Stocks to Watch: Paratek Pharmaceuticals Study Meets EndPoint

Paratek study meets primary, secondary FDA, EMA efficacy endpoints

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Paratek Pharmaceuticals (PRTK) announced positive top-line results from a pivotal Phase 3 clinical study comparing its once-daily, oral investigational antibiotic, omadacycline, to twice-daily oral linezolid in the treatment of acute bacterial skin and skin structure infections.

The study met all of its primary and secondary endpoints required to support approval for this indication by the U.S. Food and Drug Administration and the European Medicines Agency.

This represents the third positive Phase 3 registration study of omadacycline.

“This successful study demonstrates the potential of an oral-only dosing regimen of omadacycline, which would enable treatment in the outpatient setting and potentially reduce the need for admission to the hospital,” said Michael Bigham, Chairman and Chief Executive Officer of Paratek.

“The utility of the oral only dosing regimen represents a significant potential benefit to patients and prescribers who are in need of new, effective oral agents to combat serious community-acquired infections.”

The pivotal Phase 3 clinical study known as #OASIS-2 evaluated the efficacy and safety of once-daily, oral-only omadacycline compared to twice-daily, oral-only linezolid in 735 adults with ABSSSI.

#Omadacycline met the FDA-specified primary endpoint of statistical non-inferiority in the modified intent-to-treat population compared to linezolid at the early clinical response 48 to 72 hours after the first dose of study drug.

The ECR rate for omadacycline was 87.5% compared to 82.5% for linezolid.

Additionally, omadacycline met statistical NI compared to linezolid for the EMA-specified co-primary endpoints at the post therapy evaluation, 7 to 14 days after completion of therapy in the mITT and the Clinically Evaluable populations.

Clinical success rates at PTE in the mITT population for the omadacycline and linezolid arms were 84.2% vs. 80.8%, respectively; and in the CE population were 97.9% vs. 95.5%, respectively.

Omadacycline demonstrated high clinical success rates for infections caused by the most common #ABSSSI pathogens, including methicillin-resistant Staphylococcus aureus.

STOCK PRICE

PRTK last traded at $24.95. Stock has a 52-week trading range of $9.80 – $26.10.

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Stocks to Watch: Tesla Cheap or Expensive

Tesla stock low if you believe in company’s future, Elon Musk says

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In a recent tweet, clarifying earlier comments, Tesla CEO Elon Musk tweeted:

“I should clarify: Tesla stock is obviously high based on past & present, but low if you believe in Tesla’s future. Place bets accordingly …”

Earlier in the day, according to CNBC, Musk said, “I’ve gone on the record several times that the stock price is higher than we have the right to deserve and that’s for sure true based on where we are today,” Musk told Nevada Gov. Brian Sandoval at the National Governors Association summer meeting on Saturday.

According to media reports, Musk added when speaking at the meeting that Tesla’s current stock price reflects a “lot of optimism” adding that he has tried to bring expectations in line.

Musk noted that it has been “quite tough” to temper expectations in a euphoric environment.

Shares of Tesla (TSLA) dropped to an intraday low of $313.45 per share after his comments from the governor’s meeting but have regained some ground and are currently down 2.6% to $319.50 per share in afternoon trading.

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We believe TSLA shares will continue to be under pressure till they reach around $275-$285 level.

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Stocks to Watch – Beleaguered Signet Jewelers Names New CEO

Amid recent struggles and sexual harassment allegations, Signet Jewelers names new female CEO

 

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Shares of Signet Jewelers (SIG) are in focus in morning trading after the company said Chief Executive Officer Mark Light would be succeeded by named Virginia Drosos on August 1.

The appointment comes after the company reported quarterly earnings below expectations in May, disclosed the resignation of its COO, announced plans to outsource its credit portfolio and faced sexual harassment allegations.

CEO APPOINTMENT

Signet, the owner of Zale and Kay Jewelers, announced this morning that Mark Light, who has served as CEO of Signet since 2014, has decided to retire after more than 35 years with the company due to health reasons. Signet’s board of directors has appointed Virginia “Gina” Drosos, who has served as an independent director of the company’s board since 2012, as the company’s new CEO. Drosos has over 29 years of executive leadership experience in the beauty and consumer goods industries, most recently serving as president and CEO of Assurex Health, Signet said in a statement.

RECENT COO RESIGNATION, DISAPPOINTING EARNINGS AND OTHER WOES

Light’s departure follows the recent resignation of Chief Operating Officer Bryan Morgan due to violations of company policy “unrelated to financial matters.”

Additional details regarding Morgan’s resignation have not been reported. In January, Signet announced several senior organizational changes to drive growth, including promoting Morgan to COO from executive vice president, Supply Chain Management and Repair.

In May, Signet, which has been struggling with declining revenue over the past four quarters as demand for its jewelry has weakened, reported first quarter earnings that fell below analysts’ expectations. Light said at the time that Signet had a “very slow start” to the year as headwinds in the overall retail environment were exacerbated by a slowdown in jewelry spending and company-specific challenges.

Additionally, Signet announced plans to outsource its credit portfolio. The company has also said it would step up efforts to restore its reputation following allegations of sexual harassment at its Sterling Jewelers unit and diamond swapping allegations.

In May, Signet said it reached an agreement with the EEOC to resolve claims related to pay and promotion of female retail sales workers.

Signet has said allegations of sexual harassment have no merit, calling them “distorted and inaccurate.”

PEERS IN THE NEWS

Other publicly traded retailers of fine jewelry include Tiffany & Co (TIF), which in May reported quarterly sales that fell below analysts’ forecasts as well as a decline in comparable store sales.

Last week, Tiffany named Alessandro Bogliolo, who spent 16 years at Bulgari SpA and once served as that company’s COO, as its new CEO. Bogliolo is expected to take over as Tiffany’s CEO by October 2, the company said, and he will also join the company’s board.

The company increased the size of its board of directors earlier this year, adding three independent directors and ousted former CEO Frederic Cumenal in February following pressure from activist investor JANA Partners amid declining sales and profits.

PRICE ACTION

Signet (SIG) shares are down roughly 1.9% to $58.764 in Monday’s trading. Shares are down nearly 37% year-to-date.

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Multi-Color on $1.3 Billion Shopping Spree

Multi-Color to acquire Labels Division of Constantia Flexibles for $1.3B

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Multi-Color announces that it has signed a definitive agreement to acquire the Labels Division of Constantia Flexibles from Constantia Flexibles GmbH for approximately $1.3B, payable in cash and stock.

The combined annual revenues and EBITDA of the two businesses will be approximately $1.6B and $300M, respectively.

The combination brings together Constantia Labels’ high performing Food and Beverage business with Multi-Color’s strong Wine and Spirit, and Home and Personal Care platforms, and emerging global position in Healthcare.

Additional growth opportunities for Multi-Color exist in Home and Personal Care by utilizing Constantia Labels’ European operational footprint and assets. Growth opportunities for Constantia Labels exist in Food & Beverage and derive from Multi-Color’s U.S. operational footprint and assets.

The stronger combined footprint in Asia will provide further revenue opportunities. Cost synergies are anticipated to reach $15M by FY20 through a combination of procurement, SG&A, and manufacturing efficiencies.

As an example, Multi-Color will utilize Constantia Labels’ pressure sensitive substrate manufacturing capability in the U.S. and Europe to drive future efficiencies. Both companies currently generate EBITDA margins of approximately 18%.

As part of the transaction, Mike Henry, current EVP and Head of Constantia Labels, is expected to become CEO-elect of Multi-Color Corporation.

Current Multi-Color CEO, Vadis Rodato, is expected to retire in early 2018 after a transition period. Nigel Vinecombe will remain Executive Chairman. Two representatives of Constantia Flexibles will join Multi-Color’s board, and the shares issued as consideration will be subject to customary lock-up provisions.

The transaction is expected to close in Q3 of 2018.

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Waterpik Sold for $1 Billion Cash

Church & Dwight to acquire Waterpik for $1B in cash

 

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Church & Dwight (CHD) has signed a definitive agreement to acquire Water Pik for approximately $1B in cash. The transaction, which is subject to regulatory approval and other customary conditions, is expected to close in the third quarter.

Waterpik’s net sales for the trailing twelve months through June 30, 2017 were approximately $265M.

Waterpik is the #1 water flosser brand and the #1 replacement showerhead brand in the U.S. Approximately 70% of net sales are in the water flosser segment with the remainder in showerheads.

The international business represents approximately 20% of sales. The products are marketed in the U.S. and Canada and exported to over 80 countries.

Waterpik’s trailing twelve months EBITDA was approximately $80M, a 30% EBITDA margin.

Once the business is fully integrated, Church & Dwight expects to leverage its distribution network and operating discipline to achieve an estimated $10M in operating synergies by 2019.

The acquisition is structured as a stock purchase that the Company expects to finance with debt. The acquisition is expected to be neutral to 2017 EPS, inclusive of transition costs, acquisition-related expenses, interest expense and intangible amortization expense.

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Dominion Diamond Sold for $1.2 Billion

Dominion Diamond to be acquired by The Washington Cos for $14.25/share in cash

 

Dominion Diamond in advanced talks to be bought by Washington Companies. See Stockwinners.com Market Radar for more

 

Dominion Diamond (DDC) and The Washington Companies, a group of privately held North American mining, industrial and transportation businesses founded by industrialist and entrepreneur Dennis R. Washington, announced that they have entered into an arrangement agreement under which an entity affiliated with Washington will acquire all of Dominion’s outstanding common shares for $14.25 per share in cash or a total equity value of approximately $1.2B pursuant to a plan of arrangement under the Canada Business Corporations Act.

The transaction represents a 44% premium to Dominion’s unaffected share price of $9.92 on March 17, 2017. The transaction marks the result of Dominion’s review of strategic alternatives as previously announced on March 27, 2017.

The Board of Directors of Dominion, after consultation with financial and legal advisors, and based on the recommendation of a special committee of the Board consisting of four independent directors, has unanimously determined that the Arrangement is in the best interests of the Company, approved the Arrangement and recommends that Dominion’s shareholders vote in favor of the Arrangement.

All directors of the Company have entered into support agreements to vote their common shares in support of the Arrangement.

As part of this acquisition, Washington plans to: Operate Dominion as a standalone business as Washington does with its other successful operating companies; Appoint a new CEO based in Canada to the Dominion management team; Keep Dominion’s headquarters in Canada and maintain a significantly Canadian management team.

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TherapeuticsMD Tumbles on FDA Update

TherapeuticsMD drops as TX-004HR update seen not reading ‘well at all’

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Shares of TherapeuticsMD (TXMD) plunged in pre-market trading on Monday after the company provided a regulatory update on the status of its New Drug Application for TX-004HR.

REGULATORY UPDATE

In a statement, TherapeuticsMD provided an update on the status of its NDA for TX-004HR, its investigational applicator-free estradiol vaginal softgel capsule for the treatment of moderate-to-severe vaginal pain during sexual intercourse, saying that it participated in a Type A Post-Action Meeting on June 14 with the FDA’s Division of Bone, Reproductive, and Urologic Products.

At the meeting, the two sides discussed the complete response letter that TherapeuticsMD previously received for the NDA, which also allowed the company to present new information it believes could address concerns raised in the letter and “positively” impact the status of the NDA.

TherapeuticsMD said it has formally submitted the new information for consideration per the FDA’s request.

However, the company noted that while it continues to have “productive” dialogue with the FDA related to its review, it has not yet received a formal timeline for a conclusion of this review.

#TherapeuticsMD said it “looks forward” to working with the FDA to address its concerns and sees further clarity on the pathway forward for the NDA “in the coming weeks,” adding that it “reserves the right to pursue the FDA’s formal dispute resolution process if a reasonable timeline to address such concerns cannot be established.”

WHAT’S NOTABLE

On May 8, TherapeuticsMD said it received the CRL from the FDA regarding the TX-004HR NDA.

At the time, the company said it planned to meet with the FDA as soon as possible to address the concerns raised in the letter, which involved “the lack of long-term endometrial safety data for TX-004HR beyond the 12-weeks studied in the pivotal phase 3 Rejoice Trial.”

Adam #Feuerstein, who previously wrote about biotech stocks for TheStreet and currently is a senior writer for StatNews, tweeted in May that the company lacks the cash to conduct the type of safety study of TX-004HR requested by the FDA, without cutting expenses or raising more money, adding that a delay for this product “could be fatal” for the company.

Feuerstein tweeted this morning that TherapeuticsMD’s regulatory update on resolving the CRL “does not read well at all.”

ANALYST COMMENTARY PRIOR TO UPDATE

Oppenheimer analyst Jay Olson upgraded TherapeuticsMD to Outperform recently ahead of the FDA meeting update, and said there was a “reasonable probability” of positive news.

Olson argued that data on complete response letters provides confidence that there are likely no other TX-004HR approvability issues besides lack of long-term endometrial safety data beyond the 12 weeks studied in REJOICE and that there are likely no approvability issues that would have any implications for TX-001HR.

PRICE ACTION

In pre-market trading on Monday, TherapeuticsMD is down 12%.

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Sevcon Sold for $200 Million

Sevcon signs definitive agreement to be acquired by BorgWarner for $22 per share

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Sevcon (SEV) announced that it has entered into a definitive merger agreement with BorgWarner (BWA) that provides for BorgWarner to acquire all of the outstanding shares of Sevcon’s common stock for $22.00 per share in cash and all of the outstanding shares of Sevcon’s Series A Convertible Preferred Stock for a price per share on an as-converted basis equal to the common stock, together with payment of any accrued and unpaid dividends.

Sevcon, Inc. designs and sells motor controllers under the Sevcon name in the United States, the United Kingdom, France, South Korea, Japan, and China.

The total transaction value, including the assumption of indebtedness, is expected to be approximately $200M at the closing of the transaction.

The transaction price of $22.00 per share represents a 61% premium to the closing sale price of common stock of the Company on Friday, July 14, 2017 and a 64% premium to the 30-day volume weighted average price of common stock of the company.

The Sevcon board has unanimously approved the merger agreement and has recommended approval of the merger by Sevcon’s stockholders.

The transaction is expected to close in the fourth calendar quarter of 2017 and is contingent on the approval of Sevcon’s stockholders, and is subject to the satisfaction or waiver of certain other closing conditions.

The transaction is not subject to a financing condition.

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CBO Delays Health Care Bill Analysis, Stocks to Watch

CBO delays health care bill analysis 

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The Congressional Budget Office had been scheduled to release an analysis Monday on the latest GOP bill, including estimated cost and scope of insurance coverage, but the Senate Budget Committee said the release had been postponed, according to Associated Press.

The committee did not indicate an explanation or when the analysis was expected, the report noted.

The CBO’s announcement comes after Senate Majority Leader Mitch McConnell said he was delaying a highly anticipated Senate vote this coming week on the bill, after Sen. John McCain’s disclosed that he had undergone surgery.  Doctors had advised McCain to recover in Arizona this week.

Publicly traded hospital operators include HCA Holdings (HCA), LifePoint (LPNT), Tenet Healthcare (THC), Community Health (CYH) and Quorum Health (QHC), and health insurance providers include Aetna (AET), Anthem (ANTM), Centene (CNC), Cigna (CI), Humana (HUM), Molina Healthcare (MOH), UnitedHealth (UNH) and WellCare (WCG).

 

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Box Office Report for July 14 Weekend

‘War for the Planet of the Apes’ tops ‘Spider-Man’  

'War for the Planet of the Apes' tops 'Spider-Man' . See Stockwinners.com Market Radar every Friday and Sunday for the Box Office Report

BOX OFFICE BATTLE:

Ahead of Sony’s (SNE) “Spider-Man,” 21st Century Fox’s (FOX) “War for the Planet of the Apes” led the North American box office, coming in on the low end of expectations with $56.5M from a little over four thousand locations.

OVERSEAS SALES

Overseas, the latest film in the rebooted franchise opened in less than a third of the marketplace, grossing $46M from 62 markets for global bow of $102.5M. “War for the Planet of the Apes” holds a critics rating of 95% on Rotten Tomatoes and received an A- in audience polls from #CinemaScore.

BOX OFFICE RUNNERS-UP:

Declining more than expected in its sophomore outing to $45.2M, Sony’s “Spider-Man: Homecoming” came in second place.

Behind it was Comcast’s (CMCSA) “Despicable Me 3” in its third weekend, with $18.9M for a domestic total of $188M. Sony’s “Baby Driver” followed at number 4 with $8.8M for a domestic total of $73.1M.

Rounding out the top five, “The Big Stick” ended the week with $7.6M from 2,597 cinemas. Amazon (AMZN) Studios acquired the critical hit out of #Sundance before partnering with Lionsgate (LGF.A) on the theatrical release.

Other publicly traded companies in filmmaking include Disney (DIS), Time Warner (TWX) and Viacom (VIAB; VIA).

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