ModSpace sold for $1.1 billion

Williams Scotsman to acquire ModSpace for approx. $1.1B

ModSpace sold for $1.1 billion, Stockwinners
ModSpace sold for $1.1 billion, Stockwinners

WillScot Corporation (WSC) announced that it has entered into a definitive agreement to acquire Modular Space Holdings, the parent holding company of Modular Space Corporation, for an enterprise value of approximately $1.1B. Williams Scotsman will indirectly acquire MS Holdings for a purchase price comprising $1,063,750,000 of cash consideration, 6,458,500 shares of WSC Class A common stock and warrants to purchase 10,000,000 shares of WSC Class A common stock at an exercise price of $15.50 per share, subject to customary adjustments.

The transaction, which is subject to customary closing conditions, is expected to close in 3Q18.

ModSpace, a privately-owned provider of office trailers, portable storage units and modular buildings, had approximately $1.1B of total assets as of March 31, 2018.

ModSpace generated $453M of total revenue, $18M of net income and $106M of Adjusted EBITDA for the twelve months ended March 31, 2018. Once combined, Williams Scotsman will have over 160,000 modular space and portable storage units serving a diverse customer base from approximately 120 locations across the United States, Canada and Mexico.

Williams Scotsman expects to capture $60M in annual cost synergies after integration, with approximately 80% of the forecast synergies expected to be realized on a full run-rate basis by the end of 2019.

Williams Scotsman also expects to benefit from the net operating tax loss carryforwards to be acquired in the transaction, and for the transaction to be accretive to earnings in 2019.

Williams Scotsman expects to expand its “Ready to Work” value proposition across the ModSpace fleet and customer base, a strategy that has driven double-digit organic Adjusted EBITDA growth in Williams Scotsman’s U.S. Modular segment in recent years and proven successful in Williams Scotsman’s acquisitions of Acton Mobile and Tyson Onsite.

Until the transaction closes, both companies will operate independently and execute on their respective strategic priorities. Williams Scotsman has secured committed financing to fund the transaction, which includes an amendment and expansion of its existing revolving ABL credit facility to $1.35B with an accordion feature allowing up to $1.8B of total capacity, a $280M secured bridge credit facility, and $320M unsecured bridge credit facility.

Williams Scotsman expects the permanent financing plan to include a combination of long-term debt and equity or equity-linked securities.

WSC closed at $12.15, it last traded at $14.10.


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Heron Therapeutics HTX-001 achieves primary endpoints

Heron Therapeutics HTX-001 achieves primary endpoints in Study 209, 211

Heron Therapeutics HTX-001 achieves primary endpoints, Stockwinners
Heron Therapeutics HTX-001 achieves primary endpoints, Stockwinners
Heron Therapeutics (HRTX) announced positive topline results from two completed Phase 2b studies of HTX-011: Study 209 and Study 211.
HTX-011 achieved the primary endpoints in both studies.
Study 209 was a randomized, placebo- and active-controlled, double-blind, Phase 2b clinical study in patients undergoing primary unilateral total knee arthroplasty to evaluate the analgesic efficacy, safety and pharmacokinetics of HTX-011 locally administered into the surgical site.
Following a dose-escalation phase, 222 patients were randomized to receive: HTX-011 400 mg administered via instillation into the surgical site; HTX-011 400 mg administered via instillation into the surgical site with a low dose of ropivacaine injected into the posterior capsule (HTX-011 combination); bupivacaine 125 mg administered via multiple injections into the surgical site; and placebo.
Ropivacaine and bupivacaine are generically available standard-of-care local anesthetics used in the management of postoperative pain.
This study included a pre-specified hierarchical testing strategy for the primary and key secondary endpoints for the HTX-011 400 mg treatment groups. The primary endpoint was pain intensity as measured by the area under the curve, or AUC, from 0 to 48 hours post-surgery for HTX-011 compared to placebo.
The key secondary endpoint was pain intensity as measured by the AUC from 0 to 72 hours post-surgery for HTX-011 compared to placebo.
The primary and key secondary endpoints were achieved.
Study 211 was a randomized, placebo- and active-controlled, double-blind, Phase 2b dose-finding study in patients undergoing augmentation mammoplasty to evaluate the analgesic efficacy, safety and pharmacokinetics of HTX-011 when administered by instillation into the surgical site or via ultrasound-guided lateral and medial pectoral nerve block before surgery.
The study consisted of three cohorts comparing HTX-011 nerve block to the standard dose of bupivacaine 50 mg, administered as a nerve block, and placebo, and a final cohort comparing both HTX-011 400 mg administered by instillation and HTX-011 400 mg administered as a nerve block to the same two control groups.
A total of 243 patients were enrolled.
The primary endpoint was pain intensity as measured by the AUC from 0 to 24 hours post-surgery compared to placebo. The primary endpoint of the study was achieved.
HRTX closed at $30.70. it last traded at $40.00


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Incyte says REACH1 trial met primary endpoint

Incyte says REACH1 trial met primary endpoint of ORR for Ruxolitinib

Incyte says REACH1 trial met primary endpoint, Stockwinners
Incyte says REACH1 trial met primary endpoint, Stockwinners

Incyte (INCY) announced positive topline results from its ongoing pivotal Phase 2 REACH1 trial evaluating ruxolitinib, or Jakafi, in combination with corticosteroids for the treatment of patients with steroid-refractory acute graft-versus-host disease.

The study met its primary endpoint, demonstrating an overall response rate of 55% at Day 28.

In addition, the best overall response rate , the number of patients achieving a response at any time point during the study, was 73%.

The most common treatment-emergent adverse events of any grade were anemia, thrombocytopenia and neutropenia.

Based on these data from REACH1, Incyte plans to file a Supplemental New Drug Application for the approval of ruxolitinib for the treatment of steroid-refractory acute GVHD with the U.S. FDA during the third quarter of 2018.

“The results of the REACH1 study demonstrate the potential of ruxolitinib to meaningfully improve the outcomes of allogeneic transplant patients who develop steroid-refractory acute GVHD and further underscore the promise of JAK inhibition to advance the treatment of this potentially-devastating condition,” said Steven Stein, M.D., Chief Medical Officer, Incyte.

“We look forward to sharing additional results from this study with the medical community, and to working with U.S. regulatory authorities to submit our supplementary new drug application seeking approval of ruxolitinib in this indication later this year.”

INCY closed at $73.43, it last traded at $74.65.


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Disney raises its offer for 21st Century Fox to $38 per share

Disney boosts offer for 21st Century Fox assets to $38 per share

Disney raises its offer for 21st Century Fox to $38 per share

Twenty-First Century Fox (FOXA) announced that it has entered into an amended and restated merger agreement with Walt Disney (DIS) pursuant to which Disney has agreed to acquire for a price of $38 per 21CF share the same businesses Disney agreed to acquire under the previously announced merger agreement between 21CF and Disney.

This price represents a “significant increase” over the purchase price of approximately $28 per share included in the Disney merger agreement when it was announced in December 2017.

The amended and restated Disney merger agreement offers a package of consideration, flexibility and deal certainty enhancements that is superior to the proposal made by the Comcast Corporation (CMCSA) on June 13, Fox stated.

Under the amended and restated Disney merger agreement, Disney would acquire those businesses on substantially the same terms, except that, among other things, Disney’s offer allows 21CF stockholders to elect to receive their consideration, on a value equalized basis, in the form of cash or stock, subject to 50/50 proration.

The collar on the stock consideration will ensure that 21st Century Fox shareholders will receive a number of Disney shares equal to $38 in value if the average Disney stock price at closing is between $93.53 and $114.32.

In light of the revised terms contained in the amended and restated Disney Merger Agreement, 21CF’s board, after consultation with its outside legal counsel and financial advisors, has not concluded that the unsolicited proposal it received on June 13, 2018 from Comcast could reasonably be expected to result in a “Company Superior Proposal” under the Disney merger agreement.

However, the amended and restated Disney merger agreement contains no changes to the provisions relating to the company’s directors’ ability to evaluate a competing proposal.

As announced on May 30, 2018, 21CF has established a record date of May 29, 2018 and a meeting date of July 10, 2018, for a special meeting of its stockholders to, among other things, consider and vote on a proposal to adopt the Disney merger agreement.

21CF has determined to postpone its special meeting of stockholders to a future date in order to provide stockholders the opportunity to evaluate the terms of Disney’s revised proposal and other developments to date.

Once 21CF determines the new date for 21CF’s special meeting of stockholders, the date will be communicated to 21CF stockholders.


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Cotiviti sold for $4.9 billion

Cotiviti to be acquired by Veritas Capital-backed Verscend for $4.9B in cash

Cotiviti sold for $4.9 billion, Stockwinners
Cotiviti sold for $4.9 billion
Cotiviti Holdings (COTV) and Verscend Technologies, a portfolio company of Veritas Capital announced that they have entered into a definitive agreement whereby Verscend has agreed to acquire Cotiviti for $4.9B in cash.
Under the terms of the agreement, Cotiviti shareholders will receive $44.75 in cash per share of Cotiviti common stock, and Verscend will assume all of Cotiviti’s outstanding debt, resulting in an enterprise value of approximately $4.9B.
The offer price represents a 32% premium to Cotiviti’s unaffected share price as of June 4, 2018 and a 136% premium to the initial public offering price of Cotiviti’s common stock.
The transaction, which was unanimously approved by Cotiviti’s Board of Directors, is expected to close during the fourth quarter of 2018.
Closing of the transaction is subject to the approval of Cotiviti shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.
Advent International has entered into a voting agreement whereby it has agreed to vote shares representing approximately 44% of the company’s voting power in favor of the transaction.


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Foundation Medicine sold for $2.4 billion

Roche acquires Foundation Medicine for $137 per share or $2.4B

Foundation Medicine sold or $2.4B, Stockwinners
Foundation Medicine sold or $2.4B

Roche (RHHBY) and Foundation Medicine (FMI) announced they have entered into a definitive merger agreement for Roche to acquire the outstanding shares of Foundation Medicine not already owned by Roche and its affiliates at a price of $137.00 per share in cash.

This corresponds to a total transaction value of $2.4B on a fully diluted basis, and a total company value of $5.3B on a fully diluted basis. This price represents a premium of 29% to FMI’s closing price on June 18.

The merger agreement has been unanimously approved by the board of Roche and a Special Committee of the independent directors of FMI and by its full board of directors with the Roche designated directors abstaining from the deliberations and vote.

All current members of the FMI board have indicated that they intend to tender their FMI shares in the tender offer. Under the terms of the merger agreement, Roche will promptly commence a tender offer to acquire all of the outstanding shares of FMI’s common stock not already owned.

The closing of the tender offer will be subject to a majority of FMI’s outstanding shares not already held by Roche being tendered in the tender offer, it noted.

In addition, the transaction is subject to other customary closing conditions. Following completion of the tender offer, Roche will acquire all remaining shares at the same price of $137 per share through a second step merger.

The closing of the transaction is expected to take place in the second half of 2018. Daniel O’Day, CEO Roche Pharmaceuticals, said, “This is important to our personalised healthcare strategy as we believe molecular insights and the broad availability of high quality comprehensive genomic profiling are key enablers for the development of, and access to, new cancer treatments.

We will preserve FMI’s autonomy while supporting them in accelerating their progress.”

FMI closed at $106.45. RHHBY closed at $26.39.


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Rent-A-Center sold for $1.365 billion

Rent-A-Center to be acquired by Vintage Capital for $15 per share in cash

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Rent-A-Center sold for $1.365 billion

Rent-A-Center (RCII) announced that it has entered into a definitive agreement with Vintage Rodeo Parent, LLC, an affiliate of Vintage Capital Management, LLC, pursuant to which Vintage will acquire all of the outstanding shares of Rent-A-Center common stock for $15.00 per share in cash.

The transaction, which is not subject to a financing condition, and is expected to close by the end of 2018, subject to customary closing conditions including the receipt of stockholder and regulatory approvals, represents a total consideration of approximately $1.365B, including net debt.

Under the terms of the Merger Agreement, Rent-A-Center stockholders will receive $15.00 in cash for each share of Rent-A-Center common stock, which represents a premium of approximately 49 percent over the Company’s closing stock price on October 30, 2017, immediately prior to the announcement that the Company’s Board of Directors initiated a process to evaluate strategic and financial alternatives focused on maximizing stockholder value.

The Rent-A-Center Board has unanimously approved the transaction and recommends that stockholders vote in favor of the transaction.

Upon completion of the transaction, Rent-A-Center will become a privately held company and its common shares will no longer be listed on any public market.

“The Rent-A-Center Board, having just completed a comprehensive review of strategic and financial alternatives in consultation with outside legal and financial advisors, unanimously supports this transaction and is confident it maximizes value for stockholders while delivering a significant and immediate cash premium,” said Mitch Fadel, CEO of Rent-A-Center.

RCII closed at $12.03.


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Oracle lower after losing business to Amazon, Microsoft

Oracle slides as JPMorgan cuts rating on business lost to Amazon, Microsoft

Oracle slides as JPMorgan cuts rating on business lost to Amazon, Microsoft , Stockwinners
Oracle slides as JPMorgan cuts rating on business lost to Amazon, Microsoft ,

Shares of Oracle (ORCL) are sliding after JPMorgan analyst Mark Murphy downgraded the stock to Neutral, citing negative results from a survey of Chief Information Officers about their spending.

The analyst noted that the survey showed spending contraction ahead as Oracle’s databases are being unplugged in favor of Microsoft (MSFT) and Amazon (AMZN) databases.

SURVEY SAYS

In a research note this morning, JPMorgan’s Murphy downgraded Oracle to Neutral from Overweight as specific metrics in the firm’s large-scale CIO survey have arced over into negative territory.

The analyst told investors that while Oracle’s shares have risen from the $30s into the high $40s in the last 2 years, the company’s fundamental performance has remained inconsistent. Citing his survey of 154 CIOs, Murphy noted that Oracle received the largest number of indications for planned spending contraction this year, materially more than the second-worst company, which was IBM (IBM) with 25 indications of spending contraction.

Further, while ranking the top 8 or 9 mega-vendors in terms of who will be most critical and indispensable to CIOs’ IT environment in the future, Oracle only received 6.5% of votes, down from 11% in previous surveys, the analyst highlighted.

At the same time, Murphy pointed out that Amazon AWS improved from 9.5% of votes last year to 14.9% of votes this year, creating the appearance of a “sucking sound” out of Oracle and into AWS.

The company also ranked number 8 in terms of association with Digital Transformation projects, disappointing relative to its scale and lagging behind the likes of SAP (SAP), IBM, and Cisco (CSCO), he added, noting that despite Oracle’s efforts to build a Cloud presence, it rated no better than SAP in terms of association with Cloud Computing plans, and is nowhere close to the leaders Microsoft, Amazon, and Google (GOOGL; GOOG) in this respect. Oracle was mentioned by only 2% of the CIOs as the platform that will be “most integral” to their cloud computing plans, Murphy said.

Overall, the analyst questions where Oracle’s business and stock are heading in the next couple of years if the largest-scale CIO survey shows Oracle now has negative spending intentions, is lagging in Digital Transformation projects, is trailing in Cloud Computing plans, its databases are being unplugged in favor of Microsoft and Amazon databases, its applications are being unplugged in favor of Salesforce (CRM) and Workday (WDAY) applications, and customers are weary of its unpopular commercial tactics.

Murphy also lowered his price target on Oracle’s shares to $53 from $55.

WHAT’S NOTABLE

In a research note of his own, Nomura Instinet analyst Christopher Eberle lowered his price target for Oracle to $60 from $64 ahead of the company’s fourth quarter results on June 19.

The analyst trimmed his estimates to account for currency and expectations for more modest revenue acceleration in fiscal 2019. He remains optimistic, however, on Oracle’s transition and model growth reacceleration as the year progresses. Eberle reiterated a Buy rating on the shares.

PRICE ACTION

In Wednesday’s trading, shares of Oracle dropped almost 5% to $46.14.


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Alexion Pharmaceuticals presents results from ALXN1210

Alexion to present results from ALXN1210 Phase 3 study at EHA

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Alexion to present results from ALXN1210 Phase 3 study at EHA

Alexion Pharmaceuticals (ALXN) announced that results from one of the two large Phase 3 studies of ALXN1210, the company’s investigational long-acting C5 complement inhibitor, in patients with paroxysmal nocturnal hemoglobinuria were selected for presentation during the Late-Breaking Oral Session on Sunday, June 17, 2018 at the Annual Conference of the European Hematology Association in Stockholm, Sweden.

“We are very excited about EHA’s recognition of the robustness and importance of these data in complement inhibitor treatment-naive patients. We enrolled a very broad patient population, representative of patients with PNH in clinical practice, including patients with a history of aplastic anemia, and ‘classic’ PNH, as well as transfused and non-transfused patients,” said John Orloff, M.D., EVP and Head of Research & Development at Alexion.

“We look forward to discussing the data with leading hematologists in Europe at the conference later this week as part of our ambition to make ALXN1210 the new standard of care for patients with PNH.”

As previously announced, weight-optimized treatment every eight weeks with ALXN1210 demonstrated non-inferiority to treatment every two weeks with Soliris in complement inhibitor treatment-naive patients with PNH on the two co-primary endpoints and all four key secondary endpoints.

The numeric results for all these endpoints, including breakthrough hemolysis, favored ALXN1210 and are consistent with the immediate and complete C5 inhibition observed by the end of the first infusion of ALXN1210 and sustained throughout the entire 26-week treatment period.

The safety profile of ALXN1210, based on almost 180 patient years of experience, was similar to that of Soliris.

Paroxysmal nocturnal hemoglobinuria (PNH) is a chronic, progressive, debilitating, and potentially life-threatening ultra-rare blood disorder that can strike men and women of all races, backgrounds, and ages without warning, with an average age of onset in the early 30s.

PNH often goes unrecognized, with delays in diagnosis ranging from one to more than 10 years. In patients with PNH, chronic, uncontrolled activation of the complement system, a component of the body’s immune system, results in hemolysis (the destruction of red blood cells), which in turn can result in progressive anemia, fatigue, dark urine, and shortness of breath.

The most devastating consequence of chronic hemolysis is thrombosis (the formation of blood clots), which can damage vital organs and cause premature death.

Historically, it had been estimated that one in three patients with PNH did not survive more than five years from the time of diagnosis.

PNH is more common among patients with disorders of the bone marrow, including aplastic anemia (AA) and myelodysplastic syndromes (MDS).9,10,11 In certain patients with thrombosis of unknown origin, PNH may be an underlying cause.

ALXN closed at $118.20.


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Envision Healthcare sold for $9.9B

Envision Healthcare to be acquired by KKR for approximately $9.9B

 

Envision Healthcare sold for $9.9B, Stockwinners
Envision Healthcare sold for $9.9B, Stockwinners

Envision Healthcare (EVHC) announced it has entered into a definitive agreement to be acquired by global investment firm KKR (KKR) in an all-cash transaction for approximately $9.9B, including the assumption or repayment of debt.

Under the terms of the agreement, which has been unanimously approved by Envision’s Board of Directors, KKR will acquire all of the outstanding shares of Envision’s common stock for $46.00 per share in cash, representing a 32% premium to Envision’s volume-weighted average share price from November 1, 2017, the day immediately following the company’s first announcement that it was reviewing strategic alternatives.

The transaction price represents a multiple of 10.9x trailing 12 months Adjusted EBITDA and 10.1x 2018 anticipated Adjusted EBITDA.

The agreement represents the culmination of the Board’s comprehensive review of strategic alternatives to enhance shareholder value.

During the last seven months, the Board, with the assistance of three independent financial advisors and legal counsel, examined a full range of options to generate shareholder value, including capital structure alternatives, potential acquisitions, portfolio optimization, a potential sale of the whole company, and continued operation as a standalone business.

The Board oversaw an extensive process that involved outreach to 25 potential buyers, including financial sponsors and strategic entities, and invited proposals for all or parts of the business.

After consideration of the opportunities, risks and uncertainties facing the company and the broader sector, as well as the alternatives available to the company, the Board determined that the KKR proposal presented the best opportunity to maximize value for shareholders.

The completion of the transaction, which is targeted for the fourth quarter of 2018, is subject to customary closing conditions and regulatory approvals. Envision intends to present the proposed transaction to its shareholders for approval at the company’s 2018 Annual Meeting, which will be scheduled as soon as practicable following the filing and review of proxy materials.

The company intends to hold its Annual Meeting no later than October 1, 2018.

Upon the completion of the transaction, Envision will become a private company, and its common stock will no longer be traded on the New York Stock Exchange. KKR will be making the investment primarily from its KKR Americas Fund XII.


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Rockwell Automation to make $1B investment in PTC

Rockwell Automation to make $1B equity investment in PTC

Rockwell Automation to make $1B equity investment in PTC, Stockwinners
Rockwell Automation to make $1B equity investment in PTC

PTC (PTC) and Rockwell Automation (ROK) announced that they have entered into a definitive agreement for a strategic partnership that is expected to accelerate growth for both companies and enable them to be the partner of choice for customers around the world who want to transform their physical operations with digital technology.

As part of the partnership, Rockwell Automation will make a $1B equity investment in PTC, and Rockwell Automation’s Chairman and CEO, Blake Moret, will join PTC’s board of directors effective with the closing of the equity transaction.

Under the terms of the agreement relating to the equity investment, Rockwell Automation will make a $1 billion equity investment in PTC by acquiring 10,582,010 newly issued shares at a price of $94.50, representing an approximate 8.4% ownership interest in PTC based on PTC’s current outstanding shares pro forma for the share issuance to Rockwell Automation.

The price per share represents an 8.6% premium to PTC’s closing stock price on June 8, 2018, the last trading day prior to today’s announcement.

Rockwell Automation intends to fund the investment through a combination of cash on hand and commercial paper borrowings.

Rockwell Automation will account for its ownership interest in PTC as an Available for Sale security, reported at fair value.

As separately announced today, Rockwell Automation is increasing its share repurchase target for fiscal year 2018 to $1.5 billion.

This represents a $300 million increase to its previous plans to repurchase $1.2 billion of its stock in fiscal year 2018.

The investment transaction is subject to customary closing conditions and regulatory approvals, and is expected to close within 60 days.

PTC Inc. develops and delivers software products and solutions worldwide.


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A.V. Homes sold for $963 million

Taylor Morrison to acquire A.V. Homes for $21.50 per share

A.V. Homes sold for $963 million, Stockwinners
A.V. Homes sold for $963 million

Taylor Morrison Home (TMHC) and AV Homes (AVHI) announced that they have entered into a definitive agreement pursuant to which Taylor Morrison will acquire all of the outstanding shares of AV Homes common stock at $21.50 per share in a cash and stock transaction valued, including outstanding AV Homes debt, at approximately $963M.

The transaction has been unanimously approved by the boards of both Taylor Morrison and AV Homes and will be submitted to the stockholders of AV Homes for approval.

The transaction is expected to close late in Q3 or early in Q4 and the closing is subject to customary closing conditions. TPG Capital, the holder of approximately 40% of AV Homes common stock, has agreed to vote all of its shares of AV Homes common stock in favor of the transaction.

Under the terms of the agreement, AV Homes stockholders will have the option to receive, at their election, consideration per share equal to $21.50 in cash, 0.9793 shares of Taylor Morrison Class A common stock or the combination of $12.64 in cash and 0.4034 shares of Taylor Morrison Class A common stock, subject to an overall proration of approximately 60% cash and 40% stock.

On a pro forma basis, AV Homes stockholders are expected to own up to approximately 10% of the combined company, subject to conversion mechanics applicable to holders of AV Homes’ convertible notes.

AVHI closed at $16.50.


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GE creates new company to develop unmanned traffic management

GE creates  AiRXOS to develop unmanned traffic management 

GE introduces new company AiRXOS, Stockwinners
GE introduces new company AiRXOS

GE (GE) introduced AiRXOS a new company helping to accelerate the safe, efficient, scalable integration of air and ground space for manned and unmanned vehicles.

AiRXOS helps government agencies, regional aviation authorities and private sector operators manage and meet the increasing demand for sophisticated and safe Unmanned Aircraft Systems operations. AiRXOS is a wholly-owned subsidiary of GE.

The Department of Transportation recently announced the UAS IPP to help government agencies, municipalities, regional aviation authorities and private sector operators manage and meet the increasing demand for sophisticated and safe UAS operations.

Of the ten pilot programs, AiRXOS was selected as a partner for three: The City of San Diego, the City of Memphis, and the Choctaw Nation of Oklahoma. AiRXOS will work with these program partners in safely demonstrating capabilities such as operations over urban settings, night operations, beyond visual line of sight, as well as developing overall UTM systems.

Drive Ohio’s UAS Center announced an investment of $5.9M for UTM research that will include both air and ground vehicles and will complement Drive Ohio’s current efforts for autonomous and connected vehicle testing along the U.S. 33 Smart Mobility Corridor. AiRXOS has been selected as a partner, along with Gryphon Sensors, CAL Analytics, and Ohio State University’s College of Engineering to implement a UTM solution for the U.S. 33 Smart Mobility Corridor. AiRXOS has also formed a collaboration with NUAIR Alliance for an unmanned testing and rating initiative that will combine NUAIR’s new National Unmanned Systems Testing and Rating capability with AiRXOS’ Autonomous Service Platform.

While NUSTAR will objectively measure UAS performance and test systems against industry consensus standards, AiRXOS will automate the processes used by commercial operators, pilots, organizations, and drone manufacturers to engage in commercial flight operations.

To support this effort, AiRXOS plans to open an office in the Syracuse, New York Tech Garden offices. To keep pace with innovation, NASA’s Technical Capability Level testing and the expansion of the Low Altitude Authorization and Notification Capability service program continue to move the industry forward.

AiRXOS is a TCL partner and has recently applied for a LAANC application in support of bringing a broad range of UAS operations safely to scale.

GE closed at $13.64.


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Tesla higher on Model 3 production

Tesla jumps after Musk keeps dual role, voices optimism on Model 3 output

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Tesla jumps after Musk keeps dual role, voices optimism on Model 3 output

Shares of Tesla (TSLA) are higher as much as 4% on Wednesday morning following the company’s annual meeting in California.

At the meeting, shareholders rejected two proposals, including one that would have separated the roles of chairman and chief executive officer. Additionally, Elon Musk said the company will likely reach its goal of producing 5,000 Model 3 sedans “by the end of this month.”

SHAREHOLDERS REJECT SEPARATION OF CHAIRMAN, CEO ROLES

Tesla shareholders rejected two proposals that would have changed the company’s board, including one that would have removed CEO Elon Musk from the chairman role.

According to a CNBC report, Jiang Zhao, a shareholder who owns 12 shares of Tesla stock, brought forward the proposal to have an independent chairman, as he believes it is necessary to prevent conflicts of interest.

In May, proxy advisory firm ISS recommend that investors split the role of chairman and CEO, saying shareholders would “benefit from the strongest form of independent board oversight in the form of an independent chair.”

Shareholders also rejected a proposal to remove three Tesla board members up for re-election this year, which was brought by the CtW Investment Group.

CtW, which works with pension funds for unions, said in a letter last month that board members Antonio Gracias and Elon’s brother Kimbal Musk were too close to the CEO to ensure needed independence, while 21st Century Fox (FOX, FOXA) CEO James Murdoch lacked relevant experience.

According to Bloomberg, which viewed a copy of the letter, CtW said that “instead of recognizing the need for independent and effective board leadership, Tesla has re-nominated three directors who exemplify the company’s failure to evolve.”

‘QUITE LIKELY’ TO MEET MODEL 3 OUTPUT GOAL

At the meeting, Musk said that the carmaker’s goal of making 5,000 Model 3 vehicles per week by the end of June was “quite likely” as the car maker’s production lines were now demonstrating the ability to build 3,500 vehicles a week, Reuters reported. “This is the most excruciating hellish several months I’ve ever had… but I think we’re getting there,” Musk said.

Tesla Model 3 named Popular Mechanics' Car of the Year
Tesla Model 3 named Popular Mechanics’ Car of the Year

OTHER ANNOUNCEMENTS

Robin Ren, Tesla’s head of worldwide sales, announced at the meeting that the company intends to build its first factory outside of the U.S. in Shanghai, China, CNBC reported.

Unlike Tesla’s first U.S. factories, the company’s new “Dreadnought” factories should produce both batteries and assemble vehicles in one place.

Additionally, according to Business Insider, Musk said the company plans to reveal the Model Y next March and will likely go into production in early 2020. The report also said that the Semi will go into production in 2020 and that it will be slightly different than what was revealed in 2017 because the company has made improvements.

The Tesla Roadster will follow the same timeline for production and will have a SpaceX option package available, BI also said.

WHAT’S NOTABLE

Musk has said that Tesla plans to be profitable and cash flow positive in Q3 and Q4, tweeting in April that there is “obviously no need to raise money.”

Musk previously said that the company was not planning to raise any capital before the end of 2019. He reiterated that during the shareholder meeting and said he is still confident that Tesla will become profitable in Q3 or Q4, BI reported.

Tesla originally sought to build 5,000 Model 3 vehicles a week by the end of 2017, but later revised its target to making 5,000 Model 3 cars by the end of the second quarter.

ANALYST COMMENTARY

Citi analyst Itay Michaeli told investors this morning that while he appreciates the bull case of ramping Model 3 deliveries and Tesla achieving profitability in the second half of the year, thereby easing cash concerns and cementing the carmaker’s electric vehicle lead, he “can’t get there on risk/reward at this point.” Michaeli cut his price target for Tesla to $313 from $347 and maintained a Neutral rating on the shares.

Baird analyst Ben Kallo, who remains bullish on Tesla, said the body language at the meeting was positive, noted that shareholders approved the board of directors by a significant margin and expects management to achieve positive GAAP net income and positive cash flow in Q3 and Q4. Kallo keeps his Buy rating and $411 price target on Tesla.

PRICE ACTION

Tesla is up about 5% in early trading to $305.76.


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Loxo Oncology shares higher on data

Loxo announces positive interim data from LOXO-292 dose escalation trial

Loxo Oncology presents positive data  at ASCO meeting

Loxo Oncology (LOXO) announced interim clinical data from the LOXO-292 global Phase 1 LIBRETTO-001 dose escalation trial.

LOXO-292 is an investigational, highly potent and selective RET inhibitor.

Resonance Energy Transfer (RET),  is a mechanism describing energy transfer between two chromophores.

These data are being presented at the 2018 American Society of Clinical Oncology Annual Meeting.

The LIBRETTO-001 Phase 1 trial contains a dose escalation phase and a dose expansion phase. The dose escalation phase follows a “3+3” design.

LOXO-292 is dosed orally in 28-day cycles. As dose cohorts are cleared, additional patients can enroll in these cleared cohorts.

Intra-patient dose escalation is also permitted as dose cohorts are cleared.

The primary endpoint of the trial is the determination of the maximum tolerated dose or recommended dose for further study.

Secondary endpoints include safety, overall response rate and duration of response. The dose expansion phase is designed to further characterize the overall response rate, durability of response, and safety of LOXO-292 in predefined groups of patients with activating RET alterations.

The data presented at ASCO were based on an April 2, 2018 data cut-off date.

Eighty-two total patients had been enrolled to eight dose escalation cohorts.

Pharmacokinetic analyses during the dose escalation demonstrated dose-dependent increases in LOXO-292 exposure with increasing dose.

Starting at the 40 mg BID dose and the 80 mg BID dose, respectively, LOXO-292 delivered sustained greater thanIC90 RET fusion and greater thanIC90 RET M918T-mutant target coverage, based on cell-based potencies.

Most treatment-emergent adverse events were Grade 1 in severity. The expansion cohorts of the LIBRETTO-001 trial are now open and enrolling at the 160 mg BID dose. This dose was selected for initial expansion based on its promising activity and tolerability profile.

Additional dose exploration above 160 mg BID is ongoing and patients enrolled to the expansion cohorts may dose escalate should a higher dose be advanced.

ANALYST COMMENTS

Citi analyst Yigal Nochomovitz raised his price target for Loxo Oncology to $235 saying the company is the “star of ASCO.” The analyst now believes LOXO-292 has advanced into an advantageous competitive position in RET fusions. He expects the shares to continue to trade up and keeps a Buy rating on Loxo.

Morgan Stanley analyst Matthew Harrison said he expects Loxo Oncology shares to trade near $200 in the wake of data on LOXO-292 presented at the ASCO meeting that he said “sets a high bar for competitors.” The data positions LOXO-292 to rapidly advance to registration, said Harrison, who raised his market share estimate for LOXO-292 to 70% from 60%, increased his LOXO-292 peak sales estimate to $1B from $700M, and lowered his risk-adjustment, all of which drove his price target on Loxo shares to $215 from $170. He maintains an Overweight rating on Loxo Oncology, which is up 13% to $210.50 in pre-market trading.

JMP Securities analyst Konstantinos Aprilakis said the Phase 1 study data presented on LOXO-292 in patients with RET-altered cancers at the ASCO meeting came in “far above expectations” with respect to both efficacy and safety. Citing the overall response rate in RET fusion cancers of 77%, Aprilakis called the efficacy data “exceedingly impressive” and increased his price target on Loxo Oncology to $221 from $182 following the presentation. Aprilakis maintains his Outperform rating on Loxo shares.


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