Alliance Data sells Epsilon for $4.4 billion

Publicis to acquire Epsilon for $4.40B in cash

Publicis (PUBGY) announced it has entered into an agreement with Alliance Data Systems (ADS) under which Publicis will acquire Alliance Data’s Epsilon business for a net purchase price of $3.95B after tax step-up – total cash consideration of $4.40B – and build a strategic partnership with Alliance Data remaining business.


Publicis to acquire Epsilon for $4.40B in cash , Stockwinners

The acquisition gives Publicis access to Epsilon’s data capabilities. The company says, for example, it has more than 250 million unique consumers identified in the U.S. The company says it can build on top of a client’s first-party data with its own assets, like behavioral and transactional data.

The Directoire, or Management Board, and the Conseil de Surveillance, or Supervisory Board, of Publicis have unanimously approved this transaction.

Alliance Data sells Epsilon for $4.4 billion, Stockwinners

Arthur Sadoun, Chairman and CEO of Publicis, said that, “Our clients are facing increasing pressure from the rise in consumer expectations, the mainstreaming of direct-to-consumer brands and new data regulations. The only response is to deliver personalized experiences at scale. They have to transform to meet this new market imperative.”

Edward Heffernan, Alliance Data Systems’ President and CEO, added that, “I’m pleased to say today’s announcement represents a trifecta win for Alliance Data, Epsilon and Publicis Groupe.

The announcement of this transaction represents the culmination of an extensive assessment of strategic options for our Epsilon business.

With this transaction, we have found what we believe to be the right home for Epsilon’s technology, data assets and associates.

Publicis Groupe will be the ideal cultural and strategic fit for Epsilon and its Conversant business, and will help drive Publicis Groupe’s own transformation in today’s data-driven digital world.

Furthermore, the unique relationships that have been cultivated between Epsilon and our other Alliance Data businesses will remain intact, and we look forward to working with Publicis Groupe to develop an even broader relationship promoting mutual and sustainable growth going forward.”

Under the terms of the agreed transaction, Publicis will acquire Epsilon for a cash consideration of $4.40B, representing a net purchase price of $3.95B after deducting the benefit of acquisition-related tax step-up.

This implies an 8.2-times multiple, based on a 2018 Adjusted EBITDA of $485M.

According to Publicis, the transaction will be double digit accretive to its headline EPS and free Cash Flow per share from year one.

Publicis also said that it “remains committed” to its 45% dividend payout ratio and will put on hold its share repurchase program in the context of this acquisition.

The transaction remains subject to customary approvals and is expected to close in Q3 2019.

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Anika Therapeutics receives FDA clearance for bone void filler

Anika Therapeutics receives FDA 510(k) clearance for HA-based bone void filler

Anika Therapeutics says Monovisc approved in India. See Stockwinners.com Market Radar for Stock Upgrades, stock downgrades, stock earnings, stocks to watch
Anika Therapeutics receives FDA 510(k) clearance for HA-based bone void filler

Anika Therapeutics (ANIK) announced that its HA-based bone void filler received 510(k) clearance from the U.S. Food and Drug Administration and is indicated for filling bone voids or defects of the skeletal system, which are not intrinsic to the stability of the bone, created during surgery or resulting from traumatic injury.

HA-based bone  stands for therapeutics based on its proprietary hyaluronic acid (“HA”) technology. The bone void filler, which is composed of a synthetic, biocompatible bone graft substitute material, is injected into a void, hardens at body temperature, and is then resorbed and replaced by the growth of new bone during the healing process.

Over one million musculoskeletal procedures performed in the U.S. involve bone void filling, also known as bone grafting,, and such procedures are most commonly required for spinal fusion, trauma, and revision total joint replacement procedures.

While the use of autologous bone or autograft has been the gold standard of treatment for bone grafting, the increased risk of procedural complications has prompted a shift towards alternate treatments, such as synthetic, resorbable bone graft substitute materials.

The company estimates that the current market size for treating tibial plateau fractures, stress fractures around joints, and decompression of necrosed bone to be around $300M.

ANIK closed at $52.44.


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Cerner and Amazon to announce a deal next week

Amazon to announce ‘huge healthcare deal’ with Cerner, CNBC says

 

AWS and CERNER to announce major deal. See Stockwinners.com for details

Shares of Cerner (CERN) are up 4.5% to $69.75 after CNBC, citing sources, reported that Amazon Web Services (AMZN) CEO Andy Jassy plans to announce next week that the company is teaming up with Cerner to help health-care providers better use their data.

Cerner Corporation designs, develops, markets, installs, hosts, and supports health care information technology, health care devices, hardware, and content solutions for health care organizations and consumers in the United States and internationally.

ANALYST COMMENTS

Stifel analyst David #Grossman noted that such an agreement would allow Cerner to leverage AWS’ global reach and technology to scale this business, which is still relatively small but is perceived to be one of the more important and faster growing industry segments, Grossman tells investors.

A “much more significant opportunity” would be for Cerner to reduce implementation times and reduce the capital intensity of its business by partnering with a hyperscale cloud provider, like Amazon, added Grossman, who keeps a Hold rating on Cerner shares.

RBC Capital analyst George #Hill commented that he thinks the deal would give the company even more credibility when trying to sell its outsourcing or hosting services to large health system clients.

The analyst, who doesn’t see Amazon getting into the provider interface business near to medium term, doesn’t view the deal as a meaningful threat to Cerner, he adds. Hill maintains an Outperform rating and $74 price target on Cerner shares.

Piper Jaffray analyst Sean #Wieland says that if they can overcome patient privacy risks, the partnership will be complementary and synergistic. Further, the analyst believes the deal would also validate Cerner as a market leader in Electronic Health Records. Wieland reiterates an Overweight rating and $70 price target on Cerner‘s shares.

OTHERS TO WATCH

Shares of athenahealth (ATHN) initially dropped after CNBC said Cerner (CERN) will be teaming up with Amazon Web Services (AWS) to help health-care providers better use their data, but the stock has recovered to briefly move back into positive territory following the headlines.


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Tesla’s Cash Burn Accelerates

Tesla burning through cash at $480K per hour pace

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Tesla’s (TSLA) latest announcement of designing a sports car should take a back seat to investors’ focus of the company’s cash burn, says Bloomberg, estimating that at the current rate, Tesla would be out of cash by August 6th.

Bloomberg Intelligence analyst Kevin Tynan estimates that the company may have to raise at least $2B in fresh capital by mid-2018.

The report adds that the bond market route may not be welcoming, as Tesla investors who bought $1.8B in debt 3 months ago remain under water.

Over the past 12 months, the electric-car maker has been burning money at a clip of about $8,000 a minute (or $480,000 an hour), Bloomberg data show. At this pace, the company is on track to exhaust its current cash pile on Monday, Aug. 6.

To be fair, few Tesla watchers expect the cash burn to continue at quite such a breakneck pace, and the company itself says it’s ramping up output of its all-important Model 3, which will bring money in the door. Investors don’t seem concerned.

The Founders Series Roadster will cost buyers a $250,000 down payment even though it’s not coming for more than two years. Orders of those cars are capped at 1,000, meaning they alone could generate $250 million. Tesla is charging a total of $50,000 for reservations of the regular Roadster. Companies can also pre-order electric Semi trucks for $5,000, though they don’t go into production until 2019.

Tesla has said it has ample money to meet its target of producing 5,000 Model 3 sedans by the end of March. After that date, the company expects to “generate significant cash flows from operating activities,” Tesla said in a Nov. 1 letter to shareholders. Tesla’s capital expenditures should also decline as the company pays off its expenses related to the Model 3, CFO Deepak Ahuja said on a conference call the same day.

TSLA last traded at $314.40


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NovoCure reports positive data from its brain cancer drug

Novocure says increased compliance with Optune showed increased survival

Novocure reports positive brain cancer data. See Stockwinners.com for details

Novocure (NVCR) announced results from a retrospective post-hoc analysis of its phase 3 pivotal EF-14 trial data showing that increased compliance with Optune predicted increased survival in glioblastoma patients.

Glioblastomas  are tumors that arise from astrocytes—the star-shaped cells that make up the “glue-like,” or supportive tissue of the brain. These tumors are usually highly malignant (cancerous) because the cells reproduce quickly and they are supported by a large network of blood vessels. Glioblastomas are generally found in the cerebral hemispheres of the brain, but can be found anywhere in the brain or spinal cord.

Results were highlighted in an oral presentation at the 22nd Annual Meeting of the Society for Neuro-Oncology in San Francisco.

The analysis showed that an Optune compliance threshold as low as 50% correlated with significantly improved outcomes in patients treated with Optune together with temozolomide compared to patients treated with temozolomide alone.

The results also demonstrated that the greater patients’ compliance with Optune, the better their outcomes.

Patients who used Optune more than 90% of the time had the greatest chance of survival: a median survival of 24.9 months from randomization and a five-year survival of 29.3%.

The median time from diagnosis to randomization was 3.8 months for patients treated with Optune together with temozolomide.

Novocure’s phase 3 pivotal EF-14 trial compared Optune in combination with temozolomide to temozolomide alone in 695 patients with newly diagnosed GBM. The trial was designed to test both progression free survival and overall survival.

The trial demonstrated unprecedented five-year survival results in newly diagnosed GBM.

Patients treated with Optune in combination with temozolomide experienced a significant extension of overall survival without added systemic toxicity compared to patients treated with temozolomide alone.

The data also showed that Optune-treated patients were able to maintain quality of life for longer compared to patients treated with temozolomide alone.

Patients in the EF-14 trial treated with Optune together with temozolomide were recommended to use Optune 75 percent of the time, or 18 hours per day.

This new analysis demonstrated that a threshold value as low as 50% compliance with Optune led to an extension of both PFS and OS versus temozolomide alone.

As compliance increased to 75% or greater, the survival benefit significantly increased. Patients who used Optune 70-80 percent of the time had a median survival of 21.7 months.

Patients who used Optune more than 90% of the time had the greatest chance of survival: a median survival of 24.9 months from randomization and a five-year survival of 29.3%.

The median time from diagnosis to randomization was 3.8 months for patients treated with Optune together with temozolomide.

The data also show that increased compliance independently predicted survival and was not affected by prognostic factors such as performance status, age or MGMT methylation.

NVCR closed at $18.60.


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JB Hunt and Wal-Mart to use Tesla’s trucks

J.B. Hunt reports reservation to purchase multiple Tesla Semi tractors

Wal-Mart says has pre-ordered 10 units of Tesla’s new heavy-duty electric vehicle for Wal-Mart Canada

[youtube https://www.youtube.com/watch?v=5n9xafjynJA&w=640&h=360]

J.B. Hunt Transport Services (JBHT) announced that it placed a reservation to purchase multiple Tesla (TSLA) Semi tractors to be manufactured by Tesla.

The electric tractor was unveiled by Tesla at an event on November 16.

J.B. Hunt plans to deploy electric tractors to its Intermodal and Dedicated Contract Services divisions to support operations on the West Coast.

In addition to the electric truck investment, J.B. Hunt is also supporting sustainable initiatives such as reducing engine idle time, governing top speed limits, converting over-the-road shipments to intermodal, engineering fleet routes that maximize efficiency, and using biodiesel fuels when possible.

In April, J.B. Hunt announced a five-year, $500M commitment to enhancing operating systems, developing cloud infrastructure, and creating innovative and disruptive technologies.

The additional investment in Tesla trucks further demonstrates J.B. Hunt’s commitment to meeting the needs of an evolving supply chain and introducing new technology for its customers and employees.

TESLA  TRUCKS

Tesla unveiled a sleek electric semi truck with semi-autonomous capabilities and a new roadster.

Emphasizing the truck’s “badass” performance, Tesla CEO Elon Musk pitched the new Tesla Semi as the safest, most comfortable truck ever.

The semi is a fully electric Class 8 truck, a category of freight vehicles that weigh more than 33,000 pounds, including tractor-trailer rigs that form the backbone of commercial road freight. This one, Musk said, can haul 80,000 pounds.

The truck can gain 400 miles of range with just a 30-minute charge from a “megacharger” and its operating cost per mile is 20 percent below that of conventional diesel semi trucks.

Tesla’s offering has a range of 500 miles at maximum weight at highways speeds, much higher than early spec reports of a range of 300 miles. Musk said the truck has a coefficient of drag of just 0.36, making it more aerodynamic than the Bugatti Chiron, a $2.7 million supercar with a drag coefficient of 0.38.

At the end of the event, Musk also presented the company’s new four-seat roadster, a car with 620 miles of range that can go from zero to 60 mph in 1.8 seconds. “The point of doing this is to give a hardcore smackdown to gasoline cars,” Musk said. It’s also claimed to be the fastest production car ever made.

ANALYST COMMENTS

Morgan Stanley analyst Ravi Shanker said Tesla “unveiled the future of trucking” with its Class 8 semi truck, which he contends appears to best current diesel truck performance in “almost every measurable way.” While what he heard was very impressive, questions remain about battery size, launch partners and third-party logistics services, said Shanker, who adds that “its now time to deliver.” The firm has an Equal Weight rating and $379 price target on Tesla shares.

Wal-Mart Gets Onboard

Following Tesla’s (TSLA) unveiling of a new electric semi-tractor-trailer last night, Wal-Mart issued the following statement to CNBC: “We have a long history of testing new technology – including alternative-fuel trucks – and we are excited to be among the first to pilot this new heavy-duty electric vehicle. We believe we can learn how this technology performs within our supply chain, as well as how it could help us meet some of our long-term sustainability goals, such as lowering emissions.”

Wal-Mart says has pre-ordered 10 units of Tesla’s new heavy-duty electric vehicle for Wal-Mart Canada.

TSLA closed at $313.00   JBHT closed at $102.98


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Ultragenyx announces FDA approval of its Sly Syndrome drug

Ultragenyx announces FDA approval of MEPSEVII

Ultragenyx announces FDA approval of MEPSEVII. See Stockwinners.com for details

Ultragenyx Pharmaceutical (RARE) announced that the U.S. Food and Drug Administration has approved MEPSEVII, the first medicine approved for the treatment of children and adults with Mucopolysaccharidosis VII.

MEPSEVII is an enzyme replacement therapy designed to replace the deficient lysosomal enzyme beta-glucuronidase in MPS VII patients.

MPS VII is a mucopolysaccharide disease also known as Sly syndrome.

MPS VII is a rare genetic, metabolic lysosomal storage disorder caused by the deficiency of beta-glucuronidase, an enzyme required for the breakdown of the glycosaminoglycans dermatan sulfate, chondroitin sulfate and heparan sulfate. These complex GAG carbohydrates are a critical component of many tissues.

The inability to properly break down GAGs leads to a progressive accumulation in many tissues and results in a multi-system tissue and organ damage.

MPS VII is one of the rarest MPS disorders, with an estimated 200 patients in the developed world.

MEPSEVII was evaluated by the FDA with Priority Review, which is reserved for drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists.

With this approval, the FDA issued a Rare Pediatric Disease Priority Review Voucher, which confers priority review to a subsequent drug application that would not otherwise qualify for priority review.

The rare pediatric disease review voucher program is designed to encourage development of new drugs and biologics for the prevention or treatment of rare pediatric diseases.

MEPSEVII will be available to patients in the U.S. later this month.

In Europe, the European Medicines Agency is currently reviewing the Marketing Authorization Application for vestronidase alfa, and an opinion from the Committee for Medicinal Products for Human Use is expected in the first half of 2018.

RARE last traded at $46.44, up 88 cents.


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Envision Healthcare could be sold

Envision rises amid report of private equity interest

Envision Healthcare could be sold. See Stockwinners.com for more

Shares of Envision Healthcare (EVHC) are on the rise following a report by Bloomberg claiming the company has attracted buyout interest from private equity investors.

The hospital based physician group, which activist Starboard Value has targeted, had previously announced that it was exploring options to enhance shareholder value.

Meanwhile, Baird analyst Whit Mayo told investors that Envision could be worth in the area of $40 per share in a leveraged buyout, which is an estimated value that his peer at Keybanc also sees as possible.

PRIVATE EQUITY INTEREST

According to a report by Bloomberg, Envision has attracted buyout interest from firms including Carlyle Group (CG) and Onex Corp.

The two are among companies that may bid for Envision alone or as part of a group, the report added.

The health-services provider has been under pressure from activist investor Starboard Value, who revealed a stake in Envision in October and recommended the company as an attractive takeover target, Bloomberg noted.

LBO ‘DOABLE’

In a research note to investors published prior to the release of Bloomberg’s report, Baird‘s Mayo noted that he would guess that about three to four hedge funds now collectively own about 20% of Envision Healthcare, with “potentially more in the shadows,” and that a leveraged buyout is “very doable” if one believes there is an investment case for industry volumes.

If there is a case seen for structural changes in volumes, cash collections and/or physician rate, Mayo sees the potential for “very acceptable returns” on a theoretical leveraged buyout in the $40 per share area, he contended.

#Mayo pointed out that he thinks the upside risk of a leveraged buyout is being “underappreciated,” and reiterated an Outperform rating and $35 price target on the shares.

Meanwhile, KeyBanc analyst Jason #Gurda told investors in a research note of his own that he also believes a private equity buyer could reasonably bid “in the low $40s” for Envision in a leveraged buyout.

The analyst noted that he was not surprised to hear of reports that there is private equity interest in the company as in the past there has been a considerable level of private equity investment in both of Envision’s business segments – physician services and ambulatory surgical centers. Gurda reiterated an Overweight rating on the stock, while raising his price target on the shares to $40 from $37.

PRICE ACTION

In Tuesday’s trading, shares of Envision have jumped about 7% to $27.66. Year-to-date, however, the stock is still down over 56%.


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Buffalo Wildwing soars on takeover offer

Buffalo Wild Wings receives $2.3 billion offer

Buffalo-Wild-Wings gets $2.3 billion offer. See Stockwinners.com for details

Shares of Buffalo Wild Wings (BWLD) are sharply higher following a Wall Street Journal report saying that private-equity firm Roark Capital Group has made a bid for the company.

According to the report, Roark offered to pay “more than $150 a share,” or more than $2.3 billion, for Buffalo Wild Wings.

Buffalo Wild Wings has faced some trouble over the last year, as the company struggles with high wing costs and declining sales at stores open for at least 15 months.

Activist investors at Marcato Capital Management won several board seats during the summer and are pushing the company to franchise more of its restaurants and improve its technology.

ANALYST  COMMENTS

#Mizuho analyst Jeremy Scott wrote to clients that “we can only speculate as to whether or not this bid was solicited.” But he also thinks the company’s board is likely taking the offer seriously. “We anticipate that the activist refranchising initiative may have faced growing resistance both internally and externally,” he adds.

Wells Fargo analyst Jeff Farmer has “conviction in a potential Roark acquisition,” due to the company’s financial struggles as of late and its “leadership void” — CEO Sally Smith announced her resignation on the same day that Marcato won its board seats.

He thinks that there is “modest opportunity for a competing bid” but isn’t sure if one will come around. On one hand, investors might feel that a $150/share bid undervalues the company. But interested bidders might not want to pay much more for Buffalo Wild Wings given falling traffic and weak financials at the chain.

Credit Suisse analyst Jason West says he views the offer as a modest surprise given the latter’s negative same store sales and margins trends in recent years. The analyst reiterates a Neutral rating on Buffalo Wild Wings’ shares.

Maxim analyst Stephen Anderson notes yesterday’s press speculation of a bid for Buffalo Wild Wings from Roark Capital, saying that while the $150/share price is “plausible”, there is potential for a competing bid given the company-specific initiatives to cut expenses and an improving food cost climate.

Anderson says that despite the industry headwinds and the pending exit of CEO Sally Smith, the company is laying the groundwork for a return to SSS growth, margin expansion, and increased shareholder returns.

The analyst also says the recent decline in spot wing costs, already down 15% since summer end, will add to EPS next year. Anderson keeps his Buy rating and $160 price target on Buffalo Wild Wings.

Stifel analyst Chris O’Cull said he thinks Roark could be a credible buyer given its success with several restaurant investments, including Wingstop, and that BWW could be a willing seller given Marcato’s involvement and the company’s recent struggles defining a clear vision for improving shareholder value. O’Cull has a Hold rating and $115 price target on Buffalo Wild Wings shares.

BWLD closed at $117.25. It last traded at $148.40.


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Loxo Oncology to receive $400 million

Loxo Oncology, Bayer enter into an exclusive global collaboration

Loxo Oncology to present at upcoming lung cancer conference. See Stockwinners.com for details

Bayer (BAYRY) announced that the company has entered into an exclusive global collaboration with Loxo Oncology (LOXO) for the development and commercialization of larotrectinib (LOXO-101) and LOXO-195.

Both compounds are being investigated in global studies for the treatment of patients with cancers harboring tropomyosin receptor kinase gene fusions, which are genetic alterations across a wide range of tumors resulting in uncontrolled TRK signaling and tumor growth.

Under the terms of the agreement, Loxo Oncology will receive an upfront payment of $400M and is eligible for $450M in milestone payments upon larotrectinib regulatory approvals and first commercial sale events in certain major markets and an additional $200M in milestones payments upon LOXO-195 regulatory approvals and first commercial sale events in certain major markets.

Bayer and Loxo Oncology will jointly develop the two products, larotrectinib and LOXO-195, and share development costs on a 50/50 basis.

Bayer will lead ex-U.S. regulatory activities, and worldwide commercial activities. In the U.S., where Bayer and Loxo Oncology will co-promote the products, the parties will share commercial costs and profits on a 50/50 basis.

Loxo Oncology will remain responsible for the filing in the U.S. Bayer will pay Loxo Oncology tiered double-digit percentage royalties on future net sales outside of the U.S., and U.S. and ex-U.S. sales milestones totaling $500M.

Bayer will pay Loxo Oncology a $25M milestone upon achieving a certain U.S. net sales threshold. Outside of the U.S., where Bayer will commercialize, Bayer will pay Loxo Oncology tiered, double-digit royalties on net sales, and sales milestones totaling $475M. Bayer will book revenues worldwide.

Loxo Oncology was advised by Fenwick and West in the transaction.

WHAT’S NOTABLE

In a clinical trial presented in June by Loxo, larotrectinib demonstrated a 76% objective response rate in patients with cancers that contained the TRK fusions but originated in different parts of the body.

In those studies 12% saw their tumors entirely disappear while 64% saw theirs tumors partially shrink. David Hyman, MD, of Memorial Sloan Kettering Cancer Center, said at the time that “We believe [these data] demonstrate that larotrectinib is profoundly effective in a durable manner in patients with TRK fusion cancers.”

Loxo expects to submit an NDA to the FDA for the larotrectinib program in late 2017 or early 2018, with the potential for an FDA decision by mid-2018. As the only selective pan-TRK inhibitor currently in clinical development, larotrectinib could “potentially be the first novel targeted therapy that’s developed and eventually used in a ‘tumor-agnostic’ manner,” Hyman said.

TRK fusions occur in between 1,500 and 5,000 cancer patients per year, or about 1%-3% of cancer cases.

PRICE ACTION

Though Loxo Oncology initially jumped, the stock is now down about 5.4% to $78.75 after pre-market trading was resumed.

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GGP receives $23 per share offer

GGP confirms receipt of unsolicited proposal from Brookfield Property

general-growth-properties receives $23 a share offer. See Stockwinners.com for details

GGP Inc. (GGP) confirmed that on Saturday, November 11, 2017, the company’s Board of Directors received an unsolicited proposal from Brookfield Property Partners L.P. (BPY) for BPY to acquire all of the outstanding shares of common stock of GGP other than those shares currently held by BPY and its affiliates.

According to the Proposal, each GGP stockholder would be entitled to elect to receive consideration per GGP common share of either $23.00 in cash or 0.9656 of a limited partnership unit of BPY, subject in each case to pro-ration based on a maximum cash component of 50% of the aggregate offer and a maximum stock component of 50% of the aggregate offer.

General Growth Properties, Inc is an equity real estate investment trust. The firm invests in the real estate markets of the United States. It engages in owning, managing, leasing, and redeveloping high-quality regional malls.

The Board has formed a special committee of its non-executive, independent directors which, in consultation with its financial and legal advisors, will carefully review and consider the Proposal and pursue the course of action that it believes is in the best interests of the company’s stockholders.

The company’s stockholders do not need to take any action at this time.

Goldman Sachs & Co. LLC. is serving as financial advisor and Simpson Thacher & Bartlett LLP is serving as legal counsel to the Special Committee.

Citigroup Global Markets Inc. is serving as financial advisor and Sullivan & Cromwell LLP is serving as legal counsel to GGP.


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Short Squeeze in JC Penney

Retailer reports Q3 revenue $2.81B, consensus $2.74B

JC Penney's woes continue. See Stockwinners.com for details

J.C. Penney  (JCP) reported its first increase in same-store sales in more than a year and losses were not as bad as expected, sending shares higher.

The company had a loss of $128 million for the third quarter, or 41 cents per share. Losses, adjusted for one-time gains and costs, came to 33 cents per share, which is a dime better than Wall Street had expected.

Revenue, at $2.81 billion, also topped expectations of $2,74 billion.

J.C. Penney backs FY17 adjusted EPS 2c-8c, consensus 43c – Backs FY17 SSS down 1% to flat. Backs FY17 cost of goods sold to be up 100 to 120 basis points versus 2016. Backs Free cash flow view $200M-$300M.

Chairman and CEO Marvin Ellison said on the company’s Q3 earnings conference call that J.C. Penney took “the bold but necessary step” to liquidate apparel inventory in an effort to accelerate a wider transformation of the women’s department. Following this reset, Ellison said the retailer saw improved performance in the women’s division, “confirming these actions were necessary to drive growth in this high-volume apparel division.” Ellison noted that women’s apparel delivered a positive comp for the month of October “even when you remove the benefits of the accelerated clearance sales.” “At this stage of our turnaround, we are committed to making decisions that benefit the long-term financial health of the company,” Ellison said. Appliance sales more than doubled versus Q3 of last year, he added.

SHORT  RATIO

The short ratio, short interest ratio (SIR) or float short for a public company is the ratio of tradable shares being shorted to shares in the market, or the float. It is an indirect metric of investor sentiment. When short interest is high, above 40%, it implies company investors hope shares will decline in value.

SHORT  INTEREST

A situation in which a heavily shorted stock or commodity moves sharply higher, forcing more short sellers to close out their short positions and adding to the upward pressure on the stock. A short squeeze implies that short sellers are being squeezed out of their short positions, usually at a loss.

According to the latest data, a total of 148,287,000  JCP shares have been shorted, giving the stock a short ratio of 7.5 days. That is 50.73% of total shares.

PRICE  ACTION

JCP closed at $2.75. It last traded at $3.18. The issue has a 52-weeks trading range of $2.35 – $10.74.


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Sage Therapeutics surges on its depression drug

Sage Therapeutics’ brexanolone achieves primary endpoint in Phase 3 trial

Sage Therapeutics announces results from Sage-547. See Stockwinners.com for details

Sage Therapeutics (SAGE) announced positive top-line results from two Phase 3 clinical trials with its proprietary i.v. formulation of brexanolone;

  • Study 202B in severe postpartum depression and
  • Study 202C in moderate PPD.

Brexanolone achieved the primary endpoint in both trials, a mean reduction from baseline in the Hamilton Rating Scale for Depression total score compared to placebo at 60 hours.

Patients treated with brexanolone demonstrated mean reductions from baseline in HAM-D total scores of 14 to 20 points at 60 hours maintained to 30 days in both trials.

Brexanolone was generally well tolerated and showed a similar safety profile as seen in earlier studies.

Sage believes these data will be sufficient to support submissions of regulatory applications seeking approval of brexanolone for PPD.

Sage plans to file a New Drug Application with the FDA in 2018.

MARINUS

Shares of Marinus Pharmaceuticals (MRNS) are also higher. The move comes after Sage Therapeutics announced that its Phase 3 clinical trial with its proprietary i.v. formulation of #brexanolone in severe postpartum depression achieved its primary endpoint.

#Marinus is preparing to initiate clinical trials with Captisol-enabled ganaxolone IV in patients with postpartum depression.

ANALYSTS VIEW

H.C. Wainwright analyst Joseph #Pantginis notes Ligand Pharmaceuticals (LGND) partner Sage Therapeutics announced positive top-line data of brexanolone for patients with moderate and severe postpartum depression. Recall that brexanolone is one of the “Big Six assets” at Ligand which is expected to receive a 3% royalty on sales, Pantginis tells investors in a research note. The analyst raised his price target for Ligand shares to $159 from $157 and keeps a Buy rating on the shares.

BMO Capital analyst Gary Nachman calls today’s Phase 3 data in post-partum depression a “very significant milestone” for Sage Therapeutics. The analyst sees a “high probability of approval” in the U.S. and Europe based on these data.

Further, he thinks they could potentially bode well for the anticipated SAGE-217 results in both major depressive disorder and for in postpartum depression. #Nachman reiterates an Outperform rating on Sage with an $80 price target.

PRICE ACTION

In Thursday’s trading SAGE is up 44% to $90.65 per share.


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Nomura is bullish on Tesla

Nomura sees Tesla selling all it can produce after Model 3 sedan spin

Model 3 production bottlenecks send  Tesla lower. See Stockwinners.com

In a research note titled “Better Than Advertised,” Nomura Instinet Romit Shah says he left test driving Tesla’s (TSLA) Model 3 sedan feeling the automaker will be selling as many cars as it can produce for a long time.

Taking the sedan for a spin reinforced the analyst’s view that Tesla’s addressable market opportunity is “perhaps much larger” than the BMW 3-series, Mercedes C class and Audi A4.

There is a “real passion” for the brand, which is “bigger than loyalty because much of the enthusiasm comes from people who have never owned a Tesla,” Shah tells investors in a research note.

The only comparable product the analyst sees is Apple’s (AAPL) iPhone. Apple succeeded because the world shifted from computers to smartphones and Apple had the best product, the analyst writes.

Similarly, he believes there is a secular shift today from internal combustion engines to electric vehicles and that Tesla has the best product.

If Tesla can overcome its operational challenges, it will see “unprecedented revenue growth and strong cash flows,” Shah concludes. He has a Buy rating on Tesla with a $500 price target.

The automaker closed yesterday down $1.66 to $304.39.

Production Rate

Tesla produced just over 440 Model 3 vehicles since the automaker began production in July, meaning the company built about 180 of the cars last month, electrek reports, citing sources familiar with the matter.

Tesla CEO Elon Musk, who hopes to ramp up production to 5,000 vehicles a week in December following production challenges, said on the company’s conference call he would not provide the number of vehicles produced in October as “people would just read too much into it.”


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Digital Ally exploring strategic alternatives

Digital Ally exploring strategic alternatives

Digital Ally exploring strategic alternatives. See Stockwinners.com for details

Digital Ally (DGLY) announced that its board has initiated a process to explore a full range of strategic alternatives to best position the Company for the future including, but not limited to, monetizing its patent portfolio and related patent infringement litigation against Axon Enterprise, Inc. and Enforcement Video, LLC d/b/a WatchGuard Video, the sale of the company as a whole, or the sale of select properties or groups of properties or individual businesses.

The result of the strategic review may also include the continued implementation of the company’s business plan.

The company has retained Roth Capital Partners to assist in this process.

There can be no assurance a transaction will result from this process and the company does not intend to disclose additional details unless and until it has entered into a specific transaction.

The company has recently received several unsolicited inquiries from parties involving a variety of alternatives including, but not limited to,

  1. seeking distribution and/or licensing rights to the company’s patented VuLink auto-activation technology,
  2. seeking distribution and/or licensing rights to the company’s suite of patents other than the VuLink;
  3. full sale of the company; and
  4. partial sale of its law enforcement or commercial divisions.

In addition, the company has recently entered into an exclusive distribution agreement with VieVU, LLC regarding the company’s patented VuLink product line.

The company believes the unsolicited inquiries are being driven by the recent and important wins it received in the U.S. Patent Office that confirm the validity of our VuLink and related auto-activation technologies.

Digital’s board and management engaged Roth to ensure that the company and its shareholders consider all reasonable alternatives to maximize shareholder value, given the multiple inquiries.

On July 6, the Patent Office denied Axon’s petition for inter partes review, or IPR, of Digital’s Patent No. 9,253,452. And on August 3, 2017, the Patent Office denied Axon’s final petition for IPR of the ‘452 Patent. This was Axon’s final attempt to invalidate the ‘452 Patent before the Patent Office.

With the Patent Office determining that Axon failed to demonstrate even a reasonable likelihood of invalidating the ‘452 Patent in its IPR petition, an IPR status update was submitted to the District Court of Kansas.

The Court can now decide whether to maintain the stay of the litigation that was implemented pending the results of the IPR petitions. The Company believes that there will be no reason to maintain the stay and, if lifted, it will request an expedited schedule for trial.

On May 27, 2016, Digital filed a complaint against WatchGuard in the U.S. District Court for the District of Kansas alleging patent infringement based on WatchGuard’s VISTA Wifi and 4RE In-Car product lines.

In May 2016, WatchGuard filed an IPR petition with the Patent Office challenging the validity of the ‘950 Patent and filed a motion to stay litigation, pending at least a preliminary decision from the PTAB regarding the IPR petition filed challenging the ‘950 Patent and four additional IPR petitions filed by Axon challenging the ‘292 Patent and the ‘452 Patent. In doing so, WatchGuard agreed to be bound by the Patent Office’s decision in connection with the four IPR petitions filed by Axon against the ‘292 Patent and the ‘452 Patent. A compromise was subsequently reached under which the court stayed the case, and ordered the parties to submit a report by January 5, 2018 notifying the court about the status of the pending IPR petitions.

The Patent Office subsequently denied institution of all of Axon’s IPR petitions against the ‘452 Patent, which means these requests will not proceed.

The Company expects Patent Office to render its decision in the near future regarding whether it will grant institution of WatchGuard’s IPR regarding the ‘950 Patent.

DGLY closed at $1.80.


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