Allergan sold for $63 billion

AbbVie to acquire Allergan in cash, stock deal valued around $63B

Watch Allergan into better botox data. See Stockwinners.com
Allergan sold for $63 billion, Stockwinners

AbbVie (ABBV) and Allergan (AGN) announced that the companies have entered into a definitive transaction agreement under which AbbVie will acquire Allergan in a cash and stock transaction for a transaction equity value of approximately $63B, based on the closing price of AbbVie’s common stock of $78.45 on June 24.

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Abbvie to pay $63B to buy Allergan, Stockwinners

Upon completion of the transaction, AbbVie will continue to be incorporated in Delaware as AbbVie Inc. and have its principal executive offices in North Chicago, IL.

AbbVie will continue to be led by Richard Gonzalez as chairman and CEO.

Two members of Allergan’s board, including chairman and CEO, Brent Saunders, will join AbbVie’s board upon completion of the transaction.

Under the terms of the Transaction Agreement, Allergan Shareholders will receive 0.8660 AbbVie Shares and $120.30 in cash for each Allergan Share that they hold, for a total consideration of $188.24 per Allergan Share.

The transaction represents a 45% premium to the closing price of Allergan’s Shares on June 24.

AbbVie anticipates that the Acquisition will provide annual pre-tax synergies and other cost reductions of at least $2B in year three while leaving investments in key growth franchises untouched.

Botox is one of Allergan’s leading products, Stockwinners

The synergies and other cost reductions will be a result of optimizing the research and early stage portfolio, and reducing overlapping R&D resources, driving efficiencies in SG&A, including sales and marketing and central support function costs, and eliminating redundancies in manufacturing and supply chain, and leveraging procurement spend.

The synergies estimate excludes any potential revenue synergies.

AbbVie is expected to generate significant annual operating cash flow, which will support a debt reduction target of $15B to $18B before the end of 2021, while also enabling a continued commitment to Baa2/BBB or better credit rating and continued dividend growth.

It is expected that, immediately after the closing of the Acquisition, AbbVie Shareholders will own approximately 83% of AbbVie on a fully diluted basis and the Allergan Shareholders will own approximately 17% of AbbVie on a fully diluted basis.

PIPER COMMENTS

Piper Jaffray analyst Christopher Raymond said his first reaction to the deal could be summed up with the phrase “two turkeys don’t make an eagle,” but he is “willing to listen” despite his skepticism about the transaction.

Though he cannot say he is “excited at the prospect of AbbVie entering the field of medical aesthetics,” EPS accretion of 10% in year one and over 20% at peak, and the potential for meaningful deleveraging and cost cutting, has his attention, Raymond said. He keeps a Neutral rating on AbbVie based on his initial reaction to the deal announcement.

Humira is AbbVie’s blockbuster drug, Stockwinners

Wells Fargo

Wells Fargo analyst David #Maris said he views the deal as a good alternative for Allergan versus the current share price, but he is not convinced its a better long term alternative given the eventual biosimilar threat to Abbvie’s blockbuster drug Humira.

With that said, Maris tells investors that “deals at such premiums are rarely killed because of a bad strategic fit or longer -term value outlook in the absence of other bidders.” Though he would not completely rule out an activist investor disrupting the deal, he thinks it is unlikely given there has been a strategic review of the company for some time. Maris, who said he thinks the deal could go through, keeps an Outperform rating on Allergan shares.

Leerink 

SVB Leerink analyst Marc Goodman is not surprise that one of the large pharma companies has made a bid on Allergan (AGN) given the multi-year stock weakness.

Juvederm is another one of Allergan’s top selling products. Stockwinners

However, he believes a $188 price is “too low,” as he “can’t believe that Allergan is not being taken out at least at $200,” which “begs the question” whether this was a process or is AbbVie (ABBV) “opportunistically pursuing a wounded stock.” If it is the latter, Goodman believes this bid could initiate others to pursue Allergan as well. He has an Outperform rating on Allegan’s shares.

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Orthofix reports positive results of its artificial cervical disc

Orthofix announces full two-year outcomes from IDE study of M6 cervical disc

Orthofix reports positive results of its artificial cervical disc, Stockwinners

Orthofix Medical (OFIX) announced the full two-year outcomes from its U.S. Investigational Device Exemption study of the M6-C artificial cervical disc.

Currently, the most common form of surgery for treating cervical degenerative disc disease is an anterior cervical discectomy and fusion (ACDF). More than 200,000 cervical procedures are performed each year to relieve compression on the spinal cord or nerve roots. Spinal fusion surgery creates a solid union between two or more vertebrae to help strengthen the spine and alleviate chronic neck pain. There are several types of spinal fusion surgery, as well as varied instrumentation used to secure the fusion.

The data demonstrates that patients treated with the M6-C artificial cervical disc had significant improvements in neck and arm pain, function and quality of life scores.

Additionally, these patients had a significant difference in the reduction of pain and opioid medications use when compared to anterior cervical discectomy and fusion patients.

At 24 months, patients in the ACDF group who were still using pain medications had a seven times higher rate of opioid use than those in the M6-C disc group.

A prospective, non-randomized, concurrently controlled clinical trial, the M6-C IDE study was conducted at 23 sites in the United States with an average patient age of 44 years.

The study evaluated the safety and effectiveness of the M6-C artificial cervical disc compared to ACDF for the treatment of single level symptomatic cervical radiculopathy with or without cord compression.

The overall success rate for the protocol-specified primary endpoint for the M6-C disc patients was 86.8 percent at 24 months and 79.3 percent in the control group.

This data statistically demonstrates that cervical disc replacement with the M6-C disc is not inferior to treatment with ACDF. Secondary outcomes at 24 months include: Patients who received the M6-C disc demonstrated statistically significant improvement in the Neck Disability Index as measured at week six and months three, six, 12 and 24.

Meaningful clinical improvement was seen in the following pain scores: 91.2 percent of patients who received the M6-C disc reported an improvement in neck pain compared to 77.9 percent in patients who underwent the ACDF procedure.

90.5 percent of the M6-C patients reported improvement in arm pain scores compared to 79.9 percent in ACDF patients. Prior to surgery, 80.6 percent of the M6-C disc patients and 85.7 percent of the ACDF patients were taking some type of pain medication for the treatment of their cervical spine condition. At 24 months, the rate of M6-C patients who were still taking some type of pain medication dropped to 14.0 percent compared to 38.2 percent of the ACDF patients.

Of these, there was a seven times higher rate of opioid use with the ACDF patients than with patients who received the M6-C disc.

There was a statistically significant difference in the average mean surgery time – 74.5 minutes for patients receiving the M6-C disc versus 120.2 minutes for those patients having the ACDF procedure.

In addition, there was a statistically significant difference in the mean length of hospital stay – 0.61 days for the M6-C patients versus 1.10 days for ACDF patients. Subsequent surgery at the treated level was needed in 4.8 percent of the ACDF patients compared to 1.9 percent of the M6-C disc patients.

There were no device migrations reported in the study. Overall patients receiving the M6-C disc reported a 92-percent satisfaction rate with the surgery, and 93 percent said they would have the surgery again.

There were 3.8 percent serious adverse events related to the device or procedure in the M6-C disc group versus 6.1 percent in the ACDF group.

The M6-C disc received FDA approval in February 2019 based on the results of this study.

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Ascendis Pharma reports positive data, shares jump

Phase 3 heiGHt trial met primary objective in children with pediatric growth hormone deficiency

Ascendis Pharma (ASND) announced positive top-line results from the phase 3 heiGHt Trial, a randomized, open-label, active-controlled trial that compared once-weekly TransCon Growth Hormone to a daily growth hormone in children with pediatric growth hormone deficiency.

Ascendis Pharma reports positive data, shares jump, Stockwinners

The trial met its primary objective, demonstrating that TransCon hGH was observed to be non-inferior and, additionally, superior to the daily hGH on the primary endpoint of annualized height velocity at 52 weeks.

In the primary analysis of the intent-to-treat population using ANCOVA, TransCon hGH demonstrated an AHV of 11.2 cm/year compared to 10.3 cm/year for the daily hGH.

The treatment difference was 0.86 cm/year with a 95% confidence interval of 0.22 to 1.50 cm/year.

The AHV for TransCon hGH was significantly greater than the daily hGH.

The AHV was greater for TransCon hGH than for the daily hGH at each visit, with the treatment difference reaching statistical significance from and including week 26 onward.

The incidence of poor responders was 4% and 11% in the TransCon hGH and daily hGH arms, respectively. All sensitivity analyses completed from the trial support the primary outcome, indicating the robustness of these results.

Results from the trial indicate that TransCon hGH was generally safe and well-tolerated, with adverse events consistent with the type and frequency observed with daily hGH therapy and comparable between arms of the trial.

ASND is up $44.64 to $113.95.

Cantor Fitzgerald analyst Alethia Young raised her price target for Ascendis Pharma to $185 from $100 as she was “positively surprised” that the TransCon hGH study for growth hormone achieved a superior result on annualized growth velocity of .86cm.

The analyst thinks that the expectation had been non-inferiority with a slightly favorable numerical trend. Young also thinks safety was clean as well, which has been a challenge with other long acting growth hormones.

She would expect shares to trade up 50%-100% based on her model, and sees continued upside from shares as additional programs, such as TransCon PTH, achieve proof of concept and more candidates from the proprietary TransCon platform enter the clinic. The analyst reiterates an Overweight rating on the shares.

Growth hormone (GH) has been available for management of the short stature associated with growth hormone deficiency (GHD) for more than 60 years; recombinant DNA-derived human growth hormone (rhGH) has been available since 1985. While availability is no longer a problem, there still remains a number of difficulties with the diagnosis of GHD, resulting mainly from the lack of appropriate tools to make (or exclude) the diagnosis reliably.

The incidence of short stature associated with GHD has been estimated to be about 1:4000 to 1:10000 . It is the primary indication for GH treatment in childhood, which presently requires daily subcutaneous injections for the patient and substantial cost for the healthcare system. Based on these premises, it is clear that an accurate diagnosis is essential

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Spark Therapeutics sold for $4.8 billion

Roche acquires Spark Therapeutics for $114.50 per share, a 122% premium

Spark tumbles on hemophilia study , Stockwinners

Roche acquires Spark Therapeutics for $114.50 per share , Stockwinners

Spark Therapeutics (ONCE) announced that it has entered into a definitive merger agreement for Roche (RHHBY) to fully acquire Spark Therapeutics at a price of $114.50 per share in an all-cash transaction.

This corresponds to a total equity value of approximately $4.8B on a fully diluted basis, inclusive of approximately $500M of projected net cash expected at close.

The per share price represents a premium of 122% to Spark’s closing price on Feb. 22, 2019. The merger agreement has been unanimously approved by the boards of both Spark and Roche.

Under the terms of the merger agreement, Roche will commence a tender offer to acquire all outstanding shares of Spark’s common stock, and Spark will file a recommendation statement containing the unanimous recommendation of the Spark board that Spark shareholders tender their shares to Roche.

Spark Therapeutics will continue its operations in Philadelphia as an independent company within the Roche Group.

The closing of the transaction is expected to take place in Q2 of 2019.

Bernstein analyst Vincent #Chen notes that he has long seen Spark Therapeutics (ONCE) as a takeout candidate in gene therapy after the Wall Street Journal reported Roche (RHHBY) is near acquiring the company for close to $5B.

The analyst thinks the deal makes sense as adding hemophilia gene therapy to Hemlibra sets up Roche as a leader in next-gen non-factor hemophilia drugs, CNS gene therapy pipeline is a good fit for Roche’s growing neuroscience franchise, and as it serves as a cornerstone in establishing Roche as a gene therapy leader, to rival the likes of Novartis (NVS).


Credit Suisse analyst Martin Auster notes that the Wall Street Journal recently reported that Roche (RHHBY) is nearing a deal with Spark Therapeutics (ONCE) for $5B.

The analyst believes the transaction value implies the re-emergence of Spark’s hemophilia A gene therapy program with a competitive profile and substantial value assigned to additional pipeline programs, such as SPK-3006 for Pompe, and the technology platform.

Spark’s acquisition would further strengthen the company’s position in the hemophilia space, he contends. Further, Auster argues that the deal may increase M&A interest among other gene therapy names in his coverage universe, which include BioMarin (BMRN), Sarepta (SRPT), Ultragenyx (RARE), PTC (PTC) and Solid Biosciences (SLDB). He sees particularly strong read-through to Sarepta.


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Altria to buy stake in Juul Labs

Altria, under pressure from FDA, said in talks to buy stake in Juul Labs

 

Altria to buy stake in Juul Labs, Stockwinners
Altria to buy stake in Juul Labs, Stockwinners

Following a report that Altria Group (MO) is in talks to take a “significant” stake in Juul Labs, an analyst said that an agreement could make strategic sense for the tobacco giant to gain exposure to a fast-growing product that poses a threat to its cigarette business.

The Wall Street Journal said Altria is in talks to take a “significant” minority interest in Juul Labs, a controversial e-cigarette startup.

According to people familiar with the matter, any deal is likely several weeks away. Juul was last valued at $16B in a private fundraising round this summer.

Altria has an agreement with Philip Morris (PM) to market IQOS, subject to regulatory approval. Philip Morris is already selling it in 43 countries and has said it could get approved for the U.S. by the end of the year.

Juul has drawn criticism over its products’ popularity with teens.

Juul, whose products are sold online and in convenience stores, gas stations and vape shops, accounted for about three-quarters of the U.S. e-cigarette market in the four-week period ended November 17, according to the Wells Fargo analysis of Nielsen data.

Earlier this month, the U.S. Food and Drug Administration announced plans to place restrictions on sales of flavored e-cigarettes.

Juul also said it would restrict sales of nearly all its flavored pods to the internet, and stop most social media promotion to combat youth vaping.

“More than 99% of all social media content related to JUUL Labs is generated through third-party users and accounts with no affiliation to our company. Nevertheless, we understand that many young people get their information from social media. To remove ourselves entirely from participation in the social conversation, we have decided to shut down our U.S.-based social media accounts on Facebook (FB) and Instagram. We have never used Snapchat (SNAP),” the company stated.

WHAT’S NOTABLE

Following the FDA statement on the agency’s proposed steps against underage smoking, Altria General Counsel Murray Garnick said it “welcomed” the FDA’s efforts to address the underage use of e-vapor products and said it believes Congress should raise the legal age of purchase for all tobacco products to 21.

Last month, Altria said it would pull its pod-based e-vapor products from the market until approved by FDA.

The company said Nu Mark will remove MarkTen Elite and Apex by MarkTen pod-based products from the market “until these products receive a market order from the FDA or the youth issue is otherwise addressed,” and that for the remaining MarkTen and Green Smoke cig-a-like products, Nu Mark will sell only tobacco, menthol and mint varieties.

Nu Mark will discontinue the sale of all other flavor variants of our cig-a-like products until these products receive a market order from the FDA.

The FDA is also pursuing a ban on menthol cigarettes, which could remove nearly a third of the roughly 250B cigarettes sold annually in the U.S., The Wall Street Journal said.

A rule could take a year or more to finalize, the FDA said. The FDA concluded in 2013 that menthols are harder to quit and likely pose a greater health risk than regular cigarettes.

ANALYST COMMENTARY

Morgan Stanley analyst Pamela Kaufman said she has no knowledge of a potential deal between Altria and Juul but that taking such a stake could make strategic sense for Altria to gain exposure to a fast growing product that poses a threat to its cigarette business.

Altria does not have a robust reduced risk product portfolio and Juul’s e-cigs could significantly enhance its competitive position, stated Kaufman, who also believes Altria would likely be buying in at a lower valuation than the previously reported $15B given the FDA recently prohibited flavored pods sales in convenience stores.

 OTHERS TO WATCH

Publicly traded companies in the tobacco products space also include Philip Morris and British American Tobacco (BTI).


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Yum China receives takeover offer

Yum China rises after reportedly spurning $46 per share takeover bid

Yum China receives takeover offer, Stockwinners
Yum China receives takeover offer, Stockwinners

Shares of Yum China (YUMC) are on the rise following a media report saying the company has rejected a buyout offer of $46 per share made by a consortium led by Hillhouse Capital.

Earlier this month, Bloomberg had reported that China’s sovereign wealth fund, China Investment Corp., was part of the consortium bidding to take Yum China private.

BUYOUT OFFER REPORTEDLY REJECTED

Yum China has rejected a private buyout offer from a consortium of investors that valued the company at over $17B, according to The Wall Street Journal, citing a person familiar with the matter.

An investor group led by Hillhouse Capital Group in recent months offered to take the restaurant operator private at $46 per share, but the all-cash offer was turned down by the company’s board in recent weeks, source told the publication.

Last month, The Information had reported that Hillhouse Capital was in talks to acquire Yum China. The company operates over 8,000 KFC and Pizza Hut restaurants across mainland China.

A takeover led by Hillhouse would assist the company in accelerating its efforts to implement high-tech initiatives in its brick-and-mortar stores in order to attract Chinese millennials, the report pointed out.

CHINA INVESTMENT PART OF CONSORTIUM

Earlier this month, Bloomberg reported that China’s sovereign wealth fund, China Investment Corp., was part of the consortium bidding to take Yum China private.

The sovereign fund and DCP Capital, an investment fund run by former KKR (KKR) executives, are considering a buyout of Yum China, which runs KFC and Pizza Hut outlets, along with Hillhouse Capital, the publication added. Yum China spun off from Yum! Brands (YUM) in 2016.

PRICE ACTION

In tuesday’s trading, shares of Yum China trading in New York are off their earlier highs, but are trading up 3.8% to $37.14.


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SodaStream sold for $3.2 billion

PepsiCo agrees to acquire SodaStream for $144 per share in cash

SodaStream sold for $3.2 billion, Stockwinners
SodaStream sold for $3.2 billion, Stockwinners

PepsiCo (PEP) and SodaStream (SODA) announced that they have entered into an agreement under which PepsiCo has agreed to acquire all outstanding shares of SodaStream for $144.00 per share in cash, which represents a 32% premium to the 30-day volume weighted average price.

PepsiCo’s strong distribution capabilities, global reach, R&D, design and marketing expertise, combined with SodaStream’s differentiated and unique product range will position SodaStream for further expansion and breakthrough innovation.

Under the terms of the agreement between PepsiCo and SodaStream, PepsiCo has agreed to acquire all of the outstanding shares of SodaStream International for $144.00 per share, in a transaction valued at $3.2B.

The transaction will be funded with PepsiCo’s cash on hand.

The acquisition has been unanimously approved by the boards of both companies.

The transaction is subject to a SodaStream shareholder vote, certain regulatory approvals and other customary conditions, and closing is expected by January 2019.

“SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio, while catalyzing our ability to offer personalized in-home beverage solutions around the world,” said Ramon Laguarta, CEO-Elect and President, PepsiCo.

“From breakthrough innovations like Drinkfinity to beverage dispensing technologies like Spire for foodservice and Aquafina water stations for workplaces and colleges, PepsiCo is finding new ways to reach consumers beyond the bottle, and today’s announcement is fully in line with that strategy.”


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Zogenix sharply higher on data

Zogenix says primary endpoint achieved in second Phase 3 clinical trial of ZX008

Zogenix sharply higher on data, Stockwinners
Zogenix sharply higher on data, Stockwinners

Zogenix (ZGNX) reported positive top-line results from its second confirmatory Phase 3 study for its investigational drug, ZX008, for the treatment of children and young adults with Dravet syndrome.

Dravet syndrome is a rare, catastrophic, lifelong form of epilepsy that begins in the first year of life with frequent and/or prolonged seizures. Previously known as Severe Myoclonic Epilepsy of Infancy (SMEI), it affects one out of 15,700 individuals, 80% of whom have a mutation in their SCN1A gene.

The study results, which are consistent with those reported in Study 1, Zogenix’s first pivotal Phase 3 study, successfully met the primary endpoint and all key secondary endpoints, demonstrating that ZX008, at a dose of 0.5 mg/kg/day, is superior to placebo when added to a stiripentol regimen. Key Findings: Patients taking ZX008 achieved a 54.7% greater reduction in mean monthly convulsive seizures compared to placebo.

The median reduction in monthly convulsive seizure frequency was 62.7% in the ZX008 group compared to 1.2% in placebo patients. ZX008 also demonstrated statistically significant improvement versus placebo in both key secondary measures, including patients with clinically meaningful reductions in seizure frequency and longest seizure-free interval.

ZX008 was generally well-tolerated in this study with the adverse events consistent with those observed in Study 1 and the known safety profile of fenfluramine.

No patient exhibited cardiac valvulopathy or pulmonary hypertension at any time in the study.

Secondary endpoints assessed ZX008 compared to placebo in terms of the proportions of patients who achieved greater than or equal to 50% reductions and greater than or equal to 75% reductions in monthly convulsive seizures, as well as the median of the longest convulsive seizure-free interval.

ZX008 was generally well-tolerated in this study, with the adverse events consistent with those observed in Study 1 and the known safety profile of fenfluramine.

The incidence of treatment emergent adverse events was similar in both the treatment and placebo groups, with 97.7% of patients receiving ZX008 experiencing at least one treatment emergent adverse event compared to 95.5% of patients in the placebo group.

The most common adverse events in the ZX008 group were decreased appetite, diarrhea, pyrexia, fatigue, and nasopharyngitis.

The incidence of serious adverse events was similar in both the treatment and placebo groups, with 14% of patients in the ZX008 group experiencing at least one treatment emergent serious adverse event compared to 15.9% of patients in the placebo group. T

wo patients in the ZX008 group had an adverse event leading to study discontinuation compared to one in the placebo group.

ZGNX closed at $46.30, it last traded at $55.30.


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Amazon.com launches new delivery business

Amazon.com launches new offering to help entrepreneurs start delivery businesses

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Amazon.com launches new delivery business

Amazon (AMZN) announced the launch of a new offering that helps entrepreneurs build their own companies delivering Amazon packages.

Amazon will take an active role in helping interested entrepreneurs start, set up and manage their own delivery business.

Successful owners can earn as much as $300,000 in annual profit operating a fleet of up to 40 delivery vehicles.

Individual owners can build their business knowing they will have delivery volume from Amazon, access to the company’s sophisticated delivery technology, hands-on training, and discounts on a suite of assets and services, including vehicle leases and comprehensive insurance.

Over time, Amazon will empower hundreds of new, small business owners to hire tens of thousands of delivery drivers across the U.S., joining a robust existing community of traditional carriers, as well as small-and-medium-sized businesses that already employ thousands of drivers delivering Amazon packages.

The offering provides technology and operational support to individuals with little to no logistics experience the opportunity to run their own delivery business.

To help keep startup costs as low as $10,000, entrepreneurs will also have access to a variety of exclusively negotiated discounts on important resources they’ll need to operate a delivery business.

The deals are available on Amazon-branded vehicles customized for delivery, branded uniforms, fuel, comprehensive insurance coverage, and more.

Amazon is constantly looking for hands-on leaders who think big and deliver results for our customers. These principles are very familiar to those who have served our country in the armed forces.

The company is committing $1M towards funding startup costs for military veterans, offering $10,000 reimbursements for qualified candidates to build their own businesses.

AMZN closed at $1,660.51.


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Cara reports positive top-line data from CR845

Cara reports ‘positive’ top-line data from Phase 2/3 trial of I.V. CR845

 

Cara reports positive top-line data from CR845, Stockwinners
Cara reports positive top-line data from CR845, Stockwinners

Cara Therapeutics (CARA) announced positive top-line data from the adaptive Phase 2/3 trial of I.V. CR845 in patients undergoing abdominal surgeries.

At the 1.0 mcg/kg dose, I.V. CR845 demonstrated statistically significant reductions in pain intensity compared to placebo at all pre-specified post-operative periods of 0-6 hours; 0-12 hours; 0-18 hours; and 0-24 hours.

Additionally, I.V. CR845 treatment resulted in statistically significant reductions in the incidence of post-operative nausea and vomiting over the 24-hour period post-surgery for both 0.5 and 1.0 mcg/kg doses.

The adaptive Phase 2/3 trial was a randomized, double-blind, placebo-controlled trial designed to evaluate the analgesic efficacy and safety of two doses of I.V. CR845 versus placebo given at pre-specified intervals pre- and post-surgery in 444 patients undergoing abdominal surgery, composed of 228 patients who underwent ventral hernia surgery and 216 patients who completed a hysterectomy procedure.

Patients received a 2X loading dose of I.V. CR845 pre-surgery and four additional doses given at 0, 6, 12 and 18 hours after surgery. The primary endpoint was pain relief as measured by Area Under the Curve of the Numerical Rating Scale pain intensity scores collected over the first 24-hour period after the baseline dose post-surgery for all combined surgeries.

In addition to safety, the secondary endpoints included incidence of vomiting, improvement in impact scores of post-operative nausea and vomiting, reduction in use of rescue analgesic medication, as well as patient global assessment at 24 hours post baseline dose after surgery. I.V. CR845 achieved statistical significance for the primary endpoint of pain relief over 24 hours post-surgery with the 1.0 mcg/kg dose versus placebo and also demonstrated statistical significance across two additional pre-specified sensitivity analyses for pain relief for the same period post-surgery. The 0.5 mcg/kg dose did not achieve statistical significance over the 0-24 hour period.

In addition, improvement in pain AUC was statistically significant for both the 0.5 and 1.0 mcg/kg doses over 0 to 6 hours and 0 to 12 hours periods and also statistically significant for the 1.0 mcg/kg dose over the 0 to 18-hour period post-surgery.

At 6 and 24 hours after baseline dose post-surgery, there were statistically significant improvements in PONV impact scores with both doses of I.V. CR845 compared to placebo: 0.5 mcg/kg and 1.0 mcg/kg. There were statistically significant differences between placebo and both doses of CR845 with respect to the total use of anti-emetic medication over the first 24 hours post-surgery.

The percentage of patients who did not take any anti-emetic medication over 24 hours was 56% for placebo compared to 70% for CR845 0.5 mcg/kg and 81% for CR845 1.0 mcg/kg.

There was a 73% reduction in the incidence of patient-reported vomiting in the group receiving the 1.0 mcg/kg dose versus placebo. Although the 0.5 mcg/kg also showed reduction in vomiting, it did not reach statistical significance.

Both doses of I.V. CR845 exhibited numerical trends toward reduced use of rescue analgesic medication compared to placebo, but did not achieve statistical significance.

There was no significant effect, compared to placebo, on patient’s global assessment of medication for either dose of I.V. CR845 over the 24-hour period. Common adverse effects reported in the placebo and both I.V. CR845 groups were generally low and similar in incidence, and included nausea, constipation, vomiting, flatulence, headache and dyspepsia.

CARA closed at $16.44, it last traded at $22.25.


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Tesla higher on Model 3 production

Tesla jumps after Musk keeps dual role, voices optimism on Model 3 output

https://stockwinners.com/blog/
Tesla jumps after Musk keeps dual role, voices optimism on Model 3 output

Shares of Tesla (TSLA) are higher as much as 4% on Wednesday morning following the company’s annual meeting in California.

At the meeting, shareholders rejected two proposals, including one that would have separated the roles of chairman and chief executive officer. Additionally, Elon Musk said the company will likely reach its goal of producing 5,000 Model 3 sedans “by the end of this month.”

SHAREHOLDERS REJECT SEPARATION OF CHAIRMAN, CEO ROLES

Tesla shareholders rejected two proposals that would have changed the company’s board, including one that would have removed CEO Elon Musk from the chairman role.

According to a CNBC report, Jiang Zhao, a shareholder who owns 12 shares of Tesla stock, brought forward the proposal to have an independent chairman, as he believes it is necessary to prevent conflicts of interest.

In May, proxy advisory firm ISS recommend that investors split the role of chairman and CEO, saying shareholders would “benefit from the strongest form of independent board oversight in the form of an independent chair.”

Shareholders also rejected a proposal to remove three Tesla board members up for re-election this year, which was brought by the CtW Investment Group.

CtW, which works with pension funds for unions, said in a letter last month that board members Antonio Gracias and Elon’s brother Kimbal Musk were too close to the CEO to ensure needed independence, while 21st Century Fox (FOX, FOXA) CEO James Murdoch lacked relevant experience.

According to Bloomberg, which viewed a copy of the letter, CtW said that “instead of recognizing the need for independent and effective board leadership, Tesla has re-nominated three directors who exemplify the company’s failure to evolve.”

‘QUITE LIKELY’ TO MEET MODEL 3 OUTPUT GOAL

At the meeting, Musk said that the carmaker’s goal of making 5,000 Model 3 vehicles per week by the end of June was “quite likely” as the car maker’s production lines were now demonstrating the ability to build 3,500 vehicles a week, Reuters reported. “This is the most excruciating hellish several months I’ve ever had… but I think we’re getting there,” Musk said.

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

OTHER ANNOUNCEMENTS

Robin Ren, Tesla’s head of worldwide sales, announced at the meeting that the company intends to build its first factory outside of the U.S. in Shanghai, China, CNBC reported.

Unlike Tesla’s first U.S. factories, the company’s new “Dreadnought” factories should produce both batteries and assemble vehicles in one place.

Additionally, according to Business Insider, Musk said the company plans to reveal the Model Y next March and will likely go into production in early 2020. The report also said that the Semi will go into production in 2020 and that it will be slightly different than what was revealed in 2017 because the company has made improvements.

The Tesla Roadster will follow the same timeline for production and will have a SpaceX option package available, BI also said.

WHAT’S NOTABLE

Musk has said that Tesla plans to be profitable and cash flow positive in Q3 and Q4, tweeting in April that there is “obviously no need to raise money.”

Musk previously said that the company was not planning to raise any capital before the end of 2019. He reiterated that during the shareholder meeting and said he is still confident that Tesla will become profitable in Q3 or Q4, BI reported.

Tesla originally sought to build 5,000 Model 3 vehicles a week by the end of 2017, but later revised its target to making 5,000 Model 3 cars by the end of the second quarter.

ANALYST COMMENTARY

Citi analyst Itay Michaeli told investors this morning that while he appreciates the bull case of ramping Model 3 deliveries and Tesla achieving profitability in the second half of the year, thereby easing cash concerns and cementing the carmaker’s electric vehicle lead, he “can’t get there on risk/reward at this point.” Michaeli cut his price target for Tesla to $313 from $347 and maintained a Neutral rating on the shares.

Baird analyst Ben Kallo, who remains bullish on Tesla, said the body language at the meeting was positive, noted that shareholders approved the board of directors by a significant margin and expects management to achieve positive GAAP net income and positive cash flow in Q3 and Q4. Kallo keeps his Buy rating and $411 price target on Tesla.

PRICE ACTION

Tesla is up about 5% in early trading to $305.76.


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Loxo Oncology shares higher on data

Loxo announces positive interim data from LOXO-292 dose escalation trial

Loxo Oncology presents positive data  at ASCO meeting

Loxo Oncology (LOXO) announced interim clinical data from the LOXO-292 global Phase 1 LIBRETTO-001 dose escalation trial.

LOXO-292 is an investigational, highly potent and selective RET inhibitor.

Resonance Energy Transfer (RET),  is a mechanism describing energy transfer between two chromophores.

These data are being presented at the 2018 American Society of Clinical Oncology Annual Meeting.

The LIBRETTO-001 Phase 1 trial contains a dose escalation phase and a dose expansion phase. The dose escalation phase follows a “3+3” design.

LOXO-292 is dosed orally in 28-day cycles. As dose cohorts are cleared, additional patients can enroll in these cleared cohorts.

Intra-patient dose escalation is also permitted as dose cohorts are cleared.

The primary endpoint of the trial is the determination of the maximum tolerated dose or recommended dose for further study.

Secondary endpoints include safety, overall response rate and duration of response. The dose expansion phase is designed to further characterize the overall response rate, durability of response, and safety of LOXO-292 in predefined groups of patients with activating RET alterations.

The data presented at ASCO were based on an April 2, 2018 data cut-off date.

Eighty-two total patients had been enrolled to eight dose escalation cohorts.

Pharmacokinetic analyses during the dose escalation demonstrated dose-dependent increases in LOXO-292 exposure with increasing dose.

Starting at the 40 mg BID dose and the 80 mg BID dose, respectively, LOXO-292 delivered sustained greater thanIC90 RET fusion and greater thanIC90 RET M918T-mutant target coverage, based on cell-based potencies.

Most treatment-emergent adverse events were Grade 1 in severity. The expansion cohorts of the LIBRETTO-001 trial are now open and enrolling at the 160 mg BID dose. This dose was selected for initial expansion based on its promising activity and tolerability profile.

Additional dose exploration above 160 mg BID is ongoing and patients enrolled to the expansion cohorts may dose escalate should a higher dose be advanced.

ANALYST COMMENTS

Citi analyst Yigal Nochomovitz raised his price target for Loxo Oncology to $235 saying the company is the “star of ASCO.” The analyst now believes LOXO-292 has advanced into an advantageous competitive position in RET fusions. He expects the shares to continue to trade up and keeps a Buy rating on Loxo.

Morgan Stanley analyst Matthew Harrison said he expects Loxo Oncology shares to trade near $200 in the wake of data on LOXO-292 presented at the ASCO meeting that he said “sets a high bar for competitors.” The data positions LOXO-292 to rapidly advance to registration, said Harrison, who raised his market share estimate for LOXO-292 to 70% from 60%, increased his LOXO-292 peak sales estimate to $1B from $700M, and lowered his risk-adjustment, all of which drove his price target on Loxo shares to $215 from $170. He maintains an Overweight rating on Loxo Oncology, which is up 13% to $210.50 in pre-market trading.

JMP Securities analyst Konstantinos Aprilakis said the Phase 1 study data presented on LOXO-292 in patients with RET-altered cancers at the ASCO meeting came in “far above expectations” with respect to both efficacy and safety. Citing the overall response rate in RET fusion cancers of 77%, Aprilakis called the efficacy data “exceedingly impressive” and increased his price target on Loxo Oncology to $221 from $182 following the presentation. Aprilakis maintains his Outperform rating on Loxo shares.


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Starbucks receives $7.15 billion from Nestle

Nestle pays $7.15B to Starbucks for rights to sell packaged coffee, tea

Nestle pays $7.15B to Starbucks for rights to sell packaged coffee, Stockwinners
Nestle pays $7.15B to Starbucks for rights to sell packaged coffee,

Starbucks (SBUX) announced it will form a global coffee alliance with Nestle (NSRGY) to “accelerate and grow the global reach of Starbucks brands in Consumer Packaged Goods and Foodservice.”

It added, “With a shared commitment to ethical and sustainable sourcing of coffee, this alliance will transform, expand and elevate both the at-home and away-from-home coffee and related categories around the world.” As part of the alliance, Nestle will obtain the rights to market, sell, and distribute Starbucks, Seattle’s Best Coffee, Starbucks Reserve, Teavana, Starbucks VIA and Torrefazione Italia packaged coffee and tea in all global at-home and away-from-home channels.

Nestle will pay Starbucks $7.15B in closing consideration, and Starbucks “will retain a significant stake as licensor and supplier of roast and ground and other products going forward.”

Additionally, the Starbucks brand portfolio will be represented on Nestle’s single-serve capsule systems.

The agreement is subject to customary regulatory approval and is expected to close this summer or early fall.

The agreement excludes ready-to-drink coffee, tea and juice products. Starbucks intends to use the after-tax proceeds from the up-front payment primarily to accelerate share buybacks and now expects to return approximately $20B in cash to shareholders in the form of share buybacks and dividends through fiscal year 2020.

Additionally, the transaction is expected to be earnings per share accretive by the end of fiscal year 2021 or sooner, with no change to the company’s currently stated long-term financial targets.


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Barron’s is bullish on Ensco, bearish on Chipotle

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, stocks to watch,

BULLISH   MENTIONS:

Investors should consider Ensco to benefit from oil-price surge.  Crude-oil prices are set to jump because President Donald Trump is likely to reintroduce harsh sanctions on Iran by mid-May and to benefit from the oil-price surge, investors should consider buying shares in Ensco (ESV), Simon Constable writes in this week’s edition of Barron’s. Other key oil stocks include EOG Resource (EOG), Transocean (RIG), Exxon Mobil (XOM), Halliburton (HAL), ConocoPhillips (COP) and Devon Energy (DVN), he adds.

Netflix may soon pass Disney in Market Value – Any week now, Netflix (NFLX) will surpass in market value Walt Disney (DIS) as investors cheer on the streaming service’s continued subscriber growth, Jack Hough writes in this week’s edition of Barron’s. Investors who buy Disney shares now could have a long wait before they learn whether the streaming push will result in a rebounding price/earnings ratio, but that is where a diversified business model helps, Hough says.

BEARISH  MENTIONS

Chipotle results boosted by potentially short-lived dynamics – Brian Niccol, the new CEO at Chipotle Mexican Grill, got an “enormous” endorsement on Thursday, as shares of the restaurant chain soared 24%, Avi Salzman writes in this week’s edition of Barron’s. But Salzman is still skeptical that investors should buy the rebound. The first-quarter report was boosted by several dynamics that could be short-lived, he argues, adding that even with those results, it is hard to “make a queso” for Chipotle tripling earnings.


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Mitel sold for $2 billion

Mitel to be acquired by Searchlight Capital Partners affiliates for $2B in cash

Mitel sold for $2 billion. Stockwinners
Mitel sold for $2 billion. Stockwinners

Mitel (MITL) announced that it has signed a definitive arrangement agreement to be acquired by an investor group led by affiliates of Searchlight Capital Partners in an all-cash transaction valued at approximately $2B, including Mitel’s net debt.

Under the terms of the agreement, to be completed pursuant to a plan of arrangement, upon completion Mitel shareholders will receive $11.15 per common share in cash.

This exceeds Mitel’s 52-week and last three-year-high price and represents a premium of approximately 24% to the 90-calendar-day volume-weighted average price of Mitel common shares through April 23, 2018.

Upon completion of the transaction, Mitel will become a privately held company, which is expected to provide the company with additional flexibility to accelerate its move-to-the-cloud strategy.

The Mitel Board of Directors has unanimously determined that the transaction is in the best interests of Mitel and fair to Mitel shareholders, and will recommend that Mitel shareholders approve the arrangement. The arrangement is not subject to a financing condition.

The transaction is expected to close during the second half of 2018, subject to customary closing conditions, including receipt of shareholder, regulatory and court approvals.

The arrangement agreement includes a 45-day “go-shop” period, which permits Mitel’s Board of Directors and advisors to actively solicit, evaluate and potentially enter into negotiations with parties that make alternative acquisition proposals through June 7, 2018.

There can be no assurance that this process will result in a superior offer.

Mitel does not intend to disclose developments with respect to the solicitation process unless and until the Board of Directors makes a determination requiring further disclosure. Jefferies LLC is serving as financial advisor to Mitel.

Paul, Weiss, Rifkind, Wharton & Garrison LLP and Osler, Hoskin & Harcourt LLP are serving as legal advisors to Mitel. National Bank Financial Inc. is serving as independent financial advisor to the Mitel Board of Directors and provided a fairness opinion to the Mitel Board of Directors on a fixed fee basis.


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