Consensus $4.20
Wednesday, May 8, 2019
Novartis weighs bid for Takeda eye-disease assets
Bloomberg reports Novartis (NVS) is weighing a bid for the eye-disease assets that Takeda (TKPYY) acquired through its $62B takeover of Shire (SHPG), Bloomberg’s Manuel Baigorri, James Paton, and Dinesh Nair report, citing people familiar with the situation. Novartis is among companies eyeing the business, which includes Xiidra prescription drops, the authors say. No final decision has been made and the Swiss drugmaker could choose to pursue different targets or Takeda could select a different buyer for the assets, the authors note.
Akorn jumps as RBC highlights ‘encouraging’ early turnaround signs
RBC Capital’s Stanicky raised his price target for Akorn to $5 after the company’s better than expected first quarter results
Shares of Akorn (AKRX) are on the rise after RBC Capital analyst Randall Stanicky told investors in a research note that the company’s better than expected first quarter results and guidance should help ease uncertainty around risk of further downside. The analyst also pointed out that while there is a “long way to go,” the early turnaround is “encouraging.”
‘ENCOURAGING’ EARLY TURNAROUND: RBC Capital’s Stanicky raised his price target on Akorn to $5 from $4, while applying a Speculative Risk qualifier to his Sector Perform rating on the name. The analyst pointed out that the company delivered better results for the first quarter and guidance than expected, which should help uncertainty around risk of further downside that had weighed on shares. Turnaround efforts are well underway and while the year is back-half weighted, sequential improvements are expected through the balance of the year, he added. There is a “long way to go” to get past manufacturing challenges, address high leverage and rebuild the growth story, but Stanicky believes the early turnaround is “encouraging.” Progress on the Food and Drug Administration action items related to inspections continues with the majority of these efforts to be completed by mid-year, he added. Additionally, the analyst pointed out that pipeline rebuilding efforts are a focus but there remain some important opportunities. The other focus will be around addressing the $832M in outstanding debt, he contended.
TAKEOVER SPECULATION: Back in March, Spanish media group Intereconomia claimed that Baxter (BAX) was in advanced talks to buy Akorn. The report said that Baxter’s offer was expected to be around $1.3B. However, a spokeswoman for Baxter denied that the company was in advanced talks with Akorn and said it had no plans to submit an offer to buy the company. The takeover report came after the collapse of Akorn’s agreement to be acquired by Fresenius SE (FSNUY) at eight times its current share price. Late last year, the Delaware Supreme Court ruled in favor of Frenesius SE, permitting the company to cancel its takeover of Akorn given the latter’s rapid downturn in its generic drug business.
PRICE ACTION: In afternoon trading, shares of Akorn have gained almost 24% to $4.39.
Gilead says generic HIV prevention drug coming in 2020
Gilead (GILD) has announced that a generic version of Truvada will be available in September 2020, one earlier than expected, following an agreement with Teva Pharmaceuticals (TEVA). In a filing, Gilead stated that, “We face significant competition from global pharmaceutical and biotechnology companies, specialized pharmaceutical firms and generic drug manufacturers. Our products compete with other available products based primarily on efficacy, safety, tolerability, acceptance by doctors, ease of patient compliance, ease of use, price, insurance and other reimbursement coverage, distribution and marketing. Our TAF-containing HIV products compete primarily with products from ViiV Healthcare Company (ViiV). We also face competition from generic HIV products. Generic versions of efavirenz, a component of Atripla, are available in the United States, Canada and Europe. We have observed some pricing pressure related to the efavirenz component of our Atripla sales. TDF, one of the active pharmaceutical ingredients in Truvada, Atripla, Complera/Eviplera and Stribild, faces generic competition in the European Union, the United States and certain other countries. In addition, because emtricitabine, the other active pharmaceutical ingredient of Truvada, faces generic competition in the European Union, Truvada also faces generic competition in the European Union and certain other countries outside of the United States. Pursuant to a settlement agreement relating to patents that protect Truvada and Atripla, Teva Pharmaceuticals will be able to launch generic fixed-dose combinations of emtricitabine and TDF and generic fixed-dose combinations of emtricitabine, TDF and efavirenz in the United States on September 30, 2020.”
Arena Pharmaceuticals reports Q1 EPS $12.10, consensus $13.89
Reports Q1 revenue $801.1M, consensus $801.7M.
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