Biotech stocks to watch in January

Ten biotech names to watch in January 

Biogen says BAN2401 did not meet primary endpoint. Stockwinners.com

In a research note to investors, Jefferies analyst Michael #Yee identified what he sees as ten potential disclosures or announcements that could come in the next two weeks to start 2018.

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Among the names that may see stock-moving events as the new year begins are Celgene (CELG), Biogen (BIIB) and Vertex (VRTX).

TURNING THE PAGE TO 2018

Jefferies’ Yee told investors that “turning the page to 2018 and into a January conference,” he is modestly optimistic that large-cap biotech picks up a bit given the recent pullback, tax reform and low investor expectations.

He reiterated that the big biotech names are working toward a much bigger 2018 product cycle and late-stage data read out period.

Celgene tumbles

Thinking outside of the box, the analyst pointed out that the key upside “wild-card” is whether “big consolidation” actually occurs in the large caps based on pharmaceutical companies buying pharma or “big biotech” companies.

STOCK-MOVING ANNOUNCEMENTS

Other than surprise M&A deals that could swing sentiment in biotech, Jefferies’ Yee sees the potential for at least ten stock-moving announcements within his coverage going into a major industry conference in two weeks.

The analyst told investors that #Celgene is likely to pre-announce results for its fourth quarter and provide new 2018 guidance, though investors should assume that outlook could be conservative.

#Biogen could also disclose color around Spinraza patient numbers and update on aducanumab Alzheimer’s enrollment, he contended.

Yee argued that #Vertex could pre-announce on its fourth quarter but may not provide 2018 Cystic Fibrosis guidance until its ‘661 combo is approved in February. The company could also disclose Phase 3 triple plans and update on Phase 2 data.

Regarding #Alnylam Pharmaceuticals (ALNY), the analyst highlighted the company may discuss the path forward for ALN-TTRsc02, update on the ALN-GO1 phase 1 program, or announce a new program in the near-term.

#AveXis (AVXS) may provide FDA meeting updates and next steps post recent regulatory discussions; Intercept Pharmaceuticals (ICPT) may pre-announce fourth quarter Ocaliva sales or announced the initiation of a Phase 3 cirrhosis study, or give color on upcoming FDA label change; and Assembly Biosciences (ASMB) could announce Phase 1b HBV data on viral knockdown, he contended.

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Lastly, Yee pointed out that Axovant Sciences (AXON) may report Phase 2B data for intepiridine in dementia with Lewy bodies and nelotansersin in visual hallucinations, while Acorda Therapeutics (ACOR) is likely to pre-announce 2017 Ampyra net sales and provide 2018 financial guidance, and FibroGen (FGEN) could disclose HRCT imaging IPF data or Phase 2 pancreatic cancer data for pamrevlumab.


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JC Penney’s woes continue

J.C. Penney plunges after slashing 2017 earnings view

JC Penney's woes continue. See Stockwinners.com for details

Shares of J.C. Penney (JCP) are down 21%, a new multi-year low, after the retailer slashed its forecast for fiscal 2017 as it accelerated actions to liquidate inventory and overhauled its women’s apparel department. Following the implementation of the “reset,” the retailer said it has already seen an improvement in performance.

THIRD QUARTER UPDATE

J.C. Penney said it expected to report an adjusted loss per share of (45c)-(40c) for the current quarter, well below the current analysts’ consensus of a loss of (18c), and comparable store sales up 0.6%-0.8%.

Cost of goods sold for the quarter are expected to increase 300 to 320 basis points compared to the same period last year, impacted primarily by a greater sales penetration in major appliances and e-commerce and the decision to accelerate the liquidation of inventory.

Chairman and Chief Executive Officer Marvin Ellison stated that “based on the encouraging results from a third quarter reset in women’s apparel, which expanded our casual and contemporary offering, we made the strategic decision to accelerate a wider transformation of the entire women’s department by clearing slow-moving inventory primarily in women’s and other apparel categories.”

He noted that “following this comprehensive reset, we saw an improvement in performance, particularly in our women’s division.”

The retailer also said that Jeffrey Davis, its new Chief Financial Officer, will oversee the company’s pricing and planning policies to improve its predictive analytics capabilities and get a better view of current sales trends.

The retailer said the inventory liquidation favorably impacted sales during September and October, and that “although these actions will create a short-term negative impact to cost of goods sold and earnings, long term, we firmly believe it was the right decision for the company as we transition into the fourth quarter and fiscal 2018.”

J.C. Penney will report third quarter results on November 10.

SLASHED FISCAL 2017 OUTLOOK

However, the “improvement” Ellison noted following the reset was not enough for the retailer to maintain its forecast, and J.C. Penney significantly cut its fiscal 2017 adjusted EPS view to 2c-8c from 40c-65c and comp sales down 1% to flat vs. its prior view of down 1% to up 1%.

Prior to the report, analysts expected J.C. Penney would report FY17 EPS of 43c. Cost of goods sold for the year are now seen up 100-200 basis points vs. 2016 and free cash flow is now seen at $200M-$300M.

WHAT’S NOTABLE

Retailers tend to clear out leftover inventory ahead of the critical holiday season to stock up on fresh merchandise. J.C. Penney and other mall-based retailers and department stores have been hurt by the increasing popularity of fast-fashion retailers like Zara, Forever 21, and H&M, as well as an increase in online shopping on sites such as Amazon (AMZN).


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Changes to S&P 100 and 500 Indices

S&P announces changes to S&P 100, 500 indices

Stocks to buy, stocks to watch, upgrades, downgrades, earningsS&P Dow Jones Indices will make the following changes to the S&P 100 and S&P 500 indices:

Quintiles IMS Holdings (Q) will replace Whole Foods Market (WFM) in the S&P 500 effective prior to the open on Tuesday, August 29.

S&P 100 & 500 constituent Amazon.com (AMZN) is acquiring Whole Foods Market in a deal expected to be completed on Monday, August 28.

S&P 500 constituent Charter Communications (CHTR) will replace E. I. du Pont de Nemours and Co. (DD) in the S&P 100, and SBA Communications (SBAC) will replace E. I. du Pont de Nemours in the S&P 500 effective prior to the open on Friday, September 1.

S&P 100 & 500 constituent The Dow Chemical Company (DOW) is acquiring du Pont in a deal expected to be completed after the close on Thursday, August 31.

Post-merger, the combined company, which will change its name to DowDuPont and trade under the ticker “DWDP“, will remain in the S&P 100 & S&P 500.

S&P 100 INDEX

The S&P 100 Index is a stock market index of United States stocks maintained by Standard & Poor’s.

Index options on the S&P 100 are traded with the ticker symbol “OEX”. Because of the popularity of these options, investors often refer to the index by its ticker symbol.

The S&P 100, a subset of the S&P 500, includes 102 (because two of its component companies have 2 classes of stock) leading U.S. stocks with exchange-listed options.

Constituents of the S&P 100 are selected for sector balance and represent about 63% of the market capitalization of the S&P 500 and almost 51% of the market capitalization of the U.S. equity markets as of January 2017.

The stocks in the S&P 100 tend to be the largest and most established companies in the S&P 500.

S&P 500 INDEX

The Standard & Poor’s 500, often abbreviated as the S&P 500, or just “the S&P” is an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ.

The S&P 500 index components and their weightings are determined by S&P Dow Jones Indices. It differs from other U.S. stock market indices, such as the Dow Jones Industrial Average or the Nasdaq Composite index, because of its diverse constituency and weighting methodology.

It is one of the most commonly followed equity indices, and many consider it one of the best representations of the U.S. stock market, and a bellwether for the U.S. economy.


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Siris Capital Offers $18 a Share for Synchronoss

Synchronoss surges after Siris Capital offers to Acquire Company for $18/share

SNCR receives a $18 per share offer. See Stockwinners.com Market Radar

Shares of Synchronoss have jumped after the company disclosed in a regulatory filing that Siris Capital Group delivered a letter to the company indicating that they believe they could be in a position to acquire the company in an all-cash acquisition at $18.00 per share of common stock, subject to completion of customary due diligence, including a review of outstanding shareholder litigation and the company’s financial statements, as well as the negotiation and execution of a transaction agreement acceptable to the company and Siris.

Synchronoss Technologies, Inc. provides cloud solutions and software-based activation for connected devices worldwide.

Siris, which holds a roughly 13% stake in Synchronoss, stated in its letter:

“We believe that we would be able to complete due diligence, obtain satisfactory financing commitments, and negotiate and sign a definitive agreement within six weeks from the date on which Synchronoss provides a fully-populated data room. We have engaged legal counsel and are prepared to engage financial and accounting advisors to assist us in this potential transaction. In order to commit the time and resources necessary to proceed on this expedited timeframe, we would request a limited period of exclusivity.”

Synchronoss shares have been heavily shorted and are getting a ‘short-squeeze’ today. As of May 31, a total of 7,678,091 shares have been shorted giving the stock a 4.8 days to cover. SNCR has a 52-week trading range of $10.11 to $49.94. SNCR last traded at $16.39, up 34% on the day!

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Glencore Raises Offer for Rio Tinto’s Coal & Allied

Glencore raises offer for Rio Tinto’s Coal & Allied to $2.675B plus royalties

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Glencore (GLNCY) announced that it has submitted an improved irrevocable binding offer to acquire Rio Tinto’s (RIO) 100% interest in Coal & Allied Industries Limited for $2.675B cash plus a coal price linked royalty.

All cash is payable in full immediately upon completion. Glencore’s offer is at least $225M greater than Yancoal’s proposal, the company stated.

The Glencore offer remains conditional only on approval from China, Korea, Taiwan and Australia. Japanese regulatory approval to acquire C&A has already been obtained. “Demonstrating our confidence in securing all approvals, Glencore’s Offer is supported by a $225M deposit which will be forfeited if the transaction does not complete as a result of a failure to obtain a regulatory approval.

Glencore believes that it will obtain all regulatory approvals in a timely manner and that its offer fully compensates Rio Tinto for any potential delays beyond Yancoal’s expected completion date as announced by Rio Tinto,” the company said.

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FDA Grants Thermo Fisher Pre-Market Approval for Oncomine Test

Thermo Fisher says FDA grants premarket approval for Oncomine Dx Target Test that simultaneously screens tumor samples for three FDA-approved therapies for non-small cell lung cancer

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Thermo Fisher ( $TMO ) announced that the FDA has granted premarket approval for its #Oncomine Dx Target Test, which the company called the first next-generation sequencing-based test that simultaneously screens tumor samples for biomarkers associated with three FDA-approved therapies for non-small cell lung cancer.

LabCorp’s ( $LH ) Diagnostics and Covance Businesses, NeoGenomics (NEO) Laboratories, and Cancer Genetics (CGIX) are among the first laboratories that will offer the Oncomine Dx Target Test as a service to oncologists, Thermo Fisher said.

All tests will be run on Thermo Fisher’s Ion PGM Dx System, which received FDA 510k clearance in parallel for use on formalin-fixed, paraffin-embedded tissue samples.

Thermo Fisher developed the Oncomine Dx Target Test in collaboration with Novartis (NVS) and Pfizer (PFE).

“This first iteration of the test is just the beginning since the diagnostic claims of the Oncomine Dx Target Test may be expanded in the future based on the existing panel.

Thermo Fisher has entered into discussions with several pharmaceutical companies looking to use the panel for FDA-approved targeted therapy applications beyond lung cancer,” the company noted.

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AMD EPYC’s Gain, Intel’s Loss

AMD processors seen as threat to Intel in the data center

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The shares of Advanced Micro Devices (AMD) are climbing after the company announced the launch of its EPYC series data center processors.

Analysts were upbeat on the processors, as research firms Canaccord and Craig-Hallum raised their price targets on AMD and Bank of America Merrill Lynch said the processors could create a positive “turning point” for the company.

Meanwhile, Merrill Lynch downgraded Intel (INTC) to Neutral from Buy, citing increased competition from AMD and Nvidia (NVDA).

AMD TARGETS HIKED 

Craig-Hallum analyst Christian #Schwab raised his price target on AMD to $17 from $16, stating that the company’s list of customers and partners, which includes Microsoft (MSFT), Baidu (BIDU) and Dell, is “strong.”

AMD emphasized that #EPYC offers better performance and lower prices than competing chips from Intel, according to Schwab, who said he’s more confident in AMD’s data center business following the product launch. He reiterated a Buy rating on the stock.

Meanwhile, Canaccord’s David Evanson said AMD has “built the foundation to re-emerge as a solid competitor in the enterprise, cloud and storage tiers of the server market. Evanson, who raised his price target on AMD shares to $20 from $17, said the “unique” combination of CPU and GPU technologies embodied in AMD’s processors add value to customers’ deep learning and AI endeavors. He kept a Buy rating on the shares.

TURNING POINT

BofA analyst Vivek Arya says that EPYC could be a “turning point” for the company’s data center business, as the product appears to provide “significantly better price per performance” compared to competing products from Intel. It seems that the product will enable AMD to gain market share in the server market, added Arya, who kept a $16.50 price target and a Buy rating on AMD. Increased competition from AMD in servers and market share gains by Nvidia in accelerators and artificial intelligence could limit Intel’s ability to raise prices in the future as it has done historically, wrote Arya, who downgraded Intel to Neutral from Buy.

Over the last five years, about a third of Intel’s revenue growth from data center companies has been derived from price increases, Arya noted.

Meanwhile, Intel has had to raise its operating spending to cater to large cloud customers and has been forced to increase its investments in memory products, according to the analyst, who trimmed his price target on Intel to $38 from $42.

PRICE ACTION

In Wednesday trading, AMD rose nearly 8% to $13.63 while Intel fell 1.5% to $34.33.

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Amazon to acquire Whole Foods for $42 per share

Amazon will acquire Whole Foods Market for $13.7 billion in cash

John Mackey will remain as CEO of Whole Foods Market

Amazon to buy Whole Foods

Amazon (AMZN) and Whole Foods Market (WFM) announced that they have entered into a definitive merger agreement under which Amazon will acquire Whole Foods Market for $42 per share in an all-cash transaction valued at approximately $13.7B, including Whole Foods Market’s net debt.

Whole Foods Market will continue to operate stores under the Whole Foods Market brand and source from trusted vendors and partners around the world.

John Mackey will remain as CEO of Whole Foods Market and Whole Foods Market’s headquarters will stay in Austin, Texas.

Completion of the transaction is subject to approval by Whole Foods Market’s shareholders, regulatory approvals and other customary closing conditions.

The parties expect to close the transaction during the second half of 2017.

Amazon (AMZN) said Whole Foods (WFM) “will be obligated to pay a fee equal to $400M if the Merger Agreement is terminated (i) by the company because the Whole Foods Market board of directors has changed its recommendation of the Merger prior to the Whole Foods Market shareholder approval having been obtained, or (ii) by Whole Foods Market if, prior to the time the Whole Foods Market shareholder approval is obtained, Whole Foods Market enters into an Alternative Acquisition Agreement that provides for a Superior Proposal.

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Weight Watchers Higher on Insider Buy

Weight Watchers said in a regulatory filing that its general counsel purchased 7,110 shares in the company

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Weight Watchers (WTW) shares are getting a boost following a filing by the company’s general counsel showing he purchased shares in the weight loss company.

SHARE PURCHASE

Weight Watchers said in a regulatory filing on Thursday afternoon that general counsel Michael Colosi purchased 7,110 shares in the company.

RECENT COMPANY NEWS

In May, the Oprah Winfrey-backed diet company posted a surprise profit for the first quarter and reported revenue that also beat analysts’ expectations.

The company also said it ended the quarter with 3.6M subscribers, up 16% from a year ago. The gains prompted the company to raise its earnings per share view for fiscal year 2017.

Weight Watchers has been on a turnaround track since Winfrey took a stake in the company and agreed to become a company spokesperson in October 2015.

In addition to “the Oprah Effect,” CFO Nick Hotchkin said the company is retaining customers through technology investments and an improved weight loss program.

New CEO

Weight Watchers announced in late April that Mindy Grossman, CEO of HSN, Inc (HSNI), would join the company as president and CEO in July. The company had been seeking a replacement for Jim Chambers, who resigned in September 2016.

Weight Watchers recently announced results from a two-year study published in The Lancet which found that adults with obesity referred to Weight Watchers for one year lost significantly more weight and were able to keep it off for longer “compared to those who either received brief advice and self-help materials, or were referred to a 12-week Weight Watchers program.” Those on both the 12- and 52-week Weight Watchers program also had greater blood sugar control and greater reductions in body fat than those on the brief intervention program.

PRICE ACTION:

Weight Watchers closed on Thursday up 6.3% at $28.80, just off the 52-week high of $28.95 hit during the session.

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Trump plans executive order on drug prices

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The Trump administration is preparing an executive order regarding U.S. drug costs, which may express support for value-based agreements via which drug companies and health insurers make arrangements to pay for products depending on how well they work, Bloomberg reported yesterday afternoon, citing people familiar with the matter.

A first executive order on drug prices may come out soon, followed by a second, more extensive one later, sources told the news service.

Top health and budget officials in the administration will meet today to discuss the issue, according to the people, who asked not to be identified because the session is private. Trump sought recommendations from the nation’s health agencies on reducing medication costs, Health and Human Services Secretary Tom Price told senators last week.

Unlike other advanced economies, the U.S. doesn’t directly regulate medicine prices. The pricing system is opaque, with list prices set by drugmakers and rebates negotiated in private with intermediaries like PBMs.

The industry wants the government to modify the law so that companies can reach more value-based payment agreements, whereby reimbursements are based on a drug’s results. Swiss pharma giant Novartis AG has such a “pay-for-performance” plan in place for heart failure treatment #Entresto, in which insurers pay more if the drug keeps patients out of the hospital and lowers associated costs.

Another idea discussed by the industry would allow insurers to pay by increments for very expensive drugs that essentially cure diseases.

The president has threatened on several occasions to force drugmakers to bid for government business as a way to reduce prices. He’s also talked about letting consumers import drugs from other countries with lower prices. Neither of those policies, which would likely require a change in law to be implemented in a meaningful way, are in drafts of the orders, according to one person familiar with the effort.

Publicly traded large-cap drugmakers include AstraZeneca (AZN), Bristol-Myers (BMY), Eli Lilly (LLY), GlaxoSmithKline (GSK), Johnson & Johnson (JNJ), Merck (MRK), Novartis (NVS), Pfizer (PFE), Roche (RHHBY) and Sanofi (SNY).

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BabyRuth is For Sale!

Nestle to explore strategic options for its US confectionery business

Brands for sale include Butterfinger, BabyRuth, 100Grand, SkinnyCow, Raisinets, Chunky, OhHenry! and LaffyTaffy

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Nestle (NSRGY) to explore strategic options for its US confectionery business, including a potential sale.

The review covers the US market only and is expected to be completed by the end of this year. Nestle’s US confectionery business had sales of around CHF 900M in 2016.

It primarily includes popular local chocolate brands such as #Butterfinger, #BabyRuth, 100Grand, SkinnyCow, Raisinets, Chunky, OhHenry! and SnoCaps, as well as local sugar brands such as SweeTarts, #LaffyTaffy, Nerds, FunDip, PixyStix, Gobstopper, BottleCaps, Spree and Runts.

It also comprises the international chocolate brand #Crunch.

The strategic review does not cover Nestle’s Toll House baking products, a strategic growth brand which the company will continue to develop in the US market.

Nestle remains fully committed to growing its leading international confectionery activities around the world, particularly its global brand #KitKat.

Nestle’s global confectionery sales amounted to CHF 8.8B in 2016.

Potential buyers include Hershey’s (HSY), Carlisle Group Kraft-Heinz (KHC), and Warren Buffett’s Berkshire Hathaway (BRK-B).

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Adamis Shares Jump on FDA approval of its EpiPen equivalent

FDA grants Adamis Pharma. approval for generic version of Epi Pen

Mylan shares are down on the news

 

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Adamis Pharmaceuticals (ADMP) announced that the U.S. Food and Drug Administration has approved Adamis’ Epinephrin Injenction, USP, 1:1000 for the emergency treatment of allergic reactions including anaphylaxis.

The FDA has also approved the PFS trade name of #Symjepi. Symjepi provides two single dose syringes of epinephrine, which is considered the drug of choice for immediate administration in acute anaphylactic reactions to insect stings or bites, allergic reaction to foods, drugs and other allergens, as well as idiopathic or exercise-induced anaphylaxis.

Dr. Dennis J. Carlo, President and CEO of Adamis, stated, “We are very excited by this approval, and at the same time, are already preparing to submit our second NDA to the FDA.  This second submission is for the junior version of Symjepi. We are committed to helping patients by providing them with additional therapeutic choices.  With an anticipated lower cost, small size and user-friendly design, we believe Symjepi could be an attractive option for a significant portion of both the retail and non-retail (professional) sectors of the epinephrine market. We are currently in the process of exploring all of our commercialization options and in discussions with potential partners in order to facilitate broad patient access to this new epinephrine treatment option and to maximize the value of our important asset. In the interim, we expect to build inventory levels in preparation for an anticipated launch in the second half of this year.”

Mylan (MYL) shares are down 3% to $36.75. ADMP shares are up 30% to $5.00

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