Category: Stock Market News

Mallinckrodt PLC shares dropped 8% in heavy morning trade Monday after short-seller Citron Research released a new report criticizing the pharmaceutical company. Citron Research has previously targeted the drugmaker, comparing it to Valeant in a tweet in 2015. In the Monday report, the short-seller focused on Mallinckrodt’s H.P. Acthar Gel, which can be used for a variety of diseases including multiple sclerosis, dermatological diseases and respiratory diseases. Massive price increases over the years have brought Acthar’s price to nearly $40,000 a vial, and the product brings in more than $1 billion in revenue for Mallinckrodt. The report focused on recent remarks by Express Scripts management as part of a conference call with Citi Research in which the company’s Senior Vice President, Supply Chain and Specialty Everett Neville said “I think everybody in our company would agree that the product is vastly overpriced for the value.” The Citron Research report claims that Mallinckrodt’s Acthar relies on Express Scripts, which as a pharmacy-benefit manager middleman works to negotiate drug prices with drugmakers on behalf of health insurers and employers. “Express Scripts has FINALLY changed its stance on Acthar and the effect will send shares of Mallinckrodt to ZERO,” the report claimed. “The words of Express Scripts management will echo through the halls of
Medicare and insurance companies as Acthar has finally met the truth:
it is an old drug that is way too expensive and not as good as its
competition.” Citron Research has also previously targeted Express Scripts, comparing the company to Philidor Rx Services, the now-shuttered mail-order pharmacy which had its relationship with Valeant come under scrutiny after criticism by Citron Research and others, including two news organizations. Mallinckrodt did not immediately respond to MarketWatch’s request for comment. Shares have dropped 24.3% over the last three months, compared with a 2.3% rise in the S&P 500 .

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Advanced Micro Devices Inc.’s stock bounced sharply in morning trade Monday, enough to make it the second-biggest gainer in the S&P 500 , amid a broad rally in the semiconductor sector. The stock jumped 2.2%, after dropping 2.6% over the past two sessions, while the PHLX Semiconductor Index gained 0.5% in morning trade. Shares of fellow chip maker Nvidia Corp. was the third-biggest S&P 500 gainer, rising 2.1%. Among other chip makers, shares of Intel Corp. and Applied Materials Inc. both rose about 0.1% and Texas Instruments Inc.’s stock tacked on 0.6%. The S&P 500’s biggest gainer was Michael Kors Holdings Ltd.’s stock , which rallied 2.8% after closing Friday at a 5-year low.

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About 155 million people in the U.S. visited Amazon.com Inc. in the first quarter, which represents 63% of all internet users in the country for the period, according to Wells Fargo. None of the other companies covered by Wells Fargo reached more than 5% of U.S. web users, analysts wrote in a Monday note. Among their companies covered, the highest was L Brands Inc.’s Victoria’s Secret with 3.8%, followed by Gap Inc.’s Old Navy brand (3.2%) and Nike Inc. (3.0%). “Even when extending to the department stores (who by definition have a broader customer base than a specialty retailer), only the Kohl’s website attracts more than 10% of total U.S. web users,” the Monday note said. For the quarter, Amazon accounted for 67% of addressable-market growth. “Addressable market” is retail sales excluding gas stations and food/beverage stores, according to Wells Fargo. This is lower than the fourth quarter, but “when accounting for seasonality of Amazon’s sales (relative to the rest of retail), we see that Amazon’s share of industry growth continues to climb higher,” the note said. Amazon shares, which topped $1,000 for the first time last week, are up 0.4% in Monday trading. For the year so far, shares are up nearly 35%, outpacing the S&P 500 index , which has grown nearly 9%.

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The former head of the London Metals Exchange has launched an electronic trading platform for non-ferrous, or largely industrial, metals to compete with the 140-year-old exchange. The platform, called NFEx Markets, will run on a system designed by London-based startup Autilla and will begin trading in the first quarter of 2018. News of the development group’s desire to create a competitor first hit in March. NFEx will be headed by a five-member team that includes Martin Abbott, who left the LME in 2013 after it was sold to Hong Kong Exchanges. “We anticipate NFEx Markets will increase cost-efficiency in the global base metals markets,” said Mark Bradley, who will run the new platform, in a release. “This new trading platform will not replace or disturb current trading models but will be complementary to them,” he said. The broad decline in LME trading volumes–it also includes electronic trading–have been widely reported. LME, the world’s oldest exchange, also competes in certain metals-trading markets with New York-based COMEX, owned by CME Group .

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Shares of Cogint Inc. tumbled 11% in active morning trade Monday, following a negative report from a short seller alleging that a number of the data analysis company’s insiders were under investigation for securities fraud. Volume spiked to over 1 million shares within the first hour of the regular session, compared with the full-day average of about 210,000 shares. The company did not immediately respond to a request for comment. Short seller Unemon said documents reveal that several Cogint insiders, including Chairman Michael Brauser, are facing multiple investigations by the Securities and Exchange Commission and the Department of Justice regarding collapsed stock promotions. The stock has run up 43% year to date, while the S&P 500 has gained 8.9%.

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Shares of Snap Inc. [s:SNAP] were falling 2% Monday after the stock’s price target was cut to $18 from $20 at J.P. Morgan. The analysts lowered their price target because they see Snap’s ad business decelerating in the third quarter, due to seasonality. Overall, they believe Snap will have a slower-than-expected pace of scaling its ad platform as its new products, such as self-serve Snap ads, will take some time to gain adoption. The analysts cut the estimated number of daily active user additions to 8 million from 10 million for the second half of the year in part because of competition from Facebook Inc . The analysts also point to Snap’s lock-up expiration of about 70% to 80% of Snap shares, coming in late July, which could hurt Snap shares before the lockup and after. Finally, the analysts expect a softer outlook for Spectacles — an area of business that they note the Street likely doesn’t include in their models — with an expectation of 429,000 units sold and $56 million in revenue in 2017. The analysts reiterated a neutral rating on the stock. Shares of Snap have fallen 10.5% in the past month, while the S&P 500 has gained 1.6%.

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Shares of network monitoring software maker Gigamon Inc. surged 12% Monday, after Reuters said the company is exploring a sale, citing people familiar with the matter. In May, activist shareholder Elliott Management Corp. said it had amassed a 15.3% stake in the company and said it would urge management to conduct a strategic review that included a possible sale. Gigamon has hired Goldman Sachs as an adviser and is gearing up for talks with companies and private-equity investors, said Reuters. Gigamon, Goldman and Elliott declined to comment. Gigamon shares have fallen 3% in 2017, while the S&P 500 has gained 9%.

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Shares of Celsion Corp. surged 73.7% in extremely heavy morning trade Monday, after the cancer drug developer said an early-stage trial of a treatment of ovarian cancer showed promising findings. The phase 1b clinical trial evaluated Gen-1, the company’s DNA-based immunotherapy, with the standard care for patients with advanced ovarian cancer who will undergo chemotherapy followed by surgery. Of the 14 patients treated in the study, two demonstrated a complete response, ten a partial response, and two remained stable. “This translates to a 100% disease control rate (“DCR”) and an 86% objective response rate (“ORR”),” said the company. Celsion shares rose 44.4% over the last three months to $4.58, while the S&P 500 has gained 2.3%.

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Bluebird Bio Inc. shares rose 7.4% in heavy morning trade Monday after the company released updated results from an ongoing early-stage clinical trial in relapsed/refractory multiple myeloma. Relapsed multiple myeloma refers to when the cancer returns after treatment, while refractory multiple myeloma means the cancer isn’t responding to treatment. The drug, bb2121, which is being jointly developed by Bluebird Bio and Celgene Corp. , had a 100% overall response rate in three of four groups of dosed patients, with the other group having an overall response rate of 33%. The 31 patients who were enrolled in the trial as of early May (the company plans to enroll up to 50 patients total) got several types of treatment prior to bb2121, with a median of 7 lines of prior therapy, with the range varying between three and 14 lines of therapy, the company said. None of the patients in the active dose groups saw the cancer progress, said Celgene’s Michael Pehl, president, hematology and oncology. “The consistency, depth and durability of these patients’ responses coupled with a manageable safety profile is very exciting, and we believe will provide hope for patients in this setting,” Pehl said. “The efficacy and safety profile of bb2121 continues to look very strong,” said Leerink analyst Michael Schmidt. “We believe these data position BLUE (and partner CELG [MP]) well among companies developing CAR-T products in multiple myeloma and provide additional validation for bb2121 and BLUE’s emerging CAR-T platform,” referring to CAR-T cell therapy, a type of cancer immunotherapy that uses a patient’s blood cells to fight cancer. Bluebird Bio shares have risen 7% to $91.45 over the last three months, compared with a 2.2% rise in the S&P 500 .

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Gap Inc. was upgraded to outperform from perform at Oppenheimer on strength at both the Old Navy and Gap brands. The price target was raised to $28 from $24. Analysts highlight the 14.3% decline in Gap shares over the past month despite reporting earnings per share in the most recent quarter of 36 cents, which beat consensus and was up from 32 cents last year. Old Navy operates primarily “off-mall” and benefits from the “department stores’ malaise,” analysts wrote. Oppenheimer estimates that department stores have lost as much as $3 billion in women’s apparel. “On average department stores have about 30% overlap with Gap’s three big brands; no surprise, Old Navy is most exposed,” the Oppenheimer note said. The Gap brand is also benefiting from adopting Old Navy’s process of testing and quicker speed. Gap shares are down 0.2% in Monday trading, but up 18% for the past year. S&P 500 index is up 16% for the last 12 months.

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