Category: Stock Market News

Inovio Pharmaceuticals Inc. stock dropped 13.9% in morning trade Monday after the company said its proposed phase 3 trial for a cancer treatment had been placed on a clinical hold by the Food and Drug Administration. The company said the regulator had requested more data to “support the shelf-life of the newly designed and manufactured disposable parts” of the company’s Cellectra 5PSP immunotherapy delivery device. Inovio anticipates a formal letter from the FDA with more information within a month and said it estimates the phase 3 trial will be delayed until the first half of 2017.The trial has not yet started, enrolled or dosed patients, the company said. Inovio shares dropped 21.4% over the last three months, compared with a 1.0% decline in the S&P 500 .

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Moody’s Investors Service said Monday it has placed At&T Inc.’s Baa1 senior unsecured rating on review for a possible downgrade, after the phone company said it has agreed to acquire Time Warner Inc. in a deal valued at $85.5 billion. The company intends to fund the deal with 50% equity and 50% cash and Moody’s is expecting the company’s gross leverage will rise to about 3.5%, adding 0.7% to reported leverage at end 2018, assuming the deal closes next year. “The deal’s financing costs will consume the majority of acquired free cash flow due to an incremental $2.3 billion in annual dividends and $1.3 billion in additional after-tax annual interest expense,” the agency said in a statement. “Moody’s believes that given AT&T’s limited excess cash after dividends and modest EBITDA growth potential, that organic leverage reduction is limited to around 0.1 times to 0.2 times annually.” The company could boost that reduction via asset sales, including selling parts of each company. Credit positives from the deal include the additional scale it will give AT&T, the boost to growth potential and lower capital intensity, said Moody’s. AT&T shares were trading down 1.7%, but are up 7.3% in the year so far, while the S&P 500 has gained 5.3%.

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The worldwide smartwatch market significantly contracted in the third quarter, according to a new report from IDC. The industry shipped 2.7 million units last quarter, down 51.6% from 5.6 million in the same quarter last year. IDC attributed some of the decline to tough year-over-year comparisons, with Apple Inc.’s watch becoming widely available after a limited online launch in the third quarter of 2015 and the second-generation watch only available for sale during the remaining two weeks of this year’s third quarter. However, IDC analyst Jitesh Ubrani also said it has “become evident that at present smartwatches are not for everyone,” with the industry struggling to define a clear purpose and use case for them. Apple’s market share tumbled to 41% from 71% as sales fell nearly 72% year-over-year, the second-worst decline of any manufacturer, behind only Lenovo . Garmin Ltd. inched closer to Apple in terms of total share, posting the sharpest rise of any of the smartwatch manufacturers, with sales rocketing 324% and its share ballooning to 20.5%. Shares of Apple rose 0.5% to $117.20 in late-morning trade, while Garmin’s increased 0.5% to $48.87. The S&P 500 was also up 0.5%.

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U.S. stocks opened higher on Monday, bolstered by strong corporate earnings and a series of merger announcements. The S&P 500 index gained 9 points, or 0.4%, to 18,254. The Dow Jones Industrial Average climbed 108 points, or 0.6%, to 18,259. The Nasdaq Composite Index added 32 points, or 0.6%, to 5,292. T-Mobile rose sharply after the company said sales grew much more quickly than expected during the third quarter. Shares of AT&T and Time Warner fell after the AT&T announced that it had agreed to buy Time Warner in a deal that’s expected to face heavy scrutiny from regulators.

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Shares of Basic Energy Services Inc. plummeted 51% in premarket trade Monday, after the operator of oil and gas wells announced an agreement with debt holders as it prepares to file for bankruptcy. Under terms of the restructuring support agreement with its secured term loan lenders, the company must file for chapter 11 protection on or before oct. 25. “After careful consideration, we have taken this difficult but necessary step to secure a bright future for Basic Energy Services,” said Chief Executive Roe Patterson. “This process is about fixing our capital structure for the long-term to benefit all of our stakeholders.” The stock, which has traded below $1 since July 22, is set to open at an all-time low. It had plunged 73% year to date through Friday, while the S&P 500 has gained 4.8%.

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Aduro Biotech Inc. shares plummeted as much as 22% in premarket trade Monday after the company said a patient tested positive for listeria, prompting the Food and Drug Administration to place its clinical trials on partial clinical hold. The hold is directed at Aduro’s listeria-based immunotherapy construct platform and will pause new patient enrollment, though nearly all current patients will continue to receive treatment, the company said. The patient who tested positive for listeria — which causes food poisoning that can be deadly — was given antibiotics and subsequent blood cultures tested negative for the infection, Aduro said. The company said it is working with the FDA to get the clinical trials back on track and is “revising study protocols in accordance with feedback from the agency,” it said. The hold does not affect clinical trials for Aduro’s other platform technologies. Aduro shares dropped 12.5% over the last three months, compared with a 1.6% drop in the S&P 500 .

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Advaxis Inc. shares dropped as much as 13.6% in premarket trade before evening out to a 1.5% decline Monday after the company said a clinical hold last year prevented a midstage clinical trial from being completed as designed. The company released preliminary results for the trial prior to the hold, finding that cancer therapy axalimogene filolisbac had an overall survival rate consistent with phase 1 trial results. Both the phase 1 and phase 2 trials had relatively small patient populations enrolled, with 26 patients in the first stage and 24 patients in the second stage. Advaxis said the 37.5% 12-month overall survival rate exceeded the 25% survival rate that could have been expected, results it said “illustrate the promising therapeutic potential” of the treatment, which is intended for patients with persistent or recurrent metastatic cervical cancer. Cervical cancer is one of the top cancers affecting women globally, with about 13,000 new cases likely to be diagnosed in the U.S. this year, according to Advaxis. Advaxis shares rose 16.6% over the last three months, compared with a 1.6% decline in the S&P 500 .

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Shares of Hilton Worldwide Holdings Inc. soared 7% in premarket trade Monday, after the hotel operator disclosed a deal in which China’s HNA Tourism Group will buy 247.5 million Hilton shares from its largest shareholder, Blackstone Group LP , for $6.5 billion. As part of the agreement, HNA will pay Blackstone $26.25 for each Hilton share, which is 15% above Friday’s closing price of $22.91. The deal would make HNA Hilton’s largest shareholder, with 25% of the shares outstanding, as Blackstone had owned 452.8 million shares, or 45.75% of the shares outstanding. Hilton expects to appoint two HNA representatives to its board of directors. Blackstone’s two representatives will remain on Hilton’s board, including Chairman Jonathan Gray. Blackstone’s stock gained 1.5% in premarket trade. Hilton shares have have climbed 7.1% year to date through Friday, while Blackstone’s stock has tumbled 18% and the S&P 500 has gained 4.8%.

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Shares of Hilton Worldwide Holdings Inc. soared 7% in premarket trade Monday, after the hotel operator disclosed a deal in which China’s HNA Tourism Group will buy 247.5 million Hilton shares from its largest shareholder, Blackstone Group LP , for $6.5 billion. As part of the agreement, HNA will pay Blackstone $26.25 for each Hilton share, which is 15% above Friday’s closing price of $22.91. The deal would make HNA Hilton’s largest shareholder, with 25% of the shares outstanding, as Blackstone had owned 452.8 million shares, or 45.75% of the shares outstanding. Hilton expects to appoint two HNA representatives to its board of directors. Blackstone’s two representatives will remain on Hilton’s board, including Chairman Jonathan Gray. Blackstone’s stock gained 1.5% in premarket trade. Hilton shares have have climbed 7.1% year to date through Friday, while Blackstone’s stock has tumbled 18% and the S&P 500 has gained 4.8%.

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Kimberly-Clark Corp. shares fell 3.8% in Monday premarket trading after the company reported third-quarter earnings that missed consensus and cut its full-year guidance. The company, whose brands include Kleenex, Kotex and Huggies, reported net income of $550 million, or $1.52 per share, up from $517 million, or 88 cents per share, for the same period last year. Adjusted earnings totaled $1.52, below the FactSet consensus was for $1.54. Revenue totaled $4.59 billion, down from $4.72 billion last year and below the FactSet estimate of $4.73 billion. Kimberly-Clark expects full-year sales growth of 2% compared with previous guidance for the low-end of 3% to 5% growth. Adjusted earnings are expected to be $5.95 to $6.05, compared with previous guidance of $5.95 to $6.15. The company expects its restructuring program, launched in 2014, to be complete by the end of 2016 with costs expected to be on the high end of a range of $130 million to $160 million, after taxes. Kimberly-Clark shares are down 6.1% for 2016 so far while the S&P 500 Index is up 4.8% for the same period.

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