Today - Wednesday, November 25, 2015
- UBS has downgraded both SunEdison (NYSE:SUNE) and its TerraForm Power (NASDAQ:TERP) YieldCo to Sell. The former has fallen to $3.93 premarket, and the latter to $8.30.
- The downgrades come a day after SunEdison's beaten-down shares rose 37.3% following news the company has paid down $95M of a $100M margin loan, and is selling 425MW of Indian assets to TerraForm Global. Two days ago, SunEdison announced it's putting CFO Brian Wuebbels in charge of its YieldCos, and giving chairman Manny Hernandez a more hands-on role.
- Needham's Edwin Mok (Buy rating) is talking up SunEdison's recent moves. "We see the management shake-up at the board level and the yieldcos, the drop down of higher yield projects to GLBL, and SUNE's pay down of the margin loan as positive signs that SUNE is responding to investor concerns regarding its liquidity and cash flow generation ... As SUNE continues to improve the operation structure, we see potential for shares to move higher given the depressed levels."
- The FDA designates Cellceutix's (OTCPK:CTIX) Phase 2-stage oral rinse Brilacidin-OM for Fast Track review for the prevention of oral mucositis, a common and debilitating inflammation and ulceration in the mouth that occurs as a side effect of certain cancer treatments. There are currently no approved therapies for the condition.
- According to clinicaltrials.gov, the estimated final data collection date for the primary endpoint (WHO OM Score) in the 60-subject Phase 2 trial is June 2016. The estimated study completion date is December 2016.
- Fast Track status allows for more frequent interactions with the FDA review team and a rolling review of the New Drug Application (NDA).
- Following the company's quarterly results yesterday, RBC Capital VAL)+to+Underperform/11106620.html" target="_blank">downgrades Valspar (VAL) from Sector Perform to Underperform.
- The brokerage firm, however, raised the price target on the stock to $82 from a previous PT of $80.
- Previously: More on Valspar's FQ4 (Nov. 24 2015)
- A Phase 3 clinical trial assessing Pfizer's (NYSE:PFE) LYRICA (pregabalin) for the treatment of chronic post-traumatic peripheral neuropathic pain failed to achieve its primary endpoint of a statistically valid reduction in pain from baseline to week 15.
- There are currently no approved treatments in the U.S. for the condition. The company does not disclose whether it is abandoning its pursuit of the indication or considering another late-stage trial.
- LYRICA is currently approved for the treatment of neuropathic pain associated with diabetic peripheral neuropathy, postherpetic neuralgia, adjunctive therapy in adults with partial onset seizures and neuropathic pain associated with spinal cord injury.
- Now an activist target, American Capital (NASDAQ:ACAS) responds, hiring Goldman Sachs to assist with a strategic review of all alternatives, including a sale of the company or various business lines.
- The just-launched $300M-$600M buyback program is increased to $600M-$1B. Purchases will only be made at prices less than 85% of net asset value (Sept. 30 NAV was $20.44; yesterday's close of $13.90 was a 32% discount to that). The company expects to complete the buyback by June.
- Results of the strategic review are anticipated no later than Jan. 31.
- Source: Press Release
- ACAS +6.4% premarket to $14.79.
- Previously: American Capital becomes activist target; up 5% premarket (Nov. 16)
- Sales of Star Wars consumer products could reach $5B over the first year after the December release date of Star Wars: The Force Awakens, according to some high-flying projections.
- The mark would smash the previous movie product sales record of $2.8B set by Cars 2.
- Disney (NYSE:DIS) turned the screws on licensing partners by working a deal for a ~20% royalty which is about double the normal rate. Hasbro (NASDAQ:HAS) is the major licensee for Star Wars toys, while a host of other companies have bits and pieces - including Jakks Pacific (NASDAQ:JAKK), Lego, Kay Jewelers (NYSE:SIG), Topps, Electronic Arts (NASDAQ:EA), Rubie's Costume Company, and even CoverGirl (NYSE:COTY).
- Pandora (NYSE:P) states the Register of Copyrights declined to express an opinion on the matter of differentiated music webcasting royalty rates. She added that since all participants in the ongoing Web IV rate proceeding had assumed a non-differentiated (uniform) rate structure, such a structure is the only reasonable outcome for the proceeding.
- Pandora has been seeking a uniform rate structure. The Register of Copyrights' opinion comes ahead of a mid-December decision by the Copyright Royalty Board (CRB) on the recording royalty rates Pandora will pay from 2016-2020. Pandora rose in September after the CRB backed the admissibility of Pandora's deal with indie music rights agency Merlin as a benchmark for broader recording royalty rates.
- Recording royalty payments account for much of Pandora's content acquisition costs, which in turn totaled $129.5M (42% of revenue) in Q3 after backing out one-time charges. Shares have risen to $13.97 premarket.
- Total (NYSE:TOT) is raising about $1.2B of new debt financing through a structure combining the issue of non-dilutive cash-settled convertible bonds with the purchase of cash-settled call options to hedge the company's exposure to the exercise of the conversion rights under the bonds.
- The combination of the two products will create a synthetic bond financing equal to a standard debt instrument with no dilution for shareholders.
- TOT -0.2% premarket
- Allergan (NYSE:AGN) and start-up Rugen Therapeutics enter into an exclusive collaboration to discover and develop novel therapies for Autism Spectrum Disorders and Obsessive Compulsive Disorders, focusing on small molecule candidates.
- Under the terms of the agreement, Rugen will receive an upfront payment and milestones. Allergan will have the exclusive option to acquire all rights, including global IP, to the compounds following clinical proof-of-concept studies. Specific financial terms are not disclosed.
- As expected, the European Commission approves Impax Laboratories' (NASDAQ:IPXL) NUMIENT (carbidopa-levodopa extended-release capsule) for the symptomatic treatment of adults with Parkinson's disease (PD). It is the company's first branded drug approval outside of the U.S.
- In clinical studies, PD patients receiving NUMIENT (formerly IPX066) experienced a decrease in "off" time (36.9% to 23.8%) compared to immediate-release levodopa-carbidopa. An "off" episode is a period of time when PD symptoms reemerge despite taking PD medications. In addition, NUMIENT patients increased "on" time without dyskinesia (abnormal involuntary movements) by 1.9 hours compared to 0.8 hours for the immediate-release version.
- IPX066 is marketed under the brand name RYTARY in the U.S.
- Previously: European Ad Comm backs Impax Labs' NUMIENT for Parkinson's symptoms (Sept. 25)
- Yingli (NYSE:YGE) expects to report Q3 revenue of $340M-$350M, a range declared to be "in-line with management's previous estimation," but which is below a $355.2M consensus.
- Module shipments are expected to total 450MW-460MW, below prior guidance of 550MW-580MW - Yingli blames "lower-than-expected utilization of production facilities for in-house PV [modules]." Gross margin is expected to rise to 8%-9% from Q2's 6.3% thanks to higher ASPs and lower unit costs.
- A $581.3M non-cash impairment charge will be recorded, primarily "due to the lower-than-expected utilization of certain production facilities" in 2015.
- Q3 results are due on the morning of Dec. 2. Shares haven't yet moved premarket. They closed yesterday at $0.70, having plunged this year due to solvency fears.
- Cowen and Company projects holiday retail sales will increase between 2% and 3%. The forecast is below the 3.5% to 4.2% consensus range of analysts.
- Analyst Olivia Chen notes the earlier start to the promotional season and that online is driving a larger percentage of revenue. Typically, online shopping leads to a smaller basket size when compared to brick-and-mortar shopping and a higher degree of fragmentation of sales. Both trends work against big-box retailers (TGT, WMT, COST, BBY]]).
- ETFs: XLY, XRT, VCR, RTH, RETL, FXD, FDIS, RCD, PMR, BITE
- Citigroup initiates Lindblad (NASDAQ:LIND) with a Buy rating and $13 price target - 20% above last night's close.
- Things are going to plan, according to Lindblad bull Dane Capital Management, who expects sell-side coverage will be one of the catalysts for driving this inexpensive (in Dane's estimation) and under-followed stock higher.
- Previously: Lindblad Expeditions launches buyback (Nov. 9)
- Related: Lindblad Expeditions: An Unheard Of Small-Cap With An Impressive Growth Story (Nov. 18)
- Adjusted net earnings of $45.4M, or $0.34 per diluted share vs. $55.9M or $0.40 per diluted share in the same quarter a year ago.
- Net sales declined 9.8% to $538M from $596.5M in the same period of fiscal 2015. Gross margin of 33.1% vs. 35%.
- Repurchased 2.07M shares at an average price of $32.85 for a total of $68M.
- Fiscal 2016 outlook: Adjusted EPS of $1.49 -$1.69 (prior guidance of $1.57-$1.77). Sales between $2.2B-$2.3B.
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