Tag Archives: technology

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 .

Brocade Stock Dives While Raising Ruckus Over Networking Merger

Computer networking midcap Brocade Communications Systems ( BRCD ) said Monday it’s agreed to acquire small-cap mobile networker Ruckus Wireless ( RKUS ) for $1.5 billion, sending Ruckus stock soaring 32%, as of midday, while Brocade stock plunged 14%. Under the deal terms, Ruckus stockholders will receive $6.45 in cash and 0.75 share of Brocade common stock for each share of Ruckus common stock, the companies said. Based on Friday’s closing price, the transaction values Ruckus at $14.43 a share, or about $1.5 billion. The actual value is closer to $1.2 billion after netting out cash being acquired, the companies said. It’s been a rough road for Ruckus, which went public priced at 15 in November 2012 and peaked four months later at 26.50. It hasn’t traded higher than 13.50 in the last 18 months, most recently touching that interim high Oct. 15. In morning trading in the stock market today , Ruckus stock was above 13, while Brocade stock was near 9, 30% off a 13-year high of 12.88 touched last June. Network gear leader  Cisco Systems ( CSCO ), a rival of both companies, was down 2% midday Monday, near 28. “The acquisition will complement Brocade’s enterprise networking portfolio, adding Ruckus’ higher-growth, wireless products to Brocade’s market-leading networking solutions,” Brocade said in its press release. “It will also significantly strengthen Brocade’s strategic presence in the broader service provider space, with Ruckus’ market-leading Wi-Fi position.” Brocade expects the deal to accrete to non-GAAP earnings by its fiscal 2017’s first quarter, ending Dec. 31, 2016. Ruckus CEO Selina Lo will continue to lead that company, reporting directly to Brocade CEO Lloyd Carney. “We operate in adjacent segments of the larger networking market, with a number of common customers for our complementary products, and have a successful track record of working together,” Lo said in the merger announcement. Carney said the merger “will position us to expand our addressable market and technology leadership with Ruckus’ fast-growing wireless LAN products, and supports our vision to deliver market-leading new IP solutions that enable the network to become a platform for innovation.” Brocade’s annual revenue hasn’t grown by double-digit percentages since 2009, falling 1% in both 2013 and 2014, and growing only 2% last year to $2.26 billion. Earnings, however, grew 12% last year to $1.01 per share minus items. For its fiscal Q2 ending May 2, analysts polled by Thomson Reuters expect Brocade to grow EPS ex items by 5% to 23 cents, on revenue up less than 1%, to $552 million. Analysts expect Ruckus to report Q1 earnings up 29% to 9 cents per share, with sales rising 20% to $98.4 million. For 2015, its EPS ex items fell 1 cent to 43 cents a share against a tough comparison in 2014, when earnings doubled to 44 cents. Revenue rose 14% to $373 million. Brocade carries a good 84 IBD Composite Rating, while Ruckus carries as modest 63. Cisco earns an 81 CR. Image provided by Shutterstock .