U.S. sues Teva Pharmaceuticals for kickbacks

Justice Department files False Claims Act against Teva Pharmaceuticals

The U.S. Attorney’s Office has filed a complaint under the False Claims Act against Teva Pharmaceuticals USA. and Teva Neuroscience (TEVA), the maker of Copaxone, a drug for multiple sclerosis.

The government alleges that Teva conspired with a specialty pharmacy, Advanced Care Scripts, and two purportedly independent foundations, Chronic Disease Fund and The Assistance Fund, to violate the Anti-Kickback Statute and False Claims Act by using the foundations as conduits to subsidize Medicare co-pays for Copaxone, all while steadily raising Copaxone’s price, the Justice Department said in a statement.

Teva Pharma. is accused of offering kickbacks

The government alleges that, from 2006 through at least 2015, Teva paid the two foundations well over $300M with the intent and understanding that the foundations would use Teva’s money to cover the Medicare co-pays of patients taking Copaxone. During the same period, Teva raised the price of Copaxone from approximately $17,000 per year to over $73,000 per year, according to the DOJ.

Copaxone is used to treat multiple sclerosis

Copaxone is a brand-name prescription drug. It’s approved to treat certain forms of multiple sclerosis (MS) in adults.

Chronic Disease Fund is accused of being part of the scheme

With MS, the immune system mistakenly attacks the nerves. The damaged nerves then have trouble communicating with brain. This condition can cause a wide variety of symptoms, such as muscle weakness and fatigue (lack of energy).

The Assistance Fund is accused of being part of the price kickback

Copaxone contains the active drug glatiramer acetate. It’s a disease-modifying therapy for MS. Copaxone helps to stop the immune system from attacking the nerves. The drug can reduce the number of MS relapses and also slow worsening of the disease.

Copaxone comes as a solution that’s given by subcutaneous injection (an injection under your skin).

Teva Pharmaceutical Industries Limited is an Israeli pharmaceutical company. The firm develops, manufactures, markets, and distributes generic medicines, specialty medicines, and biopharmaceutical products in North America, Europe, and internationally. It is one of the largest generic drugmakers in the world.

Shares of Teva are down 9% to $10.52 in morning trading. 

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Mohawk shares tumble on investors lawsuit

Mississippi Retirement System sues the carpet maker

In January, the Public Employees’ Retirement System of Mississippi filed a lawsuit claiming accounting fraud at Mohawk (MHK). The suit did not get a lot of attention at the time, but new filings submitted in late June add significant details about the allegations.

According to analysts, the filing includes testimony from a former Mohawk employee who claims the company has used fictitious sales to artificially boost revenue since 2017.

JPMorgan

JPMorgan analyst Michael Rehaut noted earlier that the Public Employees’ Retirement System of Mississippi, as part of a consolidated class action complaint filing dated June 29, gave “significant incremental details” regarding claims that Mohawk engaged in channel stuffing at the end of the quarter and intentionally overproduced product.

MPERS sues Mohawk Industries

While “the veracity of these accusations will likely not be determined until after an extended legal process” of several months if not longer, Rehaut sees the lawsuit as likely to remain an overhang on the stock until this matter concludes.

He also sees the “fairly granular level of detail across the allegations” and quotes from interviews with several former employees creating a higher level of risk for the company from this lawsuit, added the analyst, who keeps a Neutral rating on Mohawk shares.

SunTrust

A shareholder lawsuit filed earlier this year has recently added new court filings that allege multiple issues inside Mohawk Industries, the most damaging allegation being its revenue recognition practices which included shipping goods on the last day of the quarter and then having those as returns in the following quarter, SunTrust analyst Keith Hughes tells investors in a research note.

The allegations being made during the company’s quiet period “have hamstrung any response,” says Hughes, who admits “it is hard to say as an outsider whether these have merit at this point.” However, given the size of Mohawk, it would need “widespread practices to boost revenues via the method” alleged, adds the analyst, who keeps a Buy rating on Mohawk with a $119 price target.

Wells Fargo

Wells Fargo analyst Truman Patterson notes that the Public Employees’ Retirement System of Mississippi has filed a Class Action Complaint against Mohawk and CEO Jeff Lorberbaum, claiming the company engaged in a “fraudulent scheme to fabricate revenues through fictitious ‘sales’ of products that were not delivered to customers and to conceal from investors the true reasons for the company’s ballooning inventory,” damaging shareholders between April 2017 and July 2019.

While Mohawk stakeholders have known about the lawsuit since early January, filings have only recently become publicly available, which the analyst believes drove shares down on Wednesday. Patterson expresses no opinion on the validity of the allegations against the company, but acknowledges that they would clearly be a negative if proven to be true, likely damaging shareholder confidence in management. The analyst has an Underweight rating and an $80 price target on the stock.

The stock is down 19% to $74.10. The question now shifts to whether the allegations will result in a full SEC investigation.

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FDA rejects Intercept’s drug application, shares plunge

Intercept receives FDA CRL for obeticholic acid recommending additional data

Intercept Pharmaceuticals (ICPT) announced that the U.S. Food and Drug Administration has issued a Complete Response Letter regarding the New Drug Application for obeticholic acid for the treatment of fibrosis due to nonalcoholic steatohepatitis.

stockwinners.com ICPT
Shares plunge following FDA’s comments

The CRL indicated that, based on the data the FDA has reviewed to date, the Agency has determined that the predicted benefit of OCA based on a surrogate histopathologic endpoint remains uncertain and does not sufficiently outweigh the potential risks to support accelerated approval for the treatment of patients with liver fibrosis due to NASH.

NASH is the severe form of Non-Alcoholic Fatty Liver Disease (NAFLD). It can lead to liver cancer, cirrhosis, and liver transplants.

The FDA recommends that Intercept submit additional post-interim analysis efficacy and safety data from the ongoing REGENERATE study in support of potential accelerated approval and that the long-term outcomes phase of the study should continue.

Intercept had previously disclosed that, based on the FDA’s decision to postpone a tentatively scheduled advisory committee meeting, it was expected that the Agency’s review of its NDA would extend beyond the PDUFA goal date and that the FDA would move forward with rescheduling the Adcom.

The NDA submission for OCA is the first for NASH and was based on data from 35 clinical trials and more than 1,700 NASH patients treated with the drug.

OCA is the only investigational NASH drug with Breakthrough Therapy designation and has uniquely demonstrated reproducible ability to reverse or otherwise stabilize liver fibrosis in patients with advanced fibrosis due to NASH.

According to the FDA draft guidance for NASH fibrosis, of the histologic features of NASH, fibrosis is considered the strongest predictor of adverse clinical outcomes, including liver-related death.

Estimated number of people suffering from fatty liver, Stockwinners

There is currently no approved therapy for this devastating disease, which has become a leading cause of liver failure and resulting poor clinical outcomes.

A number of other companies working on NASH treatments are also moving lower, with CymaBay (CBAY) down about 3% and NGM Biopharmaceuticals (NGM) fractionally lower.

Other companies exploring NASH treatments include Madrigal Pharmaceuticals (MDGL), Novo Nordisk (NVO), Genfit (GNFT), Eli Lilly (LLY), and Alnylam Pharmaceuticals (ALNY).

ICPT closed at $77.49, last traded at $48.00, down 38%.

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California Resources on the verge of bankruptcy!

The oil driller is preparing near-term bankruptcy filing, WSJ reports

California Resources Corporation (CRC) operates as an oil and natural gas exploration and production company in the State of California.

The company sells crude oil, natural gas, and natural gas liquids to marketers, California refineries, and other purchasers that have access to transportation and storage facilities. It holds interests in approximately 2.2 million net acres of mineral acreage. As of December 31, 2019, the company had net proved reserves of 644 million barrels of oil equivalent.

Interest Payment

California Resources skipped an interest payment to lenders and could file for bankruptcy as soon as next week, The Wall Street Journal’s Alexander Gladstone reports, citing people familiar with the matter.

The company said in an 8-K filing that it entered into forbearance agreements most of its lenders, who have agreed not to exercise “remedies” under the credit agreements. 

The oil driller said Monday it has entered into an agreement with a majority of its senior lenders to wait until Sunday before they can declare a default, the author notes.

2-Year price chart for CRC

The company has suffered from a sharp selloff in crude oil futures prices to start this year, as a result of the drop in demand from the COVID-19 pandemic and the price war between Saudia Arabia and Russia.

CRC is up 67 cents to $2.68.

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Amarin shares tumble as court voids patent

Amarin ‘strongly disagrees’ with ruling in Vascepa ANDA litigation

Shares of Amarin (AMRN) tumbled in after hours trading after a federal judge ruled patents on its best selling drug, Vascepa was invalid. The company issued the following statement after shares tumbled 65 percent.

Amarin loses patent on its Vascepa, Stockwinners

Vascepa (Icosapent ethyl) is a type of omega-3 fatty acid, a fat found in fish oil. It is used along with a proper diet to help lower fats (triglycerides) in the blood. This medication is thought to work by decreasing the amount of triglycerides made by the body.

Amarin Corporation (AMRN) commented on the United States District Court for the District of Nevada’s ruling in favor of the generic companies in the company’s patent litigation against two filers of abbreviated new drug applications, or ANDAs, for Amarin’s VASCEPA capsule franchise.

Vascepa is derived from fish oil, Stockwinners

Based on Amarin’s review of U.S. Food and Drug Administration’s website, an ANDA for VASCEPA has not been approved, which would be required for launch of a generic product in the United States.

The company thus does not believe there is an impending generic launch by the litigants that would compete with VASCEPA at this time.

“Amarin strongly disagrees with the ruling and will vigorously pursue all available remedies, including an appeal of the Court’s decision and a preliminary injunction pending appeal to, if an ANDA is approved by FDA, prevent launch of generic versions of VASCEPA in the United States,” said John F. Thero, president and chief executive officer of Amarin.

“At Amarin, we have a strong balance sheet with capacity and flexibility, and we plan to fight to protect our VASCEPA franchise for the benefit of our patients, physicians, the broader healthcare community and our investors.

We believe we are favorably situated to obtain an injunction against generic launch pending appeal, subject to our posting a bond to secure generics’ lost profits in the event that generics prevail on appeal.

UK’s Hikma Pharma. had asked for overturn of the patent

As we work to take all legal actions necessary to defend and protect our intellectual property, we will continue to press forward with our educational and promotional efforts for VASCEPA in treating indicated patients at high risk of cardiovascular events, such as heart attack and stroke. After we determine the outcome of our effort to prevent a generic launch (if an ANDA approval is obtained), we expect to provide an update on how we would adjust certain promotional activities for VASCEPA in the United States.”

Generic drug maker Dr. Reddy’s will be making generic Vascepa

Generic drugmakers Hikma Pharmaceuticals of UK and Dr. Reddy’s Laboratories Limited  (RDY) had asked to overturn the patents so they can begin making generic versions of the medication.

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Aveo Pharma. shares tumble following FDA meeting

Aveo Pharmaceuticals provides update after FDA meeting discussing TIVO-3 results

Aveo Pharmaceuticals (AVEO) provided a regulatory update following a meeting with the FDA to discuss results from the August overall survival, or OS, analysis of the TIVO-3 trial and the company’s proposal to proceed with a new drug application, or NDA, for tivozanib. TIVO-3 is the company’s Phase 3 randomized, controlled, multi-center, open-label study to compare tivozanib, the company’s vascular endothelial growth factor receptor tyrosine kinase inhibitor, or VEGFR-TKI, to sorafenib in 350 subjects with highly refractory metastatic renal cell carcinoma, or RCC.

AVEO shares tumble following FDA meeting, Stockwinners

The TIVO-3 trial was designed to address the FDA’s concerns regarding the OS trend in the TIVO-1 trial. In the TIVO-1 trial, the company’s initial RCC pivotal trial, the FDA found that the inconsistent progression free survival, or PFS, and OS results and imbalance in post study treatments made the trial results uninterpretable and inconclusive when making a risk-benefit assessment necessary for drug approval.

The company previously announced that the TIVO-3 trial met its primary endpoint of demonstrating a significant improvement in PFS. The study also demonstrated a significant improvement in the secondary endpoint of overall response rate.

The August analysis of the secondary endpoint of OS was the second prespecified interim OS analysis of the TIVO-3 trial, and showed an updated OS hazard ratio, or HR, of 0.99 at two years from the last patient enrolled in the study.

In the FDA’s preliminary feedback, based on its assessment of the totality of evidence presented to date, the FDA recommended that the company not submit an NDA at this time.

The FDA stated that it remained concerned about the results of TIVO-3 in the context of the overall development of tivozanib. The FDA noted that the company’s current interim OS results do not abrogate the FDA’s concerns over detriment and that those results may worsen with final analysis at 263 events and that the median OS for tivozanib is worse than that of sorafenib.

In view of the changing first-line treatment landscape as well as the FDA’s continued concerns, the company informed the FDA that it intends to narrow its proposed indication to relapsed/refractory RCC.

At the meeting, the FDA acknowledged AVEO’s responses and reiterated its concerns about the survival information and the totality of data.

The FDA noted that the choice to submit the data is the company’s, and that a discussion with the Oncologic Drug Advisory Committee will likely be required.

The FDA said that if AVEO wishes to proceed with a revised OS analysis in June 2020, AVEO should submit an updated statistical analysis plan, or SAP, with a planned OS update based on the projected number of events at that time.

AVEO intends to submit to the FDA an update to the SAP for the final OS analysis consistent with these discussions, followed by an NDA submission in Q1 of 2020.

AVEO expects to report the final OS analysis in June 2020 based on a May 1, 2020 cutoff, at which point the company estimates that the study will have reached approximately 263 OS events, as discussed with the FDA.

The FDA and the company agreed that if the final analysis yields an OS HR above 1.00, the company will withdraw its NDA application.

AVEO shares are down 35% to $0.59.

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Canary in the mine, Homebuilders

Homebuilders continue tumble as Credit Suisse downgrades several in space

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Homebuilder shares tumble; Stockwinners

Many believe that housing market is the engine of the economy. If that is the case, we should expect a slow down in the economy. Housing prices have always been one of the first indicators of a slowdown or a coming out of a recession for the economy. We should brace ourselves for lower home prices!

Shares of homebuilders continued their decline after an analyst at Credit Suisse downgraded several companies in the space, saying that she expects more tempered demand and rising affordability concerns to weigh on homebuilding sentiment and broader group valuation, offsetting any near-term earnings beats.

A different analyst at the firm downgraded home improvement retailers Home Depot (HD) and Lowe’s (LOW) this morning, due to his concern that their recent results and stock prices have disconnected from housing.

HOMEBUILDERS DOWNGRADED

Credit Suisse analyst Susan Maklari told investors in a research note this morning that although she believes housing and macro fundamentals remain “intact,” including high consumer confidence and sustained low unemployment, unit gains are likely to moderate.

She sees any near-term earnings beats to be offset by even more tempered demand and rising affordability concerns. She sees average order growth for 2019 of 8%, compared to 11% in 2018 and 12% in 2017, and sees “relative” outperformance from builders who are able to capture above-trend gains due to product mix, like D.R. Horton (DHI), and geographic positioning, like PulteGroup (PHM). Maklari downgraded Lennar (LEN) and Meritage Homes (MTH) to Neutral from Outperform and lowered her respective price targets for the shares to $45 from $55 and to $36 from $50.

The analyst sees more limited upside to Lennar looking ahead as its strategic initiatives, as well as geographic exposure, are reflected in its current valuation.

While Meritage has benefited from efforts to drive improvements in operations in its East region as well as the rollout of its entry level targeted homes, Maklari believes much of the initial gains have been captured and she expects limited upside to the current valuation as comparisons become more difficult.

The analyst also downgraded KB Home (KBH) to Underperform from Neutral and lowered her price target to $18 from $27, saying that over the last several months her channel checks and Realtor Survey have pointed to slowing demand in higher cost MSAs, including California, which accounted for about 50% of the company’s 2017 revenues.

HOME DEPOT, LOWE’S ALSO DOWNGRADED

Another analyst at Credit Suisse, Seth Sigman, this morning downgraded Home Depot and Lowe’s, both to Neutral from Outperform, citing his concern that their recent results and stock prices have disconnected from housing. In a research note of his own, Sigman said his key concern is that home prices will continue to moderate, at least temporarily, as higher rates weigh on affordability.

Overall, Sigman still sees EPS growing, but sees less upside over the next 12 months relative to current estimates.

The analyst continues to view Home Depot as best-in-class in retail, but struggles to find multiple upside from its current premium level as housing sentiment shifts and some uncertainty arises. While he continues to expect meaningful improvement in sales and operating profit at Lowe’s under new CEO Marvin Ellison, Sigman thinks consensus estimates are baking that in. The analyst cut his price target on Home Depot to $204 from $222 and on Lowe’s to $111 from $115.

PRICE ACTION

Shares of Lennar dropped 3%, while Meritage Homes dropped 6.6% and KB Home declined 4.4%. Other homebuilders were dragged lower, including D.R. Horton, PulteGroup and Toll Brothers (TOL), which are all down over 3%.

Additionally, Home Depot and Lowe’s both declined over 4%. Further, XHB, the homebuilding ETF, is down nearly 3% today and about 10% month-to-date.


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Today’s stock disaster

GTx announces placebo-controlled ASTRID trial did not meet primary endpoint

GTx Phase 2 trial of enobosarm meets primary endpoint. Stockwinners.com
Today’s stock disaster

GTx (GTXI) announced that the ASTRID Trial, a Phase 2 double-blind, placebo-controlled clinical trial of orally-administered enobosarm in post-menopausal women with stress urinary incontinence, did not achieve statistical significance on the primary endpoint of the proportion of patients with a greater than 50% reduction in incontinence episodes per day compared to placebo.

The percentage of patients with a greater than 50% reduction after 12 weeks of enobosarm treatment was 58.9% for 3mg, 57.7% for 1mg and 52.7% for placebo.

Enobosarm was generally safe and well tolerated.

Reported adverse events were minimal and similar across all treatment groups.

“We are very disappointed that the ASTRID Trial did not achieve its primary endpoint,” said Robert Wills, executive chairman of GTx.

“We plan to conduct a full review of all the data. We want to thank the patients, physicians, study coordinators and the entire GTx team for their support of this novel study. We have an ongoing preclinical program assessing the potential of SARDs, our novel selective androgen receptor degrader technology, to treat castration-resistant prostate cancer. We are currently on target to have development candidates by year end, which we potentially plan to take into IND-enabling studies.”

GTXI closed at $23.29, it last traded at $2.00.


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L Brands drops after PINK CEO departs

L Brands slides after slashing earnings forecast, PINK brand CEO departure 

L Brands drops after PINK CEO departs, Stockwinners
L Brands drops after PINK CEO departs, Stockwinners

Shares of L Brands (LB) are sliding after the parent of Victoria’s Secret and Bath & Body Works reported better than expected quarterly earnings and revenue but lowered its profit outlook.

While Jefferies analyst Randal Konik reduced his price target for L Brands and recommended investors sell the shares, his peer at Citi argued that the guidance cut was expected and reiterated a Buy rating on the stock.

QUARTERLY RESULTS

Last night, L Brands reported second quarter adjusted earnings per share of 36c and revenue of $2.98B, both above the consensus of 34c and $2.93B, respectively.

The company also lowered its FY18 earnings per share view to $2.45-$2.70 from $2.70-$3.00, with consensus at $2.77.

Additionally, L Brands said second quarter consolidated same-store sales for Stores and Direct were up 3%, while same-store sales for the quarter at Victoria’s Secret were down 1% and up 10% at at Bath & Body Works.

Alongside quarterly results, the company announced that Denise Landman, CEO of Victoria’s Secret PINK, has made the decision to retire at the end of this year.

Pink CEO departs, Shares slide

Amy Hauk, currently president for merchandising and product development of Bath & Body Works, will replace Landman as CEO of Victoria’s Secret PINK.

JEFFERIES SAYS SELL SHARES

In a research note to investors this morning, Jefferies’ Konik lowered his price target for L Brands to $20 from $23 and recommended investors sell the shares.

The analyst argued that the company’s fiscal year earnings guidance cut is still not low enough, and sees PINK on “precipice of massive declines.” Further, the analyst thinks L Brands’ free cash flow guidance is too high as its net debt continues to grow.

The dividend is at risk in the medium-term and the company needs to save cash now “before the next recession,” Konik contended.

The analyst reiterated an Underperform rating on the stock.

Meanwhile, his peer at JPMorgan also lowered his price target for L Brands to $26 from $28.

While the stock was bracing for an earnings forecast reduction, the magnitude of management’s near-term third quarter cut was greater than expected, calling for break-even earnings at the low-end, the first time in more than a decade, analyst Matthew Boss contended.

He reiterated a Neutral rating on the shares. Voicing a similar opinion, Wells Fargo analyst Ike Boruchow lowered his price target for L Brands to $30 from $42 and kept a Market Perform rating on the shares as the core Victoria’s Secret concept continues to struggle.

Pointing out that the second quarter results “raised a number of red flags,” including “severe” margin contraction, “bloated” inventory, Bath & Body Works returning to margin contraction and issues at PINK, Nomura Instinet analyst Simeon Siegel reiterated a Neutral rating and $31 price target on L Brands’ shares.

CITI SAYS RISK/REWARD STILL ATTRACTIVE

Still bullish on the stock, Citi analyst Paul Lejuez told investors that while the turnaround path for Victoria’s Secret “remains unclear,” the market expected last night’s fiscal 2018 guidance cut.

With a 7.5% dividend yield, the stock’s risk/reward is attractive, particularly given actions by management that suggest “they have more than enough liquidity to continue funding the dividend,” Lejuez argued.

The analyst reiterated a Buy rating on the shares and said he views the dividend as safe.

While lowering her price target for L Brands to $44 from $49, B. Riley FBR analyst Susan Anderson kept a Buy rating on the stock as she believes Bath & Body Works continues to excel and Victoria’s Secret remains a work in progress.

While weaker PINK performance is “disappointing,” the analyst believes management is taking steps to correct lounge performance as well as improve performance in lingerie.

Further, Anderson highlighted that L Brands reiterated its commitment to share repurchases and dividend, and reiterated that the company has substantial liquidity to fund the dividend and other expenditures.

PRICE ACTION

In Thursday’s trading, shares of L Brands have plunged over 12% to $28.50.


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Zynerba lower following disappointing results

Zynerba says target blood levels in ZYN001 THC-Prodrug patch study not achieved

Zynerba lower following disappointing results, Stockwinners
Zynerba lower following disappointing results, Stockwinners

Zynerba Pharmaceuticals (ZYNE) announced top line results from a Phase 1 clinical program studying ZYN001, the Company’s patent-protected, pro-drug of tetrahydrocannabinol delivered via a transdermal patch, in healthy volunteers.

The program assessed the safety and pharmacokinetics in single and multiple doses of several formulations of ZYN001.

The top line results of this Phase 1 study indicate that target blood levels of 5 to 15 ng/ml THC were not achieved.

ZYN001 was very well tolerated with minimal skin erythema.

There were no serious adverse events or discontinuations for subjects receiving ZYN001.

As a result of these data, the Company will focus its development efforts and investments on the ZYN002 Fragile X syndrome, developmental and epileptic encephalopathy and adult refractory epilepsy programs.

The company expects that this change will extend its cash runway into the second half of 2019.

This Phase 1 study was a single and multiple dose, placebo-controlled first-in-man study to assess the safety and pharmacokinetics of ZYN001 administered as a transdermal patch to healthy adult subjects.

Several formulations and patch wear times ranging from 24 hours to 14 days were assessed in in 60 healthy subjects who were randomized to ZYN001 or placebo.

ZYNE closed at $9.61, it last traded at $7.60.


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Esperion falls after drug failure

Esperion falls after Phase 3 study of bempedoic acid met primary endpoint

Esperion announces 'positive' top-line results from bempedoic acid study, Stockwinners.com
There were no clinically relevant differences between the bempedoic acid and placebo groups

Esperion (ESPR) announced top-line results from the second pivotal, Phase 3 study, the long-term safety study of bempedoic acid 180 mg, in this case evaluating the safety, tolerability and efficacy of bempedoic acid versus placebo in high-risk patients with atherosclerotic cardiovascular disease who are inadequately controlled with current lipid-modifying therapies, including maximally tolerated statin therapy.

The study included 2,230 patients and met the primary endpoint of safety and tolerability and the key efficacy endpoint with on-treatment LDL-C lowering of an additional 20% at twelve weeks, the company said.

Patients treated with bempedoic acid also achieved a significant reduction of 22% in high-sensitivity C-reactive protein, an important marker of the underlying inflammation associated with cardiovascular disease, Esperion added.

There were no clinically relevant differences between the bempedoic acid and placebo groups in the occurrence of adverse events with 78.5% and 78.7% respectively; or serious adverse events with 14.5% and 14.0% respectively, it added.

Discontinuations due to AEs were 10.9% and 7.1%, respectively for the bempedoic acid and placebo groups; discontinuations due to muscle-related AEs were 2.2% and 1.9%, respectively, in the bempedoic acid and placebo groups.

“In this study, the largest in our Phase 3 program, bempedoic acid was observed to be safe and well tolerated over a 52-week period, while providing clinically and statistically significant LDL-cholesterol lowering and reductions in hsCRP when added on to maximally tolerated statin therapy,” said Tim Mayleben, CEO of Esperion.

“In the coming months, results from our three remaining pivotal Phase 3 studies are expected to further validate the safety, efficacy and tolerability profile of bempedoic acid and the bempedoic acid / ezetimibe combination pill, definitively establishing these once-daily oral therapies as convenient and complementary to existing treatments for the 13 million people in the U.S. with ASCVD who live with elevated levels of LDL-cholesterol despite taking maximally-tolerated lipid-modifying therapy and remain at high risk for further cardiovascular disease or events, including heart attack and stroke.”

Esperion shares in premarket trading are down 27% to $52.40.


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Barron’s is bearish on Fitbit, L Brand and Nokia

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:

Stockwinners offers Barron's review of Stockwinners offers stocks to buy, stocks to watch, upgrades, downgrades, earnings, Stocks to Buy On Margin
Stockwinners offers Barron’s review of stocks to buy

BULLISH   MENTIONS:

Invesco stock weakness a buying opportunity – U.S. stocks are down 5% from their January 26 peak, while shares of Invesco (IVZ) have fallen much more, which gives investors a buying opportunity, Jack Hough writes in this week’s edition of Barron’s. Driven by strong exchange-traded fund lows, BlackRock’s (BLK) shares have skyrocketed in recent years while Invesco’s have lagged behind, he notes, adding that the latter’s forward price-earnings multiple now represents a bargain-basement 44% discount to BlackRock’s.

Nordstrom, TJX appear to have most staying power– Department store stocks have rebounded in recent months, but they are not all likely to emerge as winners, Avi Salzman writes in this week’s edition of Barron’s. Nordstrom (JWN) and TJX (TJX) appear to have the most staying power, with the former the more attractive choice in terms of valuation, he notes. Kohl’s (KSS) and Macy’s (M) are showing new life but need to prove they can repeat their fourth quarter performances, Salzman says, adding that JCPenney (JCP) and Dillard’s (DDS) remain “tricky.”

BEARISH  MENTIONS:

L Brands shares may still go lower given multiple problems – Shares of L Brands  (LB) tumble after quarterly results, with the stock trading at just 13.5 times 12-month earnings forecasts, Ben Levisohn writes in this week’s edition. While it may look tempting, Levisohn cannot help think that the multiple problems facing the company could send them lower still.

Not much time left for Fitbit – In a follow-up story, Barron’s notes that plenty of people still use fitness trackers and Fitbit (FIT) still sells millions of them, but the company has acknowledged that the market is “rapidly changing.” Fitbit CEO James Park has pledged to expand the company’s line of watches, putting it in direct competition with Apple (AAPL), but there is no indication that Fitbit knows how to nurture an “ecosystem” of software developers.

VMware investors not happy with possible Dell deal – VMWare (VMW) fell on Thursday and Friday in the wake of a CNBC report that Dell and VMware are considering a reverse merger in which the latter would issue shares to Dell Technologies and allow it to go public without doing an IPO, Andrew Bary writes in this week’s edition of Barron’s. A Dell/VMware combination could benefit Dell’s tracking stock for VMware, he notes, while adding that VMware investors are not happy about a possible transaction as it would link a thriving, cash-rich company with a highly leveraged Dell.

5G cannot deploy fast enough for Ericsson/Nokia – While the battle to dominate the future of wireless networks would be a boon for any wireless arms merchant such as Nokia (NOK) or Ericsson (ERIC), the race to build the new technology dubbed 5G is not going to produce a boom in revenue overnight, and both companies are struggling to get back on their feet, Tiernan Ray writes in this week’s edition of Barron’s. If they stabilize this year, and sentiment starts to warm about 5G, it could boost their stock prices even if 5G takes a while to pay off, he adds.


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Gun stocks fall as pressure mounts on NRA

Gun stocks fall as corporate pressure mounts on NRA

Gun stocks fall as pressure mounts on NRA. Stockwinners.com
Gun stocks fall as pressure mounts on NRA – AR15

The National Rifle Association, or #NRA, an American organization that advocates for gun rights, is seeing public pressure mount from corporations that it has partnered with in the wake of the Parkland, Florida school shooting, which resulted in 17 deaths.

PARTNERSHIPS DROPPED

The nation’s largest privately owned bank, First National Bank of Omaha, said on Thursday that it will not renew its contract with the NRA for a branded Visa card.

A spokesman for the bank said in a statement, “Customer feedback has caused us to review our relationship with the NRA. As a result, First National Bank of Omaha will not renew its contract with the National Rifle Association to issue the NRA Visa Card.”

Additionally on Thursday, privately held Enterprise Holdings, which owns the Enterprise, Alamo, and National car rental brands, said it will end its partnership with the NRA — which gave NRA members discounts — next month.

FORMER PARTNERS DISTANCING THEMSELVES

Hotel companies Best Western and Wyndham Hotels, which were previously targeted for boycotts following the Newton, Connecticut elementary school shooting in 2012, have posted dozens of tweets each, letting customers know they are no longer affiliated with the NRA.

Wyndham tweeted repeatedly, “Please know, Wyndham is no longer affiliated with the NRA,” while Best Western tweeted a similar message, “Best Western Hotels & Resorts does not have an affiliation with and is not a partner of the National Rifle Association.”

MORE PARTNERSHIPS DROPPED

Over the course of the day, more companies joined the growing chorus, including Hertz (HTZ), which ended its rental car discount program with the NRA, Symantec (SYMC), which stopped its discount program with the NRA, Metlife (MET), which ended its insurance discount program with the NRA, and Chubb (CB), which will stop underwriting a NRA-branded insurance policy for gun owners.

PRICE ACTION

Publicly traded gunmakers are down in Friday’s trading on a day the broader markets are rising. American Outdoor Brands Corp (AOBC), formerly known as Smith & Wesson, is down 5.5% to $9.56, while Sturm Ruger & Company (RGR) is down 3.67% to $47.20.


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MiMedx tumbles on questionable “sales practices”

MiMedx sinks after announcing internal investigation into sales practices

MiMedx tumbles on questionable "sales practices". Stockwinners.com
MiMedx tumbles on questionable “sales practices”

Shares of MiMedx (MDXG) are sinking after the company delayed its Q4 results to conduct an internal investigation.

The biopharmaceutical company said earlier that its Audit Committee has engaged independent legal and accounting advisors to conduct an internal investigation into current and prior-period matters relating to allegations regarding certain sales and distribution practices.

Company executives are also reviewing, among other items, the accounting treatment of certain distributor contracts.

MiMedx believes, however, that based on information available to date, the “outcome of such investigation should not have a material impact on revenue guidance for 2018.”

The company’s CEO Pete Petit stated, “”Our Board of Directors and executives believe it is in the best interests of our Company and shareholders for our Audit Committee to address these allegations in an internal investigation with the support of independent legal and accounting advisors. We look forward to releasing our 2017 financial results as soon as this process is complete.

MiMedx has been experiencing rapid growth over the last few years as our product portfolio continues to meet significant, unmet needs in the marketplace. We are literally saving lives by saving limbs, and we expect to continue to deliver operational and clinical success in the months and years to come.”

MDXG closed at $14.47. It last traded at $11.50.


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Algos and VIX

Algos are manipulating the VIX according to a whistleblower complaint

CBOE Global Markets falls amid VIX swings - Stockwinners.com
CBOE Global Markets falls amid VIX swings 

Algorithms  (Algos) are manipulating the VIX according to a whistleblower complaint filed with the SEC and CBoE, according to a Bloomberg report filed late yesterday.

“Algos,” as they’re called, automatically execute trades based on pre-programmed criteria. They can process millions of trades in seconds, predict market movements, take advantage of arbitrage opportunities, speculate on trends and otherwise do whatever programmers design them for.

The letter filed by the lawyer for the unnamed whistleblower claims that derivative VIX equity volatility index can be targeted and moved by posting quotes on options on the underlying S&P 500 without needing to actually trade them or deploy capital.

This has reportedly cost investors $100’s of millions/month in profits and may have contributed to the flat-line on the VIX followed by its surge to 50.3 last week, according to the report.

The CBoE denied the validity of the manipulation charge, citing factual errors and fundamental misunderstanding of the relationship between the VIX index, VIX futures and volatility.

The search for a scapegoat will no doubt continue after the VIX surge last week contributed to the 10-11% correction on underlying stocks, along with the demise of the XIV inverse VIX short-volatility index.

CBOE Global Markets (CBOE) is up 24 cents to $110.92′


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