The Zacks Analyst Blog Highlights: Facebook, AT&T, Array BioPharma, Biogen Idec and Celgene


For Immediate Release
Chicago, IL – May 30, 2014 – announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Facebook (FB-Free Report), AT&T (T-Free Report), Array BioPharma (ARRY-Free Report), Biogen Idec (BIIB-Free Report) and Celgene Corp. (CELG-Free Report).
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Here are highlights from Thursday’s Analyst Blog:

Facebook Seeks EU Approval for WhatsApp

Facebook (FB-Free Report) has sought antitrust approval from the European Union for its purchase of mobile-messaging service, WhatsApp.

In Feb, 2014, Facebook declared its intention of acquiring Whatsapp for a whopping sum of $19.0 billion. The company expected this acquisition to not only expand its mobile product lineup but also to add a predominantly young user base.

Since the time Facebook first floated the idea of acquiring WhatsApp, some European telecom companies have raised concerns about the proposed deal, apprehending that the social network will have a monopoly in the mobile communications market.

Facebook’s WhatsApp is expected to offer free voice-call services by the end of second quarter of this year. It announced that the service will initially be available on iOS and Android and will gradually be extended to Windows and Blackberry users. WhatsApp’s free voice-call service will intensify competition for telecom companies such as AT&T (T-Free Report).

This acquisition has already been approved by the Federal Trade Commission (FTC) in the U.S. This step of seeking approval from the European Union was initiated by Facebook, as it will save the company from multiple regulatory reviews in different European nations.

However, the acquisition deal may be outside the purview of the European Commission as WhatsApp does not earn sufficient revenues to fit into the given criteria. Nevertheless, the commission can take responsibility for the case provided three national regulators raise objection against the same.

Allthough any negative result of the aforesaid review will likely to be a headwind for Facebook, we believe that it will not significantly impact its revenue growth in the near term. Moreover, the decision of the European Union will in no way prevent the closure of the acquisition deal. At the most, it can prevent the usage of WhatsApp in Europe.

Facebook intends to use the services of Whatsapp in its program. Hence, if WhatsApp gets banned in Europe then the growth prospect of the initiative may be hampered to some extent.

Facebook’s rapid pace of acquisitions is expected to weigh down on profitability and cash balance in the near term.

Array Collaborating with Biogen

Array BioPharma (ARRY-Free Report) announced that it has entered into a drug discovery collaboration agreement with Biogen Idec (BIIB-Free Report).

The collaboration primarily relates to the discovery and development of inhibitors targeting a novel kinase for the treatment of autoimmune disorders.

The target and lead inhibitors were discovered through Array BioPharma's proprietary Kinase-Directed Phenotypic Screening Platform.

As per the terms of the agreement, Biogen will be responsible for all aspects of clinical development and commercialization, which includes research funding for three years, various milestone payments and royalties to Array BioPharma.

We note that Array BioPharma, a clinical stage biopharmaceutical company, primarily focuses on the discovery and development of targeted small molecule drugs to treat patients suffering from cancer.

The company currently has seven phase III studies underway or will begin later in 2014. Key candidates in the pipeline include filanesib (ARRY-520), selumetinib and binimetinib. Out of these, filanesib is currently in phase II and is being evaluated for multiple myeloma. Both selumetinib and binimetinib are in phase III and are funded by its collaboration partners.

Array BioPharma has been quite active in collaboration activities in recent times. We remind investors that Array BioPharma partnered with Celgene Corp. (CELG-Free Report) to discover and develop drugs targeting a novel inflammation pathway.

Array BioPharma has received a total of $631.5 million in research funding as well as in upfront and milestone payments from its various collaboration partners since inception till Mar 31, 2014.

Currently, Array BioPharma carries a Zacks Rank #3 (Hold).

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