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The Burrill Report submits: By Marie Daghlian Emerging market M&A headlined the third week of May as Big Pharma continued its push into emerging markets. Abbott Laboratories (ABT) wasted no time after creating its Established Product Division to expand its branded generics market share, especially in emerging markets. The company announced a definitive agreement with Piramal Healthcare Limited to acquire full ownership of Piramal's Healthcare Solutions business, one of India’s top branded generics companies, for an upfront payment of $2.1 billion, plus $400 million annually for the next four years. The $3.7 billion deal will make Abbott in the leader in the Indian pharmaceutical market. Complete Story »

The Burrill Report submits: By Michael FitzhughAstellas Pharma (ALPMF.PK), Japan's second-largest drugmaker, is paying $4 billion for OSI Pharmecuticals (OSIP) and its profitable cancer medicine, Tarceva. The pricey victory is a triple-win for Astellas, likely to bolster its revenue, geographic base, and pipeline. Complete Story »

EP Vantage submits:To coin a L’Oréal phrase, in the eyes of Astellas Pharma (ALPMF.PK), OSI Pharmaceuticals (OSIP) is definitely ‘worth it’. Having conducted its due diligence of OSI’s private books, Astellas Sunday raised its original hostile offer of $52 cash per share to an accepted bid of $57.50 cash per share, valuing the deal at $4bn, the second biggest overseas acquisition by a Japanese pharma company.Big sighs of relief all round then at Astellas, who failed to land CV Therapeutics last year and adopted a slightly risky approach to bidding for OSI. But it now looks set to increase its presence in the US market and gain a portfolio of marketed and pipeline cancer drugs, most notably lung cancer drug Tarceva. As for OSI, some ambitious shareholders will be disappointed with the price as the stock reached $59.80 on Friday, but given that the offer is a 55% premium overall and equivalent to a five-year high, they should be more than happy.Complete Story »

• Macarthur rebuffs Peabody offer. Peabody Energy (BTU) made an unsolicited A$3.3B ($3B) offer for Australia's Macarthur Coal, but was rebuffed this morning. Macarthur's board said the "highly conditional proposal" doesn't represent "the best interests of shareholders" and undervalues the company's growth prospects by offering just a 7.5% premium to Macarthur's recent closing price. Peabody is still open to a deal and is in talks with Macarthur's three largest shareholders. BTU -1% premarket (7:00 ET).
• Baker Hughes agrees on conditional asset sale. Baker Hughes (BHI) said yesterday that it reached a general understanding with antitrust regulators over asset sales it will have to make to gain approval for its merger with BJ Services (BJS). Baker Hughes will need to divest certain assets used to perform sand control services in the U.S. Gulf of Mexico, but the divestitures are not expected to have a material impact on the combined company. The company said it's working with regulators to finalize the proposal, which must then receive court approval before the deal can close. Shareholders from both companies will vote on the merger today.
• China may adjust yuan policy. China may adjust its exchange rate system next month, according to Chinese media reports, possibly allowing the yuan a more flexible exchange rate by widening its narrow daily trading band. A policy change next month could preempt the possibility the U.S. Treasury will label China a "currency manipulator" in a report due April 15. Separately, taking a stance opposed to that of the U.S., a high-profile World Bank official rejected claims that the yuan is undervalued and warned that "a yuan appreciation, if it happened soon, would destroy Chinese exports, push up property prices and accelerate the inflow of hot money into China."
• China rolls out new trading tools. China launched its trial program today for margin trading and short selling, part of its effort to introduce risky alternative-investment tools to its stock market. Though the initial impact of margin trading and short selling is expected to be limited, the two options are meant to better prepare investors for the April 16 launch of stock-index futures, a product that is both more complicated and riskier.
• Mutual funds score win on fees. The mutual fund industry won a key Supreme Court case yesterday on the fairness of fees. The court ruled in favor of an earlier legal standard that gave funds considerable leeway in setting their investment adviser charges. The ruling reduces the potential that lawmakers or lower courts could try to force the industry to lower the roughly $90B in fees collected annually.
• Bank of Ireland plans to raise capital. Bank of Ireland (IRE) reported a net loss of €1.46B ($2B) for the last nine months of 2009, due to bad debts related to real estate, and said Q1 trading conditions remain "challenging." However, the bank also said today that it's working with a "syndicate of major international investment banks" to help raise the €2.7B of capital it needs by the end of the year, potentially making it the only participant in Ireland's "bad bank" plan to avoid a fresh bailout. IRE +12.3% premarket (7:00 ET).
• Astellas extends tender offer. Japan's Astellas Pharma extended its tender offer for U.S. drugmaker OSI Pharmaceuticals (OSIP) to April 23. The offer was set to expire today but only 37,858 OSI shares had been tendered for sale to Astellas as of yesterday, representing just 0.06% of OSI's outstanding shares. Astellas had previously decided to freeze its takeover attempt, but may ultimately make a new offer for OSI pending the tender offer extension and a review of OSI's non-public information.
• Blockbuster drops like a ton of blocks. Beleaguered Blockbuster (BBI) fell more than 10% again in trading yesterday, to just $0.25, following Monday's announcement that it's not in compliance with NYSE listing requirements regarding minimum market value. Blockbuster, which earlier this month said it may need to file for bankruptcy, plans to submit a plan to NYSE to demonstrate its ability to regain compliance within 18 months, and will ask shareholders to vote in May on a reverse stock split.
• Redwood may test market for unbacked MBS. Redwood Trust (RWT) is reportedly trying to jumpstart the market for mortgage-backed securities that aren't backed by the government. Sources said Redwood may launch an offer next week of at least $200M of securities backed by newly-originated "jumbo" mortgages, loans that are too big for government backing. If successful, it would mark the first such sale in more than two years and the first step in the return of the private-label mortgage securities market.
• Novell wins Unix copyright case. A federal court ruled that Novell (NOVL), not SCO Group Inc., is the rightful owner of two key Unix copyrights. The decision may mark the end of much of the copyright case that SCO filed against Novell in 2004, and could affect another Unix-related lawsuit that SCO filed against IBM (IBM) in 2003.
• Terra Firma restarts EMI licensing talks. Private-equity firm Terra Firma has reportedly restarted talks to license the North American rights to its EMI music unit to Universal Music Group (VIVDY.PK). The licensing deal would generate an estimated $300M over five years. Sources said Terra Firma is pushing to secure a deal, and an upfront cash payment, ahead of a key banking covenant test today.
• Confidence still struggling for altitude. Three data points released yesterday showed that while consumer and investor confidence have seen some minor gains, uncertainty still reigns. The ABC Consumer Comfort Index dropped one-point to -45. There was an increase in those rating the national economy positively, but positive ratings of personal finance slipped. Conference Board's Consumer Confidence Index came in at 52.5 vs. 51 expected and 46.4 prior, but "consumers continue to express concern about current business and labor market conditions. And, their outlook for the next six months is still rather pessimistic." The State Street Investor Confidence Index rose to 108 from a revised 102.6, but the breakdown saw a large jump in Asian confidence, a small increase in North American confidence and a fall in European confidence.

Earnings: Wednesday Before Open

• BPZ Energy (BPZ): Q4 EPS of -$0.09 misses by $0.07. Revenue of $15.1M (-16.7%) vs. $14.9M. (PR)

Complete Story »

Joseph Krueger submits: At the 28th annual JP Morgan Healthcare conference, which ran from January 11- January 14th 2010, there were more than 300 companies represented, making their presentations to more than 6000 public and private equity and venture capital investors.Leading up to the conference and early last week there was bullish movement in many companies presenting at the conference. Many of the many of the larger companies like Amgen (AMGN), Genzyme (GENZ), Biogen (BIIB), Celgene (CELG), Gilead Sciences (GILD), TEVA Pharmaceuticals TEVA), Watson Pharmaceuticals (WPI) and OSI Pharmaceuticals (OSIP) previewed 2009 earnings during the conference.Complete Story »

AlphaClone submits: The founders of the Galleon Group, a hedge fund started in 1997 and which has a technology and healthcare focus, have been charged with insider trading. Galleon is one of the 250 hedge and institutional investment funds that are available on AlphaClone. The fund's Top 10 Holding Clone, which invests quarterly in the the fund's ten largest holdings at the time they are disclosed, is up 48.2% so far this year but has not performed very well over time returning a negative 3.9% annualized over five years and a dismal negative 18% annualized since 2000 (all returns as of 10/15/09 close). We thought we'd list the fund's 50 largest holdings below (as of 6/30/09). Now that the fund will almost certainly wind down, perhaps there are some good short opportunities. Name Ticker 1 EBAY INC EBAY 2 GOOGLE INC GOOG 3 APPLE INC AAPL 4 OSI PHARMACEUTICALS... OSIP 5 BANK OF AMERICA COR... BAC 6 JP MORGAN CHASE & CO JPM 7 CISCO SYS INC CSCO 8 SPDR S&P 500 SPY 9 DELL INC DELL 10 NVIDIA CORP NVDA 11 E M C CORP MASS EMC 12 WYETH WYE 13 PEPSI BOTTLING GROU... PBG 14 MEMC ELECTR MATLS INC WFR 15 First Solar Inc FSLR 16 VERISIGN INC VRSN 17 YAHOO INC YHOO 18 ELECTRONIC ARTS INC ERTS 19 SPDR Gold GLD 20 INTEL CORP INTC 21 QUALCOMM INC QCOM 22 COGNIZANT TECHNOLOG... CTSH 23 FORD MTR CO DEL F 24 NATIONAL SEMICONDUC... NSM 25 NETEASE COM INC NTES 26 SUNTRUST BKS INC STI 27 TYCO INTERNATIONAL LTD TYC 28 TERADYNE INC TER 29 RESEARCH IN MOTION LTD RIMM 30 ALCON INC ACL 31 HEWLETT PACKARD CO HPQ 32 VISA INC V 33 AMAZON COM INC AMZN 34 BIOGEN IDEC INC BIIB 35 NOVELLUS SYS INC NVLS 36 ANADARKO PETE CORP APC 37 COMMSCOPE INC CTV 38 FTI CONSULTING INC FCN 39 PEPSICO INC PEP 40 ABERCROMBIE & FITCH CO ANF 41 F5 NETWORKS INC FFIV 42 LAM RESEARCH CORP LRCX 43 LEXMARK INTL NEW LXK 44 GAP INC DEL GPS 45 Seagate Tech STX 46 YINGLI GREEN ENERGY... YGE 47 RADIOSHACK CORP RSH 48 KLA-TENCOR CORP KLAC 49 FIDELITY NATIONAL F... FNF 50 ALLERGAN INC AGN Complete Story »

On Friday, Spectrum Pharmaceuticals (SPPI) announced the company sold $50 million worth of common shares at $7.55. As is often the case when a company sells additional shares, the share price fell.Shares of SPPI closed down -4.39% to $7.18 in Friday trading.Complete Story »

Frederic Ruffy submits: SentimentStocks opened higher, but the early gains faded fast and the major averages have been under water throughout most of Friday's trading session. With very little tradable news to guide the early action, the Dow Jones Industrial Average extended this week's three-day 236-point advance heading into the University of Michigan's preliminary Consumer Sentiment Index for September.The data, released 25 minutes into the trading session, didn't disappoint. According to the index, sentiment improved to 70.2 in early September, up from 65.7 at the end of August and better than the 67.5 economists had predicted. The Dow Jones Industrial Average hit session highs on the news.Complete Story »

• Goldman is TARP-free at last. Goldman Sachs (GS) became the first major bank to completely shed its bailout ties, paying $1.1B to redeem the government's TARP warrants and calling the Treasury's valuation 'full and fair' given the government's support of the financial system. With the warrant redemption and the $318M Goldman paid in dividends on its $10B TARP aid, taxpayers received a 23% annualized return for the nine-month transaction.
• S&P flip-flops on ratings. Standard & Poor's unexpectedly switched its rating of some bonds backed by commercial mortgages, upgrading the bonds to AAA just days after the same bonds had been sharply downgraded. The unusual move further damaged S&P's credibility and unsettled investors in the $700B market for commercial mortgage-backed securities [CMBS]. The reversal came after S&P realized bonds with a shorter lifespan were less risky than similarly structured bonds with a longer lifespan, a mistake that could reflect a basic misunderstanding of the way cash flows are distributed across CMBS.
• Bristol-Myers buys biotech firm. Bristol-Myers Squibb (BMY) agreed to acquire Medarex (MEDX), the biotech firm it already owns a 2% stake in, for $2.4B in cash. Bristol-Myers said the $16/share deal, which marks a 90% premium to Medarex's closing price on Wednesday, buys it proven antibody discovery technology and rights to an immunotherapy the companies developed. MEDX +89% premarket (7:00 ET).
• Intel fights antitrust fine. Intel (INTC) is fighting back against a record €1.06B ($1.45B) fine levied by EU antitrust regulators in May, saying the fine violates protections granted by European human rights law. Since the EU antitrust body handles both the investigation and judgment of a given case, companies don't have the opportunity to fully defend themselves as they would in a court. However, the appeal is a bit of a long shot as no EU antitrust appeal has ever won on this argument.
• Amazon's shoe-in to online apparel. Amazon (AMZN) will buy online shoe retailer Zappos.com for around $928M, an aggressive expansion into online apparel after Amazon's solo attempts at selling footwear were unsuccessful. Zappos is known for its fiercely loyal customer base, good customer service and free shipping/free returns policy. AMZN +0.6% premarket (7:00 ET).
• Bair wants large firms to pay. FDIC's Sheila Bair is scheduled to testify before the Senate Banking Committee this morning, and will ask lawmakers to impose fees on the country's biggest financial firms. Bair wants Congress to create an industry-supported Financial Company Resolution Fund which will provide working capital and cover unanticipated losses if the government has to wind down a failed firm. In addition to minimizing government outlays, this would also "provide an economic incentive for an institution not to grow too large."
• SEC targets pay-to-play. The SEC voted unanimously to propose rules preventing investment advisers from managing public programs for two years if they make political contributions. The proposal is an attempt to curb pay-to-play practices, in which public contracts are awarded to those who make political contributions.
• Chrysler warns on dealership legislation. Chrysler warned it could face liquidation for a second time if lawmakers move forward with a plan to reinstate terminated dealership agreements. The House of Representatives has already approved a measure to restore contracts with 789 dealerships, but the bill's future in the Senate is less certain.
• Moody's rebuffed in Berkshire sale. Moody's (MCO) fell 10.3% in after-hours trading following a disclosure by Berkshire Hathaway (BRK.A) that it sold 7.99M shares of the ratings company this week. Though Berkshire remains Moody's largest shareholder, the sale reduced its stake by 17%. Moody's has reported a profit decline for seven consecutive quarters.
• Porsche CEO, CFO resign. Porsche's CEO Wendelin Wiedeking and CFO Holger Haerter both resigned from the company with immediate effect, after coming to "the conclusion that the further strategic development of Porsche... is better off, if they are not on board as acting persons," said a company spokesman. The move is expected to facilitate a merger agreement with Volkswagen (VLKAY.PK).
• eBay beats as Paypal, marketplace show signs of life. eBay (EBAY) managed to beat quarterly earnings expectations (see details below), even as profit fell 29% and revenue fell 4%. The company's PayPal online-payments unit continued to grow strongly and a decline in eBay's core marketplace leveled off.
• ING may sell private banking unit. ING Group (ING) reportedly hired JPMorgan Chase (JPM) to advise it on the possible sale of its private banking business in Europe and Asia. A deal could be worth over $1B.
• House prices rise. The FHFA House Price Index was up 0.9% in May vs. -0.2% consensus, after falling 0.3% in April (revised). Nationwide prices are down 5.6% from a year earlier, and 10.7% from the April 2007 peak.

Earnings: Thursday Before Open

• Bunge (BG): Q2 EPS of $2.28 beats by $1.57. Revenue of $11B (-23.5%) vs. $12B. (PR)
• Danaher (DHR): Q2 EPS of $0.89 beats by $0.01. Revenue of $2.7B (-19%) vs. $2.8B. (PR)
• Diamond Offshore Drilling (DO): Q2 EPS of $2.79 beats by $0.15. Revenue of $946M (-0.8%) vs. $942M. (PR)
• EnCana (ECA): Q2 EPS of $1.22 beats by $0.25. Revenue of $3.8B (-49%) vs. $4.4B. (EnCana news release (.pdf))
• Ford Motor (F): Q2 EPS of -$0.21 beats by $0.27. Revenue of $27.2B (-34%) vs. $24.8B. (PR)
• Goodrich (GR): Q2 EPS of $1.15 beats by $0.04. Revenue of $1.7B (-8%) in-line. (PR)
• Newmont Mining (NEM): Q2 EPS of $0.43 misses by $0.04. Revenue of $1.6B (+7%) in-line. (PR)
• NII Holdings (NIHD): Q2 EPS of $0.79 beats by $0.23. Revenue of $1.1B (-4%) vs. $1B. (PR)
• PNC Financial Services Group (PNC): Q2 EPS of $0.14 vs. consensus of $0.45 (may not be comparable). Revenue of $4B (+95.5%) vs. $3.65B. (PR)
• Potash Corp. (POT): Q2 EPS of $0.62 misses by $0.07. Revenue of $856M (-67%) vs. $981M. Issues downside Q3 EPS guidance of $0.80-1.20 vs. $1.56 consensus. Issues downside FY '09 EPS guidance of $4.00-5.00 vs. $5.24 consensus. Shares -2.3% premarket (6:50 ET). (PR)
• Terra Industries (TRA): Q2 EPS of $0.81 misses by $0.10. Revenue of $453.5M (-46%) vs. $568M. (PR)
• Thermo Fisher Scientific (TMO): Q2 EPS of $0.74 beats by $0.08. Revenue of $2.5B (-8%) vs. $2.4B. (PR)
• Xerox (XRX): Q2 EPS of $0.16 beats by $0.05. Revenue of $3.7B (-18%) in-line. (PR)

Earnings: Wednesday After Close

• Alliance Data Systems (ADS): Q2 EPS of $0.95 misses by $0.07. Revenue of $460M (-9%) vs. $481M. Sees Q3 EPS of $1.34 in-line. Maintains 2009 EPS guidance of $5.15 vs. $5.00. (PR)
• Amdocs (DOX): Q3 EPS of $0.53 beats by $0.05. Revenue of $690M (-16%) vs. $679M. Sees Q4 EPS of $0.47-0.51 vs. $0.48. Sees Q4 revenue of $670M-690M vs. $668M. (PR)
• Citrix Systems (CTXS): Q2 EPS of $0.39 beats by $0.01. Revenue of $393M (+0%) vs. $387M. Sees Q3, FY09 revenues flat vs. 2008. (PR)
• Covanta Holding Corp. (CVA): Q2 EPS of $0.21 beats by $0.01. Revenue of $376M (-11%) vs. $391M. Reaffirms 2009 EPS $0.65-0.80 vs. $0.71 and adjusted EBITDA of $500M-540M. (PR)
• C.R. Bard (BCR): Q2 EPS of $1.23 beats by $0.02. Revenue of $625M (+1%) vs. $634M. (PR)
• eBay (EBAY): Q2 EPS of $0.37 beats by $0.01. Revenue of $2.1B (-4%) vs. $2B. Sees Q3 EPS of $0.34-0.36 vs. $0.35. Sees Q3 revenue of $2.05B-2.15B vs. $2B. (PR)
• Equifax (EFX): Q2 EPS of $0.57 in-line. Revenue of $455M (-9%) vs. $453M. Sees Q3 EPS of $0.52-0.57 vs. $0.59. (PR)
• Equinix (EQIX): Q2 EPS of $0.44 beats by $0.11. Revenue of $213M (+7%) vs. $209M. Sees Q3 revenue of $221M-225M vs. $220M. Sees FY09 revenue of $860M-$875M vs. $861M. (PR)
• E*TRADE Financial (ETFC): Q2 EPS of -$0.22 beats by $0.09. Total loan loss allowance was flat at $1.2B, or 5% of gross loans receivable. (PR)

Complete Story »

Brooks McFeely submits:4:13 PM, Jul 13, 2009 --

• NYSE up 133.9 (2.4%) to 5,761.37.
• DJIA up 185.2 (2.3%) to 8,332.
• S&P 500 up 21.9 (2.5%) to 901.05.
• Nasdaq up 37.2 (2.1%) to 1,793.

GLOBAL SENTIMENT Complete Story »