Exact Sciences Higher on UnitedHealth News

Cologuard is a noninvasive, at-home screening test for colon cancer

About 30M more people will be able to be reimbursed for Cologuard tests as a result of UnitedHealth’s decision

 

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UnitedHealth to begin covering Cologuard July 1

 

EXACT Science ( $EXAS ) shares are climbing after health insurance giant UnitedHealth ( $UNH ) agreed to cover the company’s Cologuard test, starting July 1.

Cologuard is a noninvasive, at-home screening test for colon cancer. It is for adults 50 years or older who are at average risk for colon cancer, and it is available by prescription only.  As of March 2017, the list price of Cologuard was $649.

A number of analysts responded to the news by raising their price targets on EXACT Sciences.

TARGET INCREASES:

Canaccord analyst Mark #Massaro raised his price target on EXAS to $40 from $38.

About 30M more people will be able to be reimbursed for Cologuard tests as a result of UnitedHealth’s decision, and a total of more than 227M people will be able to get reimbursed for the test by their insurers as of July 1, the analyst stated. The analyst expects the company’s 2017 revenue to come in at the high end of its 2017 guidance range of $195M-$205M, although he noted that the consensus outlook was $210M before yesterday.

He increased his 2020 earnings per share estimate for the company to 90c from 80c, but he believes that estimate could be conservative. The analyst kept a Buy rating on the stock and continued to identify it as a top pick.

#Benchmark analyst Raymond Myers increased his price target on Exact Sciences to $50 from $34 as he raised his 2018 test volume growth forecast for Cologuard to 55% from 50% and increased his revenue forecast per test to $470 from $440. He kept a Buy rating on the shares.

DEMAND SEEN AS STRONG: “Essentially” all major insurers now cover Cologuard and demand for the test should continue to be strong, according to William Blair analyst Brian Weinstein. By the middle of 2018, most major insurers should have deals with EXACT Sciences to cover the test for at least the $510 that Medicare is paying, the analyst predicted. He kept an Outperform rating on the stock.

Meanwhile, shot-seller site #Citron Research views UnitedHealth’s (UNH) coverage of Cologuard as a negative for Exact Sciences (EXAS), claiming Exact had to lower the price of the test, making it unprofitable.

PRICE ACTION: In morning trading, EXACT Sciences rose nearly 10% to $35.90.

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Avoid Bank Stocks, JP Morgan Chart Signals Sell

Bank stocks rose on prospects of tax-cuts but Trump’s problems have sidelined his agenda

Yield Curve is now Flattest since the Election rally began

 

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Head and Shoulders pattern on JP Morgan (JPM)

JP Morgan (JPM), the DJIA component, shares rose along with the rest of the market  following last year’s election on expectation of tax cuts and other pro-growth measures. But Trump has been embroiled in troubles, distracting him from his legislative agenda. Republicans are divided on key issues, including how much to cut and how to offset the lost revenue, if at all. Easing of bank regulations and oversight imposed by the Frank-Dodd Law appear to have taken backseat to the Russian and Comey investigations.

On a 1-year daily chart of  JPM stock chart there is a clear active bearish head and shoulders pattern that became active when price broke below the neckline at the $82 area.

Rising Rates

Economic growth spurs demand for loans, but it also encourages higher interest rates and wider spreads between banks’ short-term funding costs and long-term lending rates. Yield spreads widened after the election. But with the Federal Reserve raising short-term interest rates and the 10-year Treasury yield sliding toward 2017 lows, the yield curve is the flattest since the 2016 election. That’s bad news for banks’ net margins and not a comforting sign for the economy as a whole. It is widely expected that the FOMC will raise its key lending rate by 25 bp on June 9th.

Sector Troubles

JP Morgan is considered as one of the best operated large banks. If you add impact of other not-so-well-managed banks to the sector, you will realize that the Financial Select Sector ETF ( $XLF ) is heading lower.

This morning New York City Mayor Bill de Blasio and Comptroller Scott M. Stringer jointly announced that they will vote to prohibit New York City from entering into new contracts for deposits with Wells Fargo ( $WFC ). The beleaguered bank has lost many executives and customer over its various marketing schemes.  Shares of WFC are now in a well defined bearish downward pattern. Shares are trading well below their 200-day moving average #MA .

Bank of America ( $BAC ) announced that it expects to complete the sale of its consumer credit card business in the United Kingdom, #MBNA Ltd., to #Lloyds Banking Group (LYG). The sale is expected to improve #Basel 3 risk-based capital ratios by approximately 11 basis points under the Advanced approaches and 15 basis points under the Standardized approach in the second quarter ending June 30, 2017. The U.K. consumer credit card portfolio had approximately $9.4B in credit card receivables and earned $211M in interest income in the first quarter of 2017. This type of news should send BAC shares higher but BAC is down 2.7% and has broken below its support level of $23.

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Deutsche Bank Fined $41 million by the Feds

The Federal Reserve Board announced a $41 million penalty against Deutsche Bank AG for anti-money laundering deficiencies

Deutsche Bank CEO encourages Europeans not to follow U.S. Mortgage Regulations

DB-LOGO

The Federal Reserve Board announced a $41M penalty and consent cease and desist order against the U.S. operations of #DeutscheBank $DB for anti-money laundering deficiencies. “The actions were taken by the Board to address unsafe and unsound practices at the firm’s domestic banking operations.

The Board identified failures by Deutsche Bank’s U.S. banking operations to maintain an effective program to comply with the Bank Secrecy Act and anti-money laundering laws,” the Federal Reserve said.

The consent order requires Deutsche Bank to improve its senior management oversight and controls related to compliance by the U.S. banking operations with anti-money #laundering laws.

Meanwhile, Deutsche Bank CEO John #Cryan pressured regulators in Europe to dismiss the same kind of rules for lenders’ mortgage holdings that have been adopted by their U.S.-based counterparts, Bloomberg reports, citing comments from Cryan at an investor conference in New York.

“By and large, Germans pay their debts” and aren’t close to as a risky as U.S. banks and home-buyers have been in the past, Cryan said, according to Bloomberg.

“For Europe to surrender, to accept U.S. mortgage capitalization rules, I think would be inappropriate,” the Deutsche Bank CEO said. “So to price them as though they were Californian subprime mortgages from 10 years ago is not appropriate.”

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Gilead HIV Success Shields it Against Patent Loss, Competition

The bictegravir combination was “well tolerated and no patients discontinued study medication due to renal events”

Analyst expects Gilead to use one of its priority review vouchers to obtain an accelerated six month regulatory timeline

 

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#Gilead (GILD) announced Tuesday that its latest #HIV treatment candidate met its primary goal in four late-stage studies, showing “non-inferiority” against existing regimens, including a competitor from GlaxoSmithKline (GSK).

By definition, a #non-inferiority trial aims to demonstrate that the test product is not worse than the comparator by more than a small pre-specified amount. This amount is known as the non-inferiority margin, or delta.

Wall Street analysts largely cheered the news and said it could be key in preserving Gilead’s spot in the HIV treatment arena.

BACKGROUND: Gilead announced Tuesday morning that four Phase 3 studies evaluating its #bictegravir in combination with the already-approved emtricitabine/tenofovir in HIV patients met their primary goals of “non-inferiority” against existing regimens, including GlaxoSmithKline’s #Tivicay.

On the safety front, the bictegravir combination was “well tolerated and no patients discontinued study medication due to renal events.” The company noted that it plans an New Drug Application (NDA) submission in Q2, with a Marketing Authorization Approval (MAA) filing in Europe following in Q3.

CITI SEES POTENTIAL FIRST CHOICE FOR PHYSICIANS: #Citi analyst Robyn #Karnauskas says today’s data are “key” to the long-term health of Gilead’s HIV franchise and could make the bictegravir regimen the first choice among physicians, adding that a 1Q18 launch of the bictegravir regimen looks “likely” now. While cautioning that Gilead’s announcement did not include comment on drug superiority or detailed efficacy metrics, Karnauskas’ base case estimates about 25% of patients switching to the bictegravir combo, contributing roughly $6 per share to her discounted cash flow modeling.

JPMORGAN SAYS KEY TO HIV FRANCHISE: #JPMorgan analyst Cory #Kasimov is “generally encouraged” by Gilead’s announcement but “not entirely surprised” given the previous Phase 2 data. Kasimov thinks a 2018 launch, potentially with accelerated FDA review using one of the company’s priority vouchers, could be “key” to help the company maintain market share in the face of pending patent expirations as well as continued growth in GlaxoSmithKline’s Tivicay. Kasimov adds that he expects sales of the bictegravir product to peak around $5B by 2022.

LEERINK SEES POTENTIAL YEAR-END LAUNCH: #Leerink’s Geoffrey #Porges says the bictegravir news looks “in line” with both his and the company’s expectations: While the trials “do not appear to have shown statistical superiority,” they also didn’t bring new safety concerns. The analyst expects Gilead to use one of its priority review vouchers to obtain an accelerated six month regulatory timeline, potentially allowing for year-end approval and launch, adding that his forecast for the regimen eventually ramps to over $10B in global sales.

PRICE ACTION: Shares of Gilead showed volatility Tuesday, reaching highs near $64.75 before paring those gains into session close at $64.50. Meanwhile, GlaxoSmithKline $GSK gained 1.8% to $43.43.

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Ensco to buy Atwood Oceanics

Offshore driller Ensco to buy is rival Oceanis for $10.72 per shares

The combined company will have a market cap just shy of $7 billion

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Offshore driller Ensco Plc $ESV said it would buy smaller rival Atwood Oceanics Inc $ATW in an all-stock deal valued at about $839 million.

Atwood shareholders will receive 1.6 Ensco shares for each Atwood share.

The deal, which values each Atwood share at $10.72, represents a premium of 32.6 percent to the company’s Friday close.

Ensco expects to realize annual pre-tax expense synergies of approximately $65 million for full year 2019 and beyond. The combination is expected to be accretive on a discounted cash flow basis.

The transaction will join two leading offshore drillers – combining long-established histories of operational, safety and technical expertise with high-quality assets that cover the world`s most prolific offshore drilling basins.

The acquisition will strengthen Ensco`s position as the leading offshore driller with exposure to deep- and shallow-water markets that span six continents.  Upon closing, Ensco will add six ultra-deepwater floaters, including four of the most capable drillships in the industry, and five high-specification jackups. The combined company will have a fleet of 63 rigs, comprised of ultra-deepwater drillships, versatile deep- and mid-water semisubmersibles and shallow-water jackups, along with a diverse customer base of 27 national oil companies, supermajors and independents.

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CardConnect Sold for $15 per share

Payments solution company #CardConnect $CCN agreed to be acquired by #FirstData $FDC for $15.00 per share in cash.

The transaction is expected to be modestly accretive to First Data’s EPS in the first full year post-closing

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CardConnect to be acquired by First Data

CardConnect CCN is a provider of payment processing and technology solutions and is one of First Data’s largest distribution partners. It processes approximately $26 billion of volume annually from about 67,000 merchant customers which are served by CardConnect’s large base of distribution partners. CCN closed at $13.65. FDC closed at $16.64.

First Data FDC will commence a tender offer to acquire all of the outstanding CardConnect common stock for a purchase price of $15.00 per share in cash. The aggregate transaction value is approximately $750 million, including repayment of CardConnect’s outstanding debt and the redemption of CardConnect’s preferred stock. First Data intends to fund the transaction with a combination of cash on hand and funds available under existing credit facilities.

First Data Corporation provides electronic commerce solutions for merchants, financial institutions, and card issuers worldwide. It operates through three segments: Global Business Solutions, Global Financial Solutions, and Network & Security Solutions. The Global Business Solutions segment offers retail point-of-sale merchant acquiring and e-commerce services; and mobile payment services and Webstore-in-a-box solutions, as well as its cloud-based Clover point-of-sale operating system. FDC has a market capitalization of $15.3 billion.

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Barron’s says, Buy Yahoo, Sell Foot Locker

Barron’s is bullish on Ford, Crox, McKesson, and Yahoo

Barron’s is bearish on Nike, Foot Locker and Tesla

 

In its weekly review of stocks and market, Barron’s tells its readers:

Yahoo! $YHOO continues to look undervalued, with shares trading at a “sizable” discount to estimated asset value, Barron’s contends in a ‘Follow Up’ column. According to the report, #Gabelli analyst Brett Harriss calculates Yahoo’s asset value at $71 per share, though the expected sale of those assets could fetch closer to $60 after accounting for taxes and discounts.

Tiernan Ray of the Barron’s Technology Trader column argues that tech companies “often reach critical mass” when annual revenues approach $1B. Some young companies have already passed that benchmark and stand out, the publication says, including #Arista Networks $ANET . Among companies approaching $1B, Pure Storage $PSTG looks “noteworthy,” with Barron’s also naming Veeva Systems $VEEV , #FireEye $FEYE , #Splunk $SPLK , Box $BOX and Atlassian $TEAM .

Despite wider concerns over the future of retail, investors and analysts should “renew their faith” in #Crocs , Barron’s contends in a ‘Trader Extra’ column. The company has already undergone a restructuring effort, and the cheap shares offer an “excellent deal” as Crocs $CROX returns to profitability and finds its place in the marketplace.

Headwinds are appearing for Foot Locker $FL as mall traffic slumps and the basketball sneaker boom potentially loses steam, Barron’s contends in a ‘Trader Extra’ column. The already-weakened stock is vulnerable to another double-digit percentage slump, the publication adds. The report also cites independent analyst Jonathan Hanlon of Research 360, who highlights lackluster execution in apparel and growing competition from online, particularly from #Nike $NKE .

International Paper $IP offers “plenty to entice investors,” including rising free cash flow and a steadily growing dividend, Barron’s contends in a feature article. The packaging and paper name is a beneficiary of ecommerce trends, and could return 25% by year end as volumes rebound and the company hikes prices, the publication says. “We are at an inflection point. We expect margins to return to peak levels at the end of this year. In industrial packaging, we will exit the year in the 23% to 25% range, compared with trough margins in the first quarter of 18.5%,” CFO Glenn Landau told the publication in an interview.

Newly appointed #Ford $F CEO Jim Hackett “looks like an inspired choice” to accelerate the company’s autonomous driving effort and lift shares, Barron’s contends in a cover story. Investors could make 30% in a year as #Hackett makes his case in the coming months, the publication says, adding that the stock has an “excellent chance” of outperforming Tesla $TSLA over the next five years.

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Web.com is For Sale

Web.com has held early stage talks with private equity groups

The takeover interest in the company comes as its sector has become crowded

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Web.com is for sale

#Web.com (WEB) is in discussions with private equity firms after drawing takeover approaches, Reuters reports, citing people familiar with the matter.

The takeover interest in the company comes as its sector has become crowded, with competitors such as Wix.com (WIX), Weebly, GoDaddy (GDDY), and Squarespace trying to gain market share, the report notes.

Web.com $WEB has held early stage talks with private equity groups in response to approaches over a possible leveraged buyout, the report says. The company is not actively soliciting bids, the report notes.

Web.com generated $710.5 million in revenue in 2016, compared to $543.5 million the year before. It reported adjusted earnings before interest, tax, depreciation and amortization in 2016 of $179.5 million, up from $155.8 million the year before.

Web.com has been trying to expand into new areas, buying local marketing services firm Yodle last year for more than $300 million.

Web.com’s top shareholder is New York-based hedge fund Okumus Fund Management, which owned 18.64 percent of the company as of March 31. In 2015, the company reached an agreement with Okumus to add two independent directors to its board.

The market for web services to small and medium size businesses remains fiercely competitive, as low barriers to entry and downward pressure on prices have weighed on the profitability of many companies in this space.

GoDaddy, Web.com competitor, has been pursuing acquisitions following its initial public offering in 2015. Private equity firms KKR & Co LP and Silver Lake Partners LP had acquired GoDaddy in 2011 for $2.25 billion before taking it public.

Last year, GoDaddy spent $1.82 billion on buying Host Europe, a company that provides similar web services, in a bid to expand its international expansion.

PRICE ACTION: WEB closed at $21.20. The stock has a 52-week trading range of $12.90 – $22.50.

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Rig Counts Continue to Rise

U.S. Rig Counts rise to 908 from last year’s 404 rigs

Canadian Rig Counts rise to 93 from last year’s 43

 

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Rig Counts Rise

#Baker Hughes $BHI reports that the U.S. rig count is up 7 rigs from last week to 908, with oil rigs up 2 to 722, gas rigs up 5 to 185, and miscellaneous rigs unchanged at 1.

The U.S. Rig Count is up 504 rigs from last year’s count of 404, with oil rigs up 406, gas rigs up 98, and miscellaneous rigs unchanged.

The U.S. Offshore Rig Count is unchanged from last week at 23 and down 1 rig year over year.

The Canadian Rig Count is up 8 rigs from last week to 93, with oil rigs up 4 to 40 and gas rigs up 4 to 53.

The Canadian Rig Count is up 50 rigs from last year’s count of 43, with oil rigs up 26, gas rigs up 25, and miscellaneous rigs down 1 to 0.

In an attempt to shore up oil prices, yesterday, the Organization of Petroleum Exporting Countries, #OPEC, ministers meeting in Vienna produced an agreement to maintain production reduction of 1.8 million barrels per day for another nine months. On the news, the commodity sold off more than 5% on Thursday. Prices have rebounded some today and #WTI crude oil last traded at $49.82 per barrel. Brent crude last traded at $52.20 per barrel.

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Crude Oil Lower on OPEC Announcement

The Vienne Group agreed to extend its production cut for another nine months 

Traders had anticipated the move and had pushed prices up ahead of the meeting

 

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Oil glut continues to push prices lower

The Organization of Petroleum Exporting Countries, #OPEC, ministers meeting in Vienna produced an agreement to maintain production reduction of 1.8 million barrels per day for another nine months. The so-called Vienne Group, which is OPEC nations plus allied oil producing nations, most notably Russia, made the announcement today.

Last week, Kuwaiti Oil Minister said the 9-month production cut was a done deal. He had said OPEC is committed to restore the balance of the oil market and is not ruling out any option for discussion at the upcoming meeting on Thursday, including considering deeper cuts.

Ahead of the meeting, traders had front-run today’s decision, which did not include a positive surprise. The lack of positive surprises (deeper cuts) prompted a sell-the-news response.

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12-Month Chart on Crude Oil with 200-day MA shown

From a #technical standpoint, the reversal in oil comes after its consecutive failed push (on a daily basis) to the $52.00/bbl level, which happened to be the 200-day moving average #MA on the chart (shown in brown). Crude oil made a 2017 high of $55.24 at the start of January, but selling in March pushed the commodity back below its 200-day MA, which happened to be the $52.00 level. Looking at the chart clearly shows the downward trendline resistance. The trendline comes from connecting the highs in January, April and May. Based on the chart, the commodity should see a rebound to the $50 level.

Prices are supported by production cuts from OPEC but have been kept in check by domestic productions. Rig counts in the U.S. have more than doubled in the past 12 months. Canadian rig counts are on the rise too. The Canadian Rig Count rose last week to 85 rigs from last year’s count of 44.

Today’s weakness in oil has weighed on the energy sector. The Energy Select Sector #SPDR #XLE is underperforming the broader averages. At the current price of $66.91, the ETF is down over 1.2%. At that price next support is at $66.16. Resistance is at $67.50. A continued underperformance could impair the broader rally in the S&P 500 (SPX).

Crude has traded today in the range of $48.75 – $52.00. It last traded at $49.00 per barrel. $XOM and $CVX are among losers in the DJIA.

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Sears shares higher on short-covering

Revenue for the quarter of $4.3B was down from $5.4B in the prior year quarter, but was better than the $4.05B consensus

Comparable store sales declined 11.9% in the quarter. Kmart comparable sales declined 11.2%

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Shares of #Sears Holdings $SHLD are higher after the troubled department store posted a smaller than expected loss for the first quarter. While the company said it had a challenging quarter, it is committed to returning to “solid financial footing.”

EARNINGS: Sears this morning reported an adjusted loss per share of $2.15, better than the $3.05 loss analysts were expecting. Revenue for the quarter of $4.3B was down from $5.4B in the prior year quarter, but was better than the $4.05B consensus.

Comparable store sales declined 11.9% in the quarter. Kmart comparable sales declined 11.2%, primarily driven by declines in the grocery and household, pharmacy, apparel and home categories, while Sears Domestic comp sales dropped 12.4%, primarily due to decreases in the home appliances, apparel and lawn and garden categories.

Sears Chairman and CEO Edward #Lampert said that while Q1 was “certainly a challenging quarter” for the company, “it was also one that clearly demonstrated our commitment to return Sears Holdings to solid financial footing.” Lampert said Sears is “moving decisively” with its $1.25B restructuring program.

COST-CUTTING EFFORTS: Sears said this morning that it has already actioned $700M in cost savings to-date from its strategic restructuring program through the closure of 150 non-profitable stores, as well as the closure of 92 under-performing pharmacy operations in certain Kmart stores and the closure of 50 Sears Auto Center locations.

Sears CFO Rob Riecker commented that the company “will continue to evaluate our options to deliver further improvements to our operational performance and balance sheet.” Earlier this week, Sears signed a deal to annuitize $515M of pension liability with MLIC, under which MLIC will pay future pension benefit payments to approximately 51,000 retirees. The company is targeting a reduction in its outstanding debt and pension obligations of $1.5B for fiscal 2017.

WHAT’S NOTABLE: Sears CEO Lampert accused the media earlier this month of “unfairly singling out” the company over the past decade, blaming “irresponsible” news for the company’s issues, Reuters reported, citing a presentation Lampert made at an annual shareholders’ meeting.

Sears, which had not reported a profit for six years, is in the midst of a turnaround strategy, but the retailer has warned it may not be able to continue as a going concern.

Sears, like many other mall-dependent retailers, has been impacted by the slowdown in general mall traffic as consumers turn to #Amazon $AMZN and other online retailers.

Lampert recently told the Chicago Tribune that he feels like “We’re ahead of J.C. Penney $JCP , we’re ahead of #Macy’s $M , we’re ahead of #Target $TGT , in some aspects of where the world is going.” He added that Sears is “fighting like hell to change the way people do business with us.”

Meanwhile, Barry Sternlicht, the Chairman & CEO of Starwood Capital Group and Chairman of Starwood Property Trust $STWD , told Bloomberg that Sears is usually the weakest performing store in the mall, adding that he’d like to see Sears in its malls “go away.”

PRICE ACTION: Sears (SHLD) is up 17% to $8.74 in Thursday trading. Note that as of May 15th, a total of 14,418,732 shares were shorted compared to average daily volume of 875,054, and a 16.7 days to cover the shorts.

OTHERS TO WATCH: Peers in the sector trading higher this morning include Macy’s, J.C. Penney and Kohl’s $KSS .

If you are a Sears Holdings stockholder, it is a good idea to sell into the strength and cut your losses.

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Puma Biotechnology receives FDA Committee Approval for Neratinib

Committee voted 12 – 4 to recommend approval of Neratinib, for the extended adjuvant treatment of HER2-positive early stage breast cancer

The study demonstrated a statistically significant 33% relative reduction of risk of invasive disease recurrence within two years after treatment

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#Puma Biotechnology $PBYI announced that the U.S. FDA Oncologic Drugs Advisory Committee voted 12 – 4 to recommend approval of PB272, or neratinib, for the extended adjuvant treatment of HER2-positive early stage breast cancer based on finding that the risk-benefit profile of neratinib is favorable.

The #ODAC vote was based on a review of the clinical development program that included 11 trials in breast cancer and represented approximately 2,000 patient years’ experience. The focus of the meeting was the Phase III ExteNET study, which provided one year of continuous therapy with neratinib after patients completed one year of therapy with a trastuzumab-based regimen.

The study demonstrated a statistically significant 33% relative reduction of risk of invasive disease recurrence within two years after treatment.

ODAC is an independent panel of experts that evaluates data concerning the efficacy and safety of marketed and investigational cancer treatments and makes appropriate recommendations to the FDA.

Its vote is not binding, but is considered by the FDA in its decision making process. “We appreciate the committee’s comments and the support of the many clinicians, patients and advocates who participated in today’s meeting,” Alan H. Auerbach, CEO and President of Puma Biotechnology, said. “We look forward to further discussion with the FDA.”

The stock was last up over 25.2% to $72.40.

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Fidelity Guarantee Sold for $31.10 Per Share

FGL is a leading provider of fixed indexed annuities and life insurance products

CF Corp. will acquire FGL for $31.10 per share in cash, or a total of approximately $1.84B, plus the assumption of $405M of existing debt

Stockwinners blog on FidelityCF Corporation $CFCO and #Fidelity & Guaranty Life $FGL announced that their boards of directors have each unanimously approved a definitive merger agreement under which CF Corp. will acquire FGL for $31.10 per share in cash, or a total of approximately $1.84B, plus the assumption of $405M of existing debt.

The purchase consideration implies a value of 1.1x adjusted book value as of March 31, 2017.

The investor group, which includes the founders of CF Corp., Chinh Chu, and William Foley, II, funds affiliated with #Blackstone $BX , and Fidelity National Financial $FNF , will invest approximately $900M in common and preferred equity to fund the transaction.

FGL is a leading provider of fixed indexed annuities and life insurance products, with approximately $28B of GAAP Total Assets and approximately $1.6B of adjusted book value.

FGL has grown sales by approximately 10% annually from 2012 to 2016, supported by its long-standing relationships with distribution partners, changing U.S. retirement demographics, and an attractive product value proposition to policyholders. Following the close of the transaction, FGL will continue to be led by its current management team under Chris Littlefield as President and CEO. FGL will remain headquartered in Des Moines, Iowa, and will continue operations from Baltimore, Maryland, and Lincoln, Nebraska.

Messrs. Chu and Foley will serve as executive chairmen of the board, which will be composed of a majority of independent directors. In connection with the transaction, CF Corp. and HRG Group (HRG), FGL’s largest shareholder, have approved a purchase agreement under which CF Corp. will acquire certain reinsurance companies from HRG. The transaction is expected to close in Q4.

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Moodys Downgrades China

The downgrade reflects Moody’s expectation that China’s financial strength will erode somewhat over the coming years

The strengths of its credit profile will allow the sovereign to remain resilient to negative shocks, with GDP growth likely to stay strong

#Moody’s Investors Service has #downgraded China’s long-term local currency and foreign currency issuer ratings to A1 from Aa3 and changed the outlook to stable from negative.

Moody’s says, “The downgrade reflects Moody’s expectation that China’s financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows. While ongoing progress on reforms is likely to transform the economy and financial system over time, it is not likely to prevent a further material rise in economy-wide debt, and the consequent increase in contingent liabilities for the government.

The stable outlook reflects our assessment that, at the A1 rating level, risks are balanced. The erosion in China’s credit profile will be gradual and, we expect, eventually contained as reforms deepen.

The strengths of its credit profile will allow the sovereign to remain resilient to negative shocks, with GDP growth likely to stay strong compared to other sovereigns, still considerable scope for policy to adapt to support the economy, and a largely closed capital account.”

China’s local currency and foreign currency senior unsecured debt ratings are downgraded to A1 from Aa3.

HIV Vaccine Proves 100% Effective

Overall, 27 of 27 vaccinated participants showed a positive response

The study evaluated a four-dose regimen of PENNVAX-GP DNA

ino#Inovio Pharmaceuticals $INO announced that its #HIV vaccine, #PENNVAX-GP, produced amongst the highest overall levels of immune response rates ever demonstrated in a human study by an HIV vaccine.

The vaccine candidate, PENNVAX-GP, consists of a combination of four HIV antigens designed to cover multiple global HIV strains and generate both an antibody immune response as well as a T cell immune response to both potentially prevent and treat HIV.

These preliminary results are from a study supported by the HIV Vaccine Trials Network, or HVTN, and the National Institute of Allergy and Infectious Diseases, or NIAID, part of the National Institutes of Health, or NIH, in collaboration with Inovio.

The study evaluated a four-dose regimen of PENNVAX-GP DNA vaccine administered by intradermal, or ID, or intramuscular, or IM, administration in combination with a DNA encoded immune activator, IL-12, or INO-9012.

Overall, 71 of 76 evaluable vaccinated participants showed a CD4+ or CD8+ cellular immune response to at least one of the vaccine antigens. Similarly, 62 of 66 evaluated participants demonstrated an env specific antibody response. None of the placebo recipients demonstrated either a cellular or an antibody response in the study.

Notably, amongst the participants receiving PENNVAX-GP vaccine and IL-12 with intradermal immunization, 27 of 28 participants demonstrated a cellular response and 27 of 28 demonstrated an HIV env specific antibody response.

Amongst the evaluated participants receiving PENNVAX-GP and IL-12 via IM vaccination, 27 of 27 demonstrated a cellular response and 19 of 21 demonstrated an env specific antibody response. Similar immune responses and response rates were achieved via both ID and IM administration of the vaccine although participants vaccinated via intradermal vaccine administration received 1/5th the dose of vaccine compared to those vaccinated via intramuscular administration.

INO closed at $7.13, last traded at $9.90 in pre-market.

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