Today - Friday, December 6, 2013
2:18 PMSupreme Court to rule on software patents
- Amid intensifying scrutiny of software patents and perceived patent trolls, the Supreme Court says it will review whether companies should be able to obtain monopolies on software-related business methods via patent law.
- The review could represent a challenge to the Federal Circuit Appeals Court, which has routinely sided with patent owners in disputes related to software IP and other matters.
- The Supreme Court's decision comes shortly after the House passed the Innovation Act, a bill whose supporters argue will significantly cut the number of frivolous U.S. patent suits filed each year. Among other things, the bill requires litigants to list which patents are being infringed when making a complaint, and makes plaintiffs pay court costs if they lose.
- The White House, which earlier in 2013 issued 5 executive actions and 7 legislative proposals aimed at patent trolls, has voiced its support for the Innovation Act.
- Potentially affected companies: ACTG, RPXC, VRNG, VHC, WILN, IDCC, RMBS, PRKR.
2:16 PMGeneral Mills gains traction in key categories| Comment!
2:14 PMMixed results for Shire in late stage lifitegrast trial
- Shire (SHPG +0.8%) is out with top-line results from OPUS-2 (that's lifitegrast in dry eye patients).
- Although the ophthalmic solution met its eye dryness co-primary endpoint, it did not meet the reduced corneal staining endpoint.
- "We will be examining the totality of the data for lifitegrast in OPUS-2, as well as OPUS-1 and across the entire clinical trial program," CEO Flemming Ornskov says. (PR)
- SHPG acquired the drug in the SARcode deal.
- "The SARcode buyout was one of [Ornskov's] initial forays into ophthalmology," Jon Carroll notes, adding that "the mixed results in Phase 3 [are drawing] frowns from some analysts."
2:05 PMTiffany in China: Build the brand before the stores
- Tiffany (TIF -0.1%) says it will spend more money on marketing in China than any other region next year
- Execs with the company expect to see double-digit sales growth in China and the Tiffany brand further entrenched with wealthy consumers.
- What Tiffany won't do is blow out its Chinese investment budget on store expansion. Only 3 stores are slated to be opened next year.
2:00 PMOn the hour
- Dow +1.2%.
- 10-yr +0.02%.
- Euro +0.2% vs. dollar.
- Crude +0.2% to $97.57.
- Gold -0.18% to $1229.7.
1:56 PMHeineken and Anheuser-Busch InBev go toe-to-toe in Mexico
- Heineken (HINKY) expects to see solid growth in Mexico next year as the economic situation in the nation improves.
- The Dutch brewer and Anheuser-Busch InBev (BUD +1.9%) control 99% of the beer market in Mexico, a level of domination which has kept Mexican regulators busy.
- Despite the extra attention from antitrust officials, Heineken expects to grow its market share even higher next year at A-B's expense - led by its Mexican brands such as Tecate, Dos Equis, Indio, and Sol.
1:52 PMCanaccord steps to sidelines on Sarepta
- Sarepta Therapeutics (SRPT -3.1%) falls as Canaccord downgrades the shares to Neutral from Buy.
- "We still predict eventual clinical/commercial success, but feel there is major near-term uncertainty in eteplirsen's regulatory timelines," analyst Ritu Baral notes.
- Long story short: Canaccord likes the DMD treatment's efficacy and safety profile but doesn't necessarily like the confirmatory trial ambiguity.
- Price target is still $20.
1:50 PMCitrix outperforms as Stifel hikes PT; VMware also rallying
- Stifel's Brad Reback has raised his Citrix (CTXS +2.4%) PT to $74 from $70, while reiterating a Buy. Citrix has topped $60, and virtualization archrival VMware (VMW +2.9%) has rallied above $86.
- Reback's talks with Citrix's IR chief strengthened his belief the company's "uneven performance" (highlighted by its Q3 warning) is only due to sales execution and cyclical (rather than secular) headwinds. He also declares Amazon's WorkSpaces cloud PC virtualization service "more of a side-show than a meaningful enterprise threat, especially over the near-to-medium term."
- Both Citrix and VMware sold off when WorkSpaces was first announced. Though Reback disagreed, several analysts argued WorkSpaces could be a long-term threat, as its feature set grows.
- Reback likes the fact Citrix only trades at 10.8x his 2014 free cash flow estimate of $876.4M, and sees demand for Citrix's mobile software and the latest version of its XenDesktop PC virtualization platform acting as potential catalysts.
1:41 PMWidePoint climbs, CEO buys 28.7K shares, DHS contract speculation| Comment!
1:27 PMQuestcor slips as Citron mentions shares
- Although this comes with the "correlation does not necessarily equal causation" caveat, shares of Questcor Pharmaceuticals (QCOR -4.3%) began to move notably lower a little over a half hour ago.
- The timing of the move equates almost exactly with new tweets from Citron Research.
- See Citron's feed for details.
- For more on Citron's QCOR research, see here.
1:20 PMVerizon triples 4G capacity in top markets, looks to maintain network lead
- With its 4G rollout largely complete from a coverage standpoint (~300M Americans now covered), Verizon (VZ +0.7%) is making good on its promise to ramp network capacity. By turning on a new network in the high-frequency AWS band (good for urban areas), Big Red has tripled its 4G capacity in markets such as NYC, Chicago, and Seattle, and increased it by 150% in downtown L.A. and S.F. Dozens of additional markets will be added soon.
- On paper, the spectrum-rich network can support speeds of 100-150Mbps. Though most users won't see such numbers, the network should allow Verizon to take the U.S. 4G speed crown back from AT&T (T +0.6%), which is reallocating 2G/3G spectrum to improve its 4G capacity.
- The launch comes as Verizon admits soaring mobile data traffic has led to network congestion in markets such as NYC, Chicago, and S.F, and promises to increase capex to address the issue.
- Verizon's 4G network edge is a major reason why it has continued gaining postpaid share in spite of its premium pricing. AT&T just discounted its Mobile Share plans for certain users in an effort to better compete against Verizon and others.
1:13 PMLast bear standing no more. Hendry explains.
- "The great peril is not that the Fed finally tightens monetary policy and US stock prices suddenly tumble from what are very obviously overpriced levels," writes Hugh Hendry in his December letter, explaining his new-found bullishness. "The greater peril is that the current backdrop will turn out to mark a rapid acceleration in the ongoing move to the upside."
- In a highly entertaining essay drawing inspiration from the classic Bob Ryan character who popped up on HBO's Entourage for a couple of episodes, Hendry notes the eerie comparison to the markets of 1928, 1982, and 1998 - all ended badly, yes, but participants made plenty of money during the boom phase.
- "Just be long. Pretty much anything."
- Broad large-cap ETFs: PRF, PKW, VUG, VTV, SDOG, VV, SCHX, MGK, DEF, SCHG, SCHV, PWV, FLAG, MGV, DOD, JKD, FEX, EQL, IWY, EZY, JKE, PWB, IWX, FTC, JKF, EEH, SPXH, TRSK, SFK, PXLC, FWDD, PXLV, ALTL, GVT, RWG, FNDX, PXLG, IELG
1:00 PMOn the hour
- Dow +1.12%.
- 10-yr +0.03%.
- Euro +0.22% vs. dollar.
- Crude +0.25% to $97.62.
- Gold -0.13% to $1230.3.
12:55 PMOGX begins production at Tubarao Martelo field
- Embattled Brazilian oil company OGX Petroleum (OGXPY) confirms that production has started at its Tubarao Martelo oil field off the coast of Rio de Janeiro.
- OGX, which has $3.6B in international bonds outstanding, has only enough cash to continue production at Tubarao Martelo until the end of the year and has asked bondholders for at least another $150M to continue production next year.
- OGX hopes Tubarao Martelo can help it recover from bankruptcy protection, but it is unclear how much the field will be able to produce at first.