Allergan receives $290 million in damages

Pershing to pay $193.75M, Valeant to pay $96.25M to settle lawsuits

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Allergan receives $290 million in damages

Pershing Square announced that it has reached an agreement in principle, subject to court approval, to settle lawsuits concerning the attempted acquisition of Allergan (AGN) by Pershing Square Capital Management and Valeant Pharmaceuticals (VRX) in 2014, which were filed in the Central District of California.

Pershing Square and Valeant have agreed to split the $290M total settlement such that Pershing Square will pay $193.75M and Valeant will pay $96.25M.

Pershing says, “While Valeant had originally agreed to pay 60% of the cost of the settlement, Valeant and Pershing Square had different views on the desirability and timing of settling the case, which previously prevented settlement.

On December 19, 2017, Pershing Square acquired control of the settlement of the litigation in exchange for agreeing to pay a greater percentage of the settlement amount.”

Pershing Square CEO Bill Ackman adds, “We continue to believe the case had absolutely no merit. We decided, however, that it was in the best interest of our investors to settle the case now instead of continuing to spend substantial time and resources pursuing the litigation.”

Pershing Square had previously set aside $75M in legal reserves related to the case. The incremental cost of settling the litigation will reduce the company’s and the private funds’ performance and net asset value by 132 basis points.


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Nova Lifestyle enters blockchain frenzy

Nova Lifestyle to launch blockchain-based digital community

Nova Lifestyle enters blockchain frenzy. Stockwinners.com
Nova Lifestyle enters blockchain frenzy

Nova LifeStyle (NVFY) announced that the company has initiated design of a digital community that brings together designers and customers to deliver real time product and user experience built on Blockchain-empowered technology platform named The iDesign Blockchain Platform, which it believes to be a first in the furniture industry.

“iDesign Blockchain Technology Inc.,” a Nova LifeStyle subsidiary intends to establish a trusted digital ecosystem that links the experiences of independent product designers, customers and manufacturers with Nova-branded products on a creative global digital platform powered by Blockchain technology.

The iDesign Blockchain Technology Platform plans to target various artistic creator or designer as an innovation center, focusing on their ideation process to deliver enhanced user experience.

The company will implement these new initiatives with cash flow from existing operations.

Nova LifeStyle, Inc.  designs, manufactures, markets, and sells residential furniture for middle and upper middle-income consumers worldwide. The company develops upholstered, wood, and metal-based residential furniture for the living rooms, dining rooms, bedrooms, and home offices. It also offers sofas, chairs, dining tables, beds, entertainment consoles, cabinets, and cupboards.

CRYPTO TREND

Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) in select research. Overstock (OSTK), Digital Power (DPW), Long Blockchain (LTEA), Seven Stars Cloud Group (SSC), Riot Blockchain (RIOT), Longfin (LFIN) and Social Reality (SRAX) are other stocks that have been touted, or promoted themselves, as a way to play the crypto theme.

NVFY closed at $2.51. It last traded at $2.95 in pre-market trading.


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Celgene’s Revlimid fails in lymphoma patients

Celgene’s Revlimid in follicular lymphoma shows no superiority vs. standard

Celgene tumbles
Celgene’s Revlimid fails in lymphoma patients

Celgene (CELG) and the Lymphoma Academic Research Organisation reported results from a phase III, randomized, open-label, international clinical study evaluating Revlimid plus rituximab – R2 – followed by R2 maintenance compared to the standard of care with rituximab plus chemotherapy followed by rituximab maintenance in patients with previously untreated follicular lymphoma.

The R2 treatment arm did not achieve superiority in the co-primary endpoints of complete response or unconfirmed complete response at 120 weeks and progression-free survival during the pre-planned analysis. Neither arm was superior for either of the co-primary endpoints.

The safety findings were consistent with the known profiles of the regimens investigated. Additional analyses are ongoing and planned.

ANALYST  REACTION

Piper cuts Celgene target to $100 on second Revlimid failure in lymphoma – Piper Jaffray analyst Christopher Raymond lowered his price target for Celgene to $100 from $109 after the Phase 3 Relevance trial evaluating Revlimid plus Rituximab in front line follicular lymphoma failed to show superior efficacy versus standard-of-care.

This is the second Revlimid failure in lymphoma following last year’s disappointment in diffuse large B-cell lymphoma,

#Raymond tells investors in a research note. This latest failure could have a near-term negative impact on Revlimid’s revenue trajectory since a “decent chunk” of off-label use in the U.S. likely stems from lymphoma, the analyst contends. He sees a “new element of uncertainty” and keeps a Neutral rating on Celgene.

Jefferies analyst Michael Yee says the failed Phase III Relevance study announced tonight by Celgene is irrelevant. The study had somewhat low expectations and it also makes Revlimid “less big,” which isn’t necessarily a bad problem, Yee tells investors in a research note.

The analyst says his thesis on the stock is unchanged and keeps a Buy rating on Celgene with a $125 price target.

The stock in after-hours trading is down 4% to $103.76. It has a 52-week trading range of $94.55 – $147.17.

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Insys Therapeutics sued by N. Carolina

N. Carolina AG Stein files lawsuit against Insys Therapeutics over Subsys

N. Carolina files lawsuit against Insys. Stockwinners.com
N. Carolina files lawsuit against Insys Therapeutics 

North Carolina Attorney General Josh Stein filed a lawsuit against drug manufacturer Insys Therapeutics (INSY) alleging an extensive scheme involving kickbacks, deception and fraud in marketing its drug #Subsys.

Subsys is a spray form of the synthetic opioid fentanyl, which is approximately 50 times stronger than heroin and 100 times more potent than morphine.

Subsys is approved only for adult cancer patients who are already on round-the-clock opioids for pain, but experience additional, breakthrough pain and for whom no other pain medications are effective.

The lawsuit alleges that Insys gave illegal kickbacks to doctors for promoting and prescribing Subsys for non-cancer patients, including through a multi-million dollar speaker program that rewarded physicians who wrote prescriptions for the drug.

Insys employees also allegedly pushed doctors to switch patients who were being prescribed non-equivalent fentanyl prescriptions to Subsys, and often at a starting dose of up to twelve or sixteen times larger than the label directed.

Finally, the suit alleges that Insys deceived health insurers into covering Subsys prescription claiming Insys employees often posed as prescribers or their staff and invented medical histories for patients to ensure the drug would be covered.

Only about 10% of prescriptions for which Insys sought prior authorization from insurers were for patients with breakthrough cancer pain, the only use the FDA had approved.

INSY is down 18 cents to $7.02.


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Chipotle to name a new CEO

Chipotle forms search committee to identify new CEO

Chipotle Mexican Grill spokesman Chris Arnold says the company is aware of a "small number" of illnesses linked to a store in Sterling, Virginia
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Chipotle Mexican Grill  (CMG) announced that Steve Ells, chairman and CEO — and the founder of the company in 1993 — will become executive chairman following the completion of a search to identify a new CEO.

The Board has formed a search committee comprised of Directors Robin Hickenlooper and Ali Namvar, as well as Ells, to identify a new leader with demonstrated turnaround expertise to help address the challenges facing the company, improve execution, build customer trust, and drive sales.

Ells said, “Simply put, we need to execute better to ensure our future success.

The Board and I are committed to bringing in an experienced leader with a passion for driving excellence across every aspect of our business, including the customer experience, operations, marketing, technology, food safety, and training.

Bringing in a new CEO is the right thing to do for all our stakeholders. It will allow me to focus on my strengths, which include bringing innovation to the way we source and prepare our food. It will ultimately improve our ability to provide our guests with delicious food that is prepared with high quality ingredients that are raised responsibly and served in a way that is accessible to everyone. I am confident that this will allow us to deliver value for our shareholders, and provide rewarding opportunities for our employees. Chipotle has vast unrealized potential.

As we work hard to restore our brand, I believe we can capitalize on opportunities, including in areas such as the digital experience, menu innovation, delivery, catering, and domestic and international expansion, to deliver significant growth.”

ANALYST COMMENTS

Chipotle CEO change to be welcomed by investors, says SunTrust – After Chipotle announced it has started a search to identify a new CEO and that founder Steve Ells will become executive chairman when one is identified, SunTrust analyst Jake Bartlett said he views the news as positive for both the company’s turnaround efforts and the stock as he expects investors to welcome a CEO with a proven operational track record. Bartlett has a Buy rating and $355 price target on Chipotle shares.

William Blair downgraded the stock to Market Perform from Outperform. William Blair analyst Sharon Zackfia downgraded Chipotle Mexican Grill to Market Perform . While a new leader may accelerate the company’s turnaround longer term, today’s move likely signals that Chipotle’s trends remain under pressure and creates more near-term uncertainty, Zackfia tells investors in a research note. The analyst adds that transition years, in which costs accelerate before sales trends rebound, often follow new CEOs. As such, she’s more cautious on Chipotle’s earnings recovery trajectory following today’s announcement. The market, on the other hand, is applauding the company’s decision.

CMG closed at $285.86. It last traded at $300 in pre-market action.


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Cytokinetics’ ALS drug fails

Cytokinetics Phase 3 clinical trial of tirasemtiv did not meet primary endpoint

Cytokinetics Phase 3 clinical trial of tirasemtiv did not meet primary endpoint. See Stockwinners.com for details

Cytokinetics (CYTK) announced that Ventilatory Investigation of Tirasemtiv and Assessment of Longitudinal Indices after Treatment for a Year in ALS, or VITALITY-ALS, the international Phase 3 clinical trial of tirasemtiv in patients with amyotrophic lateral sclerosis, or ALS, did not meet the primary endpoint of change from baseline in slow vital capacity, or SVC, which was evaluated at 24 weeks following randomization or any of the secondary endpoints in the trial which were evaluated at 48 weeks.

No new safety or tolerability findings related to tirasemtiv were identified in VITALITY-ALS. Serious adverse events were similar between patients who received tirasemtiv or placebo but more patients discontinued double-blind treatment on tirasemtiv than on placebo primarily due to non-serious adverse events related to tolerability.

The decline in SVC from baseline to 24 weeks was smaller in patients who received any dose of tirasemtiv in VITALITY-ALS compared to the decline in patients receiving placebo.

The largest differences from placebo were observed in patients randomized to the mid- and high-dose groups of tirasemtiv who could tolerate and remain on their target dose, although those differences were not statistically significant.

“While we are deeply disappointed by the results of VITALITY-ALS, we remain committed to people with ALS who are fighting this devastating disease and who need new therapies to slow the decline of respiratory function and muscle strength that are key hallmarks of disease progression,” said Robert Blum, Cytokinetics’ President and CEO.

“We have decided to suspend the development of tirasemtiv. While we believe that VITALITY-ALS demonstrated pharmacologic activity for the mechanism of action, we also believe that limitations of tirasemtiv may be addressed with our next-generation fast skeletal muscle activator, CK-2127107. Based on previous Phase 1 clinical studies, we believe CK-2127107 will be better tolerated and potentially more effective than tirasemtiv in patients with ALS and look forward to Phase 2 trial results in 2018. We are grateful to the trial investigators, site personnel, patients and caregivers who participated in VITALITY-ALS.”

CYTK closed at $11.10.


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Applebee’s sales continue to suffer

DineEquity revises FY17 outlook

DineEquity Revises its guidance. See Stockwinners.com for details

DineEquity (DIN) revises expectations for Applebee’s domestic system-wide comparable same-restaurant sales performance to range between negative 5.5% and negative 6.5%.

This compares to previous expectations of between negative 6.0% and negative 8.0%.

Reiterates expectations for IHOP’s domestic system-wide comparable same-restaurant sales performance to range between negative 1.0% and negative 3.0%.

Reiterates expectations for Applebee’s franchisees to develop between 20 and 30 new restaurants globally, the majority of which are expected to be international openings.

Reiterates expectations for Applebee’s closures to range between approximately 105 and 135 restaurants.

Reiterates expectations for IHOP franchisees and its area licensee to develop between 80 and 95 restaurants globally, the majority of which are expected to be domestic openings.

Revised expectations for IHOP closures to range between 25 and 30 restaurants. This compares to previous expectations of between 20 and 25 restaurants.

Revised expectations for Franchise segment profit to be between $297 million and $303 million. This compares to previous expectations of between $302 million and $314 million. This downward revision is primarily due to additional expected reserves related to the collectability of Applebee’s royalties.

Reiterates expectations for the Rental and Financing segments to generate approximately $38 million in combined profit.

Reiterates expectations for general and administrative expenses to range between $166 million and $172 million, including non-cash stock-based compensation expense and depreciation of approximately $22 million.

Reiterates expectations for interest expense to be approximately $62 million. Approximately $3 million is projected to be non-cash interest expense.

Reiterates expectations for weighted average diluted shares outstanding to be approximately 18 million shares.

Reiterates expectation for the income tax rate to be approximately 40%. Revised expectations for cash flows provided by operating activities to range between $64 million and $74 million. This compares to previous expectations of between $80 million and $90 million.

The decline is primarily due to the timing of fourth quarter 2017 marketing spend and projections for lower Franchise segment profit as discussed above.

Reiterates expectations for capital expenditures to be approximately $14 million. Revised expectations for adjusted free cash flow (See “Non-GAAP Financial Measures” below) to range between $60 million and $70 million. This compares to previous expectations of between $76 million and $86 million.

DIN closed at $42.96.


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Fitbit is selected by the National Institutes of Health

Fitbit selected by NIH precision medicine research program

fitbit is selected by the National Health Institute. See Stockwinners.com for details

Fitbit (FIT) announced it has been selected as the first wearable for use in the national All of Us Research Program established by the White House in 2015.

This project is funded by a supplement to a funding award from the National Institutes of Health to The Scripps Research Institute.

All of Us Research Program seeks to enroll one million or more participants to accelerate research that may improve the ability to prevent and treat disease based on individual characteristics.

Researchers will use data gathered from the program to learn more about how individual differences in lifestyle, environment and biological makeup can influence health and disease.

As a subset of the All of Us Research Program, the Scripps Translational Science Institute leads The Participant Center, a unit tasked with enrolling and engaging diverse populations across the country.

Through this network, STSI will provide up to 10,000 Fitbit Charge 2 and Fitbit Alta HR devices to a representative sample of All of Us volunteers for a one-year study. At the end of the study, the researchers will provide recommendations on how the devices could be more broadly incorporated into the All of Us Research Program.

Additionally, the study will generate a data set that presents a unique opportunity to explore the relationship between health indicators such as physical activity, heart rate and sleep in conjunction with other critical health outcomes that will be captured as part of All of Us.

FIT closed at $6.06.


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Barron’s is bullish on Facebook, bearish on GE

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

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BULLISH  MENTIONS

Cummins, United Technologies good industrial bets – Cummins (CMI), United Technologies (UTX), Honeywell (HON), Ingersoll-Rand (IR) and Illinois Tool Works (ITW) boast good dividends that should rise, Lawrence Strauss writes in this week’s edition of Barron’s.

Facebook still looks like a buy – In a follow-up story, Barron’s says that Facebook’s  (FB) political-advertising imbroglio has obscured some very good revenue news. Slowing supply growth helped drive up demand and prices for Facebook ads, marking a reacceleration of growth, the report notes, adding that the company is also coming up with innovative ways to cash in on booming interest in video and creating new ad opportunities on its Messenger and Instagram platforms.

Kohl’s updated return policy raises Amazon takeover questions – Following Kohl’s (KSS) announcement that Amazon (AMZN) purchases could be returned at its stores in Chicago and Los Angeles, some have questioned if the e-Commerce giant is planning to buy the retailer, Steven Sears writes in this week’s edition of Barron’s. Citing Madison Global Partners’ Bernard Sosnick, the publication said Amazon may be testing the merits of owning a retailer that can build private-label products to showcase Amazon devices and services, with the holiday season to test the theory further.

May be time to play Mattel – Mattel (MAT) is half the stock it used to be, but the maker of Barbie and Hot Wheels knows it has a problem, Ben Levisohn writes in this week’s edition of Barron’s. Management said it would target $650M in cost cuts through 2019, while also enacting initiatives to reduce unpopular products and create new ones to help boost sales, and if it works, Mattel could be a winner, he adds.

Upside ahead for smaller companies – As tech giants soar and as the rally favors the biggest companies, there may be upside on deserving, smaller companies, such as AMD (AMD), Impinj (PI) and Everspin Technologies (MRAM), Tiernan Ray writes in this week’s edition of Barron’s. Meanwhile, companies such as Finisar (FNSR), Lumentum (LITE), Viavi (VIAV), Oclaro (OCLR), Applied Optoelectronics (AAOI), Inphi (IPHI), and NeoPhotonics (NPTN) are grappling with a slowdown in spending in China, but are “back for real,” he argues.

Intel AI push to boost growth – Artificial intelligence has been perceived to be a threat to Intel’s (INTC) decades-long dominance in computer chips, but its shares are up 30% this year, maybe due to third quarter earnings or maybe due to its plans to release a new line of A.I. chips developed in collaboration with Facebook (FB), and as the company’s purchase of Mobileye makes it an early leader in autonomous driving, Jack Hough writes in this week’s edition of Barron’s, adding that he still sees more upside ahead.

IBM, Google among potential AI winners – After decades of development, Artificial Intelligence-style computing now works, and its impact will spread far beyond board games such as Go or chess, Bill Alpert writes in this week’s edition of Barron’s. Citing Wells Fargo analyst Ken Sena, the report says the biggest beneficiaries will be the firms pioneering the technology, with machine learning already powering search suggestions of Google (GOOG; GOOGL) and Microsoft (MSFT), chatbots like Amazon’s (AMZN) Alexa, and the recommendations at Facebook (FB), and Netflix (NFLX). Given China’s vast size, the analyst also has similar outperformance expectations for Alibaba (BABA), Baidu (BIDU), JD.com (JD), and Tencent (TCEHY), Barron’s adds.

BEARISH  MENTIONS

Powerful bearish trend in General Electric – Investor’s confidence has eroded and General Electric’s (GE) stock price is at 2012, with a powerful bearish trend, Michael Kahn writes in this week’s edition of Barron’s. But while it may look like a bargain and the stock could be the buy of the decade, Kahn argues that he still needs to see the market give him either an unambiguous selling climax, or a strong upside reversal. If not for inertia, most investors would probably have already sold their shares of General Electric, but they may be persuaded as early as November 13, when its new leader, John Flannery, holds an investor day meeting, Steven Sears writes in this week’s edition of Barron’s. However, he notes that it is difficult to know how investors will react to whatever is announced at the meeting. If GE releases a draconian restructuring plan, shares could rally as investors reason that all of the bad news is out of the way, but if they lack confidence in Flannery’s approach, the stock could trade sharply lower, Barron’s adds.

Sell Under Armour as troubles ‘run deep.’  – In a follow-up story, Barron’s says that despite the skid in Under Armour (UA) shares, the sportswear company faces continuing woes, from a shift to lifestyle garments to the internet. Further, the publication notes that there seems little reason to hold shares through the holidays in hopes of a rebound.


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Shares of Shopify Spooked by Short Sellers

Shopify seeks to defend against short-seller after earnings beat

shop shares spooked by short-sellers. See Stockwinners.com for details

Shares of Shopify (SHOP) dropped in Tuesday’s trading despite the company posting quarterly results that beat analysts’ expectations.

The company continued to defend itself against criticism of short-seller Andrew Left, who has accused the company of being the “hottest new get rich quick scheme on the internet” and “a business dirtier than Herbalife (HLF).”

EARNINGS BEAT

Shopify, a Canadian retail software company, Tuesday morning reported third quarter adjusted earnings per share of 5c on revenue of $171.5M, exceeding analysts’ estimates calling for a loss per share of (1c) on revenue of $165.6M.

Subscription Solutions revenue was up 65% to $82.4M, Shopify said.

Shopify raised its fiscal year 2017 revenue view to $656M-$658M from $642M-$648M, above analysts’ estimates of $648.3M, and forecast fourth quarter revenue to be $206M-$208M, also above the $203.7M consensus.

SHOPIFY AND ANDREW LEFT

Andrew Left, a short-seller who founded Citron Research, published a report on Shopify earlier this month claiming shares “should be down 45% immediately….and that is before the company is caught by the FTC.”

According to Left’s report, Shopify “hides under the shroud of a cloud based e-commerce solution for Small and Medium sized Business,” but is actually the “promoter of the hottest new get rich quick scheme on the internet,” and he believes the FTC “will take notice.”

Additionally, Citron called Shopify “a business dirtier than $HLF [Herbalife],” which has been the target of FTC scrutiny and a well-publicized short held by Bill Ackman.

Left told Reuters a week later that he will “most likely” issue a follow-up report and that he is “looking at many parts” of Shopify’s business.

On its quarterly earnings conference call this morning, Shopify defended itself against Left’s claims, with CEO Tobias Lutke, who has previously called Left a “short-selling troll,” denying his “preposterous,” “unsubstantiated” claims.

“We don’t sell business opportunities — we sell a commerce platform,” Lutke told analysts and investors, adding that Shopify fully complies with FTC rules. Lutke also said the company has not been contacted by the FTC regarding Left’s criticisms.

RESPONSE to EARNINGS

Citron Research posted a response to Shopify’s conference call comments, stating in part: “We have no interest in going back and forth with Shopify, we are releasing this commentary as a response to the numerous media requests we have received. Citron understands Shopify’s platform is effective for small and medium sized businesses to launch e-commerce platforms. We never doubted they have good software for accomplishing this task. That being said, we were unimpressed by the company’s response to Citron’s conclusion that Shopify sells business opportunities through affiliate marketers, and they depend on affiliate marketing to drive their growth metrics. It is impossible to understand the real strength of Shopify’s core business without getting specifics of their true customer acquisition cost. To accomplish that, churn needs to be analyzed, so investors can discount or strip out the dirty/illegal part of their business that will inevitably be curbed by regulators. Immaturity and hubris of management prevents them from addressing these issues…Citron has assembled a comprehensive folder, which we have forwarded to the FTC, and we are certain that the company will face an investigation for selling business opportunities.”

PRICE ACTION

Shopify shares trading in New York are down over 11% to $97.22. SHOP has a 52-weeks trading range of $37.74 – $123.94.


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Things turn ugly for Ulta Beauty

Ulta drops as Piper survey shows slowdown in teens’ beauty spending 

$ULTA Beauty spending lower. See Stockwinners.com for details

Shares of Ulta Beauty (ULTA) dropped in Wednesday’s trading after the cosmetics retailer was downgraded at Piper Jaffray, which cited a survey showing a slowdown in beauty spending by teenagers.

Ulta had been removed from the Conviction Buy list at Goldman Sachs earlier this week and also received a price target cut at Oppenheimer yesterday.

SLOWDOWN IN SPENDING

Piper Jaffray analyst Erinn #Murphy downgraded Ulta to Neutral from Overweight and cut her price target for shares to $210 from $260.

In a note to clients, Murphy said her firm’s Fall 2017 Teen Survey results indicated spending declines of 13% in color cosmetics among all female teenagers. While skincare declines were “less bad,” down 7% year-over-year, overall beauty wallet was down low-double digits.

She also noted that Piper saw broader signs of strength from LVMH’s (LVMUY) Sephora, and that Sephora’s Beauty Insider program has gained share while Ulta’s Ultimate Rewards Program has lost share.

Murphy said she is “incrementally concerned” on current category dynamics.

REMOVAL FROM CONVICTION BUY LIST

Earlier this week, Goldman analyst Matthew #Fassler removed Ulta from the firm’s Conviction Buy List and lowered his price target to $267 from $290, telling clients that recent data points suggest a “more complicated path to recovery.”

Oppenheimer analyst Rupesh Parikh this week cut his price target for Ulta to $210 from $250 as he believes sustained outperformance is “less likely” from here and sees a more competitive brick and mortar landscape in the coming quarters.

STILL A BUYING OPPORTUNITY

One analyst still seems positive on the stock, however.

William Blair analyst Dan #Hofkin said in a note yesterday that while he recognizes concerns surrounding slower industry growth, “the Amazon (AMZN) overhang,” and the lull in the beauty industry, he believes Ulta is “differentiated” and positioned to deliver strong earnings and sales growth going forward.

He does not believe Amazon is having a materially larger impact on Ulta than a year ago.

Ulta also faces competition from department stores like Macy’s (M), which are discounting high-end cosmetics and offering rewards, but Hofkin, who has an Outperform rating on Ulta shares, said he has not seen material changes in department stores’ approach to beauty and believes they have not impacted Ulta to-date.

WHAT’S NOTABLE

In August, Ulta reported quarterly comparable sales that declined from last year.

The earnings report followed “softer” commentary from L’Oreal (LRLCY) on its earnings call regarding trends in its North American beauty business, increasing promotional activity from the department store channel and more difficult year-over-year comparisons that “could now signal a potentially more challenging beauty backdrop going forward.”

OTHERS TO WATCH

e.l.f. Beauty (ELF) is down 2.6% this morning after Piper’s Murphy lowered her price target on shares, while Sally Beauty (SBH) is fractionally lower.

PRICE ACTION

In Wednesday’s trading, shares of Ulta Beauty are down 1.25% to $199.77. Shares are down nearly 22% year-to-date.


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Mylan jumps after FDA approves generic Copaxone

Teva, Momenta slide after Mylan gets earlier than expected MS drug nod

Mylan jumps after FDA approves generic Copaxone. See Stockwinners.com for details

Shares of Mylan (MYL) are soaring after the company announced that the Food and Drug Administration had approved its generic version of Teva Pharmaceutical’s (TEVA) multiple sclerosis treatment Copaxone.

The news sent both Teva and generic competitor Momenta Pharmaceuticals (MNTA) into negative territory.

COPAXONE GENERIC APPROVAL

Mylan has announced that the FDA has approved Mylan’s Abbreviated New Drug Applications for Glatiramer Acetate Injection 40mg/mL for 3-times-a-week injection and Glatiramer Acetate Injection 20mg/mL for once-daily injection.

These are substitutable generic versions of Teva’s Copaxone 40mg/mL and Copaxone 20mg/mL, which are indicated for the treatment of patients with relapsing forms of multiple sclerosis.

Mylan will begin shipping imminently.

Commenting on the news, Teva said that any launch by Mylan of a generic version of Copaxone 40mg/mL prior to final resolution of the pending patent appeals and other patent litigation should be considered an “at-risk” launch, which could subject Mylan to significant damages among other remedies.

‘BIG WIN’ FOR MYLAN

Wells Fargo analyst David #Maris told investors that he sees this is a “big win” for Mylan, as Copaxone is an approximately $3.4B brand in the U.S., with sales last quarter of approximately $843M.

Under an optimistic case, at a 40% discount Mylan may secure 40% share of the 40mg market, Maris contended, which would mean generic Copaxone sales for Mylan could be approximately $172M per quarter from Copaxone 40mg while it is alone in the market. Further, the analyst estimates that at this level, generic Copaxone 40mg could contribute approximately 13c in earnings per share per quarter.

The analyst has a Market Perform rating and $32 price target on Mylan’s shares.

Meanwhile, his peer at BTIG told investors in a research note of his own that he believes the company gaining approval on both strengths of Copaxone not only validates Mylan’s core competency as a premier generics company, it also provides an important signal to investors that “one can simply never count out Mylan,” especially regarding complex generic products.

Analyst Timothy #Chiang estimates that Mylan could obtain up to $450M of sales from its generic version of Teva’s Copaxone in the first year in which it is marketed, and raised his price target on the shares to $45 from $42, while reiterating a Buy rating on the stock.

READ-THROUGH FOR TEVA, MOMENTA

In a research note of his own, Oppenheimer analyst Derek #Archila told investors that Mylan’s approval of its substitutable generic Copaxone 20mg and 40mg is “clearly another headwind” for Teva, but not that unexpected.

The analyst believes a 5% move to the downside is an appropriate move for the stock based on the news, and reiterated a Perform rating on Teva shares.

Meanwhile, JPMorgan analyst Chris #Schott argued the approval puts further pressure on Teva’s “already challenged” near-term earnings profile and delivering efforts.

Additionally, the analyst pointed out that the earlier than expected approval for Mylan also represents a setback for Momenta’s generic Copaxone opportunity.

Schott had assumed the company’s Glatopa would be the first generic version of Copaxone 40mg to enter the market, but he acknowledged that the product has been delayed due to manufacturing issues at a Pfizer (PFE) plant handling fill for the drug.

Nonetheless, he continues to see a “large and fairly durable” generic opportunity for Glatopa.

Schott reiterated an Overweight rating on Momenta’s shares.

PRICE ACTION

In Wednesday’s trading, shares of Mylan have gained over 18% to $38.60, while Teva and Momenta (MNTA) have dropped about 14% and 17%, respectively.


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Sonic hacked, Millions of credit card numbers stolen

Sonic breach may have impacted ‘millions’ of cards, Krebs on Security says

https://stockwinners.com/blog

Sonic Drive-In (SONC) has acknowledged unusual credit card activity at its drive-ins after a possible security breach, Krebs on Security reports, potentially impacting “millions” of credit and debit card accounts.

According to the blog, the stolen credit and debit cards are being peddled online.

In a statement to the blog, Sonic says “Our credit card processor informed us last week of unusual activity regarding credit cards used at SONIC. We are working to understand the nature and scope of this issue, as we know how important this is to our guests. We immediately engaged third-party forensic experts and law enforcement when we heard from our processor. While law enforcement limits the information we can share, we will communicate additional information as we are able.”

Christi Woodworth, VP of public relations at Sonic, told Krebs On Security that the investigation is still in its early stages, and the company does not yet know how many or which of its stores may be impacted.

Sonic has more than 3,600 locations in 45 states across the U.S.

Earlier this month, Equifax (EFX) announced that it has been hacked affecting some 140 million people.

STOCKS to WATCH

Stocks that may rally on the news are those in the software security space. They include: FEYE, PANW, VRSN, RSYS, FTNT, and RSYS.


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Axovant trial misses endpoint, shares tumble

Axovant Phase 3 Alzheimer’s study misses co-primary endpoints

 

Axovant Phase 3 Alzheimer's study misses co-primary endpoints. See Stockwinners.com

Axovant Sciences (AXON) announced that the Phase 3 Mindset clinical trial of its investigational drug intepirdine in patients with mild to moderate Alzheimer’s disease who were receiving background donepezil therapy did not meet its co-primary efficacy endpoints.

At 24 weeks, patients treated with 35 mg of intepirdine did not experience improvement in cognition or in measures of activities of daily living as measured by the Alzheimer’s Disease Assessment Scale-Cognitive Subscale and by the Alzheimer’s Disease Cooperative Study-Activities of Daily Living scale, respectively, compared to patients treated with placebo.

In the study, intepirdine was generally well tolerated, the company added.

After 24 weeks of treatment, change from baseline in cognition was non-significantly improved in the intepirdine arm versus the placebo arm.

In addition, there was essentially no difference between the intepirdine and placebo arms in change from baseline in activities of daily living.

Of the endpoints analyzed to date, the only endpoint in which any significant improvement was seen in the intepirdine arm versus the placebo arm was in the first key secondary endpoint, the Clinician Interview-Based Impression of Change plus caregiver interview, or CIBIC-plus.

Axovant said, “The Company will work with investigators to conclude the MINDSET open-label extension study. ” David Hung, CEO of Axovant, added, “While we are deeply disappointed by these trial results, we also are saddened for the millions of patients and families impacted by Alzheimer’s disease. However, we believe that the fight against Alzheimer’s and other important areas of unmet need in neurology is too important to be derailed by this setback…. We remain committed to advancing our pipeline.”

Axovant Sciences says the Headway trial studying intepirdine in patients with dementia with Lewy bodies remains on track to report topline results at the end of 2017. This study investigates two doses of intepirdine, 35 mg, the dose used in the failed Mindset trial, and 70 mg, a higher dose intended to engage both 5-HT6 and 5-HT2A receptors.

Intepirdine has received Fast Track designation from the FDA for the treatment of dementia with Lewy bodies.

PRICE  ACTION

Axovant (AXON) closed yesterday down 6c to $22.59. Shares last traded at $6.00 in pre-market trading.


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Intercept issues statement

Intercept issues statement regarding Ocaliva safety, dosing in PBC patients

stockwinners.com ICPT

Intercept Pharmaceuticals (ICPT) provided comment on the Ocaliva Dear Healthcare Provider, or DHCP, letter issued on September 12, and the subsequent drug safety communication issued by the FDA on September 21.

Ocaliva was approved in the U.S. in May 2016 for the treatment of patients with primary biliary cholangitis, or PBC, with an inadequate response to, or intolerant of the standard of care, UDCA.

PBC is a rare and life-threatening progressive liver disease that primarily afflicts women and is a leading cause of liver failure with resulting need for liver transplant in women. #Ocaliva therefore represents an important treatment option for patients with PBC and since its approval more than 3,000 patients have been treated with Ocaliva in the U.S. alone.

More than 150 patients are enrolled in ongoing open label phases of Intercept’s Phase 2 and Phase 3 clinical trials and have been on OCA treatment for periods ranging from approximately three to seven years.

Recommended dosing in the label for Ocaliva in earlier stage PBC patients with no or mild hepatic impairment starts at 5 mg once daily, increasing after three months to 10 mg once daily based on tolerability and treatment response.

However, in late stage patients with moderate or severe hepatic impairment, recommended dosing starts at 5 mg once weekly, with the possibility to gradually increase to a maximum of 10 mg twice weekly. The reason for this less frequent dosing is that systemic and hepatic concentrations of Ocaliva are predicted to significantly increase in such patients and dose-related liver adverse reactions have previously been documented in PBC patients participating in clinical trials.

In the course of Intercept’s post-marketing pharmacovigilance activities, deaths have been reported in PBC patients with moderate or severe hepatic impairment.

In an analysis performed by Intercept and in consultation with the #FDA, Intercept concluded that these patients were prescribed once daily doses of Ocaliva, which is seven times higher than the recommended weekly dose in such patients.

As a result, Intercept issued the #DHCP letter and the FDA subsequently issued their own safety communication to reinforce recommended label dosing.

Both communications remind healthcare providers of the importance of the recommended reduced dosing of Ocaliva in PBC patients with moderate or severe hepatic impairment, while reiterating the importance of close monitoring of PBC patients for progression of their disease and the occurrence of liver-related adverse reactions.

ANALYST’S  COMMENTS

Credit Suisse analyst Alethia Young thinks Intercept’s stock reaction is overdone and general uncertainty is what continues to put pressure on the stock, after concerns associated with their lead asset, Ocaliva that is currently on the market for primary biliary cholangitis patients.

The analyst argues that shares are under pressure now due to lack of comment/clarity from management, and thinks shares will recover as management provides further discussion post safety letter, clarity is given around black box warning risk, and any relevant updates that ongoing NASH trial has been reviewed recently for safety imbalances. Young reiterates an Outperform rating and $201 price target on the shares.

PRICE  ACTION

ICPT has a 52-weeks trading range of $60.97 – $172.75. ICPT shares were trading around $105 when the company issued the DHCP letter. On Friday, shares closed at $61.50. In pre-market trading on Monday, shares traded at $66.22 or up $4.63 as shares get a dead-cat bounce.


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