Rig Counts Rise Again!

Baker Hughes reports U.S. rig count up 10 to 543 rigs

Baker Hughes (BKR) reports that the U.S. rig count is up 10 from last week to 543 with oil rigs up 12 to 445, gas rigs down 1 to 98, and miscellaneous rigs down 1 to 0.

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The U.S. Rig Count is up 261 rigs from last year’s count of 282, with oil rigs up 240 gas rigs up 24 and miscellaneous rigs down 3.

The U.S. Offshore Rig Count is up 1 to 12, down 2 year-over-year.

The international offshore rig count for April 2018 was 194. Stockwinners
The international offshore rig count is up

The Canada Rig Count is up 1 from last week to 168, with oil rigs up 3 to 98, gas rigs down 2 to 70.

The Canada Rig Count is up 88 rigs from last year’s count of 80, with oil rigs up 58, gas rigs up 30.

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

West Texas Intermediate (WTI) is up $0.88 to $82.19 per barrel. Brent crude is up $0.75 to $84.75 per barrel. Gasoline last traded at $2.475 per gallon up 4 cents on the day.

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FDA Approved Vapes are coming!

FDA announces ‘first authorization’ for marketing of e-cigarette products

The U.S. Food and Drug Administration announced it has authorized the marketing of three new tobacco products, which it noted marks “the first set of electronic nicotine delivery system products ever to be authorized by the FDA through the Premarket Tobacco Product Application – PMTA – pathway.”

The FDA issued marketing granted orders to R.J. Reynolds Vapor Company, a subsidiary of British American Tobacco, for its Vuse Solo closed ENDS device and accompanying tobacco-flavored e-liquid pods, specifically, Vuse Solo Power Unit, Vuse Replacement Cartridge Original 4.8% G1, and Vuse Replacement Cartridge Original 4.8% G2.

“As the RJR Vapor Company submitted data to the FDA that demonstrated that marketing of these products is appropriate for the protection of public health, today’s authorization allows these products to be legally sold in the U.S.,” the FDA stated.

Solar Powered Vuse

Today, the FDA also issued 10 marketing denial orders for flavored ENDS products submitted under the Vuse Solo brand by RJR.

“Due to potential confidential commercial information issues, the FDA is not publicly disclosing the specific flavored products. These products subject to an MDO for a premarket application may not be introduced or delivered for introduction into interstate commerce. Should any of them already be on the market, they must be removed from the market or risk enforcement. Retailers should contact RJR with any questions about products in their inventory.

The agency is still evaluating the company’s application for menthol-flavored products under the Vuse Solo brand,” the FDA stated.

“Today’s authorizations are an important step toward ensuring all new tobacco products undergo the FDA’s robust, scientific premarket evaluation. The manufacturer’s data demonstrates its tobacco-flavored products could benefit addicted adult smokers who switch to these products – either completely or with a significant reduction in cigarette consumption – by reducing their exposure to harmful chemicals. We must remain vigilant with this authorization and we will monitor the marketing of the products, including whether the company fails to comply with any regulatory requirements or if credible evidence emerges of significant use by individuals who did not previously use a tobacco product, including youth. We will take action as appropriate, including withdrawing the authorization,” said Mitch Zeller, J.D., director of the FDA’s Center for Tobacco Products.

Mitch Zeller, J.D., director of the FDA’s Center for Tobacco Products

Shares to watch: BTI, MO, PM.

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Exxon gets into plastic recycling!

 Exxon Mobil announces plans to build plastic waste recycling facility

Exxon Mobil (XOM) plans to build its first, large-scale plastic waste advanced recycling facility in Baytown, Texas, and is expected to start operations by year-end 2022.

A smaller, temporary facility, is already operational and producing commercial volumes of certified circular polymers that will be marketed by the end of this year to meet growing demand.

The new facility follows validation of Exxon Mobil’s initial trial of its proprietary process for converting plastic waste into raw materials.

“We’ve proven our proprietary advanced recycling technology in Baytown, and we’re scaling up operations to supply certified circular polymers by year-end,” said Karen McKee, president of ExxonMobil Chemical Company. “Availability of reliable advanced recycling capacity will play an important role in helping address plastic waste in the environment, and we are evaluating wide-scale deployment in other locations around the world.”

To date, the trial has successfully recycled more than 1,000 metric tons of plastic waste, the equivalent of 200M grocery bags, and has demonstrated the capability of processing 50 metric tons per day.

Upon completion of the large-scale facility, the operation in Baytown will be among North America’s largest plastic waste recycling facilities and will have an initial planned capacity to recycle 30,000 metric tons of plastic waste per year.

Operational capacity could be expanded quickly if effective policy and regulations that recognize the lifecycle benefits of advanced recycling are implemented for residential and industrial plastic waste collection and sorting systems.

ExxonMobil is developing plans to build approximately 500,000 metric tons of advanced recycling capacity globally over the next five years.

In Europe, the company is collaborating with Plastic Energy on an advanced recycling plant in Notre Dame de Gravenchon, France, which is expected to process 25,000 metric tons of plastic waste per year when it starts up in 2023, with the potential for further expansion to 33,000 metric tons of annual capacity.

The company is also assessing sites in the Netherlands, the U.S. Gulf Coast, Canada, and Singapore.

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When It rains, It pours!

Workhorse Group suspends deliveries of C-1000 vehicles, recalls 41 that it had delivered

Workhorse Group Inc. (WKHS) shares plunged on Wednesday to their lowest in fifteen months after the beleaguered electric-vehicle maker said it will suspend deliveries of its vans and recall units it has already delivered.

Workhorse Group (WKHS) provided an update to its ongoing review of the Company’s business and go-forward operating and commercial plans to transition from an advanced technology start-up to an efficient manufacturing company.

The electric van, called the C-1000, would require additional testing and modifications to existing vehicles in order to certify them under federal motor vehicle safety standards, the company said in a statement.

The Company stopped delivery of its C-1000

The Company has identified a number of enhancements in the production process and design of the C-1000 to address customer feedback, primarily related to vehicle dynamics to increase the vehicles’ payload capacity.

As Workhorse has identified these enhancements and continued its review and redesign of the C-1000, the Company has decided to suspend deliveries of C-1000 vehicles and recall 41 vehicles it has already delivered.

As part of these efforts, the new leadership team has determined that additional testing and modifications to existing vehicles are required to certify the C-1000 vehicles under Federal Motor Vehicle Safety Standard.

The Company expects to complete testing in the fourth quarter of 2021.

Workhorse intends to provide an update on its operating and commercial plans on its upcoming third quarter 2021 earnings call.

The Company has filed a report with the National Highway Traffic Safety Administration regarding the need for additional testing and vehicle modifications to certify its C-1000 vehicles under FMVSS, and intends to fully coordinate with NHTSA.

The Company has not received any customer reports of safety issues related to this matter in any of the C-1000 vehicles previously delivered by Workhorse.

Additional details will be available in the Company’s filing with NHTSA.

Accordingly, the Company’s previous statements related to the C-1000’s compliance with NHTSA standards cannot be relied upon and the Company has so notified the Securities and Exchange Commission.

#Cowen analyst Jeffrey #Osborne lowered his price target on the company to $7.50 from $8.50, and also reduced his estimates for 2021 and 2022 after the announcement, saying a “turnaround appears more challenging.” The analyst also expects working capital to likely be challenged due to prepayments for batteries and other critical materials.

According to some reports, the company is being investigated by the U.S. Securities and Exchange Commission, as well as disappointment related to losing out on a U.S. Postal Service contract that many had expected Workhorse to win.

WKHS closed at $7.41. Shares have a 52-week high of $42.96.

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Rig Counts Continue to Rise!

Baker Hughes reports U.S. rig count up 6 to 503 rigs

Baker Hughes (BKR) reports that the U.S. rig count is up 6 from last week to 503 with oil rigs up 7 to 401, gas rigs down 1 to 101, and miscellaneous rigs unchanged at 1.

Oil Rigs, See Stockwinners.com Market Radar to read the latest on oil and rig count
Oil Rigs, See Stockwinners.com Market Radar to read the latest on oil and rig count

The U.S. Rig Count is up 249 rigs from last year’s count of 254, with oil rigs up 221 gas rigs up 30 and miscellaneous rigs down 2 to 1.

The international offshore rig count for April 2018 was 194. Stockwinners

The U.S. Offshore Rig Count is up 4 to 6, down 9 year-over-year.

The Canada Rig Count is down 9 from last week to 143, with oil rigs down 5 to 87, gas rigs down 4 to 56.

The Canada Rig Count is up 91 rigs from last year’s count of 52, with oil rigs up 68, gas rigs up 23.

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

West Texas Intermediate (WTI) is up $1.61 to $69.75 per barrel. Brent crude is up $1.51 to $72.96 per barrel. Gasoline last traded at $2.15 per gallon up 5.3 cents on the day.

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Spectrum Brands shares soar on sale of it’s division

Spectrum Brands agrees to sell Hardware & Home Improvement segment for $4.3B

Spectrum Brands Holdings (SPB) announced it has entered into a definitive agreement to sell its HHI segment to ASSA ABLOY (ASAZY) for $4.3B in cash, which it said represents over 14 times HHI’s expected FY21 Adjusted EBITDA.

Upon closing of the transaction, Spectrum Brands expects to receive approximately $3.5B in net proceeds, subject to final tax calculations and purchase price adjustments.

Spectrum Brands expects to use the proceeds from this transaction to repay debt and reduce its gross leverage ratio to approximately 2.5x times in the near term.

Excess proceeds are expected to be allocated to invest for organic growth, fund complementary acquisitions and return capital to shareholders.

The company expects to maintain its quarterly cash dividend of 42c per common share, which will be subject to the company’s continued review from time to time.

The sale of HHI is expected to close following the receipt of certain regulatory approvals and customary closing conditions.

The results of operations of HHI will be reported as discontinued operations beginning in the fourth quarter of 2021. David Maura, CEO of Spectrum Brands, said, “I am exceedingly proud of the fact that our Hardware & Home Improvement business nearly doubled its EBITDA under Spectrum Brands’ ownership.

I am pleased to know that HHI has found a new home with a great partner, and I am confident that ASSA ABLOY will take it to its highest potential, bringing great value and innovation to consumers for generations to come.

We believe this transaction demonstrates the tremendous value of Spectrum Brands as an owner and steward of our businesses and places the Company in a strong position for the future by allowing us to further reduce our leverage levels, and enhance our capital allocation strategy.

Our remaining business will be more focused, allowing us to prioritize innovation to accelerate organic growth and pursue synergistic acquisitions to further drive value creation in Global Pet Care and Home & Garden, while continuing to look for strategic and organic ways to enhance the value of Home and Personal Care.

After the closing, we will become a more pure play consumer staples company with higher growth rates and strong margins.”

The company added: “Spectrum Brands will be a simplified business consisting of three focused business units with leading market share, strong growth opportunities and consistent performance.

The pro forma business generated $3.0B in net sales and $386 million in Adjusted EBITDA representing a 13.0% margin for the LTM period ended July 4, 2021.

Spectrum Brands will report its fourth quarter 2021 results in mid-November and expects to provide Fiscal 2022 Earnings Framework at that time.”

ASSA ABLOY AB is a Swedish company that provides door opening products, solutions, and services for the institutional, commercial, and residential markets in Europe, the Middle East, Africa, North and South America, Asia, and Oceania.  In addition, the company offers entrance automation products, services, and components, such as automatic swing, sliding, and revolving doors; industrial doors; garage doors; high-performance doors; docking solutions; hangar doors; gate automation products; components for overhead sectional doors and sensors; and high security fencings and gates. The company provides its products primarily under the ASSA ABLOY, Yale, and HID brands.

Spectrum’s Hardware & Home Improvement segment offers hardware products under the National Hardware and FANAL brands; locksets and door hardware under the Kwikset, Weiser, Baldwin, EZSET, and Tell Manufacturing brands; and plumbing products under the Pfister brand. Its Home and Personal Care segment provides home appliances under the Black & Decker, Russell Hobbs, George Foreman, Toastmaster, Juiceman, Farberware, and Breadman brands; and personal care products under the Remington and LumaBella brands.

The company’s Global Pet Care segment provides rawhide chewing, dog and cat clean-up and food, training, health and grooming, small animal food and care, and rawhide-free products under the 8IN1 (8-in-1), Dingo, Nature’s Miracle, Wild Harvest, Littermaid, Jungle, Excel, FURminator, IAMS, Eukanuba, Healthy-Hide, DreamBone, SmartBones, ProSense, Perfect Coat, eCOTRITION, Birdola, and Digest-eeze brands.

ASAZY is down 38 cents to $15.53 per share while SPB is up $15 to $94.

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Rig Counts Rise!

Baker Hughes reports U.S. rig count up 3 to 491 rigs

Baker Hughes (BKR) reports that the U.S. rig count is up 3 from last week to 491 with oil rigs up 2 to 387, gas rigs unchanged at 103, and miscellaneous rigs up 1 to 1.

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The U.S. Rig Count is up 244 rigs from last year’s count of 247, with oil rigs up 211 gas rigs up 34 and miscellaneous rigs down 1.

The U.S. Offshore Rig Count is unchanged at 14, up 2 year-over-year.

The Canada Rig Count is up 3 from last week to 156, with oil rigs up 2 to 95, gas rigs up 1 to 60 and miscellaneous unchanged at 1.

The Canada Rig Count is up 109 rigs from last year’s count of 47, with oil rigs up 82, gas rigs up 26 and miscellaneous unchanged 1.

The international offshore rig count for April 2018 was 194. Stockwinners

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

West Texas Intermediate (WTI) is down 54 cents to $68.55 per barrel. Brent crude is down $0.51 to $70.96 per barrel. Gasoline last traded at $2.28 per gallon down 2 cents on the day and down 10 cents for the week.

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Rig Counts Decline!

Baker Hughes reports U.S. rig count down 3 to 488 rigs

Baker Hughes (BKR) reports the U.S. rig count is down 3 from last week to 488, with oil rigs down 2 to 385, gas rigs down 1 to 103, and miscellaneous rigs unchanged at 0.

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Rig Counts Decline- See Stockwinners.com Market Radar to read more

The U.S. rig count is up 237 rigs from last year’s count of 251, with oil rigs up 205 gas rigs up 34 and miscellaneous rigs down 2.

The U.S. offshore rig count is down 3 to 14, up 2 year-over-year.

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

West Texas Intermediate (WTI) is up 54 cents to $74.17 per barrel. Brent crude is up $0.51 to $75.61 per barrel. Gasoline last traded at $2.34 per gallon up 2 cents on the day.

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U.S. opposition leads to cancelation of merger

Aon plc, Willis Towers Watson mutually agree to terminate combination pact

Aon plc (AON) and Willis Towers Watson (WLTW) announced that the firms have agreed to terminate their business combination agreement and end litigation with the U.S. Department of Justice.

The proposed combination was first announced on March 9, 2020.

“Despite regulatory momentum around the world, including the recent approval of our combination by the European Commission, we reached an impasse with the U.S. Department of Justice,” said Aon CEO Greg Case.

“The DOJ position overlooks that our complementary businesses operate across broad, competitive areas of the economy. We are confident that the combination would have accelerated our shared ability to innovate on behalf of clients, but the inability to secure an expedited resolution of the litigation brought us to this point.”

In connection with the termination of the business combination agreement, Aon will pay the $1B termination fee to Willis Towers Watson, Willis Towers Watson’s proposed scheme of arrangement has now lapsed, and both organizations will move forward independently.

Aon CEO Greg Case gives up on the merger, pays $1B breakup fee

Both firms will provide further financial updates and outlooks on their respective Q2 2021 earnings calls, which take place on July 30 for Aon and August 3 for Willis Towers Watson.

Aon plc, a professional services firm, provides advice and solutions to clients focused on risk, retirement, and health worldwide. AON is based in Ireland.

Willis Towers Watson Public Limited Company operates as an advisory, broking, and solutions company worldwide. Willis is headquartered in London.

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New York reaches settlement over opioid drugs

NY AG announces $1.1B agreement with big three drug distributors over opioids

New York Attorney General Letitia James announced an agreement with McKesson (MCK), Cardinal Health (CAH), and Amerisource Bergen (ABC) – three of the nation’s largest drug distributors – that will deliver up to $1.1B to New York state to combat the ongoing opioid epidemic.

“The $1.1B agreement is the largest monetary settlement ever negotiated by Attorney General James. The agreement resolves claims made by Attorney General James for the three companies’ role in helping to fuel the opioid epidemic and will remove the three distributors from New York’s ongoing opioid trial, currently underway in Suffolk County State Supreme Court…

Additionally, late last month, Attorney General James announced an agreement with Johnson & Johnson (JNJ) that removed the company from New York’s opioid trial in exchange for up to $230M for the state’s opioid prevention and treatment efforts, as well as it ending the sale of opioids nationwide.

The trial against the three remaining defendants – Endo Health Solutions (ENDP), Teva Pharmaceuticals USA (TEVA), and Allergan Finance (ABBV) – is currently underway and will continue in state court,” the AG stated.

As part of today’s agreement, McKesson, Cardinal Health, and Amerisource Bergen will pay New York state a total of up to $1,179,251,066.68, of which more than $1 billion will go towards abatement.

Payments will start in just two months and will continue over the course of the next 17 years, the AG said.

Opioids are a class of drugs that include the illegal drug heroin, synthetic opioids such as fentanyl, and pain relievers available legally by prescription, such as oxycodone (OxyContin®), hydrocodone (Vicodin®), codeine, morphine, and many others. 

Fentanyl and similar compounds like carfentanil are powerful synthetic opioids — 50 to 100 times more potent than morphine. High doses of opioids, especially potent opioids such as fentanyl, can cause breathing to stop completely, which can lead to death.

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Railroad Traffic Points to Growing Economy

North American rail traffic rose 10.6% in week ended June 19, AAR says

The Association of American Railroads, AAR, reported U.S. rail traffic for the week ending June 19.

For this week, total U.S. weekly rail traffic was 514,112 carloads and intermodal units, up 12.5% compared with the same week last year.

Total carloads for the week ending June 19 were 232,144 carloads, up 15.1% compared with the same week in 2020, while U.S. weekly intermodal volume was 281,968 containers and trailers, up 10.4% compared to 2020.

For some rail traffic categories, percentage changes for the current week compared with the same week in 2020 are inflated because of the widespread shutdowns – and subsequent large reduction in rail volumes – that impacted many economic sectors last year at this time.

North American rail volume for the week ending June 19, on 12 reporting U.S., Canadian and Mexican railroads totaled 329,907 carloads, up 11.3% compared with the same week last year, and 369,258 intermodal units, up 10% compared with last year.

Total combined weekly rail traffic in North America was 699,165 carloads and intermodal units, up 10.6%.

North American rail volume for the first 24 weeks of 2021 was 16,805,420 carloads and intermodal units, up 12.1% compared with 2020.

Publicly traded companies in the space include CSX (CSX), Canadian National (CNI), Canadian Pacific (CP), Genesee & Wyoming (GWR), Kansas City Southern (KSU), Norfolk Southern (NSC) and Union Pacific (UNP).

Dow Jones Transport Index is up 19 points to 14,959.

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Merger in Senior Housing Industry!

Welltower to acquire Holiday Retirement’s Seniors Housing Portfolio for $1.58B

Welltower (WELL) announced that it has entered into a definitive agreement to acquire a portfolio of 86 seniors housing properties, including 80 nearly identical independent living and six combination independent living/assisted living properties, currently owned by Holiday Retirement.

Additionally, as announced on June 21, upon the closing date of this transaction, which is expected to be in the third quarter, Atria Senior Living will assume operations of the properties and retain Holiday’s in-place senior management and staff.

Through this landmark transaction, the 86-property portfolio will be acquired by Welltower for $1.58B, or $152,000 per unit, representing a discount to estimated replacement cost in excess of 30%.

The transaction is expected to be approximately 10c per diluted share accretive to Welltower’s normalized funds from operations during the first twelve months post-closing.

The portfolio is expected to deliver substantial net operating income growth in future quarters and in coming years as occupancy growth accelerates from near-trough levels of 76.3% as of June 20.

Portfolio occupancy has already increased over 2.7% since bottoming in March.

Additionally, the anticipated recovery in occupancy and Atria’s operational and technological expertise is expected to maximize community level performance and to generate meaningful expansion in operating margins going forward.

Welltower and Atria have agreed to a highly incentivized and strongly aligned enhanced RIDEA 3.0 management contract based on both top and bottom-line financial metrics. The contract will also include substantial promote opportunities to Atria upon achievement of certain long-term financial metrics.

The achievement of such hurdles would imply significant growth in underlying property level performance, resulting in a nominal yield in excess of 9% to Welltower and a net economic yield in excess of 8% to Welltower after capital expenditures and payment of the promote.

Welltower CEO

Atria expects to integrate Holiday’s corporate staff and retain its experienced and reputed management team, thereby de-risking the overall transaction.

Atria has significant experience with Holiday properties, having successfully assumed operations in recent years of two portfolios previously managed by Holiday: a 29-property portfolio across Canada in 2014 and, in April 2021, a 21-property portfolio owned by New Senior Investment Group Inc.

The portfolio is expected to benefit from Atria’s operating model and technology platform, which includes its proprietary Glennis software for staffing optimization, digital marketing, and CRM.

Atria’s digital marketing capabilities and front of house technology suite are also expected to reduce dependency on referral sources and increase organic lead generation.

Holiday’s management team expects that this significant investment in its platform and technology infrastructure will significantly enhance their ability to serve residents going forward.

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FDA Approves Biogen’s Alzheimer’s Drug

FDA approves Biogen Alzheimer’s drug, says benefits outweigh risks

The FDA approved Biogen’s (BIIB) Aduhelm to treat patients with Alzheimer’s disease.

“This approval is significant in many ways. Aduhelm is the first novel therapy approved for Alzheimer’s disease since 2003.

Perhaps more significantly, Aduhelm is the first treatment directed at the underlying pathophysiology of Alzheimer’s disease, the presence of amyloid beta plaques in the brain.

The clinical trials for Aduhelm were the first to show that a reduction in these plaques – a hallmark finding in the brain of patients with Alzheimer’s – is expected to lead to a reduction in the clinical decline of this devastating form of dementia,” the FDA said in a statement.

Eli Lilly announces Alimta label expanded by FDA, Stockwinners
Eli Lilly is a partner with Biogen

It added, “We ultimately decided to use the Accelerated Approval pathway – a pathway intended to provide earlier access to potentially valuable therapies for patients with serious diseases where there is an unmet need, and where there is an expectation of clinical benefit despite some residual uncertainty regarding that benefit.

Brain of an Alzheimer patient

In determining that the application met the requirements for Accelerated Approval, the Agency concluded that the benefits of Aduhelm for patients with Alzheimer’s disease outweighed the risks of the therapy.”

The FDA said in its approval statement: “Additionally, FDA is requiring Biogen to conduct a post-approval clinical trial to verify the drug’s clinical benefit. If the drug does not work as intended, we can take steps to remove it from the market. But hopefully, we will see further evidence of benefit in the clinical trial and as greater numbers of people receive Aduhelm. As an agency, we will also continue to work to foster drug development for this catastrophic disease.”

STIFEL

Stifel analyst Paul Matteis reiterates his Buy rating on Biogen shares following the FDA granting accelerated approval of aducanumab, now to be called “Aduhelm,” for the treatment of Alzheimer’s disease.

Approval based on amyloid plaque as a “surrogate” is “definitely unexpected” and appears to be a way for FDA to work around the contentious advisory committee meeting, argues Matteis, who adds that the approval “is a big win.” How investors will risk-adjust revenues that are modeled after completion of a Phase 4 trial and how insurers will treat access for a drug approved based on a biomarker are “highly interesting” questions that will now “be debated at a materially higher stock valuation,” added Matteis. Biogen shares remain halted for trading at midday following news of the FDA approval.

JEFFRIES

Jefferies analyst Andrew Tsai said news of Biogen (BIIB) being granted FDA approval for aducanumab is likely to spark investor enthusiasm across all Alzheimer’s names and he believes the longer-term setup for Athira Pharma (ATHA) looks more attractive now. Given what he views as “the FDA tailwind,” he would buy on strength as he believes the FDA’s aducanumab decision “clearly has a positive readthrough” to Athira, whose Phase I data suggests ATHA-1017 could produce “a profound cognitive benefit” in Phase 2/3 studies expected to read out in 2022, Tsai tells investors.

In that context, he thinks a 25%-50% short-term move for Athira shares “seems reasonable” relative to the company’s current market cap.

Shares of Biogen (BIIB) remain halted while Eli Lilly (LLY), who has an Alzheimer’s disease drug in its pipeline, is up 4% to $210.78 following the news.

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Merger in the REIT space

Equity Commonwealth to acquire Monmouth Real Estate for $3.4B

Equity Commonwealth (EQC) and Monmouth Real Estate (MNR) announced that they have entered into a definitive merger agreement by which Equity Commonwealth will acquire Monmouth in an all-stock transaction, valued at approximately $3.4B, including the assumption of debt.

The combined company is expected to have a pro forma equity market capitalization of approximately $5.5B.

Under the terms of the agreement, Monmouth shareholders will receive 0.67 shares of Equity Commonwealth stock for every share of Monmouth stock they own.

Based on the closing price for Equity Commonwealth on May 4, this represents approximately $19.40 per Monmouth share.

The merger agreement provides for Monmouth to declare and pay one additional regular quarterly common stock dividend of 18c per share without Equity Commonwealth paying a corresponding common dividend to its shareholders.

Accordingly, the total consideration to be received by the Monmouth shareholders in the transaction is $19.58 per Monmouth share.

Equity Commonwealth and Monmouth shareholders are expected to own approximately 65% and 35%, respectively, of the pro forma company following the close of the transaction.

Monmouth’s portfolio is comprised of 120 properties totaling 24.5M square feet. In addition, Monmouth has six properties totaling 1.8M square feet under contract and leased to investment grade tenants.

Closings for these acquisitions are expected in 2021 and 2022.

The company will continue to be led by president and CEO David Helfand and the existing senior management team.

Upon closing, the number of trustees on Equity Commonwealth’s board will be expanded to 10, with two individuals designated by Monmouth’s board.

Sam Zell will remain the chairman of the board of trustees.

The transaction is expected to close during the second half of 2021, subject to customary closing conditions, including approval by the common shareholders of both Equity Commonwealth and Monmouth.

Sam Zell to become Chairman of the new company

The board of trustees of Equity Commonwealth and the board of directors of Monmouth Real Estate have each unanimously approved the transaction.

Equity Commonwealth ( EQC) is a Chicago based, internally managed and self-advised real estate investment trust (REIT) with commercial office properties in the United States. EQC’s same property portfolio is comprised of 4 properties and 1.5 million square feet.

Monmouth Real Estate Investment specializes in single tenant, net-leased industrial properties, subject to long-term leases, primarily to investment-grade tenants. Monmouth Real Estate is a fully integrated and self-managed real estate company, whose property portfolio consists of 121 properties, containing a total of approximately 24.5 million rentable square feet, geographically diversified across 31 states. 

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Johnson & Johnson files for FDA approval of it’s Covid-19 Vaccine

 J&J submits FDA application for emergency use authorization for COVID-19 vaccine

Johnson & Johnson (JNJ) announced that Janssen Biotech, Inc., has submitted an application to the U.S. Food and Drug Administration requesting Emergency Use Authorization for its investigational single-dose Janssen COVID-19 vaccine candidate.

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JNJ files for approval of Covid-19 vaccine

The company’s EUA submission is based on topline efficacy and safety data from the Phase 3 ENSEMBLE clinical trial, demonstrating that the investigational single-dose vaccine met all primary and key secondary endpoints.

The Company expects to have product available to ship immediately following authorization. “Today’s submission for Emergency Use Authorization of our investigational single-shot COVID-19 vaccine is a pivotal step toward reducing the burden of disease for people globally and putting an end to the pandemic,” said Paul Stoffels, M.D., Vice Chairman of the Executive Committee and Chief Scientific Officer at Johnson & Johnson.

“Upon authorization of our investigational COVID-19 vaccine for emergency use, we are ready to begin shipping. With our submission to the FDA and our ongoing reviews with other health authorities around the world, we are working with great urgency to make our investigational vaccine available to the public as quickly as possible.”

Johnson & Johnson intends to distribute vaccine to the U.S. government immediately following authorization, and expects to supply 100 million doses to the U.S. in the first half of 2021.

JNJ last traded at $161.99.

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