E Don't Cry For Me, Argentina

Citigroup raised Vodafone from neutral to buy today. VOD yesterday reported a no-cash deal with Telefonica de Argentina and today it did another with Spain's Mas Movil for a joint move to provide fiber optics to 6.4 million more Spanish homes starting this year. They already cooperate over 33.9 million Spanish households. VOD rose 2%.


The Novartis Sandoz generics arm is selling part of its US business to Aurobindo Pharma of India for $1 billion, lower than initial pricing, including $100 million in performance payments to come. The price includes factories in NY and NC plus NVS dermatology labs. That will make the Indian firm No. 2 in US generics after Teva. Generics are a tough market because of pricing pressure and pharmacy benefit manager demands for the discounts which otherwise would go to patients. Reuterswrote earlier this week that drug prices fell 5.8% on average in Q2 this year. The biggest sufferers are Danish Novo Nordisk and GSK among our holdings.

This does reduce pressure for NVS to sell off its Alcon arm, which is where we came in. Aurobindo is said to be better integrated than its Israeli rival, but with the new plants coming this may reverse. NVS shares rose moderately in a down day for drug firms.

Teva lost 2.5% on this setback and the FDA acting to add another temporary source of epi-pens to handle acute allergic reactions, because TEVA cannot make enough until later this year. TEVA launched partnership with Healint to help Europe-based migraine patients deal with their problems, in conjunction with the Migraine Trust of Britain. It will also incorporate its own NeurologyBytes portal into the Healint platform for giving non-UK neurologists information on treatment. Argus Research chopped TEVA to hold from buy today.

Zymeworks won a $2 million milestone from Eli Lilly for its Azymetric platform which brings its payments from LLY, its first major investor, to $6 million. Raymond James analyst David Novak notes that the original 2013 LLY deal was followed by a second with the US firm plus another potential payout of $223 million from Lilly alone. ZYME shares have been sold by LLY but this is not over fundamentals, Novak says, but because they were held by the conservative LLY corporation rather than its venture arm. He has a $27 target price for ZYME and an outperform rating. Our reporter on this stock, Martin Ferera, worried about the LLY sales but they were not an indicator of ZYME

The US FDA extended its deadline for ruling on Roche's Tecentriq for first line treatment non-small cell lung cancer to Dec. 5. It was paid to speed up approvals by today. I am not sure if the Swiss firm can ask for a fee refund. The delay is to check out how a combo of the new drug, plus RHHBY's older Avastin, combined with chemotherapy, can extend the progression free survival of NSCLC patients regardless of their PD-L1 level. If this pans out it will be a boost for Roche against Merck's Keytruda. Data on life extension may come at the World Conference on Lung Cancer in Toronto Sept. 23-26.

GlaxoSmithKline is cutting about 650 US jobs, mostly in the NJ-PA area.

France's Sanofi is paying fines of $25 million in the US for having bribed officials in the Middle East and Kazakhstan to sell more drugs. Its ticker symbol in France is SAN but this has nothing to do with our SAN, Banco Santander. SNY will also maintain records to prove that it has internal controls in place to keep from again bribing for business in Jordan, Lebanon, Bahrain, Kuwait, Qatar, Yemen, Oman, the UAE, and both Palestinian territories.

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