Author Archives: Scalper1

First IPOs of 2016 BeiGene, Editas Medicine Surge On First Day

The first initial public offerings of 2016 arrived Wednesday with BeiGene ( BGNE ) and Editas Medicine ( EDIT ) both rising by double-digit percentages on their first trading day. Editas Medicine, a developer of gene editing therapies, raised $94 million by offering 5.9 million shares at 16, the low end of its 16-to-18 price range. The stock rose 13.8% to close at 18.20 in the stock market today . BeiGene, a China-based developer of cancer therapies that target a body’s immune system to fight cancer, raised $158 million by offering 6.6 million shares at 24, the high end of the range of its 22-to-24 range. BeiGene rose 18% to close at 28.32. They are the first U.S. listed IPOs since the Dec. 17 debut of Chinese peer-to-peer lender Yirendai ( YRD ). IPO research firm Ipreo said it was only the third time since 2001 that the new issuance market remained dormant during the month of January. Editas is described by the company as “a leading genome editing company dedicated to treating patients with genetically defined diseases by correcting their disease-causing genes.” It uses a technology known as CRISPR, or clustered, regularly interspaced short palindromic repeats, which has the potential to achieve precise, directed changes in DNA. BeiGene is described as a “globally focused biopharmaceutical company dedicated to becoming a leader in the discovery and development of innovative, molecularly targeted and immuno-oncology drugs for the treatment of cancer.” Image provided by Shutterstock .

GoPro Wipes Out After Giving Horrible Q1 Guidance; Q4 Misses

Action camera maker GoPro ( GPRO ) late Wednesday crashed like a downhill skier making a bad turn after missing earnings views for the fourth quarter and guiding to a shockingly weak first quarter. GoPro stock was down 13% to near 9 in after-hours trading following its earnings news release. GoPro stock rose 4.6% to 10.71 in the regular session on the stock market today . GoPro went public in June 2014 at 24 and climbed as high as 98.47 in October of that year. GoPro lost 8 cents a share in Q4 on a non-GAAP basis, where analysts were expecting it to break even. Under generally accepted accounting principles (GAAP), GoPro lost 25 cents a share, when Wall Street was looking for it to lose only 10 cents a share. On Jan. 13 , GoPro pre-announced lousy holiday sales for its Hero action cameras and accessories. At the time, GoPro said that it expected to report Q4 sales of $435 million, down 31% from the year-earlier quarter. Analysts had been projecting $512 million. GoPro’s actual sales in Q4 were $436.6 million. But analysts polled by Thomson Reuters had expected GoPro to post sales of $496.1 million, down 22%. For the March quarter, GoPro said that it expects sales of $160 million to $180 million, or $170 million at the midpoint. Analysts had been modeling $298 million. GoPro didn’t give an earnings-per-share outlook, but analysts had been expecting it to lose five cents a share. GoPro expects 2016 sales of $1.35 billion to $1.5 billion, or $1.425 billion at the midpoint. Analysts were modeling $1.61 billion, down 0.7%. When GoPro made its Q4 warning last month, it announced plans to cut 7% of its workforce, or about 100 employees. Late Wednesday, GoPro also announced that Brian McGee, a 30-year finance veteran who has served as chief financial officer of two publicly traded companies and who joined GoPro last year from Qualcomm ( QCOM ), will succeed CFO Jack Lazar, effective March 11. Lazar is retiring after two years at GoPro. The next catalysts for GoPro stock are the launch of its Karma drone and the release of a next-generation action camera, the Hero 5. The steep decline in GoPro’s share price had prompted speculation on Wall Street that the company might become an acquisition target. Ambarella ( AMBA ), which makes image processors for GoPro cameras, saw its shares down 2.5% in after-hours trading Wednesday.  

Merck Stock Slides As Q4 Revenue, Guidance Miss Expectations

Big pharma Merck ( MRK ) delivered mixed quarterly results and guidance Wednesday, sending its stock lower. Merck’s Q4 earnings excluding one-time items rose 7% over the year-earlier quarter to 93 cents a share, beating analysts’ consensus by 2 cents, according to Thomson Reuters. However, sales declined 2.5% to $10.22 billion, $135 million below Wall Street’s average estimate. For the year, revenue fell 6.5% to $39.45 billion, while earnings increased 3% to $3.59 a share. Merck guided 2016 EPS at $3.60 to $3.75, on the low side of analysts’ consensus of $3.72. The company said this includes a 3% negative impact from foreign-exchange rates, a tax rate of 21.5% to 22.5%, R&D spending slightly above 2015 levels, and sales, general and administrative spending slightly below 2015 levels. Sales guidance was also soft, at $38.7 billion to $40.2 billion. Merck also announced separately that its new hepatitis C drug Zepatier had been approved in Canada with a somewhat broader label than that granted by the FDA last week , as it includes patients with genotype 3 of the virus as well as genotypes 1 and 4. Diabetes drug Januvia and sister drug Janumet were largely responsible for the Q4 revenue miss, selling $1.45 billion in the quarter where analysts had expected $1.64 billion. The franchise has recently been under threat from Eli Lilly ‘s ( LLY ) Jardiance, as that drug substantially reduced death from heart failure in a giant clinical trial late last year, while Januvia had failed to do so in a similar trial. In its own Q4 earnings report last week, however, Lilly said this probably wouldn’t result in a change to Jardiance’s label until late this year, and Merck executives said on the conference call with analysts that they hadn’t seen any real impact yet. Evercore ISI analyst Mark Schoenebaum wrote in an email that Januvia “experienced a quarterly uptick due to stocking in Q3, followed by an expected drawdown in Q4.” Recently launched cancer drug Keytruda racked up $214 million in sales, missing analyst consensus by about $7 million. HPV vaccine Gardasil handily outperformed, however, growing 10% to $497 million vs. a consensus estimate of $383 million. “Overall, our initial read of the earnings and guidance reaffirms our neutral stance on the stock, as pressure on key products such as Januvia and Remicade will likely limit near-term growth opportunities and offset potential areas of upside,” Credit Suisse analyst Vamil Divan wrote in a research note. Merck stock Wednesday fell as much as 3.6%, to a four-month low of 48.58, before recovering to close at 50.05, down just a fraction on the stock market today .