Watch shares of Alnylam Pharmaceuticals

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

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

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

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

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

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

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

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

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

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

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

Stifel

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

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

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

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

ALNY closed at $127.59.

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American Airlines reports improved bookings, Shares fly!

American Airlines to fly 55% of July 2019 domestic capacity in July 2020

American Airlines (AAL) announced that, “in response to improving demand for air travel,” American is planning to fly 55% of its domestic schedule and nearly 20% of its international schedule in July 2020 compared to the same period last year.

The airline’s July systemwide capacity amounts to approximately 40% of July 2019 flying.

The company added: “American saw an increase in demand in May. By the last week of May, the airline carried a daily average of about 110,000 customers per day – an increase of 71% over the approximately 32,000 average daily customers the airline served in April.

Compared to the spring, American is increasing frequency of flying from hubs, including Dallas Fort Worth International Airport and Charlotte Douglas International Airport to destinations customers are searching and booking most, with increased flying to major cities in Florida, Gulf Coast cities as well as mountain destinations.

AAL shares jump 35% on improved bookings

The airline also increased frequency of flying to Asheville, North Carolina, Savannah, Georgia, and Charleston, South Carolina for business and leisure travelers.”

The firm  said: “While international demand continued to be diminished, today marked the return of service to eight international destinations.

These include service from Dallas-Fort Worth to Amsterdam, Paris and Frankfurt, as well as service from Miami to Antigua in the Caribbean and Guayaquil and Quito in South America. American also restored additional service to London from Chicago and New York. 

The airline said: “American Airlines will begin reopening Admirals Club lounges in phases, beginning June 22, after making improvements to adapt the clubs and product offerings to reinforce the well-being of customers and everyone who works in the clubs…

American will continue to adhere to CDC guidelines, use enhanced cleaning measures and provide limited food and beverage offerings to help ensure the well-being of customers and team members.”

AAL is up 35% to $16.05.

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White House selects vaccine finalists

Novavax sinks after White House omits as COVID vaccine finalist

The New York Times reports that Moderna (MRNA) is among the five finalists selected by the Trump administration as the most likely to produce a vaccine for the coronavirus.

Moderna (MRNA) is one of the finalists

By narrowing the field, the White House is betting it can identify the most promising vaccines at an early stage, speed along the process of determining which will work and ensure that the winner or winners can be quickly manufactured in large quanities, the Times said.

Pfizer is also one of the finalists

The announcement of the decision will be made at the White House in the next few weeks, government officials said.

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AstraZeneca is one of the five companies.

Dr. Anthony S. Fauci, the federal government’s top epidemiologist and director of the National Institute of Allergy and Infectious Diseases, hinted at the coming action on Tuesday when he told a medical seminar that “by the beginning of 2021 we hope to have a couple of hundred million doses.”

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Johnson & Johnson is also a finalist for Covid 19 vaccine

Finalists

A White House announcement is expected in the new few weeks. In addition to Moderna, the winners are AstraZeneca (AZN), Johnson & Johnson (JNJ), Merck (MRK) and Pfizer (PFE), according the Times.

Merck presents results from Phase 3 KEYNOTE-426 study, Stockwinners
Merck is the final company on the list.

B. Riley FBR

B. Riley FBR analyst Mayank Mamtani views the selloff today in shares of Novavax on the New York Times report that the company was not selected as a finalist for the White House’s “Operation Warp Speed” as overdone.

Mamtani reiterates a Buy rating on Novavax. NVAX closed down 11% to $44.25.

Novax did not make the final cut, shares tumble

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Minerva shares collapse following its drug failure

Minerva says Phase 3 trial of roluperidone did not meet primary endpoint

Minerva Neurosciences (NERV) announced that the Phase 3 trial of roluperidone to treat negative symptoms in schizophrenia did not meet its primary and key secondary endpoints.

Shares tumble following its drug failure

In total, 515 patients were enrolled into the trial, and 513 patients received treatment and were included in the safety and Intent-To-Treat population.

The trial was conducted in the USA, Europe and Israel.

There were 172 patients who received placebo, 172 patients who received roluperidone 32 mg, and 171 patients who received roluperidone 64 mg.

Demographic and baseline disease characteristics were comparable across all treatment arms.

The results for both roluperidone doses versus placebo across both the primary and the key secondary endpoints to Week 12 were corrected for multiplicity using the truncated Hochberg procedure.

The primary objective of the trial was to evaluate the change from baseline to Week 12 of NSFS with 32 mg and 64 mg doses of roluperidone compared to placebo in patients diagnosed with schizophrenia presenting with moderate to severe negative symptoms.

Neither the 32 mg nor 64 mg dose of roluperidone showed a statistically significant separation from placebo.

Furthermore, neither dose showed a statistically significant separation from placebo on the key secondary endpoint, the change from baseline to Week 12 in PSP.

Schizophrenia destroys patient’s life

Although limited inferences can be drawn from this data, unadjusted statistically significant separations from placebo were observed in NSFS at Week 4 for both doses and at Week 8 for the 64 mg dose, and the 64 mg dose was statistically significantly different from placebo as measured by change in PSP at all other assessment timepoints.

Overall, subgroup analyses by region and by age groups were similar.

Roluperidone was generally well tolerated, and the incidences of patients who reported treatment-emergent adverse events over the duration of 12 weeks of treatment were 37% for the 64 mg group, 42% for the 32 mg group, and 33% for placebo.

Only 42 patients discontinued from the study due to adverse events, 16 in 64 mg arm, 18 in 32 mg arm, and 8 in placebo arm.

Two treatment-unrelated deaths were reported in the 32 mg treatment arm says Phase 3 trial of roluperidone did not meet primary endpoint.

NERV is down 82% to $2.50.

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Boeing fires 6,770 U.S. workers

Boeing starts involuntary layoffs with 6,770 U.S. workers losing jobs

Boeing (BA) President and CEO Dave Calhoun issued a letter to employees today providing an update on workforce actions, which stated in part, “Following the reduction-in-force announcement we made last month, we have concluded our voluntary layoff program.

And now we have come to the unfortunate moment of having to start involuntary layoffs. We’re notifying the first 6,770 of our U.S. team members this week that they will be affected.

Boeing beings involuntary layoffs

We will provide all the support we can to those of you impacted by the ILOs – including severance pay, COBRA health care coverage for U.S. employees and career transition services.

Covid19 related layoffs are adding up

Our international locations also are working through workforce reductions that will be communicated locally on their own timelines in accordance with local laws and benefit terms.

Boeing plans to cut 10% of it’s workforce

The COVID-19 pandemic’s devastating impact on the airline industry means a deep cut in the number of commercial jets and services our customers will need over the next few years, which in turn means fewer jobs on our lines and in our offices.

We have done our very best to project the needs of our commercial airline customers over the next several years as they begin their path to recovery. I wish there were some other way.”

Green Shoots

In another announcement, Dave Calhoun stated “We are seeing some green shoots. Some of our customers are reporting that reservations are outpacing cancellations on their flights for the first time since the pandemic started. Some countries and U.S. states are starting cautiously to open their economies again.

And some parts of our business, most notably on the defense side, will continue hiring to meet customer commitments and fill critical skill positions.

Boeing CEO Dave Calhoun

The Defense, Space & Security and defense services teams have achieved a number of milestones recently, including the successful return to orbit of the reusable and autonomous X-37B Orbital Test Vehicle.

We’re moving forward with our plan to restart 737 MAX production in Renton, Washington, as our return-to-service efforts continue.

And our Global Services team is changing its organization to ensure it is lean and focused on the post-COVID needs of its customers. But these signs of eventual recovery do not mean the global health and economic crisis is over. Our industry will come back, but it will take some years to return to what it was just two months ago.”

Company executives said last month that Boeing planned to cut about 10% of its global workforce this year as it reduces jetliner production, and union officials say the initial wave of layoffs was focused on Boeing’s Seattle-area commercial airplanes operation.

BA last traded at $146.47, up 1.2%.

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Several retailers grab their shopping bags and file for bankruptcy

As JC Penney’s files for bankruptcy, others line up to do the same

Retailers have long been suffering from a tough retail environment due to competition from online retailers such as Amazon, Etsy and eBay; it seems like COVID-19 fired the kill shot.

J.C. Penney

J.C. Penney announced that it has received approvals from the U.S. Bankruptcy Court for the Southern District of Texas, in Corpus Christi, TX for the “First Day” motions related to the company’s voluntary Chapter 11 petitions filed on May 15, 2020, including approval for the company to access and use its approximately $500M in cash collateral.

The 118 year old retailer files for Chapter 11 bankruptcy, Stockwinners

J.C. Penney entered into a restructuring support agreement with lenders holding approximately 70% of J.C. Penney’s first lien debt to reduce the company’s outstanding indebtedness and strengthen its financial position. J.C. Penney has approximately $500M in cash on hand as of the Chapter 11 filing date.

James Cash Penney started the company in 1902

JCP Gets Delisted

The New York Stock Exchange announced that the staff of NYSE Regulation has determined to commence proceedings to delist the common stock of J.C. Penney Company – ticker symbol JCP – from the NYSE. NYSE Regulation reached its decision that the company is no longer suitable for listing after the company’s May 15, 2020 disclosure that the company filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

Recent Retail Bankruptcies

On May 4th, J.Crew Group announced it has reached an agreement with its lenders holding approximately 71% of its Term Loan and approximately 78% of its IPCo Notes, as well as with its financial sponsors, under which the company will restructure its debt and deleverage its balance sheet, positioning J.Crew and Madewell for long-term success.

Houston-based Stage Stores Inc. filed for chapter 11 bankruptcy in Texas last week.

GNC Holdings (GNC), the nutritional supplement retailer, avoided bankruptcy by reaching a last-minute deal with creditors that allows it to avoid bankruptcy for at least 30 days but no more than 90 days under a deal announced Friday.

GNC avoids bankruptcy for 90 days

True Religion

Even before COVID-19 forced True Religion to close its 87 stores, the denim specialist’s sales were in decline and its profits were negative. After shuttering its footprint in response to the pandemic, 80% of its sales disappeared, according to the company. 

Others on the list

According to Law.com, both Macy’s (M) and Neiman Marcus have hired bankruptcy law firm Kirkland, and Wachtell. Neiman filed for Chapter 11 last week. Macy’s should be forthcoming.

Pier 1 Imports (PIR) filed for bankruptcy protection this month. It would only make sense if it’s competitors follow the same path.

Nashville-based retailer, Kirkland’s, Inc. operates as a specialty retailer of home décor in the United States. The company’s stores provide various merchandise, including holiday décor, furniture, ornamental wall décor, decorative accessories, art, textiles, mirrors, fragrance and accessories, lamps, artificial floral products, housewares, outdoor living items,

Kirkland’s has avoided Chapter 11, Stockwinners

In 2019, seventeen major retailers filed for bankruptcy. For some of them it was their second trip to the alter including Payless, Gymboree, and Charming Charlie.

Some of the retailers that filed for bankruptcy in the past 18 months. Stockwinners

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Chesapeake Energy may file for bankruptcy

Chesapeake Energy slides as company considers bankruptcy, strategic alternatives

Shares of Chesapeake Energy (CHK) are tumbling after the company warned that it might not be able to stay in business amid low commodity prices caused by a global price war and depressed demand due to the COVID-19 pandemic.

Chesapeake is near bankruptcy

EVALUATING STRATEGIC ALTERNATIVES:

On Monday, Chesapeake Energy announced that it filed its Form 10-Q for the three-month period ended March 31, 2020 and, in light of the unprecedented market environment, has withdrawn the financial outlook it previously provided on February 26, 2020.

The company also reinstated a “going concern” warning. “Fluctuations in oil and natural gas prices have a material impact on our financial position, results of operations, cash flows and quantities of oil, natural gas and NGL reserves that may be economically produced.

Historically, oil and natural gas prices have been volatile; however, the volatility in the prices for these commodities has substantially increased as a result of COVID-19 and the OPEC+ decisions […]

Historical oil prices represented in 2020 dollar, Stockwinners

If the current depressed prices persist, combined with the scheduled reductions in the leverage ratio covenant and an expected significant reduction in our borrowing base in our scheduled determination, then our liquidity and our ability to comply with our financial covenants during the next 12 months will be adversely affected,” Chesapeake said in the filing.

Boom to bust for CHK

“Based on our current forecast, we do not expect to be in compliance with our financial covenants beginning in the fourth quarter of 2020. Failure to comply with these covenants, if not waived, would result in an event of default under our revolving credit facility, the potential acceleration of outstanding debt thereunder and the potential foreclosure on the collateral securing such debt, and could cause a cross-default under our other outstanding indebtedness.

As a result of the impacts to the company’s financial position resulting from declining industry conditions and in consideration of the substantial amount of long-term debt outstanding, the company has engaged advisors to assist with the evaluation of strategic alternatives, which may include, but not be limited to, seeking a restructuring, amendment or refinancing of existing debt through a private restructuring or reorganization under Chapter 11 of the Bankruptcy Code.

However, there can be no assurances that the company will be able to successfully restructure its indebtedness, improve its financial position or complete any strategic transactions. As a result of these uncertainties and the likelihood of a restructuring or reorganization, management has concluded that there is substantial doubt about the company’s ability to continue as a going concern.”

REVERSE STOCK SPLITs NEVER WORK:

Chesapeake stock has lost about 50% of it’s value since a 1-for-200 reverse stock split took effect after the close of trading on April 14, 2020.

The company had implemented the reverse split to raise its share price enough to regain compliance with listing standards, but it was viewed as validation of investor concerns as the company struggled with falling commodities prices, high debt levels and the effects of the COVID-19 pandemic, the author added.

The company lost its way after Aubrey McClendon, a founder and former chief executive of Chesapeake Energy, died in a fiery car crash in 2016, a day after he was charged with conspiring to rig bids for oil and natural gas leases. Many believe he committed suicide.

Aubrey McClendon

McClendon — a key player in the U.S. shale boom — co-founded Chesapeake in 1989 and stepped down from the company in 2013. Chesapeake used to be the second-largest natural gas producer in the United States.

PRICE ACTION: In afternoon trading on Tuesday, shares of Chesapeake have dropped almost 22% to $10.13.

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Uber in talks to acquire GrubHub

Uber made all-stock offer to acquire GrubHub, WSJ reports

Shares of food delivery company GrubHub are sharply higher after the Wall Street Journal reported that Uber Technologies (UBER) approached GrubHub (GRUB) earlier this year with a takeover offer and the parent company of Uber Eats and its rival service operator continue to discuss a possible combination.

Uber may buy GrubHub, Stockwinners

Uber is seeking to acquire GrubHub in an all-stock deal that would reshape the meal-delivery business, but “it’s far from guaranteed the talks will produce a deal,” according to the report.

UberEats has 25% of the food delivery market, Stockwinners

Bloomberg’s Ed Hammond has separately reported this morning that Uber has made an offer to acquire GrubHub.

The companies are in talks about a deal and could reach an agreement as soon as this month, sources told Bloomberg. 

“While our Rides business has been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats, and prepare us for any recovery scenario,” said Uber CEO Dara Khosrowshahi.

Uber has a market cap of $57B

Uber Eats is a direct competitor to Grubhub, with Grubhub controlling  26.7% of the market while Uber holds a 25.2% market share. 

Grubhub has a market cap of more than $5.3 billion. Uber has a market cap of $57 billion.

GrubHub (GRUB) is seeking 2.15 Uber (UBER) share in exchange for each of its own shares in a potential takeover and Uber’s board is expected to review the latest GrubHub counter proposal, according to The Wall Street Journal, citing sources.

NEEDHAM

After Bloomberg reported that Uber (UBER) has approached GrubHub (GRUB) with a takeover offer, Needham analyst Brad Erickson said such a deal would be consistent with his bullish thesis that Uber Eats could eliminate as much as $500M of its roughly $1.2B in losses last year through such a GrubHub acquisition.

With Uber having exited India and seven other unprofitable markets, Erickson thinks investors would “further recognize a dramatically clearer picture towards food delivery profitability” if a GrubHub deal were to occur, he added. Erickson reiterates a Buy rating and $42 target on Uber shares.

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Amazon may buy AMC Movie Theatres

As AMC considers bankruptcy, Amazon may snap up the company

Amazon.com (AMZN) has held talks to acquire the troubled movie chain AMC Entertainment Holdings (AMC), but it is unclear if the discussions are still active, Jamie Nimmo of Daily Mail reports, citing sources.

The companies are thought to have held talks about a potential takeover of AMC by Amazon, the sources said.

Amazon may buy AMC

Buying a cinema chain would enable Amazon to control the screening of films, giving it greater dominance of the industry. Amazon’s interest in cinemas is not new. 

In 2018, Amazon looked at buying American arthouse cinema chain Landmark Theatres, but lost out to the eventual buyer, Cohen Media Group. Netflix was also reportedly in the running to buy Landmark.

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Amazon.com is in talks to buy AMC, Stockwinners

However, a takeover of AMC would be on a different scale as Landmark only had about 250 screens in the US, while AMC has about 1,000 around the world.

Amazon certainly has the means to buy AMC, whose stock market value has collapsed in recent years to just $420million.

In a sign of bad times in the movie business, earlier this month AMC Theatres (AMC) sent a letter to Universal Studios (CMCSA) chairman Donna Langley, saying that, going forward, AMC will not license any Universal films in any of its 1,000 globally effective immediately.

Amazon bought supermarket chain Whole Foods Market in 2017 in a sign that the company was willing to spend money buying non-web-based companies. 

Stockwinners offers stocks to buy, stocks to watch, upgrades, stock downgrades, earnings, Stocks to Avoid
Amazon bought Wholefoods in 2017

AMC was bought by Chinese conglomerate Dalian Wanda for $2.6 billion in 2012, but it bought back $600 million worth of shares in 2018 after Beijing cracked down on overseas investments by Chinese companies.

Under Wanda, AMC launched a major expansion plan, and in 2016 bought Odeon in the UK for £920 million from British financier Guy Hands’ private equity firm, Terra Firma, and US group Carmike Cinemas for $1.1 billion.

The deals turned AMC into the world’s largest cinema company, with 1,000 outlets and 10,000 screens around the world.

However, the expansion plan backfired and left AMC saddled with debts that are now close to $ 5billion. Last month, AMC raised $500 million from bond investors in an effort to stay afloat during the crisis. 

However, investors still questioned whether AMC could avoid bankruptcy, given its parlous financial state.

A group of AMC’s lenders reportedly hired lawyers to advise on restructuring options last month, underlining AMC’s financial strife. 

In Monday’s pre-market trading, AMC shares are up 70% to $7.00. AMZN closed at $2379.61.

Read our blog about AMC.

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Moderna shares jump on Fauci comments, possible COVID-19 vaccine

Moderna rises as Fauci comments on COVID vaccine potential highlighted

Shares of Moderna (MRNA) are trading higher, which is being attributed to comments made earlier this week by Dr. Anthony Fauci, the U.S. National Institute of Allergy and Infectious Diseases Director who has become one of the faces of the Trump administration’s COVID-19 response.

Fauci highlighted Moderna’s COVID-19 vaccine candidate, as well as another one in development at Oxford University, in an interview with National Geographic this week, telling the publication that he believes that the U.S. will have a vaccine ready for general use as soon as January “When we look at the immune response that you can induce with a modest dose – one that’s feasible to be translated into humans – and the amount of time it takes to get to that level of immunity, it is really quite impressive,” Fauci was quoted as saying when discussing both Moderna’s vaccine candidate and the one being developed at Oxford.

Modernal shares are higher on its vaccine potentail

“It is also really easy to scale up with these two, in the sense of making a lot of doses pretty quickly,” he reportedly added.

Dr. Fauci has been government’s leading Covid-19 expert

The interview, published two days ago, may be getting added attention after The Boston Business Journal published a recap with the headline “Fauci singles out Moderna’s coronavirus vaccine as reason for optimism” yesterday afternoon.

Moderna, Inc. (MRNA) is a clinical stage biotechnology company. It develops therapeutics and vaccines based on messenger RNA for the treatment of infectious diseases, immuno-oncology, rare diseases, and cardiovascular diseases.

Covid 19 has killed thousands of people worldwide

As of February 15, 2019 the company had 11 programs in clinical trials and a total of 20 development candidates in six modalities comprising prophylactic vaccines, cancer vaccines, intratumoral immuno-oncology, localized regenerative therapeutics, systemic secreted therapeutics, and systemic intracellular therapeutics. Moderna, Inc. also has a collaboration with Lonza Ltd. for the manufacture of mRNA-1273, a COVID-19 vaccine.

MRNA is up 9.5% to $53.50.

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Norwegian Cruise Line shores up its balance sheet, raises $2B

NCL Corporation announces $400M investment by L Catterton

Norwegian Cruise proposes $650M note sale

Norwegian Cruise Line Holdings (NCLH) announced a private placement of up to $400 million in aggregate principal amount of exchangeable senior notes due 2026 to an affiliate of L Catterton.

Norwegian raises $2 billion to shore up its balance sheet

The Private Exchangeable Notes will be general senior unsecured obligations of NCLC, guaranteed by NCLH, and will be exchangeable at the holder’s option at any time prior to the close of business on the business day immediately preceding the maturity date into Series A Preference Shares of NCLC, which shall be automatically exchangeable into a number of ordinary shares of NCLH.

Material Terms: The Private Exchangeable Notes will accrue payment-in-kind interest at a rate of 7.0% per annum for the first year post-issuance, 4.5% per annum payment-in-kind interest plus 3.0% per annum cash interest for the following four years post issuance and 7.5% in cash for the final year prior to maturity; L Catterton will be entitled to nominate one member to the Company’s board of directors so long as a minimum ownership threshold is met, as well as one observer to the Company’s board of directors; The closing of the Private Exchangeable Notes is expected to occur upon the satisfaction of certain customary closing conditions, including a condition that the Company raises at least $1.0 billion in proceeds in the aggregate from other offerings; L Catterton will have certain registration rights in respect of the ordinary shares underlying the Private Exchangeable Notes and will be subject to certain customary transfer, voting and standstill restrictions, including a one-year lock-up agreement.

Share Offerings

Norwegian Cruise Line Holdings announced an underwritten public offering of $350 million of ordinary shares of the company.

The company intends to grant the underwriters an option to purchase up to $52.5 million of additional ordinary shares.

The company expects to use the net proceeds from the Offering for general corporate purposes. Goldman Sachs & Co. LLC, Barclays Capital Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Mizuho Securities USA LLC are acting as joint book-running managers for the Offering.

Goldman Sachs

Goldman Sachs analyst Stephen Grambling lowered the firm’s price target on Norwegian Cruise Line to $15 from $34 as he updated his estimates to reflect canceled itineraries through July, a sluggish recovery in 2020-2021 and capital markets activity over the past few weeks, but not the cruise operator’s just announced and pending transactions.

After the company announced plans to raise $600M of senior secured debt, $650M of exchangeable notes, and $350M in equity, and placed $400mn of exchangeable notes with Catterton Partners, Grambling said the added $2B in liquidity provides the company with runway of over 14 months at company estimated cash burn rates. He keeps a Neutral rating on Norwegian shares.

NCLH is down $2.80 to $11.65. We believe shares have found support at these levels.

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Retail bankruptcy filings are coming

J. Crew files for bankruptcy; Madewell to remain part of J.Crew

J.Crew Group announced it has reached an agreement with its lenders holding approximately 71% of its Term Loan and approximately 78% of its IPCo Notes, as well as with its financial sponsors, under which the Company will restructure its debt and deleverage its balance sheet, positioning J.Crew and Madewell for long-term success.

Madewell to remain part of the J.Crew Company, Stockwinners

Under the terms of the Transaction Support Agreement, the Company’s lenders will convert approximately $1.65 billion of the Company’s debt into equity.

To facilitate the restructuring contemplated by the TSA, the parent company of J.Crew Group, Inc., Chinos Holdings, Inc. and certain affiliates, have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Virginia.

The Company has secured commitments for a debtor-in-possession financing facility of $400 million and committed exit financing provided by existing lenders Anchorage Capital Group, L.L.C., GSO Capital Partners and Davidson Kempner Capital Management LP, among others.

Subject to Court approval, the DIP financing, combined with the Company’s projected cash flows, is expected to support its operations during the restructuring process.

As part of the TSA, Madewell will remain part of J.Crew Group, Inc.

Libby Wadle will continue in her role as CEO of Madewell.

J.Crew files for Chapter 11 bankruptcy protection, Stockwinners

“This agreement with our lenders represents a critical milestone in the ongoing process to transform our business with the goal of driving long-term, sustainable growth for J.Crew and further enhancing Madewell’s growth momentum,” said Jan Singer, CEO, J.Crew Group.

Neiman Marcus is expected to file for bankruptcy protection too

“Throughout this process, we will continue to provide our customers with the exceptional merchandise and service they expect from us, and we will continue all day-to-day operations, albeit under these extraordinary COVID-19-related circumstances.

Pier 1 Imports filed for bankruptcy protection

As we look to reopen our stores as quickly and safely as possible, this comprehensive financial restructuring should enable our business and brands to thrive for years to come.”

GNC is also expected to file for bankruptcy protection

The Company has filed a series of customary “first day” motions with the Bankruptcy Court seeking to maintain its operations during the restructuring process to help facilitate a smooth transition into Chapter 11.

JCP is inline for bankruptcy filing protection following weak sales

Note that in 2011, TPG Capital LP and Leonard Green & Partners LP privatized J.Crew in a $3 billion leveraged buyout.

Recent bankrupt retailers include Forever 21 and Pier 1 Imports.

Forever 21 filed for bankruptcy protection recently

Other retailers that may file for bankruptcy in the near future include: Neiman Marcus, JCP, GNC, and AEO. Note that Gaps (GPS) has been suffering from soft retail sales. Lands’ End (LE) is also suffering from soft sales.

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The real star war begins

AMC to no longer play Universal movies in its U.S. theaters

AMC Theatres (AMC) sent a letter to Universal Studios (CMCSA) chairman Donna Langley, saying that, going forward, AMC will not license any Universal films in any of its 1,000 globally effective immediately.

AMC will no longer play Universal movies, Stockwinners

“For much of the past four and a half years, I have been in direct dialogue with Jeff Shell and Peter Levinsohn of Universal about the importance of a robust theatrical window to the viability of the motion picture exhibition industry,” the letter reads.

“Throughout that time, AMC has expressed a willingness to consider alternatives to the current windowing strategy common in our industry, where the aim of such alternatives is to improve both studio profitability and theater operator profitability.

Universal stated it only pursued a direct-to-home entertainment release for “Trolls World Tour” because theaters were closed and Universal was committed to a lucrative toy licensing deal. We had our doubts that this was wholly Universal’s motivations, as it has been a longstanding desire by Universal to go to the home day and date.

Nonetheless, we accepted this action as an exception to our longstanding business practices in these unprecedented times.”

AMC noted that Shell was quoted in the Wall Street Journal saying that the success of “Trolls World Tour” demonstrated the viability of PVOD, and as soon as theaters reopen, the company expects to release movies on both theater and PVOD formats.

“Going forward, AMC will not license any Universal movies in any of our 1,000 theatres globally on these terms,” the letter said.

“Accordingly, we want to be absolutely clear, so that there is no ambiguity of any kind. AMC believes that with this proposed action to go to the home and theatres simultaneously, Universal is breaking the business model and dealings between our two companies.

Universal owns some blockbuster franchises, Stockwinners

It assumes that we will meekly accept a reshaped view of how studios and exhibitors should interact, with zero concern on Universal’s part as to how its actions affect us. It also presumes that Universal in fact can have its cake and eat it too, that Universal film product can be released to the home and theatres at the same time, without modification to the current economic arrangements between us. It is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice.

Therefore, effectively immediately AMC will no longer play any Universal movies in any of our theatres in the United States, Europe or the Middle East. This policy affects any and all Universal movies per se, goes into effect today and as our theatres reopen, and is not some hollow or ill-considered threat.

Incidentally, this policy is not aimed solely at Universal out of pique or to be punitive in any way, it also extends to any movie maker who unilaterally abandons current windowing practices absent good faith negotiations between us, so that they as distributor and we as exhibitor both benefit and neither are hurt from such changes.

Currently, with the press comment today, Universal is the only studio contemplating a wholesale change to the status quo. Hence, this immediate communication in response.”

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Smile Direct receives patent for its concept

SmileDirectClub granted patent for SmileShop retail concept

SmileDirectClub (SDC) announced it has been issued a patent for its SmileShop intellectual property from the United States Patent & Trademark Office.

SmileDirect receives patent for its concept, Stockwinners

The patent, U.S. Patent No. 10,636,522, further strengthens the telehealth dentistry pioneer’s efforts to bring affordable, accessible oral care to more people through its unique and innovative teledentistry platform and direct-to-consumer business model.

The patent ensures no clear aligner competitor will be able to duplicate SmileDirectClub’s unique model for 18 years.

The patent encompasses the unique SmileShop concept and process, including scheduling of an appointment at a SmileShop, sending the scheduling confirmation to the customer, conducting the intraoral scan, generating a treatment plan, receiving approval of the treatment plan by a licensed dentist or orthodontist, producing aligners in accordance with the treatment plan, and sending those aligners to the customer.

Smile Direct eliminates the middle man, Stockwinners

SmileDirectClub’s clear aligner therapy platform has helped more than 1,000,000 customers achieve a straighter and brighter smile.

Furthermore, the company announced it is making plans to slowly reopen its SmileShops beginning in May in the U.S., Canada, Germany, Australia, New Zealand, the UK and Ireland as local governments begin to lift business restrictions.

After its shops temporarily closed in March, SmileDirectClub, one of North America’s largest 3D printing manufacturers, dedicated some of its capacity to producing 3D printed personal protective equipment to help in the fight against COVID-19.

Smile Direct has an alliance with WalMart, Stockwinners

The company has shipped more than 40,000 face shields to medical organizations, elder care facilities, dentists and orthodontists during this time, and will supply all of its SmileShop team members with face shields and other PPE along with staggered appointment times, temperature scans and other social distancing measures to ensure a safe, sanitary experience upon reopening.

SDC closed at $5.39, it last traded at $7.20.

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Cash for Cannabis

Members of Congress look for marijuana industry included in virus relief

Members of the U.S. House of Representatives have signed a letter to congressional leaders asking that cannabis businesses be included in future federal relief packages due to COVID-19.

The letter which was sent to House Speaker Nancy Pelosi, a Democrat, and Minority Leader Kevin McCarthy, said in part:

“Thank you for your efforts to address the needs of the American people during the COVID-19 outbreak.

As you draft the next COVID-19 relief bill, we write to ask that you address one of the shortcomings of the CARES Act-the exclusion of state-legal cannabis businesses and their employees.

The COVID-19 crisis response demands the full participation of the American people, businesses, and workforce. However, without relief, a very large population is left without the means to execute the required public health measures and continue to provide financially for their families.

The state-legal cannabis industry is a major contributor to the U.S. economy and workforce, employing over 240,000 workers across 33 states and four territories, and generating $1.9 billion in state and local taxes in 2019.

As states respond to the COVID-19 crisis by shuttering businesses to mitigate the virus’ spread, jurisdictions across the country have recognized cannabis businesses as “essential.”

Essential businesses, in many places, can operate during the pandemic provided they abide by required public health safety measures. Like other businesses with continued operations, cannabis businesses have met the moment by preserving access to treatment for patients with chronic conditions, donating protective clothing, and manufacturing equipment for medical use.

However, unlike other small businesses, cannabis businesses are not eligible for the CARES Act programs.”

Publicly traded companies in the space include Aphria (APHA), Aurora Cannabis (ACB), CV Sciences (CVSI), CannTrust Holdings (CNTTF), Canopy Growth (CGC), Cronos Group (CRON), General Cannabis (CANN), India Globalization Capital (IGC), Tilray (TLRY), Trulieve Cannabis (TCNNF) and Zynerba (ZYNE).

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