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BioMarin Gene Therapy For Hemophilia Scores In Trial; Stock Jumps

Rare-disease specialist BioMarin Pharmaceutical ( BMRN ) was trading up sharply Wednesday after it reported strong early-stage trial results for its gene therapy for hemophilia. BioMarin delivered a single dose of its candidate BMN 270 to eight patients with severe hemophilia A — the most common variety of the disease, which makes sufferers’ blood unable to clot. Six of those were on the highest dose, and all of those “improved from severe to either moderate, mild or normal range in terms of factor levels based on World Federation of Hemophilia criteria,” according to BioMarin’s press release. BioMarin is already preparing a large phase-three trial of BMN 270 in hopes of gaining FDA approval as quickly as possible. If successful, it could be a paradigm shift in hemophilia treatment. Currently, the only treatment is regular infusions of natural or recombinant blood-derived products to replace the missing clotting factors. A gene therapy, by attacking the disease’s origin in a defective X chromosome, could provide improvement for much longer, although since BioMarin’s trial only followed up after 16 weeks, it’s unclear just how long it is effective. Currently, hemophilia treatment is dominated by Baxalta ( BXLT ) — which is in the process of being acquired by Shire ( SHPG ) — and Biogen ( BIIB ). Both companies are working on their own gene therapies. Pfizer ( PFE ) holds the dominant position in the smaller hemophilia B market. RBC Capital Markets estimates that the hemophilia A market alone is about $4 billion a year. BioMarin stock was up 5% in early trading on the stock market today , near 90.50, and touched a three-month intraday high. Since last summer, the stock has been hit not only by the larger biotech sell-off, but also by the FDA’s rejection in January of its muscular dystrophy drug Kyndrisa, as well as mixed late-stage trial results last month on a treatment for another rare disease, called phenylketonuria. Currently its IBD Relative Strength Rating is a dismal 15, meaning the stock has performed among the lowest 15% of all stocks over the past 12 months. “While the data presented today were small numbers and of relatively limited follow-up … the data were encouraging (though looks like significant variability from patient to patient) and (1) suggest a path forward for BMN 270 in hemophilia A (and potentially for hemo A gene therapy in general) and (2) set a reasonably high bar for competition that will follow,” wrote Evercore ISI analyst Mark Schoenebaum in an email to clients. Image provided by Shutterstock .

Yahoo Earnings Beat Despite Ongoing Challenges; Acquisition Near?

Yahoo ( YHOO ) stock opened higher Wednesday after the company late Tuesday assured investors it’s working diligently to find a buyer for its core, and perhaps other, businesses. Executives didn’t give any specifics, however, and its Q2 revenue outlook fell short of Wall Street estimates, as the Web company continues to cut costs. CFO Ken Goldman said the company’s headcount, including contractors, was down to 9,200, which it said is down 42% from the start of 2012. RBC Capital Markets analyst Mark Mahaney hiked his price target on Yahoo stock to 38 from 33, citing the rise of its Asian assets and his sum-of-its-parts analysis of the company. But he maintained his market perform rating on Yahoo stock. Most analysts maintained the equivalent of neutral ratings and maintained their price targets. Yahoo stock was up 2.5%, above 37, in early trading in the stock market today . “We are moving forward at the fastest possible pace,” Yahoo CEO Marissa Mayer said on the company’s earnings conference call last Tuesday. Verizon Communications ( VZ ), which bought AOL last year for $4.4 billion, is widely considered to be the front-runner for Yahoo’s core business. It’s uncertain what Yahoo will do with its 15% stake in China e-commerce leader Alibaba ( BABA ) or its big stake in Yahoo Japan. Late Tuesday, the Wall Street Journal reported that besides Verizon, bidders include U.K. publisher Daily Mail, buyout firm TPG and an investor group that included Bain Capital, Vista Equity Partners and former Yahoo interim CEO Ross Levinsohn. Mayer, then a top executive with Google (now part of Alphabet ( GOOGL )), was chosen over Levinsohn and others for the top spot at Yahoo in 2012. Private-equity firms, Silver Lake and Advent International also expressed interest in bidding, the WSJ said. Yahoo continues to attract more than 1 billion unique visitors a month to its online properties, long among the leaders on that score, but it’s spent a decade failing to spark much, if any, revenue growth. Yahoo Revenue Declines Accelerating For Q1, Yahoo said its earnings per share minus items fell 47% to 8 cents from 15 cents in Q1 2015, but analysts polled by Thomson Reuters had expected just 7 cents. Revenue fell 11% to $1.09 billion, just above the $1.08 billion that analysts had expected. For Q2, the company forecast revenue of $1.05 billion to $1.09 billion, down 14% at the midpoint and lagging consensus views of $1.102 billion. Facebook ( FB ) and Alphabet continue to gain in mobile and digital advertising at the expense of Yahoo and others. Cowen analyst John Blackledge, in a research note, pointed out the company posted a deceleration in mobile revenue growth and in growth for what its calls MAVENs, referring to the higher-growth areas of mobile, social, video and native advertising. He maintained a 32 price target on Yahoo stock. Yahoo did say MAVENs accounted for 38% of its total traffic-driven revenue, up from 33% in Q1 2015. William Blair analyst Ralph Schackart kept his market perform rating, citing “Yahoo’s weak core business fundamentals,” in a research note. “Yahoo’s search business continues to experience headwinds from declining desktop traffic, with paid clicks down 21% year over year in the first quarter after being down 10% last quarter,” Schackart wrote. “Further, search partnerships and increased affiliate traffic have caused traffic acquisition costs to grow at a faster rate than gross revenue, resulting in net search revenue declining 21% year over year in the first quarter.”

Facebook Passes 50-Day Test; Netflix, Illumina Break 2 Support Areas

Facebook ( FB ) tested a key level Tuesday but came out stronger. But Netflix ( NFLX ) and Illumina ( ILMN ) crashed through support levels on weak Q1 figures. IBM ( IBM ) gets an incomplete. MaxLinear ( MXL ) triggered a sell rule as well as breaking a support level. Facebook Facebook has been finding support at its 50-day moving average since April 11, when shares finished just below that key level. Since then the stock has closed above that support level. On Tuesday, Facebook shook off a morning dip to just above the 50-day to rally for a 1.7% gain at 112.29. On the upside, the next key level is a buy point at 117.09. Facebook fell 0.1% shortly after Wednesday’s open on the stock market today, but is comfortably above its 50-day line for now. Facebook releases earnings next week, with analysts expecting a 48% EPS gain, the third straight quarter of accelerating growth. Netflix Netflix late Monday reported an unexpected rise in Q1 earnings per share. Subscriber growth also topped expectations. But the Web-streaming giant expects net global-customer growth of just 2.5 million in Q2, which would be the weakest quarterly gain in two years . It also guided Q2 earnings lower. Netflix stock dived 13% Tuesday, crashing through its 200-day and 50-day moving averages in one fell swoop. (Netflix retook its 200-day line just last week). Netflix rose 1.6% Wednesday morning, but is still significantly below its 50-day line. How do Netflix and IBM stack up vs. their rivals? Find out at IBD Stock Checkup Illumina Illumina late Monday gave Q1 preliminary revenue figures that were well below Wall Street estimates. The gene-sequencing tools giant sees Q1 sales up 6%, ending a 14-quarter string of double-digit growth. Illumina stock crashed 23.2% on Tuesday, back near two-year lows. Like Netflix, Illumina tumbled through its 200-day and 50-day lines. The stock on Monday topped its 200-day for the first time this year. Illumina rose 1% Wednesday morning. IBM IBM revenue and earnings did top Wall Street forecasts late Monday, though sales have fallen for 16 straight quarters. Also, IBM’s implied Q2 EPS guidance appeared to be below analyst estimates. IBM stock fell 5.6% on Tuesday, undercutting its 200-day line intraday but closing just above that area. But IBM could easily retest the 200-day line in the coming days, with the 50-day only slightly below that. IBM rose 0.5% Wednesday morning, but is not far above its 200-day. MaxLinear MaxLinear’s chip designs are used in video streaming. The stock cleared an entry point of 17.85 last month, rising to a 19.10 peak on April 4. But shares drifted lower since then. On Tuesday, the stock dived 10.2% to 15.86, triggering an 8% sell rule from that entry point and breaking through its 50-day moving average. It wasn’t immediately clear why the MaxLinear shares fell. On Wednesday, MaxLinear tightened its fiscal Q4 revenue guidance and raised its gross margin target. MaxLinear jumped 5.9% in early Wednesday trading, pennies within its 50-day line again.