Railroad Traffic Points to Growing Economy

North American rail traffic rose 10.6% in week ended June 19, AAR says

The Association of American Railroads, AAR, reported U.S. rail traffic for the week ending June 19.

For this week, total U.S. weekly rail traffic was 514,112 carloads and intermodal units, up 12.5% compared with the same week last year.

Total carloads for the week ending June 19 were 232,144 carloads, up 15.1% compared with the same week in 2020, while U.S. weekly intermodal volume was 281,968 containers and trailers, up 10.4% compared to 2020.

For some rail traffic categories, percentage changes for the current week compared with the same week in 2020 are inflated because of the widespread shutdowns – and subsequent large reduction in rail volumes – that impacted many economic sectors last year at this time.

North American rail volume for the week ending June 19, on 12 reporting U.S., Canadian and Mexican railroads totaled 329,907 carloads, up 11.3% compared with the same week last year, and 369,258 intermodal units, up 10% compared with last year.

Total combined weekly rail traffic in North America was 699,165 carloads and intermodal units, up 10.6%.

North American rail volume for the first 24 weeks of 2021 was 16,805,420 carloads and intermodal units, up 12.1% compared with 2020.

Publicly traded companies in the space include CSX (CSX), Canadian National (CNI), Canadian Pacific (CP), Genesee & Wyoming (GWR), Kansas City Southern (KSU), Norfolk Southern (NSC) and Union Pacific (UNP).

Dow Jones Transport Index is up 19 points to 14,959.

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MyoKardia sold for $13.1B

Bristol-Myers to acquire MyoKardia for $225.00 per share in cash

Bristol-Myers (BMY) will buy MyoKardia (MYOK) for $225 a share in cash, or $13.1B. MyoKardia’s lead pipeline drug, code-named mavacamten, treats a chronic heart condition that can cause irregular heart rhythms in some patients and even death. Bristol plans to ask U.S. health regulators next year to approve the drug, Bristol CEO Giovanni Caforio says.

MYOK sold for $13.1B

The transaction was unanimously approved by both the Bristol Myers Squibb and MyoKardia Boards of Directors and is anticipated to close during the fourth quarter. Bristol Myers Squibb expects to finance the acquisition with a combination of cash and debt.

The transaction is expected to add a significant growth driver during the medium- to long-term.

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It is expected to be minimally dilutive to Bristol Myers Squibb’s non-GAAP EPS in 2021 and 2022 and accretive beginning in 2023. Bristol Myers Squibb reaffirms its existing 2021 non-GAAP EPS guidance range.

MyoKardia, Inc. discovers, develops, and commercializes targeted therapies for the treatment of serious and neglected rare cardiovascular diseases. Its lead product candidate is mavacamten, an orally administered small molecule, which is in Phase III clinical trial that is designed to reduce left ventricular contractility to alleviate the functional consequences and symptoms of obstructive hypertrophic cardiomyopathy (HCM) and prevent or reverse HCM progression, as well as in Phase II clinical trial for non-obstructive HCM.

The company also develops MYK-491, an orally-administered small molecule, which is in Phase IIa clinical trial that is designed to restore normal cardiac muscle contractility in the diseased dilated cardiomyopathy (DCM) heart. Its preclinical programs include MYK-224, a HCM-targeting candidate that is designed to reduce excess cardiac contractility and enhance diastolic function; LUS-1, which is used to counteract a muscle abnormality that results in impaired relaxation of the left ventricle; and ACT-1 targeting genetic DCM due to sarcomeric mutations and impaired calcium regulation.

MYOK closed at $139.60, it last traded at $221.00. BMY closed at $58.72.

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Mallinckrodt Pays $1.6B into Opioid Trust Fund, Avoids Bankruptcy

North Carolina AG announces $1.6B opioid settlement with Mallinckrodt

North Carolina Attorney General Josh Stein announced a global settlement framework agreement between state attorneys general, local subdivisions, and the opioid manufacturer Mallinckrodt (MNK), its subsidiaries, and certain other affiliates.

MNK is currently the largest generic opioid manufacturer in the United States.

MNK pays $1.6B to avoid bankruptcy, Stockwinners

In the agreement, MNK agrees to pay $1.6B in cash to a trust that will cover the costs of opioid addiction treatment and related efforts, with the potential for increased payment to the trust.

The agreement in principle has been reached with a court-appointed plaintiffs’ executive committee representing the interests of thousands of plaintiffs in the opioid multidistrict litigation, and is supported by a broad-based group of 47 state and U.S. Territory Attorneys General.

Under the terms of the proposed settlement, which would become effective upon Specialty Generics’ emergence from a contemplated Chapter 11 process, subject to court approval and other conditions: Plaintiffs would receive $1.6B in structured payments, of which $300M would be received upon Specialty Generics’ emergence from the completed Chapter 11 case, $200M would be received on each of the first and second anniversaries of emergence, and $150M would be received on each of the third through eighth anniversaries of emergence.

The substantial majority of those payments are expected to be contributed to a trust which, among other things, would establish an abatement fund to be administered to cover the costs of opioid-addiction treatment and related efforts.

Upon Specialty Generics’ emergence from the contemplated Chapter 11 process, the trust would receive warrants, exercisable at $3.15 per share, to purchase ordinary shares that would represent approximately 19.99% of the company’s fully diluted outstanding shares, including after giving effect to the exercise of the warrants.

To implement the proposed settlement, the company expects that Specialty Generics, which manufactures certain generic opioid products, among other products, will file voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the coming months.

Mallinckrodt and its Specialty Brands-related subsidiaries would not be part of the Chapter 11 filing.

This court-supervised process is expected to lead to the creation of a trust which, among other things, would establish an abatement fund to offset the expense of helping to combat opioid addiction and providing support to communities impacted by opioid abuse.

The court-supervised process is also expected to provide a fair, orderly, efficient and legally binding mechanism to resolve all opioid-related claims against the company, Specialty Generics, and all of Mallinckrodt’s other subsidiaries and related entities. It is expected that Mallinckrodt plc would receive the benefit of a “channeling injunction” that would provide for the release of all opioid-related claims that have been or could have been asserted against Mallinckrodt or its subsidiaries related to Specialty Generics’ manufacture and sale of opioids prior to the time the Specialty Generics Chapter 11 plan becomes effective.

MNK also agrees that its future generic opioid business will be subject to stringent injunctive relief that, among other things, will prevent marketing and ensure systems are in place to prevent drug misuse.

“Confronting the opioid epidemic has been my top priority as North Carolina’s Attorney General,” said Attorney General Josh Stein. “Families all across our state have been torn apart as far too many of our relatives, friends, and neighbors have become sick with addiction and died. The companies that helped to create and fuel this deadly crisis must help us recover. That is exactly why I led negotiations with Mallinckrodt and fought to bring these needed funds home to North Carolina where they will help people get well.”

MNK is up 63 cents to $4.80.

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Vail Resorts buys Peak Resorts for $11.00 per share

The deal is valued about $170 million

Peak Resorts (SKIS) announced that it has entered into a definitive merger agreement with Vail Resorts, Inc. (MTN) pursuant to which Vail Resorts will acquire all outstanding shares of common stock of Peak Resorts for $11.00 per share in cash.

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The transaction represents a 116% premium to Peak Resorts’ closing stock price on July 19, 2019.

The transaction is expected to close in fall 2019 and is subject to certain conditions, including a vote of Peak Resorts shareholders and antitrust clearance.

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The transaction was approved by the Boards of Directors of both companies. Peak Resorts’ Board of Directors also recommends that the Company’s shareholders approve the transaction.

Moelis & Company LLC is serving as financial advisor to Peak Resorts. Perkins Coie LLP, Sandberg Phoenix & von Gontard P.C. and Armstrong Teasdale LLP are serving as legal counsel to Peak Resorts.

About the Companies

Peak Resorts, Inc. owns, operates, and leases day and overnight drive ski resorts in the United States. Its resorts activities and amenities include skiing, snowboarding, terrain parks, tubing, dining, lodging, equipment rentals and sales, ski and snowboard instruction, golf, zip lines, mountain coasters, mountain biking, hiking, paint ball, and other summer activities. It operates 17 ski resorts primarily located in the Northeast, Mid-Atlantic, and Midwest.

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Vail Resorts, Inc. operates mountain resorts and urban ski areas in the United States. The company operates through three segments: Mountain, Lodging, and Real Estate. The Mountain segment operates 11 mountain resorts, including Vail Mountain, Breckenridge Ski, Keystone, and Beaver Creek resorts in Colorado; Park City resort in Utah; Heavenly Mountain, Northstar, and Kirkwood Mountain resorts in the Lake Tahoe area of California and Nevada; Whistler Blackcomb in Canada; Stowe Mountain resort in Vermont; and Perisher in Australia, as well as 3 urban ski areas, such as Wilmot Mountain in Wisconsin, Afton Alps in Minnesota, and Mount Brighton in Michigan.

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Its resorts offer various winter and summer recreational activities. The Lodging segment owns and/or manages various luxury hotels and condominiums under the RockResorts brand, and other lodging properties; various condominiums located in proximity to the company’s mountain resorts; destination resorts; and golf courses, as well as offers resort ground transportation services. This segment operates approximately 5,400 owned and managed hotel and condominium units.

The Real Estate segment owns, develops, and sells real estate properties in and around the company’s resort communities. 

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.