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In A Beaten Down Biotech Group, These Names Are Holding Their Own

Biotech stocks have been taken to the woodshed in recent months, but the group still has several top-rated names strutting their stuff due to compelling growth prospects. While it’s best to focus on leading stocks in leading industry groups, there can be opportunities in lagging groups, especially in groups that house a lot of stocks. IBD’s biotech group is home to more than 400 stocks. It’s one of the larger groups in the database, and while there’s no shortage of stocks that have been hit hard by institutional selling in recent months, several other names are holding their own, showing relative strength. IBD 50 name Ligand Pharmaceuticals ( LGND ) has more than 85 partners and licensees in the pharmaceutical and biotech space. In February, the company reported revenue of $21.2 million, down 8% from a year earlier, but royalty revenue rose 22% to $11.5 million, helped by higher royalties from Promacta and multiple myeloma drug Kyprolis. Ligand is partnered with Novartis ( NVS ) on Promacta and with  Amgen ( AMGN ) on Kyprolis. Ligand also announced a license agreement with Emergent BioSolutions ( EBS ), in which Emergent will use Ligand’s OmniAb platform to discover various antibodies. Ligand recently bought the platform from OMT, a leader in the genetic engineering of animals for the generation of human therapeutic antibodies. Emergent BioSolutions is itself another name holding up well in the biotech group. The company has a portfolio of products for biological and chemical threats, as well as emerging infectious diseases. Emergent operates a biodefense division and biosciences division, with plans to spin off the latter into a separate, publicly traded company under the name Aptevo, which will continue to focus on oncology and hematology. The distribution of Aptevo shares to Emergent shareholders is expected to be completed by the middle of the this year. Emergent’s weekly chart shows a conventional entry at 40.59, but a handle area could be in place by the end of the week that could yield an earlier entry. Elsewhere, shares of Five Prime Therapeutics ( FPRX ) have been under accumulation as they sit just below a 45.82 entry. Five Prime is scheduled to present data for its FPA144 treatment for patients with gastric cancer at the 2016 American Association for Cancer Research Annual Meeting next Monday. Five Prime isn’t profitable yet, but sales soared in 2015, thanks to a license and collaboration agreement with Bristol-Myers Squibb ( BMY ) for its FPA008 antibody. It received a $350 million upfront payment in Q4. Finally, Anika Therapeutics ( ANIK ) is a small yet compelling name in the group, with a market capitalization near $650 million. It’s showing tight action as it works on a base-on-base structure with a 47.34 entry. Anika is a provider of therapeutic pain management solutions. Earnings and sales growth accelerated nicely in the latest reported quarter, up 41% and 33% respectively. Image provided by Shutterstock .

Could $2 Bil Sway NXP Semiconductors To Curb Its Apple Exposure?

NXP Semiconductors ‘ ( NXPI ) rumored $2 billion price tag for its Apple ( AAPL )-facing standard products division is “significantly” undervalued, says Credit Suisse. A $3 billion to $3.2 billion bidding price seems more accurate, Credit Suisse analyst John Pitzer wrote in a research report Tuesday. The standard products division is expected to generate $1.54 billion in 2016 sales, about 12% of NXP’s total revenue. But the division is struggling. In 2015, sales of its standard products — signal discretes, power discretes, protection and signal conditioning — fell 3% to $1.24 billion. Q4 sales fell 18% year over year, to $271 million. For the current quarter, NXP guided $275 million to $285 million in sales, down 13% at the midpoint vs. the year-earlier period and up 3% sequentially. Chinese bidders reportedly are interested in the segment, which supplies components for handsets, computing, consumer and automotive, Pitzer wrote. Smartphone customers include Apple, Huawei and Samsung. Although China consumes roughly half of the world’s $350 billion in chips, the country’s chip companies account for just 2.5% of the sector’s revenue. The country is looking to curb its reliance on foreign chips by building its own thriving industry. But chip technology is closely guarded and a rumored $23 billion Chinese bid for U.S. memory chipmaker Micron Technology ( MU ) had analysts scoffing last year. U.S. regulators likely would have killed that deal, they said. NXP, though, wouldn’t face nearly as stringent regulatory hurdles, Pitzer wrote. NXP is based in the Netherlands and its standard products division is located outside the U.S. Also, he points out, the segment isn’t producing specialty technology. “This portfolio consists of a large variety of catalog products, using widely-known production techniques with characteristics that are largely standardized throughout the industry,” he wrote. On Monday, NXP topped the chip count in an iFixit teardown of the 9.7-inch iPad Pro . The chipmaker supplies a Touch ID sensor, a controller and a charging component. NXP also supplied a controller for the new iPhone SE . Its Freescale acquisition in December opens NXP up to the high-margin automotive industry. NXP said “90% of auto innovation” is in electronics and it plans to lead the industry in terms of infotainment, vehicle networking, body, safety and secure access. NXP stock was flat, near 83, in afternoon trading on the stock market today . Its shares are down 1.5% this year.

Facebook CEO Zuckerberg Lays Out 10-Year Plan At F8 Developer Conference

Facebook ( FB ) CEO Mark Zuckerberg wants to connect the world, even if it means building a fleet of aircraft and satellites for delivering Internet services. Its development of an aircraft was part of the 10-year strategy that Zuckerberg presented in the keynote speech at Facebook’s F8 Developer Conference Tuesday morning in San Francisco, before some 2,600 attendees. The Facebook plane will be solar powered, with a wingspan longer than a Boeing 737, able to fly at 60,000 feet and beam an Internet connection to remote areas of the world. Facebook is also planning to provide Internet service via satellites and said the first launch will take place next year. In his 30-minute keynote, Zuckerberg emphasized connecting the world,  expanding business services on the Facebook Messenger chat platform and boosting Facebook’s Live video interaction with virtual reality. As widely expected , Zuckerberg announced a program for developers to write apps that are powered by artificial intelligence, known as chatbots. The digital assistants will help Messenger users communicate with businesses for services, perhaps to fix a problem or to buy goods. Chatbots are digital characters infused with artificial intelligence that can mimic human conversation. The idea is that businesses on Messenger could use chatbots to interact with customers via automated response systems, aiming to help boost sales. Chatbots can help businesses eliminate the human effort required for communicating with users. Messenger is one of Facebook’s fastest-growing products, with more than 900 million users. Another example he used was with 1-800-Flowers, where a chatbot will help users on the selection and delivery of flowers. “Messenger will be the next big platform for connecting services,” Zuckerberg said. Messenger is already used to request a lift form Uber or Lyft, purchase tickets for concerts and other events, make a payment and more. Zuckerberg also laid out a vision for Facebook’s live video streaming service call Live. He envisioned a time when users will view Live video through a virtual reality platform, such as its Oculus Rift headset that began shipping last month. He also sees a time when VR goggles, which currently protrude across the upper face of a user and are held in place with headbands, swill someday shrink to the size of eyeglasses. “We are at the golden age of video,” Zuckerberg said. Facebook rose 1.5% to 110.60 in afternoon trade on the stock market today , rising back above its 50-day moving average.