Drugs

Benitec Biopharma (BNTC) Down Under issued a 9-mo report to the end of March and it is pretty rotten. You know that the Australian startup sacked its CEO after a botch Nasdaq listing last year, and that in Feb. BNTC started to wind down its major drug trial for hepatitis C. Now we also know that is revenues fell 41% year/year in the 9 mos to A$385,000 and its losses topped A$18.5 mn. The tangible net asset value of its shares fell to 17 cents Australian from 20.16 cents as of mid-year 2015. The EPS over the same period fell to minus 13.2 Oz cents from minus 5.4 cents.

BNTC is switching its hepatitis work to the B strain because C is now over-medicated. It aims to develop a single jab treatment called BB-HB-331 currently under study in mice infected with HBV liver cells and hopes to file an investigational new drug application in H2 next year.

It also is working on age-related macular degeneration with 4D Molecular Therapeutics (of Emeryville, CA) using its ddRNAi platform (DNA directed RNA interference). It is also working in other gene therapy including chimeric antigen receipt T cells (CAR-T) to knock out and replace mutant genes in oculopharyngeal muscular dystrophy caused by a known protein, PABPNa.

It is also working on Huntington's Disease, with a Dutch licensee, uniQure biopharma targeting three genes which play a role in the fatal genetic disease.

In addition, its license, Genable Tech Ltd, won European Medicine Agency and US orphan drug designation for a ddRNA1 silencing of the RHO gene mutation causing retinitis pigmentosa, called “RhoNova”. The Dutch firm has now been acquired by Spark Therapeutics (of Philadelphia).

Lastly, BNTC is working with another US firm, Circuit Therapeutics, to develop ddRNAi for pain prevention by silencing a sodium ion channel, Nav1.7, which triggers certain nerves.

All in all the science sounds good (at least to a layperson) but the lack of a top manager and the money for research makes Benitec a troubled investment.

GlaxoSmithKline (GSK) is publishing data on chronic obstructive pulmonary disease drug Breo (US)-Relvar (Europe) FF/VI showing that the combo therapy beat “usual care” in cutting exacerbations of COPD by 8.4%. The new drug does not contain corticosteroids which are part of the usual care. It also can be used against asthma on which data will only come out next year.

The ground-breaking COPD study, in Salford, near Manchester, England, treated patients in a clinical setting. Run by Innoviva Inc, and supported GSK plans to get another respiratory blockbuster. The stock is up.

Irish Alkermes (ALKS) will present at the American Society of Clinical Psychopharmacology in Scottsdale (AZ) June 1 new data on its ALKS 5461 to treat major depressive disorder from two phase 3 studies in patients who do not respond to other treatment. It will also report on plans for a phase 2 trials in patients with schizophrenia who drink too much alcohol for its ALKS 3831, and on several extension studies for its Aristada injection for schizophrenia which is already on the market. As is their wont. 8 c-suite execs at ALKS sold shares yesterday. There is schizophrenia among managers as well as among patients in part because the Irish firm is run from Waltham Mass after it did an inversion.

Indivior (INVVY) rose 3.2% yesterday mainly because sterling rose over a sense that older Britons will not vote to leave the European Union as massively as earlier estimates projected.

I sold Novartis (NVS) at $78.13/sh after getting fed up with its fiddling for charitable donations to people who cannot afford its drugs from Medicare. This caused a charge to the US insurance system but NVS gets to deduct the payment from its taxes. My source for this is Bloomberg Business Week.

NVS stock rose 3.1% yesterday as the Wilhelm Tell faction cheered its cheating Uncle Sam.

Finance

Banco Santander (SAN) is up sharply in Madrid trading today. SAN.

Old Mutual (ODMTY), is preparing to sell its 66%-owned Boston-based US asset management arm to Affiliated Management for cash and a 10% stake in Affiliated. The cash amount to be paid for Old Mutual Asset Mgm (OMAM) was not revealed.

Banco Latinoamericano de Comecio (BLX) led a $59 mn syndication of 3-yr senior notes for another Panama bank. BLX was sole lead arranger and book-runner. Banco Aliado, the 4^th largest bank in Panama, is owned by local entrepreneurs and was founded in 1992. This is the second placement by BLX which sold the notes in China, Curacao, Switzerland, Trinidad, the USA, and, of course, Panama.

Bank of Nova Scotia (BNS) reports before the market opens on May 31.

Oil and Gas

Veresen (FCGYF) is selling its 33 megaWatt Glen Park hydro-electric power plant for US$61 million plus working capital. The distributable cash from Glen Park will be $47-54 mn. The buyer was not named. The power stations in upstate New York require approval from the Federal Energy Regulatory Commission, the very body that tried to derail VSN's pipeline and gas liquefaction project in Oregon. 

Fellow Canadian Computer Modelling (CMG.TO) is benefiting from the decline of exploration because of oil and gas price uncertainties and cost cutting, This makes its simulators of deposits a key for small caps looking to boost their output without spending on new drilling programs. CMDXF spends heavily on research and is coming up with a new Coflow R10 will be replaced by a new R11 version in H2. This is being used by Shell and Petrobras in offshore waters, where budget cuts are great. CMDXF  also plans a 3^rd generation simulator cutout format SR6 system for 2017 for land exploration. It has invested 410 man years in new tech (about C$6.5 mn) and has C$562 mn in working capital so it can continue this spending.

As reported yesterday, Schlumberger Ltd (SLB) was added to the Goldman Sachs “Conviction Buy” list with a $94 target price “given its best-in-class financial, operational, and technical reach.” Analyst Waqaa Syed also thinks the takeover of Cameron gives SLB scale and greater data mining ability. He also predicts SLB will gain from “brownfield development”, more facilities in existing oilfields in the Middle East, Russia, and Latin America and he likes the 2.7% yield.

Funds

Fibra Uno (FBASF) won a coveted buy recommendation from Citi Research today in an analysis of all the REITs (Fibras) in Mexico despite its relatively low yield compared to later entrants. It is the oldest and largest firm in the sector and Citi says current valuation makes this a good buy into a diversified REIT offering good liquidity. Its NAV Citi says is 40 peso/share based on cashflow, and it trades at a premium over its net asset value of only 0.07%. Negatives include its aggressive growth program which can pay off if growth picks up in Mexico and the USA (where many of its tenants come from.) With shopping malls, it will gain from more spending, and with factories for leasing, from more demand.

Citi cites a specific risk with FBASF from self-dealing between the real estate group with runs it and their other holdings. The creation of a special independent administration to oversee its links with the El-Mann property family does not remove this risk. A potential target could artificially boosting its rental income to improve the price it can command if it is part of the family's holdings. (Thanks to Eduardo Garcia of www.sentidocomun.co.mx for getting me the Citi report.)

In addition to the sub of Investor A/B of Sweden (IVSBF), wheelchair tech has attracted Toyota of Japan, which has signed up the inventor of Segway, Dean Kamen, to help the disabled and the old keep on moving. IVSBF is holding up better than the other Swedish holding company, Industrivärden

Tech

Now that it has signed up to produce Nokia-labelled basic cellphones in China, and to acquire Alcatel-Lucent, Nokia (NOK) is planning to lay off about 15% of its staff world wide. It has already begun cutting manpower levels in Finland and Germany, but the latest is that it wants to save $1 billion by 2018. Being Nordic it will help the people let go with a “bridge” program to help the 10,000-15,000 employees let go find new jobs. NOK is up over 2.5% today.