Diagnostic gear costs knock profits at Siemens Healthineers

Siemens Healthineers operating income slipped 11% in the first quarter of its financial year, despite higher revenue, as the German company sold less profitable imaging machines and incurred ramp-up costs for its new blood-testing machines.

The German maker of x-ray, ultrasound and MRI scanners said on Monday its adjusted earnings before interest and tax declined to 484 million euros ($536 million) in October-December.
That was below analysts’ average estimate of 568 million euros, according to a consensus posted on the company’s website.
First-quarter revenue rose 8.7% to 3.59 billion euros, slightly above expectations, the Siemens subsidiary said, adding it was maintaining its outlook for 2020 fiscal year through September, predicting growth in adjusted earnings per share of 6% to 12%.
“Profitability was negatively impacted by a temporary dip in Imaging and the guided weak margin performance in diagnostics,” the group said in a statement.
Ramp-up costs for a new line of blood- and urine-testing gear branded Atellica were inflated by the shipment of more than 600 analyzers from July to September last year, the company added.
Siemens Healthineers’ shares were down 4.6% at 1057 GMT to a three-month low, with Credit Suisse analysts saying that while the Atellica challenges had been known, weak imaging margins posed a new concern.
“The slow start to the year will leave an overhang of a guidance reduction later on in the year given the implied catch up on margins / EPS growth for the remaining quarters,” they said in a research note.
The health tech firm is pinning its hopes on Atellica automated testing machines to turn around its diagnostics division, which lags market leader Roche, but installation has proven more costly and time-consuming than initially hoped.
Faster growth is on the cards as Healthineers announced its largest Atellica order ever on Monday with U.S. lab operator Quest Diagnostics agreeing to purchase up to 120 Atellica analyzers.
The deal would translate into additional annual sales of 40 to 50 million euros over 10 years, Chief Executive Bernd Montag said in a media call

https://www.marketscreener.com/news/Diagnostic-gear-costs-knock-profits-at-Siemens-Healthineers–29930248/?countview=0

Huawei, Chinese chip makers keep factories humming despite virus

Some technology firms in China have maintained operations to manufacture parts and products despite government calls in various cities and provinces for companies to halt work to help stop the spread of a new coronavirus.

Chinese telecom giant Huawei Technologies Co Ltd said on Monday it had resumed production of goods including consumer devices and carrier equipment, and operations were running normally.
The company restarted manufacturing after the Lunar New Year holiday in line with a special exemption that allows certain critical industries to remain in operation, despite Beijing’s call to halt all work in some cities and provinces.
The spokesman said most of the production was in , a city in the southern province of Guangdong.
Various provinces and cities in China have called for factories to halt work, though companies in certain industries can remain in operation while others can apply for an exemption
A notice in Shanghai, for example, says that business involved in producing food supplies, medical supplies or sectors relevant to the national economy.
Other companies have also kept production running, in some cases even through the New Year, in a sign of the critical importance Beijing places on its domestic tech supply chain, a subject of friction with the United States
Yangtze Memory Technologies Co Ltd (YMTC), a state-backed maker of flash memory chips based in Wuhan – the city where the virus outbreak began – confirmed that it had not ceased production.
“At present, production and operations at YMTC are proceeding normally and in an orderly manner,” a company spokesman wrote in a statement.
The spokesman said no employees had been confirmed as infection cases, and the company had enacted certain isolation measures and partitions to ensure the safety of employees.
State media reported that the chip maker did not cease operations over the Lunar New Year holiday.
Meanwhile, Semiconductor Manufacturing International Corp (SMIC) also kept production running through the holiday break.
In a post on social media, the company said it organised a work group before the holiday to ensure plants could stay open, while protecting the safety of employees and adhering to government regulations.
“SMIC needs to ensure that factory production runs 365 days a year and 24 hours a day to meet customers’ fabrication needs,” the company said in the post.
The company, which rivals Taiwan Semiconductor Manufacturing Co, has facilities in Tianjin, Shenzhen, Beijing, and Shanghai.
Nina Kao, TSMC’s spokeswoman, told Reuters that the company currently “maintains partial operation” in China and it plans to resume full operation on Feb 10.
POSSIBLE DELAYS
TCL Corp, makers of display panels and televisions, said on Monday that while the lines at its China Star Optoelectronics Technology Unit (CSOT) for LCD screens “operate non-stop all-year round,” its Wuhan factories can expect delays in manufacturing materials supply.
BOE Technology Group Co Ltd, another Chinese maker of displays, told state media outlet Global Times that one of its plants at Wuhan had encountered a supply shortage due to amid the virus.
Research firm TrendForce, which tracks the global memory sector, reported that plants at Changxin Memory Technologies Co Ltd (CXMT), based in a city close to Wuhan, and Xinxin Semiconductor Manufacturing Co Ltd, another memory company based in Wuhan, were continuing their operations.
The two companies did not immediately respond to emailed requests for comment.
Overseas parts makers with factories in China have also continued production.
Samsung Electronics has not seen a production disruption at its chip factory in Xi’an despite the coronavirus outbreak, two people familiar with the matter told Reuters.
They did not give further details.
A Samsung Electronics representative confirmed that the plant had been running as usual, saying production had not stopped during the Lunar New Year holiday.
Representatives of Samsung Display, SK Hynix and LG Display also said they were running their Chinese factories as usual.
DRAMexChange wrote in a research note that it expected the virus to have no immediate impact on memory prices, though it could delay planned expansions for some companies.
However, one Samsung source said the virus could still affect supply and demand.
“It is common sense that if the situation is prolonged, that it will hurt the industry. But I don’t know how long it will last,” the company source told Reuters.

https://www.marketscreener.com/TCL-CORPORATION-6497076/news/Huawei-Chinese-chip-makers-keep-factories-humming-despite-virus-outbreak-29930081/?countview=0

Two-thirds of China’s economy remains closed

More than a dozen Chinese provinces have announced an extension of the current Lunar New Year holiday by more than a week as the nation attempts to halt the rapidly spreading coronavirus that has so far claimed 362 lives, all but one in China.

The areas accounted for almost 69% of China’s gross domestic product in 2019, according to Bloomberg estimates.

Economists now expect that this virus will deal a more severe blow to the economy in the near term than the SARS epidemic, which subtracted an estimated 0.8 percentage point from GDP growth in 2003.

Previously: Nearly $400B wiped off of China’s stock market (Feb. 03 2020)

ETFs: FXI, KWEB, CQQQ, ASHR, YINN, MCHI, TDF, EWH, CAF, KBA, YANG, GXC, TAO, CHIX, CYB, CHIQ

https://seekingalpha.com/news/3537127-two-thirds-of-chinas-economy-remains-closed

United Therapeutics’ dinutuximab flunks cancer study

United Therapeutics (NASDAQ:UTHR) announces that Unituxin (dinutuximab) failed to achieve the primary endpoint in a Phase 2/3 clinical trial, DISTINCT, evaluating the GD-2 targeting monoclonal antibody, combined with chemo agent irinotecan, in patients with relapsed/refractory small cell lung cancer (SCLC).

The combination failed to extend overall survival (OS) compared to irinotecan or topotecan alone.

No new safety signals were observed.

Complete data will be submitted for presentation at future medical conferences and publication.

The FDA OK’d Unituxin in March 2015 for pediatric high-risk neuroblastoma. It is also pursuing a label expansion to use Unituxin, combined with irinotecan and temozolomide, for pediatric patients with relapsed/refractory neuroblastoma. It expects to meet with the FDA in H1 and file a supplemental marketing application shortly thereafter.

https://seekingalpha.com/news/3537157-united-therapeutics-dinutuximab-flunks-cancer-study

Teva’s Ajovy successful in two migraine studies in Japan

Teva Pharmaceutical Industries (NYSE:TEVA) announces positive results from two Phase 2/3 clinical trials in Japan evaluating Ajovy (fremanezumab) in patients with chronic and episodic migraine.

The studies met the primary and all secondary endpoints.

Detailed data will be submitted for presentation at future medical conferences and publication.

Otsuka Pharmaceutical Co., Ltd. (OTCPK:OTSKF) is the exclusive licensee in Japan under a May 2017 agreement.

https://seekingalpha.com/news/3537165-tevas-ajovy-successful-in-two-migraine-studies-in-japan

Humana forms JV to expand primary care centers

Humana (NYSE:HUM) Partners in Primary Care and Welsh, Carson, Anderson & Stowe (WCAS) have entered into the joint venture (JV) that will expand access to value-based primary care for Medicare patients.

The JV will develop and operate senior-focused, payor-agnostic, primary care centers, which will be managed and operated by Humana’s wholly-owned subsidiary, Partners in Primary Care.

WCAS together with Humana, is making an initial commitment of ~$600M to the JV. WCAS will have majority ownership in the new company whereas Humana will own a small minority stake.

Partners in Primary Care will receive a management fee, including performance-based incentives, for the management of all JV centers.

In addition, the agreement includes a series of put and call options through which Partners in Primary Care may acquire WCAS’s interest in the JV.

https://seekingalpha.com/news/3537174-humana-forms-jv-to-expand-primary-care-centers

Alpha Pro Tech increases N-95 face mask production

Alpha Pro Tech (NYSEMKT:APT) is exponentially ramping up production of its N-95 Particulate Respirator face mask in response to a significant increase in customer demand and level of orders resulting from the outbreak of Wuhan coronavirus (2019-nCoV).

The company has commenced additional face mask production at its Salt Lake City, Utah facility, and anticipates further production line increases in early February.

The N-95 face mask filters at least 95% of airborne particles.

Shares are up a fraction premarket.

https://seekingalpha.com/news/3537191-alpha-pro-tech-increases-nminus-95-face-mask-production