Tuesday, October 2, 2018
Edwards Lifesciences downgraded to Neutral from Buy at Guggenheim
Guggenheim downgraded Edwards Lifesciences to Neutral citing valuation.
https://thefly.com/landingPageNews.php?id=2798189
Illumina price target raised to $380 from $350 at Piper Jaffray
Piper Jaffray analyst William Quirk raised his price target for Illumina to $380 and keeps an Overweight rating on the shares. The analyst is now more confident in his projections for the company and moved his earnings multiple to 60 times from 55. He is forecasting overall sequencing spend to increase 22% from $259M in 2018 to $317M in 2019 and 25% to $397M in 2020. Most of the programs are currently focusing on large scale human sequencing, and thus the majority will gravitate to Illumina’s NovaSeq systems, Quirk tells investors in a research note titled “How Sequencing Is Taking Over The World.”
https://thefly.com/landingPageNews.php?id=2798143
Lilly Phase 3 Studies Show Lispro Met Efficacy Endpoint in Type 1 & 2 Diabetes
Readouts from two phase 3 clinical trials demonstrated that Eli Lilly and Company’s (NYSE: LLY) Ultra Rapid Lispro (URLi) met the primary efficacy endpoint of non-inferior A1C reduction from baseline compared to Humalog® (insulin lispro) and also demonstrated significantly improved post-meal glucose control in people with type 1 and type 2 diabetes.
URLi is Lilly’s novel mealtime insulin formulation that was developed to help better control blood glucose levels after meals by more closely mirroring the way insulin works in people without diabetes.
The two phase 3 studies, PRONTO-T1D and PRONTO-T2D, evaluated the safety and efficacy of URLi compared to Humalog in people with type 1 and type 2 diabetes, respectively. The primary efficacy endpoint of non-inferiority to Humalog, as measured by A1C reduction from baseline, was met in both studies at 26 weeks. In both populations, URLi demonstrated superior reduction in glucose excursions at both one and two hours during a meal test. The studies showed no significant difference in severe, nocturnal or overall hypoglycemia rates reported by study participants.
“Despite progress in insulin and diabetes management, many people with diabetes find controlling high blood sugar levels after meals frustrating. If approved, URLi will be a new option in mealtime insulin therapy designed to help keep blood sugar in range after eating,” said Thomas Hardy, Senior Medical Director, Insulins Product Development, Lilly Diabetes. “We are encouraged by these data showing that URLi was non-inferior to Humalog in controlling A1C, an overall measure of glucose control, while significantly lowering blood glucose levels during a meal test.”
In both studies, URLi showed overall safety and tolerability similar to Humalog. Lilly plans to present detailed results from these studies in 2019. Based on these results, Lilly will submit URLi to regulatory authorities in 2019
Monday, October 1, 2018
Merit Medical Signs Agreement to Acquire Cianna Medical
Merit Medical Systems, Inc. (NASDAQ: MMSI), a leading manufacturer and marketer of proprietary disposable devices used in interventional, diagnostic and therapeutic procedures, particularly in cardiology, radiology, oncology, critical care and endoscopy, today announced that it has signed a definitive merger agreement to acquire Cianna Medical, Inc., headquartered in Aliso Viejo, California. The transaction has been approved by the board of directors of both companies, and is subject to the satisfaction or waiver (in accordance with the provisions of the merger agreement) of certain closing conditions, including the approval of Cianna Medical stockholders, clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. It is anticipated that the transaction will close during the fourth quarter of 2018.
The deal structure includes an upfront payment of $135 million with potential earn-out payments of an additional $15 million for achievement of supply chain and scalability metrics, and up to an additional $50 million for achievement of sales milestones.
Based on management’s current estimates, in 2019 the proposed transaction, if consummated, would be non-accretive to Merit earnings per share on a GAAP basis in the range of ($0.06-$0.10) per common share and accretive to Merit earnings per share on a non-GAAP basis in the range of $0.08–$0.13 per common share, with anticipated GAAP gross margins of 55-65% and non-GAAP gross margins of 70-75% on the Cianna Medical products, accretive to both Merit’s GAAP gross margin and non-GAAP gross margin in the range of 55-130 basis points, and add revenues in the range of $50-$56 million. NOTE: Non-GAAP earnings per share accretion and non-GAAP gross margin are non-GAAP financial measures. Information about how Merit uses non-GAAP measures in its business, and an explanation of how these measures relate to their most directly comparable GAAP financial measures, is included under the heading “Non-GAAP Financial Measures” below.
Cianna Medical is a leader in wire-free breast localization and has been focused on breast conservation for 11 years. Cianna Medical develops, manufactures and markets innovative medical products designed to reduce costs, improve quality and reduce the anxiety and stress breast cancer treatments place on women and their families. Its research, development and commercialization teams developed the first non-radioactive, wire-free breast localization system and the world’s only technology that utilizes RADAR in human tissue. Its SCOUT® and SAVI® Brachy technologies are FDA-cleared and address unmet needs in the delivery of radiation therapy, tumor localization and surgical guidance.
The SCOUT® device has grown from $1 million in revenues in its 2015 debut to a projected $29 million in revenues in 2018. Current estimated market share is approximately 5% with no revenues currently outside the United States.
“This transaction adds to Merit a technology leader in breast tumor localization that is precise, highly directional, and visible,” said Merit’s Chairman and Chief Executive Officer Fred P. Lampropoulos. “With more than 350 initiations and 45,000 wire-free localizations to date, the SAVI SCOUT® is complementary to Merit’s strategic biopsy initiatives. The product has FDA clearance and is the subject of a pending application for CE mark approval. We believe there are substantial global growth opportunities for the Cianna Medical products, especially considering Merit’s expansive global footprint.”
“Merit plans to keep substantially all of Cianna Medical’s commercial and R&D teams in place and to enhance overall coverage in areas currently underserved by Cianna Medical,” Lampropoulos said. “We want to maintain the momentum of the Cianna Medical team while adding enhanced logistical and clinical support.”
“Additionally, Merit intends to market the SAVI® BRACHY, which uses thin tubes to deliver radiation to lumpectomy sites,” Lampropoulos said. “Merit only markets the catheter and is not involved in radiation seeds or the transport thereof. The product has both FDA clearance and CE mark approval. Merit’s medical advisors believe this is an underutilized technology.”
Ex-Danaher chief to lead GE
While John Flannery’s tenure at the helm of General Electric was far shorter than that of his predecessor Jeff Immelt, the two former chiefs have one thing in common: They both presided over a sharp drop in GE shares.
The U.S. industrial conglomerate on Monday ousted Flannery as chief executive officer in a surprise move, replacing him with outsider and board member Larry Culp.
In Culp, GE is tapping a former head of another industrial company, Danaher Corp. Culp led Danaher from 2000 to 2014, helping grow an industrial company into a broader conglomerate through a series of acquisitions, while growing earnings.
Danaher’s stock soared over that time and prospered while GE’s has struggled.
Flannery’s departure comes as he was trying to turn around GE, including through a series of major planned divestitures from the sprawling company.
GE has continued to struggle, including with a recent issue with problems with turbines in its important power unit.
GE’s share price suffered under Flannery, falling more than 50 percent since he took over last August. Under Immelt, GE’s shares lost more than a third of their value.
GE’s valuation, based on price-to-earnings ratios, also has declined, making the shares far cheaper than those of rival diversified industrial companies. The stock was up nearly 9 percent to $12.29 in Monday trading after the CEO announcement.
“Investors grew impatient with the lack of improvement and with the sheer scale of the problems uncovered; however, these problems were not created under his tenure,” CFRA Research analyst Jim Corridore said in a note.
Indeed, GE’s revenue and profit has declined over the years, in part as GE has pulled back from finance and other businesses. And in recent days the company’s market value slipped below $100 billion after approaching $600 billion about 18 years ago.
Fresenius Shares Rise After Favorable Court Ruling
Shares in Fresenius SE & Co. KGaA (FRE.XE) jumped more than 10% Monday afternoon after a Delaware court ruled in favor of the company’s decision to back out of a merger agreement with Akorn.
The German health-care company terminated its $4.3 billion agreement to buy Akorn in April, claiming that the generic drugmaker was in breach of FDA data protection regulations and had failed to fulfill several closing conditions of the deal.
In response, Akorn sued Fresenius in the Delaware Court of Chancery, which ruled in favor of Fresenius’s actions. The judgment is not yet final, Fresenius said.
At 1340 GMT shares in Fresenius were trading 8.2% higher at EUR68.40, having earlier risen as high as EUR69.64.
Akorn subsequently said it is disappointed with the court ruling and plans to appeal.
“We continue to believe Fresenius’ attempt to terminate the transaction is in breach of our binding merger agreement,” the company said.
Ono Pharma gains as Nobel awarded for cancer-fighting method used in its drug
Shares of Ono Pharmaceutical Co jumped to levels not seen in over two years after a Nobel Prize was awarded to researchers for a cancer-fighting method used in Opdivo, a drug it co-developed with Bristol-Myers Squibb Co.
Shares of the Japanese drugmaker soared as much as 6.9 percent in early morning trade on Tuesday to hit 3,430 yen, the highest level since August 2016.
On Monday, American James Allison and Japanese Tasuku Honjo won the 2018 Nobel Prize for Physiology or Medicine for game-changing discoveries about how to harness and manipulate the immune system to fight cancer. Their work in the 1990s has since swiftly led to new and dramatically improved therapies for cancers such as melanoma and lung cancer.
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