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Gilead Sciences Broadens Liver Program With Nimbus Acquisition

Big biotech Gilead Sciences ( GILD ) added to its fatty-liver-disease portfolio Monday by acquiring a line of biotech drugs in a deal potentially worth $1.2 billion. Gilead acquired Nimbus Therapeutics ‘ Nimbus Apollo division for $400 million upfront, plus up to $800 million in milestones if Nimbus’ drugs successfully make it through the development process. And the deal seemed to spark the shares of another drugmaker targeting nonalcoholic steatohepatitis,  Intercept Pharmaceuticals ( ICPT ). Nimbus Apollo has a pipeline of  acetyl-CoA carboxylase (ACC) inhibitors, the most advanced of which is NDI-010976 for nonalcoholic steatohepatitis (NASH), a common but currently untreatable condition causing liver damage through fat buildup. Phase-one trial results for NDI-010976 are due to be presented in a couple of weeks at the annual International Liver Congress. NASH is seen by analysts as a potentially enormous untapped market, and Gilead has been compiling a portfolio of drugs in the space to build on the liver-disease infrastructure it created to sell its massively successful hepatitis C drugs. In January 2015, the company bought Phenex Pharmaceuticals for its program targeting a different receptor, on top of its in-house development simtuzumab, which is in midstage testing for NASH. “These molecules will complement and further strengthen Gilead’s pipeline and capabilities to advance a broad clinical program in NASH that includes compounds targeting multiple key pathways involved in the pathogenesis of the disease,” Gilead Chief Scientific Officer Norbert Bischofberger said in a statement Monday. Credit Suisse analyst Alethia Young wrote that Gilead probably expects NASH to ultimately be treated with a combination therapy. The ACC approach has a bit of a checkered past, however. “This is a target that has been tried before by big pharm and has failed due to binding sites and difficulties in making it a drug-able target,” Young wrote in a research note. Young also wrote that she was “not surprised” that Gilead chose to buy Nimbus Apollo instead of Intercept, which has what is generally seen as the leading contender for NASH with its drug candidate obeticholic acid (OCA). Intercept has been bandied about as a buyout target by Gilead and other players in liver disease, but analysts say it’s unlikely that anyone will buy it before OCA is approved, and certainly not before this Thursday’s FDA advisory committee meeting on OCA . Intercept stock was nonetheless up 6% in strong volume in early afternoon trading on the stock market today , near 138. Gilead stock was up nearly 1%, near 95.

Facebook’s Oculus Rift Loses Round 1 With Product Shipment Delays

Facebook ( FB ) lost its first game in the virtual reality field, as its Oculus VR unit announced that a shortage of parts will delay some shipments of its high-tech Rift headsets. The Rift goggles began shipping to more than 20 countries and regions one week ago. Oculus CEO Brendan Iribe acknowledged the delay in a tweet : “First set of Rifts are going out slower than we originally estimated, so we’re giving free shipping for all preorders, including international.” Facebook stock was down 3%, near 113, in early afternoon trading in the stock market today , though it was not clear if the market action was related to the shipment delays. Facebook has said Oculus will not be material to its bottom line this year. Deutsche Bank analyst Ross Sandler said in a research note Monday that Facebook’s first-quarter results “may come in light,” in what he described as a “potential growth reset.” Sandler maintained a buy rating on Facebook with a 145 price target. Oculus did not say how many Rift shipments were delayed or when the problem might be fixed. It said buyers hit with the delay will receive an update by April 12. Preorders for the $599 Oculus Rift headsets began in January. Facebook has not said how many orders it’s received. So far, 30 games are available for the Rift, with more than 100 games expected by year-end. Game prices range from $9.99 to $59.99. Facebook sees Oculus Rift as a  game changer , starting with games but soon extending to other areas such as sports events, as users put on the Rift goggles for deep-seated immersion. A dismantling of the Rift by iFixit showed the Oculus contained chips from STMicroelectronics ( STM ), Texas Instruments ( TXN ) and Cypress Semiconductor ( CY ). STMicroelectronics supplied the Rift with an ARM ( ARMH )-based microcontroller. Cypress supplies a hub controller, which allows for multiple USB-connected devices to be plugged in at once. Texas Instruments is supplying an LED driver, which controls for image brightness and grayscale. Image provided by Shutterstock .

Apple Stock Rises On Upbeat Analyst Reports, Video Services Upside

Apple ( AAPL ) stock rose to a 2016 high Monday after the company got a pair of positive reports from Wall Street analysts. Credit Suisse analyst Kulbinder Garcha said Apple’s services business is “an underappreciated driver” for the company. He reiterated his outperform rating on Apple stock and raised his price target to 150 from 140. Brean Capital analyst Ananda Baruah maintained his buy rating on Apple stock but lowered his price target to 155 from 170. Apple stock was up 1.5% in midday trading in the stock market today , near 112. Garcha estimates that Apple’s services businesses could account for 29% of Apple’s gross profit by 2020, up from 15% today. Apple’s services include its App Store, Apple Pay, Apple Music and iCloud. Apple’s services growth will be driven by its growing installed base of devices, rising services spending per user, and new service opportunities in the TV and video market, Garcha said. A big question remains how Apple will expand in the video services market. It currently offers rentals and purchases of video through its app store, but has no subscription service like Netflix ( NFLX ) or Hulu. Apple has four options in the video services market, Garcha said. First, it could stick with its electronic sell-through model, but that has a small total addressable market. Second, it could become a “virtual MSO” (multiple-system operator) by aggregating broadcast and cable networks. Third, it could invest directly in creating its own original content. Fourth, it could acquire a subscription streaming service, but that seems unlikely, Garcha said. Brean’s Baruah remains bullish on Apple because of its iPhone business. He said early reports of iPhone SE sales point to calendar 2016 shipments at the higher end of his forecast for 20 million to 25 million units. RELATED: Low-Cost iPhone SE Could Dent Apple’s Profit Margins Middle-Aged Apple Might Get A Sports Car, New Girlfriend