Tag Archives: technology

Novo Nordisk Pops As Diabetes Drug Cuts Heart Disease Deaths

Shares of diabetes giant Novo Nordisk ( NVO ) jumped Friday after the company said its drug Victoza reduced heart attacks and strokes. Novo released few details about the results of the study, which it’s saving for the next American Diabetes Association meeting in June. However, it did say that there was a statistically significant reduction in all three of its metrics — heart attack, stroke and death from all cardiovascular causes — among the 9,000 patients taking the diabetes drug over five years, compared to the placebo group. The subjects were all over age 50 and either had cardiovascular disease or multiple risk factors. Novo Nordisk’s stock was up about 8% in afternoon trading on the stock market today , near 57. It’s the highest-rated stock in the low-rated Medical-Ethical Drugs group, with a Composite Rating of 82. The effect of diabetes drugs on cardiovascular health has been the subject of several studies lately, notably from Eli Lilly ( LLY ), whose drug Jardiance reduced deaths from heart failure by 32% in a similar large, long-term study reported last September. On the other hand, Merck ‘s ( MRK ) Januvia showed no effect either good or bad in its outcomes trial reported a few months earlier. A similarly neutral result was reported for an outcomes trial of the  Sanofi ( SNY ) drug Elixa, which is noteworthy because Elixa is in the same class as Victoza. Both are glucagon-like peptide-1 (GLP-1) analogs, similar to Bydureon from  AstraZeneca ( AZN ) and Lilly’s Trulicity, while Jardiance is an sglt2 inhibitor, in the same class as Invokana from  Johnson & Johnson ( JNJ ) and Farxiga from AstraZeneca. Merck’s Januvia belongs to another class, called DPP-4 inhibitors. On a conference call with analysts Friday, Novo’s Chief Scientific Officer Mads Thomsen said that the different results may have come from subtle differences between the drugs, which he thinks extend to Victoza’s planned successor, semaglutide. “It’s not only the question of being a member of the given class of GLP-1 agonist,” said Thomsen. “It’s also a part of the kinetics, dynamics, distribution, half-life, and so on. And as we got semaglutide, we have done rather detailed investigations. . . . There is nothing from the animal pharmacology to negate the notion that semaglutide should do at least as well on cardiovascular performance.”

Is Facebook Ready To Unleash A Multi-Billion-Dollar Opportunity?

Speculation is rising that Facebook ( FB ) will open its Messenger chat service to content publishers and advertising, creating a big multi-billion-dollar revenue opportunity and posing a growing threat to Alphabet ( GOOGL ). It’s a battle of stock market champions — both companies get a top IBD rank. Additions to the Messenger instant messaging platform are expected to be unveiled when Facebook holds its annual F8 developer’s conference April 12-14. Richard Windsor, an analyst at Edison Investment Research, said in emailed comments that Facebook’s top new announcement will be the opening of its messaging platform to allow publishers to distribute their content on Messenger. That could enable publishers to engage in direct conversation with users of Messenger and open the door for advertising sales pitches or product upgrades. “We suspect that Facebook will actually go much further and open up the platform entirely to developers to allow other functions within the messaging platform,” Windsor wrote. He expects Facebook will use its messaging platform to creating thriving multiplayer gaming environments, which would accelerate its move to add both media consumption and gaming to its digital content services. The goal would be to entice uses to do more with Facebook than just social networking and instant messaging. “This is the key to changing from being just an app into a fully-fledged ecosystem where users spend an increasing amount of their digital lives,” he wrote. The result is that Facebook would have a greater opportunity to monetize its 1.5 billion users and the 800 million users on Messenger. Facebook still has a very long way to go, but once this is complete, Windsor estimates Facebook will have the capacity to generate over $40 billion in revenue, compared to the $18 billion it generated in 2015. He also said Facebook’s apparent direction is why it’s emerging as Alphabet’s No.1 competitor, “as a large piece of this new opportunity that it hopes to generate is likely to come from Google.” Facebook has already expanded Messenger’s utility to include allowing users to send money to others, though Facebook currently does not charge a fee for the service. It’s also testing a feature that allows people to book an Uber ride through Messenger. More transportation services will be coming to the platform soon, including airlines, Facebook said. Nomura analyst Anthony DiClemente said in a research note Thursday that an advertising network which Facebook announced two years ago is gaining on a similar platform from Alphabet. The ad platform, called Facebook Audience Network (FAN), uses Facebook data to help advertisers place ads across multiple websites, beyond Facebook. FAN is in direct competition with AdSense and AdMob from Alphabet. DiClemente estimates FAN will add $2 billion to Facebook revenue in 2016, more than double that of 2015. The emerging growth drivers of FAN and Messenger will complement the strong revenue growth Facebook is getting from Instagram and video ads, he wrote. DiClemente raised his price target on Facebook to 135 from 125. Facebook stock fell 1.1% in the stock market today  to 108.39. It hit an all-time intraday high of 117.59 on Feb. 2. The company gets a best-possible Composite Rating of 99 from IBD. So does Alphabet, which slipped 0.2% Friday to 730.22. Alphabet hit an all-time high of 810.35, also on Feb. 2. Image provided by Shutterstock .

Ambarella Cuts GoPro Exposure On Sluggish Sales; Q1 Views ‘Messy’

Sluggish  GoPro ( GPRO ) sales will force Ambarella ( AMBA ) to cut its fiscal 2017 guidance from earlier views for 15%-20% growth, a Needham analyst predicted Friday after the chipmaker late Thursday posted mixed Q4 results and disappointing Q1 guidance. Ambarella stock was down 9.5% in afternoon trading  on the stock market today , below 42. GoPro stock was down more than 2%. Ambarella makes key chips used in GoPro’s Hero action cameras. Ambarella reported $67.97 million in sales and 64 cents earnings per share ex items, up 5% and down 6% year over year, respectively, for its fiscal Q4 ended Jan. 31. Sales topped the consensus model of 12 analysts polled by Thomson Reuters for $65.8 million and Ambarella’s own guidance for $65 million to $67.5 million, but EPS lagged expectations for 68 cents and declined for the first time in 18 quarters. Ambarella ended the year with $316.4 million in sales and $3.31 EPS ex items, up 45% and 66%, respectively. Both metrics beat the consensus for $313.6 million and $3.05. But Ambarella’s outlook is “messy” at best, Pacific Crest analyst Brad Erickson wrote in a research report. Erickson cut his price target on Ambarella stock to 62 from 72, but he kept his overweight rating. For Q1, Ambarella guided to $55 million to $57 million in sales, down 21% at the midpoint vs. the year-earlier quarter. It would be Ambarella’s first year-over-year decline in 18 quarters. Ambarella cut its GoPro exposure to low single digits until it refreshes its wearable sports camera line, likely in October, Erickson wrote. Overall, wearable cameras should account for a mid-teen-percentage of sales in Q1, Ambarella CFO George Laplante said Thursday on the company’s earnings conference call. The expected GoPro refresh, combined with strong seasonal IP security and drone sales, “should drive a return to year-over-year growth,” Erickson wrote. During Q4, China — which generally contributes heavily to IP security camera sales — was flat sequentially, Needham analyst N. Quinn Bolton wrote in a report. The IP security, drone and automotive segments all posted strong year-over-year growth, Bolton said. “But the consumer portions of these segments declined quarter over quarter,” he wrote. “As expected, wearable sports cameras declined substantially year over year and quarter over quarter.” Ambarella is shifting focus to the consumer and China professional IP security camera markets, where analysts say profit margins tend to be low. Quinn maintained his hold rating on Ambarella stock, noting cloudiness surrounding the China market.