, non-voting redeemable convertible preferred stock at a price of $25.50 per share.
SK ecoplant has the option to acquire a minimum of an additional 11M shares of Class A common stock at a 15% premium to the prevailing stock price at the time, which must be no later than November 30, 2023 and is subject to a maximum ownership of 15%.
Upon completion of SK ecoplant’s purchase of its second tranche, SK ecoplant will add a member to the Bloom Energy board of directors. SK will give an irrevocable proxy to vote its shares to Bloom Energy.
The investment is subject to customary closing conditions and regulatory approvals and is expected to close within 45 days.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
NY AG announces $1.1B agreement with big three drug distributors over opioids
New York Attorney General Letitia James announced an agreement with McKesson (MCK), Cardinal Health (CAH), and Amerisource Bergen (ABC) – three of the nation’s largest drug distributors – that will deliver up to $1.1B to New York state to combat the ongoing opioid epidemic.
“The $1.1B agreement is the largest monetary settlement ever negotiated by Attorney General James. The agreement resolves claims made by Attorney General James for the three companies’ role in helping to fuel the opioid epidemic and will remove the three distributors from New York’s ongoing opioid trial, currently underway in Suffolk County State Supreme Court…
Additionally, late last month, Attorney General James announced an agreement with Johnson & Johnson (JNJ) that removed the company from New York’s opioid trial in exchange for up to $230M for the state’s opioid prevention and treatment efforts, as well as it ending the sale of opioids nationwide.
The trial against the three remaining defendants – Endo Health Solutions (ENDP), Teva Pharmaceuticals USA (TEVA), and Allergan Finance (ABBV) – is currently underway and will continue in state court,” the AG stated.
As part of today’s agreement, McKesson, Cardinal Health, and Amerisource Bergen will pay New York state a total of up to $1,179,251,066.68, of which more than $1 billion will go towards abatement.
Payments will start in just two months and will continue over the course of the next 17 years, the AG said.
Opioids are a class of drugs that include the illegal drug heroin, synthetic opioids such as fentanyl, and pain relievers available legally by prescription, such as oxycodone (OxyContin®), hydrocodone (Vicodin®), codeine, morphine, and many others.
Fentanyl and similar compounds like carfentanil are powerful synthetic opioids — 50 to 100 times more potent than morphine. High doses of opioids, especially potent opioids such as fentanyl, can cause breathing to stop completely, which can lead to death.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Canadian Pacific says prepared to re-engage with Kansas City Southern
Canadian Pacific (CP) sent the following letter to the Surface Transportation Board in response to the Kansas City Southern (KSU) Board of Directors’ decision to terminate the Merger Agreement with CP:
Canadian Pacific wants to merge with Kansas City Southern
“I am writing on behalf of the Canadian Pacific Applicants in this proceeding to advise the Board and Interested Parties of the CP Applicants’ intentions in light of Kansas City Southern’s decision to terminate the merger agreement between CP and Kansas City Southern and to enter a merger agreement with Canadian National Railway.
For the reasons explained below, CP intends to proceed to prepare and file its Application in this docket seeking Board authority to control KCS and its U.S. rail carrier subsidiaries.
The decision of KCS’s board of directors to designate CN’s offer a “superior proposal” reflects the extreme price CN has offered KCS in order to extinguish CP’s proposed transaction,2 coupled with CN’s undertaking to attempt to absolve KCS and its shareholders of the regulatory risks associated with CN’s proposed acquisition through the use of a voting trust. In order to neutralize the regulatory risks posed by CN’s proposed transaction from the perspective of KCS’s shareholders,
CN’s agreement to acquire KCS is conditioned on CN’s ability to acquire KCS shares in advance of receiving Board approval to control KCS via the use of a voting trust.
On May 17, the Board ruled in Finance Docket No. 36514 that CN’s proposed acquisition of KCS is subject to the 2001 Major Merger rules, and, accordingly, that CN’s proposed use of a voting trust requires formal STB approval under 49 U.S.C. Section1180.4(b)(4)(iv).
The Combined network covers Gulf of Mexico to Pacific Ocean
The Board explained that it would “take a more cautious approach to a voting trust” in the CN proceeding and that its “consideration of whether the proposed use of a voting trust in a potential CN-KCS transaction is ‘consistent with the public interest’ would be informed by argument on both the potential benefits and costs of such use.”
CP believes that CN cannot demonstrate that its proposed use of a voting trust would be “consistent with the public interest” for reasons CP has already summarized and will address further in its comments on CN’s proposal in Finance Docket No. 36514, once CN refiles its motion seeking Board approval and the Board establishes a comment period.
Because STB Voting Trust Approval is a condition to closing, were CN unable to use a voting trust, CN’s proposed acquisition of KCS could not be consummated. KCS would then face the choice of whether to renegotiate the CN-KCS merger agreement in order to proceed with CN without the use of a voting trust.
Were KCS presented with the question of how to proceed following a decision by the Board not to approve CN’s proposed use of a voting trust, CP anticipates being available to engage with KCS to enter into another agreement to acquire KCS.
CP expects that such an agreement would be in substantially the form of the merger agreement previously entered into by CP and KCS, which was previously noticed in this docket and reviewed by the Board in connection with its approval of CP’s proposed voting trust agreement.
Accordingly, CP intends to proceed forward with the preparation of its Application in this docket seeking Board authority to acquire control of KCS.
CP believes that pursuing its Application is in the best interests of both KCS and the public so that the pro-competitive CP/KCS transaction can proceed to be reviewed by the Board and – in the event KCS’s agreement with CN is terminated or CN is otherwise unable to acquire control of KCS – a potential acquisition of KCS by CP could be implemented without undue delay, all in accord with the rulings and processes already established by the Board in this docket.
CP looks forward to establishing that its acquisition of control of KCS would be consistent with the public interest.”
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
AT&T, Discovery to create global DTC business through Reverse Morris Trust
AT&T (T) and Discovery (DISCA) announced a definitive agreement to combine WarnerMedia’s premium entertainment, sports and news assets with Discovery’s nonfiction and international entertainment and sports businesses to create a standalone global entertainment company.
ATT to merge it’s media assets with Discovery
Under the terms of the agreement, which is structured as an all-stock, Reverse Morris Trust transaction, AT&T would receive $43B in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt, and AT&T’s shareholders would receive stock representing 71% of the new company; Discovery shareholders would own 29% of the new company.
The boards of both AT&T and Discovery have approved the transaction.
Discovery to merge with ATT media
Bringing together the leadership teams, content creators, and series and film libraries.
The new company is projected for 2023 revenue of approximately $52B, adjusted EBITDA of approximately $14B, and free cash flow conversion rate of approximately 60%.
The transaction is expected to create at least $3B in expected cost synergies annually for the new company.
The new company will compete globally in the direct-to-consumer business bringing content to DTC subscribers across its portfolio, including HBO Max and the recently launched discovery+.
The transaction will combine WarnerMedia’s content library of IP with Discovery’s global footprint, local-language content and regional expertise across more than 200 countries and territories.
The companies announced that Discovery president and CEO David Zaslav will lead the proposed new company with a management team and operational and creative leadership from both companies.
Discovery’s current multiple classes of shares will be consolidated to a single class with one vote per share.
The new company’s board will consist of 13 members, seven initially appointed by AT&T, including the chairperson of the board; Discovery will initially appoint six members, including CEO David Zaslav.
The combination will be executed through a Reverse Morris Trust, under which WarnerMedia will be spun or split off to AT&T’s shareholders via dividend or through an exchange offer or a combination of both and simultaneously combined with Discovery.
The transaction is expected to be tax-free to AT&T and AT&T’s shareholders. In connection with the spin-off or split-off of WarnerMedia, AT&T will receive $43B in a combination of cash, debt securities and WarnerMedia’s retention of certain debt.
David Zaslav to head the new company
The new company expects to maintain investment grade rating and utilize the significant cash flow of the combined company to rapidly de-lever to approximately 3.0x within 24 months, and to target a new, longer term gross leverage target of 2.5x-3.0x.
WarnerMedia has secured fully committed financing for the purposes of funding the distribution.
The transaction is anticipated to close in mid-2022, subject to approval by Discovery shareholders and customary closing conditions, including receipt of regulatory approvals.
No vote is required by AT&T shareholders. Agreements are in place with John Malone and Advance to vote in favor of the transaction.
Elliott Management
Elliott Investment Management released a statement on behalf of Managing Partner Jesse Cohn and Portfolio Manager Marc Steinberg regarding AT&T’s plan to merge media assets with Discovery:
Elliott is a major shareholder in ATT
“It has been a transformational year at AT&T year since John Stankey took over as CEO, and today’s announcement represents another impressive step in the Company’s recent evolution.
AT&T has now executed on its promise to streamline operations and re-focus on its core businesses, all while improving operational execution, enhancing its financial position and advancing its corporate governance. As investors, Elliott supports AT&T in its efforts to best position the company for future success.”
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Microsoft to acquire Nuance for $56.00 per share in cash, or $19.7B
Microsoft (MSFT) and Nuance Communications (NUAN) announced they have entered into a definitive agreement under which Microsoft will acquire Nuance for $56.00 per share, implying a 23% premium to the closing price of Nuance on Friday, April 9, in an all-cash transaction valued at $19.7B, inclusive of Nuance’s net debt.
Nuance sold for $19.7B
Nuance is a trusted cloud and AI software leader representing decades of accumulated healthcare and enterprise AI experience.
Mark Benjamin will remain CEO of Nuance, reporting to Scott Guthrie, executive vice president of Cloud & AI at Microsoft.
The transaction is intended to close this calendar year.
Upon closing, Microsoft expects Nuance’s financials to be reported as part of Microsoft’s Intelligent Cloud segment.
Microsoft expects the acquisition to be minimally dilutive (less than 1%) in fiscal year 2022 and to be accretive in fiscal year 2023 to non-GAAP earnings per share, based on the expected close timeframe.
Non-GAAP excludes expected impact of purchase accounting adjustments, as well as integration and transaction-related expenses.
The acquisition will not impact the completion of its existing share repurchase authorization.
Nuance Communications, Inc. provides conversational and cognitive artificial intelligence (AI) innovations that bring intelligence to everyday work and life. The company delivers solutions that understand, analyze, and respond to people – amplifying human intelligence to increase productivity and security.
B. Riley analyst Zach Cummins reiterates a Buy rating on LivePerson (LPSN) with a $77 price target after Microsoft (MSFT) acquired Nuance Communications (NUAN), a provider of conversational commerce solutions, with expertise geared toward the healthcare vertical.
The potential deal acquisition provides a “positive valuation data point” for LivePerson, a leading provider of conversational commerce solutions across the telecom, financial services, retail, and consumer verticals, Cummins tells investors in a research note.
LivePerson currently trades at an enterprise value to sales multiple of 6.5 times, below the comp group median of 9.5 times and Nuance’s implied takeout multiple of 12.5 times, says the analyst.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Canadian Pacific to buy Kansas City Southern in $29B deal
Canadian Pacific Railway (CP) and Kansas City Southern (KSU) announced they have entered into a merger agreement, under which CP has agreed to acquire KCS in a stock and cash transaction representing an enterprise value of approximately $29B, which includes the assumption of $3.8B of outstanding KCS debt.
The transaction, which has the unanimous support of both boards of directors, values KCS at $275 per share, representing a 23% premium, based on the CP and KCS closing prices on March 19, 2021.
Following the closing into a voting trust, common shareholders of KCS will receive 0.489 of a CP share and $90 in cash for each KCS common share held.
Following final approval from the Surface Transportation Board, the transaction will combine the two railroads to create the first rail network connecting the U.S., Mexico, and Canada.
Canadian Pacific Rails
Joining seamlessly in Kansas City, Mo., in America’s heartland, CP and KCS together will connect customers via single-network transportation offerings between points on CP’s system throughout Canada, the U.S. Midwest, and the U.S. Northeast and points on KCS’ system throughout Mexico and the South Central U.S.
While remaining the smallest of six U.S. Class 1 railroads by revenue, the combined company will be a much larger and more competitive network, operating approximately 20,000 miles of rail, employing close to 20,000 people and generating total revenues of approximately $8.7 billion based on 2020 actual revenues.
Combined Companies Rails
The combination is expected to be accretive to CP’s adjusted diluted EPS in the first full year following CP’s acquisition of control of KCS, and is expected to generate double-digit accretion upon the full realization of synergies thereafter.
To fund the stock consideration of the merger, CP will issue 44.5 million new shares.
The cash portion will be funded through a combination of cash-on-hand and raising approximately $8.6B in debt, for which financing has been committed.
As part of the merger, CP will assume approximately $3.8B of KCS’ outstanding debt.
Following the closing into trust, CP expects that its outstanding debt will be approximately $20.2B. Pro forma for the transaction, CP estimates its leverage ratio against 2021E street consensus EBITDA to be approximately 4.0-times with the assumption of KCS debt and issuance of new acquisition-related debt.
In order to manage this leverage effectively, CP will be temporarily suspending its normal course issuer bid program, and expects to produce approximately $7B of levered free cash flow over the next three years.
CP estimates its long-term leverage target of approximately 2.5x to be achieved within 36 months after closing into trust.
The combined company will remain committed to maintaining strong investment grade credit ratings while continuing to return capital for the benefit of shareholders.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
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.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
PepsiCo agrees to acquire SodaStream for $144 per share in cash
SodaStream sold for $3.2 billion, Stockwinners
PepsiCo (PEP) and SodaStream (SODA) announced that they have entered into an agreement under which PepsiCo has agreed to acquire all outstanding shares of SodaStream for $144.00 per share in cash, which represents a 32% premium to the 30-day volume weighted average price.
PepsiCo’s strong distribution capabilities, global reach, R&D, design and marketing expertise, combined with SodaStream’s differentiated and unique product range will position SodaStream for further expansion and breakthrough innovation.
Under the terms of the agreement between PepsiCo and SodaStream, PepsiCo has agreed to acquire all of the outstanding shares of SodaStream International for $144.00 per share, in a transaction valued at $3.2B.
The transaction will be funded with PepsiCo’s cash on hand.
The acquisition has been unanimously approved by the boards of both companies.
The transaction is subject to a SodaStream shareholder vote, certain regulatory approvals and other customary conditions, and closing is expected by January 2019.
“SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio, while catalyzing our ability to offer personalized in-home beverage solutions around the world,” said Ramon Laguarta, CEO-Elect and President, PepsiCo.
“From breakthrough innovations like Drinkfinity to beverage dispensing technologies like Spire for foodservice and Aquafina water stations for workplaces and colleges, PepsiCo is finding new ways to reach consumers beyond the bottle, and today’s announcement is fully in line with that strategy.”
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Eisai and Biogen announce positive results of the final analysis for BAN2401
Biogen sharply higher on data, Stockwinners
Eisai (ESALY) and Biogen (BIIB) announced positive topline results from the Phase II study with BAN2401, an anti-amyloid beta protofibril antibody, in 856 patients with early Alzheimer’s disease.
The study achieved statistical significance on key predefined endpoints evaluating efficacy at 18 months on slowing progression in Alzheimer’s Disease Composite Score and on reduction of amyloid accumulated in the brain as measured using amyloid-PET. Topline results of the final analysis of the study demonstrated a statistically significant slowing of disease progression on the key clinical endpoint after 18 months of treatment in patients receiving the highest treatment dose as compared to placebo.
Results of amyloid PET analyses at 18 months, including reduction in amyloid PET standardized uptake value ratio and amyloid PET image visual read of subjects converting from positive to negative for amyloid in the brain, were also statistically significant at this dose. Dose-dependent changes from baseline were observed across the PET results and the clinical endpoints.
Further, the highest treatment dose of BAN2401 began to show statistically significant clinical benefit as measured by ADCOMS as early as 6 months including at 12 months. BAN2401 demonstrated an acceptable tolerability profile through 18 months of study drug administration.
The most common treatment emergent adverse events were infusion-related reactions and Amyloid Related Imaging Abnormalities. Infusion related reactions were mostly mild to moderate in severity. Incidence of ARIA-E was not more than 10% in any of the treatment arms, and less than 15% in patients with APOE4 at the highest dose per the study protocol safety and reporting procedures.
BIIB closed at $298.81, it last traded at $338. ESALY closed at $71.10.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Dermira Receives FDA Approval to Treat Primary Axillary Hyperhidrosis
Dermira Receives FDA Approval to Treat Primary Axillary Hyperhidrosis, Stockwinners
Dermira, Inc. (DERM) announced that the U.S. Food and Drug Administration (FDA) has approved Qbrexza™ (glycopyrronium) cloth, an anticholinergic indicated for the topical treatment of primary axillary hyperhidrosis in adult and pediatric patients 9 years of age and older.
Primary axillary hyperhidrosis, also commonly known as excessive underarm sweating, is a chronic medical skin condition that results in sweating beyond what is needed for normal body temperature regulation. The exact cause is unknown, but it affects nearly 10 million people in the United States, with both men and women having similar prevalence. Qbrexza (pronounced kew brex’ zah) is applied directly to the skin and is designed to block sweat production by inhibiting sweat gland activation.
The approval is based on results from two Phase 3 clinical trials, ATMOS-1 and ATMOS-2, which evaluated the efficacy and safety of Qbrexza in patients with primary axillary hyperhidrosis. Both trials assessed the absolute change from baseline in sweat production (the weight or amount of sweat a patient produced) following treatment with Qbrexza and the proportion of patients who achieved at least a four-point improvement from baseline in their sweating severity, as measured by the Axillary Sweating Daily Diary (ASDD), Dermira’s proprietary patient-reported outcome (PRO) instrument. The PRO was developed in consultation with the FDA and in accordance with the agency’s 2009 guidance on PRO instruments.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Takeda reaches agreement to acquire Shire for $62B in cash and stock
Shire sold for $62 billion, Stockwinners
Japan’s Takeda Pharmaceutical (TKPYY) and Shire (SHPG) announced that they have reached agreement on the terms of a recommended offer pursuant to which Takeda will acquire the entire issued and to be issued ordinary share capital of Shire.
Under the terms of the acquisition, each Shire shareholder will be entitled to receive $30.33 in cash for each Shire share and either 0.839 new Takeda shares or 1.678 Takeda ADSs. The transaction has been approved by both companies’ boards of directors, and is expected to close in the first half of calendar year 2019.
Upon the closing of the transaction, Takeda shareholders will own approximately 50% of the combined group. “With leading market positions in prioritized therapeutic areas, an attractive geographic footprint, greater scale and efficiencies, and an even more productive R&D engine, the combined group will be better positioned to deliver highly-innovative medicines and transformative care providing better health and a brighter future for patients around the world,” Takeda said.
Takeda has entered into a bridge facility agreement of $30.85B with, among others, J.P. Morgan Chase Bank, Sumitomo Mitsui Banking and MUFG Bank, part of the proceeds of which will be used to fund the cash consideration payable to Shire shareholders in connection with the acquisition.
It is currently contemplated that, prior to completion, the commitments under the bridge facility agreement will be reduced or refinanced with a combination of long-term debt, hybrid capital and available cash resources.
Shire plc, an Irish biotechnology company, researches, develops, licenses, manufactures, markets, distributes, and sells medicines for rare diseases and other specialized conditions worldwide.
Takeda Pharmaceutical Company Limited engages in the research and development, manufacture, marketing, and sale of pharmaceutical products worldwide. The company operates in three segments: Prescription Drug, Consumer Healthcare, and Other.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Lumentum to acquire Oclaro for $1.8B in cash and stock
Lumentum Holdings (LITE) and Oclaro (OCLR) announced that the two companies have signed a definitive agreement, unanimously approved by the boards of both companies, pursuant to which Lumentum will acquire all of the outstanding common stock of Oclaro. For each share of Oclaro stock held, Oclaro stockholders will be entitled to receive $5.60 in cash and 0.0636 of a share of Lumentum common stock, subject to the terms of the definitive agreement.
The transaction values Oclaro at $9.99 per share or approximately $1.8B in equity value, based on the closing price of Lumentum’s stock on March 9, of $68.98.
The transaction value represents a premium of 27% to Oclaro’s closing price on March 9 and a premium of 40% to Oclaro’s 30 day average closing price.
Oclaro stockholders are expected to own approximately 16% of the combined company at closing.
The transaction is expected to generate more than $60M of annual run-rate synergies within 12 to 24 months of the closing and be immediately accretive to non-GAAP earnings per share.
Lumentum intends to fund the cash consideration with a combination of cash on hand from the combined companies’ balance sheets and $550M in debt financing. The transaction is expected to close in the second half of calendar 2018, subject to approval by Oclaro’s stockholders, antitrust regulatory approval in the U.S. and China, and other customary closing conditions.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
General Mills acquires Blue Buffalo Pet Products for $40.00 a share in cash
Blue Buffalo sold for $8 billion
General Mills (GIS) and Blue Buffalo Pet Products (BUFF) announced that they have entered into a definitive agreement under which General Mills will acquire Blue Buffalo for $40.00 per share in cash, representing an enterprise value of approximately $8B.
The transaction establishes General Mills as the leader in the U.S. Wholesome Natural pet food category, the fastest growing portion of the overall pet food market, and accelerates its portfolio reshaping strategy.
The $30 billion U.S. pet food market is generating consistent 3-4% growth and is highly attractive for retailers based on continued market growth, premiumization and subscription-like purchase patterns that drive traffic and repeat purchases.
Blue Buffalo is the leader in the fastest-growing Wholesome Natural category with double-digit growth over each of the last three years. The Wholesome Natural market represents approximately 10% of the pet food market in volume and approximately 20% in value.
Based on the strong consumer tailwinds, the Wholesome Natural market is poised to continue to grow, propelling BLUE’s growth.
General Mills’ scale and decades of experience will support greater effectiveness and efficiency for Blue Buffalo across key business areas, including: sales, marketing, advertising, supply chain, R&D, innovation, and environmental stewardship.
These capabilities are expected to contribute to meaningful revenue synergies over time, in addition to $50 million in anticipated cost savings opportunities.
The transaction will be immediately accretive to General Mills (GIS) net sales growth and operating margin profile, and is expected to be neutral to cash EPS in fiscal 2019 and accretive in fiscal 2020.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
