Tribune to buy nineteen stations from Nexstar

Nexstar enters agreements to divest nineteen stations for $1.32B

Nexstar to sell 19 stations, Stockwinners

Nexstar Media Group (NXST) and Tribune Media Company (TRCO) announced that Nexstar has entered into definitive agreements to sell a total of nineteen stations in fifteen markets for an aggregate $1.32B in cash following the acquisition of Tribune Media by Nexstar.

Under the terms of the agreements, TEGNA Inc. (TGNA) will acquire eleven stations in eight markets for $740M and The E.W. Scripps Company (SSP) will acquire eight stations in seven markets for $580M.

Separately, Nexstar remains engaged in active negotiations to divest two stations in Indianapolis, Indiana. On December 3, 2018, Nexstar and Tribune Media entered into a definitive merger agreement whereby Nexstar will acquire all outstanding shares of Tribune Media.

Nexstar agrees to acquire Tribune Media, Stockwinners
Nexstar agrees to sell stations from Tribune, Stockwinners

The planned divestiture of nineteen stations reflects Nexstar’s stated intention to divest certain television stations in order to comply with the FCC local and national television ownership rules and to obtain FCC and Department of Justice approval of the proposed Nexstar / Tribune Media transaction.

Nexstar intends to use the net proceeds from the divestitures to fund the Tribune acquisition and to reduce debt.

Given that the net proceeds from the divestitures exceed those initially estimated at the time the transaction was announced, Nexstar now estimates that net leverage at the closing of the transaction will be reduced to approximately 5.1x.

The planned divestiture of the nineteen stations is subject to FCC approval, other regulatory approvals, the closing of the Nexstar / Tribune Media transaction and other customary closing conditions and is expected to be completed on, or about the time of, the closing of the Nexstar / Tribune Media transaction, which is expected later this year.

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Apptio sold for $1.94 billion

Apptio to be acquired by Vista Equity Partners for $38 per share 

Apptio sold for $1.94 billion, Stockwinners
Apptio sold for $1.94 billion, Stockwinners

Apptio (APTI) announced that it has entered into a definitive agreement to be acquired by an affiliate of Vista Equity Partners.

Apptio, Inc. provides cloud-based technology business management (TBM) solutions to enterprises. Its cloud-based platform and SaaS applications enable IT leaders to analyze, optimize, and plan technology investments, as well as to benchmark financial and operational performance against peers.

Under the terms of the agreement, Vista will acquire all outstanding shares of Apptio common stock for a total value of approximately $1.94B.

Apptio shareholders will receive $38.00 in cash per share, representing a 53% premium to the unaffected closing price as of November 9, 2018.

Apptio’s board unanimously approved the deal and recommended that stockholders vote their shares in favor of the transaction.

Apptio’s headquarters will remain in Bellevue, with regional offices across the U.S., EMEA and APAC.

Closing of the deal is subject to customary closing conditions, including the approval of Apptio shareholders and antitrust approval in the United States.

The transaction is expected to close in Q1 2019 and is not subject to a financing condition.

The merger agreement includes a 30 day “go-shop” period, which permits Apptio’s Board and advisors to actively initiate, solicit, encourage, and potentially enter negotiations with parties that make alternative acquisition proposals.

Apptio will have the right to terminate the merger agreement to enter into a superior proposal subject to the terms and conditions of the merger agreement.

There can be no assurance that this 30 day “go-shop” will result in a superior proposal, and Apptio does not intend to disclose developments with respect to the solicitation process unless and until the Board makes a determination requiring further disclosure.


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JP Morgan is positive on NY Times

NY Times rises on subscriber growth, Analyst Comments

JP Morgan is positive on NY Times, Stockwinners
JP Morgan is positive on NY Times, Stockwinners

Shares of New York Times (NYT) have jumped after the company reported better than expected third quarter results and strong subscriber growth.

Notably, the Times’ 203,000 total net new digital-only subscriptions represents the highest gain in digital subscribers in a quarter since the “Trump bump” in the fourth quarter of 2016 and the first quarter of 2017 after the presidential election.

Commenting on the announcement, JPMorgan analyst Alexia Quadrani told investors that she is “extremely encouraged” by the results and sees momentum continuing on digital subscriber additions.

QUARTERLY RESULTS

New York Times reported third quarter adjusted earnings per share of 15c and revenue $417.35M, both above consensus of 11c and $408.54M, respectively.

The number of digital subscribers showed a net increase of roughly 203,000, with 143,000 of those signing on for digital new products and the remainder paying for the company’s cooking and crossword features.

Operating profits rose 30% to $41.4M in the period.

Mark Thompson, president and CEO, said, “This was a strong third quarter for the company. […] We passed two significant milestones, and now have more than 3M digital-only subscriptions and more than 4M total subscriptions. We’re executing on our subscription-first strategy; this quarter, subscription revenues accounted for nearly two-thirds of the company’s revenues. We’re investing aggressively in our journalism, product and marketing and are seeing tangible results in our digital growth.

Turning to advertising, as expected, we are seeing a much stronger second half of the year. We had an exceptional third quarter with digital advertising up 17% and growth of 7% in total advertising.”

Responding to a question during its earnings conference call from JPMorgan’s Quadrani regarding potential subscription drivers, including stories that may have caused a spike in adds, the company highlighted the “important role” played by the $1 per week promotion.

NY Times also acknowledged that “there were some spikes” during the quarter related to specific stories, namely “the anonymous editorial, the story about family separation at the border and the one on the Trump family.”

MOMENTUM TO CONTINUE

In a post-earnings note, JPMorgan‘s Quadrani pointed out that NY Times reported third quarter earnings with revenue, adjusted operating profit, and EPS all ahead of consensus and her estimates.

Most notably, the analyst noted that digital subscriber net adds in the quarter were 203,000 compared to her 130,000 estimate, with the core news product adding 143,000 and digital other adding 60,000.

The 143,000 net adds for news compares to 68,000 in the second quarter, and is the best quarter for the company since the “Trump bump” driven first quarter of 2017, Quadrani contended.

Overall, the analyst said she is “extremely encouraged” by these results and sees momentum continuing on digital subscriber additions helped by the current elevated news cycle and the midterm elections. Quadrani has an Outperform rating on the shares.

FAILING’ NEW YORK TIMES

Last month, Trump criticized a NY Times investigation into his and his family’s use of “dubious tax schemes” over the years and the origins of his own wealth, calling the article an “old, boring and often told hit piece.”

In a tweet, the President said “The Failing New York Times did something I have never seen done before. They used the concept of “time value of money” in doing a very old, boring and often told hit piece on me. Added up, this means that 97% of their stories on me are bad. Never recovered from bad election call!”

This is not the first time Trump called the publication the “failing New York Times.”

Denouncing what he referred to as a “gutless editorial” posted by the New York Times in September, in which an unnamed administration official alleged that advisers to the President were intentionally attempting to thwart his misguided impulses from the inside, Trump tweeted: “Does the so-called “Senior Administration Official” really exist, or is it just the Failing New York Times with another phony source? If the GUTLESS anonymous person does indeed exist, the Times must, for National Security purposes, turn him/her over to government at once!”

PRICE ACTION

In Thursday’s trading, shares of New York Times gained 7.5% to $28.39.


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Red Hat sold for $34 billion

 IBM to acquire Red Hat for $190 per share

Red Hat sold for $34 billion, Stockwinners
Red Hat sold for $34 billion, Stockwinners

IBM (IBM) and Red Hat (RHT) announced that the companies have reached a definitive agreement under which IBM will acquire all of the issued and outstanding common shares of Red Hat for $190 per share in cash, representing a total enterprise value of approximately $34B.

With this acquisition, IBM will remain committed to Red Hat’s open governance, open source contributions, participation in the open source community and development model, and fostering its widespread developer ecosystem.

In addition, IBM and Red Hat will remain committed to the continued freedom of open source, via such efforts as Patent Promise, GPL Cooperation Commitment, the Open Invention Network and the LOT Network. IBM and Red Hat also will continue to build and enhance Red Hat partnerships, including those with major cloud providers, such as Amazon Web Services (AMZN), Microsoft (MSFT) Azure, Google (GOOG; GOOGL) Cloud, Alibaba (BABA) and more, in addition to the IBM Cloud.

At the same time, Red Hat will benefit from IBM’s hybrid cloud and enterprise IT scale in helping expand their open source technology portfolio to businesses globally.

Upon closing of the acquisition, Red Hat will join IBM’s Hybrid Cloud team as a distinct unit, preserving the independence and neutrality of Red Hat’s open source development heritage and commitment, current product portfolio and go-to-market strategy, and unique development culture.

Red Hat will continue to be led by Jim Whitehurst and Red Hat’s current management team.

Jim #Whitehurst also will join IBM’s senior management team and report to Ginni #Rometty.

IBM intends to maintain Red Hat’s headquarters, facilities, brands and practices.

The acquisition will accelerate IBM’s revenue growth, gross margin and free cash flow within 12 months of closing.

It also will support a solid and growing dividend. The company will continue with a disciplined financial policy and is committed to maintaining strong investment grade credit ratings.

The company will target a leverage profile consistent with a mid to high single A credit rating. The company intends to suspend its share repurchase program in 2020 and 2021.

The company intends to close the transaction through a combination of cash and debt. The acquisition has been approved by the boards of directors of both IBM and Red Hat.

It is subject to Red Hat shareholder approval. It also is subject to regulatory approvals and other customary closing conditions. It is expected to close in the latter half of 2019.


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Tesla jumps on results, upgrades

Tesla rises as analysts digest first profit in two years

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

Shares of Tesla (TSLA) are on the rise after the company reported third quarter results, with a net profit of $312M, the electric-vehicle maker’s largest ever.

Tesla also said deliveries of its Model 3 grew to 56,000, adding that it “was the best-selling car in the U.S. in terms of revenue and the 5th best-selling car in terms of volume.”

Following the announcement, Wolfe Research analyst Dan Galves upgraded Tesla to Outperform, while several other firms raised their targets on the stock. Nonetheless, some Wall Street analysts remain bearish on Tesla, telling investors to “not get used to [this quarter’s profitability.]”

stockwinners.com/blog
Tesla jumps on results, upgrades – See Stockwinners Market Radar

RESULTS

Last night, Tesla reported third quarter adjusted earnings per share of $2.90 and revenue of $6.82B, both above consensus of (19c) and $6.3B, respectively.

The company said that, “Model 3 quarterly production and deliveries should continue to increase in the fourth quarter compared to the third quarter.

Our target of delivering 100,000 Model S and X vehicles this year remains unchanged.

We expect gross margin for Model 3 to remain stable in the fourth quarter as manufacturing efficiencies and fixed cost absorption offset a slightly lower trim mix and the negative impact of tariffs from Chinese sourced components.

https://stockwinners.com/blog/
Stockwinners.com,Tesla jumps on results, upgrades

For all three vehicles, additional tariffs in the fourth quarter on parts sourced from China will impact our gross profit negatively by roughly $50M […] The third quarter of 2018 was a truly historic quarter for Tesla.

Model 3 was the best-selling car in the U.S. in terms of revenue and the 5th best-selling car in terms of volume.

With average weekly Model 3 production through the quarter, excluding planned shutdowns, of roughly 4,300 units per week, we achieved GAAP net income of $312M.”

WOLFE RESEARCH SAYS BUY TESLA

In a post-earnings research note, Wolfe Research’s Galves upgraded Tesla to Outperform from Peer Perform, with a $410 price target.

Saying that “Tesla became a real company,” the analyst argued that third quarter non-GAAP earnings of $2.90 and free cash flow of $881M are proof that Tesla’s earnings power is likely to outperform traditional automakers.

Management’s focus on cost and capital efficiency boosted Galves’ confidence that priorities have changed from unit growth at all cost to profitable growth and self-funding.

Further, the analyst argued that demand and margin outlook appear “very positive” and the fact that 50% of trade-ins on the Model 3 are non-luxury vehicles indicates the buyer base is likely bigger than expected.

Also bullish on the stock, Piper Jaffray analyst Alexander Potter raised his price target for Tesla to $396 from $389 as he believes the company reported a “milestone quarter,” with margins, earnings, and cash flow easily beating expectations.

While there is a still a lot of “hair” on the company, bears will struggle to poke holes in the results, Potter contended, adding that Tesla appears increasingly likely to achieve financial self-sufficiency.

The analyst reiterated an Overweight rating on Tesla shares. Oppenheimer, JMP Securities, and RBC Capital also raised their price targets on the stock.

‘DON’T GET USED TO IT’

Still bearish on Tesla shares, UBS analyst Colin Langan reiterated a Sell rating on the stock in a research note titled “Profitability at last, just don’t get used to it.”

The analyst continues to expect Model 3 average selling prices to decline into fourth quarter and 2019 as Tesla begins delivering the new $46,000 mid-range model.

Voicing a similar opinion, Needham analyst Rajvindra Gill told investors that while Tesla posted its first quarterly profit and positive free cash flow in over two years thanks to higher-margin Model 3 sales, he remains concerned over margin in the first half of 2019 given an “unfavorable mix shift of Model 3s, decline in ZEV sales, service margins stay in -35%-40% and pricing pressure on Model S/X.” Gill also questions the speed and profitability of Tesla’s production of a $45K car, “not to mention the $35K version”, in order to match its backlog of orders.

The analyst reiterated an Underperform rating on the shares.

PRICE ACTION

In Thursday’s trading, shares of Tesla have gained about 5% to $302.46.


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JetPay sold for $184 million

NCR Corp. to acquire JetPay for $5.05 per share

JetPay sold for $184 million, Stockwinners
JetPay sold for $184 million, Stockwinners

NCR Corporation (NCR) announced a definitive agreement to acquire Allentown, PA-based JetPay (JTPY).

The transaction will be a cash tender offer of $5.05 per JetPay share, which represents a multiple of 2.9 times 2018 consensus revenue forecast of $63.4 million.

The purchase price is approximately $184 million and will be financed with a combination of cash on hand and existing capacity under NCR’s revolving credit facility.

The offer has been approved by each company’s board of directors.

This acquisition will enable NCR to integrate a cloud-based payments platform into its enterprise point-of-sale solutions for retail and hospitality industries.

It also accelerates NCR’s strategy of increasing recurring revenue growth and expanding margins by enhancing its mix of software and services.

The transaction is anticipated to close by year-end, subject to regulatory approval and other customary closing conditions. The two companies anticipate a smooth transition for customers, channel partners and employees.

Two of JetPay’s major stockholders, Flexpoint Ford, a private equity investment firm that specializes in the financial services and healthcare industries, and Larry Stone, a longstanding executive in the payment processing industry, have agreed to tender their shares in support of the transaction.


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Clovis Oncology is in focus

Clovis receives Breakthrough Therapy Designation for Rubraca

CLVS to submit NDA to FDA
Clovis is in focus

 

Clovis Oncology (CLVS) announced that the U.S. Food and Drug Administration has granted Breakthrough Therapy designation for Rubraca as a monotherapy treatment of adult patients with BRCA1/2-mutated mCRPC who have received at least one prior androgen receptor-directed therapy and taxane-based chemotherapy.

Breakthrough Therapy designation is granted by the FDA to investigational agents intended to treat a serious or life-threatening disease or condition and whose preliminary clinical evidence may demonstrate substantial improvement on at least one clinically significant endpoint over available therapy.

The FDA previously granted Breakthrough Therapy designation to Rubraca for the monotherapy treatment of certain advanced ovarian cancer patients and then in December 2016 approved Rubraca for the treatment of certain adult patients with deleterious BRCA mutation associated epithelial ovarian, fallopian tube, or primary peritoneal cancer who have been treated with two or more chemotherapies.

The FDA subsequently approved Rubraca in a second indication, the maintenance treatment of adult patients with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in a complete or partial response to platinum-based chemotherapy, in April 2018.

This most recent Breakthrough Therapy designation was granted to Rubraca based on initial efficacy and safety results from TRITON2, the Phase 2 study of Rubraca in men with advanced prostate cancer with BRCA 1/2 mutations and deleterious mutations of other homologous recombination repair genes, in the metastatic castration-resistant setting.

JP Morgan Comments

JPMorgan analyst Cory Kasimov is encouraged by Clovis Oncology’s announcement this morning that rucaparib received breakthrough designation from the FDA for the third line treatment of patients with BRCA mutated metastatic castrate-resistant prostate cancer on the basis of data from the Triton-2 study.

The analyst says the news further increases his confidence in the potential for rucaparib to produce response rates that are meaningfully better than currently available options.

His model implies $9 per share for prostate, assuming a 55% probability of success and $450M in peak unadjusted sales. #Kasimov keeps an Overweight rating on Clovis.

CLVS closed at $29.14, it last traded at $31.50.


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General Mills North America sales decline

General Mills plunges after reporting North America sales decline

General Mills North America sales decline, Stockwinners
General Mills North America sales decline, Stockwinners

Shares of General Mills (GIS) sunk in late morning trading after the company reported quarterly results, including net sales for its North America Retail segment that fell 2% from the year-ago period.

QUARTERLY RESULTS AND GUIDANCE

General Mills reported first quarter adjusted earnings per share of 71c, beating analysts’ consensus estimates of 63c, while sales of $4.1B were essentially in line with the consensus forecast.

However, the company said net sales in North America, its biggest region, fell 2% to $2.39B, with net sales down 4% in U.S. Snacks and down 2% each in U.S. Meals & Baking and U.S. Yogurt.

General Mills said its pet-food division reported sales of $343.4M, up 14% on a pro forma basis. General Mills acquired Blue Buffalo earlier this year for $8B, and said its net interest expense was $134M in the quarter, primarily driven by financing related to the acquisition.

Looking ahead, General Mills reaffirmed fiscal 2019 targets, including adjusted EPS flat to down 3% from the base $3.11 earned in fiscal 2018, organic net sales flat to up 1%, net sales up 9%-10% including the impact of the Blue Buffalo deal and constant currency adjusted operating profit up 6%-9% from the base of $2.6B reported in FY18.

EXECUTIVE COMMENTARY

In a statement, Chairman and Chief Executive Officer Jeff Harmening commented that FY19 is “off to a good start” and said the Blue Buffalo transition is “progressing well.”

General Mills expects double-digit top and bottom-line growth for the Blue Buffalo business this year, excluding acquisition-related charges. On its quarterly earnings conference call, CFO Donal Mulligan said he expects price/mix to improve as the year unfolds, and that operating margins will be down “somewhat” for the year.

He also thinks there will be “a little bit more pressure” on gross margin from where the company originally expected.

For the year, General Mills expects input cost inflation will be 5% of cost of goods, one point above FY18 levels.

OTHERS TO WATCH

Peers trading lower on Tuesday include Kraft Heinz (KHC), Campbell Soup (CPB) and J.M. Smucker (SJM).


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K2M Group sold for $1.4B

Stryker to acquire K2M Group for $27.50 per share

K2M Group sold for $1.4B , Stockwinners
K2M Group sold for $1.4B , Stockwinners

Stryker (SYK) announced a definitive merger agreement to acquire all of the issued and outstanding shares of common stock of K2M Group (KTWO) for $27.50 per share, or a total equity value of approximately $1.4B.

The combined business will have a competitive portfolio across Stryker’s Spine product categories and leverage a more powerful commercial engine.

With the addition of K2M’s proven product portfolio, consistent track record of execution and robust pipeline, Stryker Spine’s business will be well-positioned to sustain innovation and provide its customers and employees with proven products.

Upon closing of the transaction, it is expected that Eric Major will serve as President of Stryker’s Spine division and lead the combined business in its continued growth and innovation.

Bradley Paddock, the current President of Stryker’s Spine division, will assist with transitioning his responsibilities to Major while also supporting the integration efforts.

The acquisition of K2M is expected to close late in the fourth quarter of this year and is expected to have an immaterial dilutive impact to Stryker’s net EPS and adjusted net EPS in 2018.

There is no change to Stryker’s previously announced expected adjusted net EPS for the full year, which is a range of $7.22-$7.27.

For 2019, and beyond, Stryker reaffirms its previously stated long-term financial goals for sales, operating margins and adjusted net EPS.


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Scotts Miracle-Gro dragged down by Bayer woes

Bayer drags Scotts Miracle-Gro down after Monsanto weed killer ruling

Scotts Miracle-Gro dragged down by Bayer woes, Stockwinners
Scotts Miracle-Gro dragged down by Bayer woes, Stockwinners

Shares of Bayer (BAYRY) trading in New York are sliding after the recently acquired Monsanto was ordered to pay $289M by a California court, who found it liable in a lawsuit alleging that the company’s Roundup caused cancer.

Commenting on the news, JPMorgan analyst Richard Vosser told investors that the selloff in the shares is “significantly overdone” as he sees the potential for the verdict to be overturned on appeal and for the damage amount to be greatly reduced.

Meanwhile, his peer at Bank of America Merrill Lynch argued that the ruling adds cloud over an important product for Scotts Miracle-Gro (SMG).

ROUNDUP RULING

Last week, a jury found Monsanto, which was recently acquired by Bayer for $63B, liable in a lawsuit alleging that the company’s glyphosate-based weedkillers, including its Roundup brand, caused cancer.

The case against Monsanto is the first of more than 5,000 similar lawsuits across the U.S.

The jury at San Francisco’s Superior Court of California found that Monsanto had failed to warn school groundskeeper Dewayne Johnson and other consumers of the cancer risks posed by its weed killers, and awarded Johnson $250M in punitive damages and about $39M in compensatory damages.

Monsanto, which plans to appeal the verdict, has denied that glyphosate causes cancer and has contended that decades of scientific studies have shown the chemical to be safe for human use.

SELLOFF ‘SIGNIFICANTLY OVERDONE’

In a research note to investors, JPMorgan’s Vosser said he views the selloff in shares of Bayer after a California jury ordered the company’s Monsanto unit to pay $289M for not warning of cancer risks posed by its weed killer, Roundup, as “significantly overdone.”

The analyst added that he sees the potential for the verdict to be overturned on appeal and for the damage amount to be greatly reduced. Overall, Vosser believes current share levels of Bayer provide a good long-term buying opportunity and reiterated an Overweight rating on the name.

RULING ‘ADDS CLOUD’ OVER IMPORTANT PRODUCT

Also commenting on the California court’s ruling, BofA/Merrill analyst Christopher Carey pointed out in a research note of his own that while the product is owned by Monsanto, Scotts Miracle-Gro is the exclusive distributor/marketer of consumer Roundup in the U.S. and Canada, with the brand on track to be about 15% to FY18 profit, but less in FY19 as a 3-year term for $20M annual payments from Monsanto ends in FY18.

Carey noted that he does not expect a ban of glyphosate, but argued that the court decision nevertheless “adds a cloud” over a product which is important for Scotts Miracle-Gro.

While any additional impact from Roundup is unclear, this adds another layer to risks, he contended, highlighting that the company already must overcome a number of headwinds in 2019.

The analyst reiterated an Underperform rating and $74 price target on Scotts Miracle-Gro’s shares. Meanwhile, his peer at SunTrust told investors that there is likely no legal risk to Scotts Miracle-Gro from Friday’s jury verdict in California.

As part of the master agreement between Scotts and Monsanto signed three years ago, Scotts is indemnified from any litigation relating to the Roundup/glyphosate issue, analyst William Chappell pointed out.

Further, the analyst noted that the company is not listed as a defendant in any of the cases filed against Monsanto.

Nevertheless, Chappell estimates that Roundup represents roughly 10% of Scotts’ EBITDA, and believes sales could be impacted over the long-term from these trials.

The analyst reiterated a Buy rating and $100 price target on Scotts Miracle-Gro’s shares.

PRICE ACTION

In Monday morning trading, shares of Bayer in New York have dropped over 10% to $23.75, while Scotts Miracle-Gro’s stock has slipped 2.25% to $73.65.


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Spark Therapeutics tumbles on hemophilia study

Spark says Phase 1/2 data for SPK-8011 shows a 97% reduction in ABR

Spark tumbles on hemophilia study , Stockwinners
Spark tumbles on hemophilia study , Stockwinners

 

Shares of Spark Therapeutics (ONCE) are sinking after the company announced preliminary Phase 1/2 data for its investigational gene therapy candidate SPK-8011 for hemophilia A. A dose response as demonstrated by FVIII expression ranged from 16% to 49%, with a mean of 30% post 12 weeks in five of the participants in the 2×1012 vg/kg cohort, Spark announced in its Q2 earnings release.

As of the July 13, 2018, data cutoff, 12 participants in the Phase 1/2 trial have received a single administration of investigational SPK-8011, including two at a dose of 5×1011 vector genomes /kg body weight, three at a dose of 1×1012 vg/kg and seven at a dose of 2×1012 vg/kg.

Across all participants, at all three doses, beginning four weeks after vector infusion, there has been a 97-percent reduction in annualized bleeding rate and a 97-percent reduction in annualized infusion rate.

The first two trial participants, who have been followed for greater than one year, have shown stable FVIII activity levels since reaching plateau for up to 66 weeks, with follow up ongoing.

Additionally, there is evidence of a dose-dependent increase in mean FVIII activity levels across the three dose cohorts.

Five of the participants in the 2×1012 vg/kg cohort have FVIII activity levels between 16 and 49 percent, with follow-up ranging from 12 to 30 weeks.

The mean FVIII activity for these five participants is 30 percent, based on average FVIII levels post-12 weeks after vector infusion. These five participants have reduced their overall ABR by 100 percent and reduced their overall AIR by 100 percent.

The other two participants in the 2×1012 vg/kg cohort had an immune response that caused their FVIII levels to decline to less than 5 percent. Clinically, both participants have moved from prophylactic to on-demand treatment and have seen meaningful reductions in their bleeding and infusion rates.

One of these participants did not rapidly respond to oral steroids and he elected to be admitted to the hospital to receive two intravenous methylprednisolone infusions rather than have the infusions on an outpatient basis.

The event was subsequently resolved. The admission to hospital for these infusions met the criteria for a serious adverse event.

Of note, across the study, seven of the 12 participants received a tapering course of oral steroids in response to an alanine aminotransferase elevation above patient baseline, declining FVIII levels and/or positive IFN-g enzyme-linked immunospots.

For these seven participants, steroids led to normalization of ALT and ELISPOTs.

For all but the two above mentioned 2×1012 vg/kg cohort participants, oral steroids led to stabilization of target FVIII levels. Based on the totality of the results to date, Spark Therapeutics intends to initiate a Phase 3 run-in study in the fourth quarter of 2018. Following completion of the run-in study, Phase 3 participants are expected to receive 2×1012 vg/kg of SPK-8011.

Additional details on the Phase 3 trial design will be determined following continued discussions with FDA and EMA, which are expected in the fourth quarter.

Finally, the company has successfully scaled-up its mammalian-based manufacturing process in suspension to a capacity level of 200 liters and amended its agreement with Brammer Bio to secure a dedicated manufacturing suite, both of which will enable Spark Therapeutics to meet supply needs for Phase 3 clinical development as well as expected commercial requirements.

ONCE closed at $77.61, it last traded at $56.00.


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Supervalu sold for $2.9 billion

United Natural Foods to acquire Supervalu for $32.50 per share in cash, or $2.9B

Supervalu sold for $32.50 per share in cash, or $2.9B, Stockwinners
Supervalu sold for $32.50 per share in cash, or $2.9B, Stockwinners

United Natural Foods (UNFI) and SUPERVALU (SVU) announced that they have entered into a definitive agreement under which UNFI will acquire SUPERVALU for $32.50 per share in cash, or approximately $2.9B, including the assumption of outstanding debt and liabilities.

UNFI expects to finance the transaction substantially with debt and Goldman Sachs provided committed financing in the transaction.

Over time, UNFI plans to divest SUPERVALU retail assets in a thoughtful and economic manner. Upon closing, UNFI’s net debt-to-EBITDA ratio is expected to be high.

With strong cash flows, proceeds from divestitures and commitment to reducing debt, the company anticipates reducing leverage by at least two full turns in the first three years.

The transaction has been approved by the boards of directors of both companies and is subject to antitrust approvals, SUPERVALU shareholder approval and other customary closing conditions, and is expected to close in the fourth quarter of calendar year 2018.

UNFI Chief Executive Officer and Chairman Steven Spinner will lead the combined entity. Sean Griffin, UNFI Chief Operating Officer, will lead the SUPERVALU integration efforts, post close and lead an integration committee comprised of executives from both companies to drive the implementation of best practices from each company and the delivery of important synergies and a rapid and smooth integration.

UNFI closed at $41.18.


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Dropbox drops as Facebook mulls switch to Google

Dropbox drops as Facebook mulls switch to Google for cloud storage

Dropbox drops as Facebook mulls switch to Google, Stockwinners
Dropbox drops as Facebook mulls switch to Google, Stockwinners

Shares of Dropbox (DBX) fell in morning trading following a report that said Facebook (FB) is considering moving its cloud storage away from the file hosting service.

FACEBOOK CONSIDERING SWITCH

Facebook is considering switching to Google (GOOG, GOOGL) for email and productivity applications, The Information reported earlier, citing two people with knowledge of the discussions.

The move would be a setback for Microsoft (MSFT), whose applications Facebook currently uses. Facebook, which has about 27,000 employees, stopped using Google apps inside the company several years ago. Additionally, Facebook is also considering moving its cloud storage to Google from Dropbox, according to The Information.

WHAT’S NOTABLE

Last month, Dropbox announced a new chapter in the evolution of Magic Pocket, its custom-built storage infrastructure, saying it is deploying Shingled Magnetic Recording, or SMR, drive technology to increase overall storage density, reduce the company’s physical data center footprint and provide significant cost savings without sacrificing performance or reliability.

Dropbox said at the time that it expects to have a quarter of its Magic Pocket infrastructure on SMR drive capacity by 2019. In its debut earnings report, Dropbox reported revenue of $316.3M, up 28% from the year-ago period.

PRICE ACTION

Shares of Dropbox are down about 4% to $31.03 in morning trading following the report.


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Biogen sharply higher on data

Eisai and Biogen announce positive results of the final analysis for BAN2401

Biogen sharply higher on data, Stockwinners
Biogen sharply higher on data, Stockwinners

Eisai (ESALY) and Biogen (BIIB) announced positive topline results from the Phase II study with BAN2401, an anti-amyloid beta protofibril antibody, in 856 patients with early Alzheimer’s disease.

The study achieved statistical significance on key predefined endpoints evaluating efficacy at 18 months on slowing progression in Alzheimer’s Disease Composite Score and on reduction of amyloid accumulated in the brain as measured using amyloid-PET. Topline results of the final analysis of the study demonstrated a statistically significant slowing of disease progression on the key clinical endpoint after 18 months of treatment in patients receiving the highest treatment dose as compared to placebo.

Results of amyloid PET analyses at 18 months, including reduction in amyloid PET standardized uptake value ratio and amyloid PET image visual read of subjects converting from positive to negative for amyloid in the brain, were also statistically significant at this dose. Dose-dependent changes from baseline were observed across the PET results and the clinical endpoints.

Further, the highest treatment dose of BAN2401 began to show statistically significant clinical benefit as measured by ADCOMS as early as 6 months including at 12 months. BAN2401 demonstrated an acceptable tolerability profile through 18 months of study drug administration.

The most common treatment emergent adverse events were infusion-related reactions and Amyloid Related Imaging Abnormalities. Infusion related reactions were mostly mild to moderate in severity. Incidence of ARIA-E was not more than 10% in any of the treatment arms, and less than 15% in patients with APOE4 at the highest dose per the study protocol safety and reporting procedures.

BIIB closed at $298.81, it last traded at $338. ESALY closed at $71.10.


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Novartis receives positive CHMP opinion for Kymriah

Novartis receives positive CHMP opinion for Kymriah

Novartis receives positive CHMP opinion for Kymriah, Stockwinners
Novartis receives positive CHMP opinion for Kymriah, Stockwinners

Novartis (NVS) announced that the Committee for Medicinal Products for Human Use of the European Medicines Agency adopted a positive opinion recommending approval of Kymriah – a novel one-time treatment that uses a patient’s own T cells to fight cancer.

The positive opinion includes two B-cell malignancies: B-cell acute lymphoblastic leukemia that is refractory, in relapse post-transplant or in second or later relapse in patients up to 25 years of age; and diffuse large B-cell lymphoma that is relapsed or refractory after two or more lines of systemic therapy in adults.

If approved by the European Commission, Kymriah will be the first CAR-T cell therapy available in the European Union for both DLBCL and B-cell ALL.

Both B-cell ALL and DLBCL are aggressive malignancies with significant treatment gaps for patients.

In Europe, ALL accounts for approximately 80% of leukemia cases among children, and for those patients who relapse, the outlook is poor. This low survival rate is in spite of patients having to undergo multiple treatments, including chemotherapy, radiation, targeted therapy or stem cell transplant, and further highlights the need for new treatment options.

DLBCL is the most common form of non-Hodgkin lymphoma, accounting for up to 40% of all cases globally.

For patients who relapse or don’t respond to initial therapy, there are limited treatment options that provide durable responses, and survival rates are low for the majority of patients due to ineligibility for autologous stem cell transplant or because salvage chemotherapy or ASCT have failed.

The positive CHMP opinion is based on two pivotal Novartis-sponsored global, multi-center, Phase II trials, ELIANA and JULIET, which included patients from Europe, the US, Australia, Canada and Japan. The collaboration of Novartis and the University of Pennsylvania has led to historic milestones in CAR-T cell therapy since 2012, including the initiation of the first global CAR-T trials, the PRIME designation granted by the EMA for Kymriah in pediatric patients with r/r B-cell ALL, and the approval of Kymriah in two distinct indications by the US Food and Drug Administration.

ELIANA is the first pediatric global CAR-T cell therapy registration trial, treating patients in 25 centers in the US, Canada, Australia, Japan and the EU, including: Austria, Belgium, France, Germany, Italy, Norway and Spain. JULIET is the first multi-center global registration study for Kymriah in adult patients with r/r DLBCL.

JULIET is also the largest global study evaluating a CAR-T cell therapy in patients with DLBCL, enrolling patients from 27 sites in 10 countries across the US, Canada, Australia, Japan and the EU, including: Austria, France, Germany, Italy, Norway and the Netherlands.

The Novartis CAR-T cell manufacturing platform includes cryopreservation, the process of freezing patients’ harvested cells in order to preserve them, which provides physicians with the flexibility to decide when to initiate both the harvesting of patients’ cells and the infusion of Kymriah, based on each patient’s condition, and allows for this individualized treatment approach on a global scale.

The European Commission will now review the CHMP recommendation to deliver its final decision, applicable to all 28 EU member states, plus Iceland, Liechtenstein and Norway.

NVS closed at $73.00, it last traded at $75.50.


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