Category: Stock Market News

Cosi Inc. announced Wednesday that it has filed for bankruptcy, as the fast-casual restaurant chain initiates a going-concern sale of its business operations. The company said it has obtained $4 million in debtor-in-possession financing to provide liquidity during the bankruptcy process. Prior to the filing, Cosi closed 29 of its 74 company-owned restaurants, while the 31 franchised locations are unaffected. “This was a difficult step, but it was necessary to address our liquidity issues,” said Interim Chief Executive Patrick Bennett. “Cosi’s core business and franchise base remain intact, and we filed with the liquidity resources necessary to carry out the restructuring plan.” The stock was down 1.3% at 16 cents prior to a trading halt; it is expected to resume trade at 2 p.m. ET. The stock has plunged 63% year to date, while the S&P 500 has gained 5.7%.

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The Food and Drug Administration said it approved Medtronic’s artificial pancreas, the first approved device of its kind, Wednesday afternoon. The wireless MiniMed 670G hybrid closed looped system, which Medtronic filed for approval for in late June, eliminates much of the work typically done by patients, measuring glucose levels every five minutes and automatically administering insulin when needed. It includes a sensor that attaches to the body, an insulin pump that is strapped to the body and an infusion patch that delivers insulin to the pump. The device is intended for patients with type 1 diabetes, who are typically diagnosed as children or young adults and make up about 5% of the overall diabetes population. Medtronic shares rose 2.9% over the last three months, compared with a 6.1% rise in the S&P 500 .

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Fulgent Genetics Inc. , a genetics testing company, set a $9 to $11 price range Wednesday for its initial public offering. The company plans to sell 4.2 million shares, which would net the company $42 million at the midpoint of its range. The underwriters have a 30-day option to purchase up to 630,000 additional shares at the IPO price and the company’s chief executive has indicated interest in buying up to 1.05 million shares at the IPO price. Credit Suisse and Piper Jaffray are the lead underwriters for the offering. The company has been approved to list on the Nasdaq Global Market under the symbol “FLGT.”

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The Securities and Exchange Commission said UBS Financial Services agreed to give back $8.2 million to retail customers for “dropping the ball” by allowing poorly trained employees to sell those inexperienced investors complex financial products. UBS will also pay $6.8 million in penalties and interest to settle the charges. The SEC said that UBS failed to educate and train UBS registered representatives in connection with the sale of reverse convertible notes, for example. Certain registered representatives sold $548 million in RCNs to more than 8,700 relatively inexperienced retail customers, which was not appropriate given their investment profiles. UBS neither admitted nor denied the findings.

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Three U.S. Senators wrote to the Department of Justice on Wednesday asking it to investigate Mylan Pharmaceuticals over the EpiPen allergic reaction treatment’s classification under the Medicaid drug program and recent price hikes. Mylan classified the EpiPen in the Medicaid Drug Rebate Program as a product with multiple competitors, though the company would have made less profit if it had been considered an “innovator drug” instead, particularly in the case of large price hikes, Sens. Richard Blumenthal (D-Ct.), Chuck Grassley (R-Ia.) and Amy Klobuchar (D-Mn.) said in a letter to the DOJ. The Center for Medicare and Medicaid Services has stated that the product was misclassified, the senators said. “Companies can reap huge profits, at the expense of the states and taxpayers, by misclassifying innovator drugs,” the letter said. “In the past, the Department has secured settlements against drug companies under the False Claims Act for such practices – including against Mylan Pharmaceuticals.” The senators said that millions of dollars may have been “diverted” from taxpayers as a result of Mylan’s alleged misclassification. Mylan shares have taken a hit since its sixfold price increases on the EpiPen attracted consumer and lawmaker outrage. The company’s shares were down 1.2% on Wednesday morning. Shares dropped 24.5% in the year to date, compared with a 5.3% rise in the S&P 500 .

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The Securities and Exchange Commission fined Anheuser-Busch InBev $6 million to settle charges that it made improper payments to government officials in India that violated the Foreign Corrupt Practices Act, and blocked a whistleblower from supporting the SEC investigation into the misconduct. Anheuser-Busch terminated the whistleblower and imposed conditions that stopped an employee from continuing to voluntarily communicate with the SEC by threatening a substantial financial penalty for violating strict non-disclosure terms. Anheuser-Busch InBev did not admit or deny the findings but must make reasonable efforts to notify certain former employees that it does not prohibit employees from contacting the SEC about possible law violations. The company also agreed to cooperate with the SEC and report on its FCPA compliance efforts.

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J.C. Penney Co. Inc.’s corporate credit rating was upgraded Wednesday two notches to B1 from B3 at Moody’s Investors Service, which cited continued improvement in financial performance in the face of a challenging retail environment. The outlook on the rating, which is still four notches below investment grade, was changed to stable from positive. “While we acknowledge the company has had easier comparisons than most of its peers, its continued progress has resulted in significant deleveraging which is evidence of the traction of its initiatives and the recovery of market share,” said Moody’s analyst Christina Boni. The department store chain has reported losses in five of the last six quarters, and in 16 of 18 quarters, but has beat expectations that last six quarters, according to FactSet. The stock gained 0.3% in morning trade, while the SPDR S&P Retail ETF shed 0.6%. Year to date, J.P. Penney shares have soared 44%, while the retail ETF has inched up 0.2% and the S&P 500 has tacked on 5.5%.

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Oil futures held onto earlier gains Wednesday after the U.S. Energy Information Administration reported that domestic crude supplies fell by 1.9 million barrels in the week ended Sept. 23. A 3.2 million-barrel climb was expected by analysts polled by S&P Global Platts, while the American Petroleum Institute late Tuesday reported a decline of 752,000 barrels, according to sources. The EIA has now reported unexpected supply declines for four weeks in a row. Gasoline supplies, meanwhile, rose by 2 million barrels, while distillate stockpiles were down 1.9 million barrels, according to the EIA. November crude rose 57 cents, or 1.3%, from Tuesday’s settlement to $45.24 a barrel on the New York Mercantile Exchange. Prices traded at $45.30 before the data.

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RBC Capital Markets raised Sarepta Therapeutics Inc.’s price target by more than double the current level to $108 a share on Wednesday. In raising its target, the bank cited its interviews with key opinion leaders and survey of 100 neurologists about Sarepta’s recently-approved Duchenne muscular dystrophy drug. Sarepta shares rose 4.7% in morning trade Wednesday. Though the price target increase is sizable given the company’s current $62.45 share price, analyst Simos Simeonidis said its basis was “some pretty conservative assumptions, which represent potential for real upside.” RBC Capital Markets’ investor call with three experienced neurologists who treat Duchenne muscular dystrophy revealed they were “positive overall” and even bullish about Sarepta’s Exondys 51, suggesting that “neurologists [are] likely to recommend EXONDYS 51 to majority of patients.” Simeonidis predicted a “very successful launch” of the drug, “once the logistics of reimbursement are slowly ironed out for patients in the first 2-3 quarters.” Though RBC Capital Markets’ outlook may seem overly bullish, Simeonidis said, the company’s model used the worst-case scenario in terms of patent litigation and didn’t include for markets for the drug outside of the U.S. and European Union. Sarepta shares rose 246.1% over the last three months, compared with a 6.1% rise in the S&P 500 .

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WASHINGTON (MarketWatch) — Federal Reserve Chairwoman Janet Yellen on Wednesday said the financial condition of the top U.S. banks has “strengthened considerably” since the financial crisis as she outlined steps the central bank is considering to make bigger banks have larger cushions and have smaller banks face less stringent requirements. The eight largest global systemically important banks have seen an increase of nearly $800 billion in common equity capital since 2008, Yellen said. “We must carefully monitor the impact of the regulatory changes we have made and remain vigilant regarding the potential emergence of new risks to financial stability,” Yellen said in prepared remarks before the House Financial Services Committee. Yellen made no mention of the recent Wells Fargo scandal in her prepared remarks.

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