The Zacks Analyst Blog Highlights: Johnson & Johnson, Novartis, GlaxoSmithKline, Monsanto and Syngenta
For Immediate Release
Chicago, IL – September 4, 2012 – Zacks.com 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 Johnson & Johnson (JNJ), Novartis (NVS), GlaxoSmithKline (GSK), Monsanto Company (MON) and Syngenta AG (SYT).
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Here are highlights from Friday’s Analyst Blog:
J&J, Genmab in Oncology Deal
Johnson & Johnson’s (JNJ) Janssen Biotech, Inc. recently signed a worldwide license and development agreement with Danish company Genmab A/S. The agreement covers Genmab’s oncology candidate, daratumumab.
Daratumumab, a human monoclonal antibody (mAb) which is currently in phase I/II studies, is being investigated for relapsed, refractory multiple myeloma.
Terms of the Deal
Per the terms of the deal, Genmab will receive an upfront payment of $55 million and development, regulatory and sales milestones. Genmab will also be entitled to receive tiered double-digit royalties on global sales of daratumumab. Janssen will fund all expenses associated with the research, development, manufacturing and commercialization of daratumumab.
Moreover, Janssen will make an $80 million equity investment in Genmab which means it will hold about 10.73% of Genmab's share capital once the deal closes. The total value of the deal could exceed $1.1 billion.
In return, Janssen will gain exclusive worldwide rights to the candidate as well as a back-up CD38 human antibody.
While Genmab will be responsible for phase I/II trials (GEN501 and GEN503) with daratumumab, other development, clinical and regulatory filing activities will be handled by Janssen. More than 10 new studies, including phase III studies, will be conducted under the deal. Genmab expects to initiate a phase I/II study of daratumumab plus Velcade in the coming months.
Besides multiple myeloma, daratumumab has the potential to be evaluated for additional indications like acute myeloid leukemia, diffuse large B-cell lymphoma, plasma cell leukemia, follicular lymphoma, acute lymphoblastic leukemia, and mantle cell lymphoma. Genmab said that it expects to evaluate daratumumab for at least three new indications.
Our Take
This deal is a major positive for Genmab. The deal will not only strengthen the company’s financial position in the form of upfront and milestone payments, Genmab will also benefit from Janssen’s expertise and experience in the oncology market. Meanwhile, the deal is in line with Johnson & Johnson’s focus on hematological cancers. The company already has a multiple myeloma product in its portfolio – Velcade.
Customary closing conditions like approval by the Danish Financial Supervisory Authority and clearance by the US antitrust authorities need to be fulfilled for the closing of the deal.
Apart from Janssen, Genmab has deals with other companies like Novartis (NVS), Cormorant Pharmaceuticals and GlaxoSmithKline (GSK).
We currently have a Neutral recommendation on Johnson & Johnson, which carries a Zacks #3 Rank (short-term Hold rating).
Monsanto's New Mobile App for Weeding
Monsanto Company (MON) recently announced the launch of Weed Manager PLUS, a new mobile application for farmers to facilitate effective weed management. This weed management solution is the latest addition to Monsanto’s Roundup Ready PLUS Weed Management Solutions platform. The new application launched at the Farm Progress Show is targeted to manage tough-to-control and glyphosate-resistant weeds.
This mobile application is expected to provide recommendation for effective weed management for crops across the country. Use of endorsed residual herbicide products is currently rewarding for its users as their potential incentives can be easily calculated by Weed Manager Plus.
Moreover, it can be used as a tank mixing tool and has a measurement conversion calculator. The new application is certainly an innovative, decision-making tool targeted toward weed management and can be downloaded from Google Play or the Apple App Store.
Monsanto Company is a global provider of agricultural products for farmers. The company produces seed brands for corn, soy and cotton. It also develops biotechnology traits that assist farmers in controlling insects and weeds, improve drought tolerance, and increase yields.
The company competes with peers like Syngenta AG (SYT). We believe that the company’s R&D and technology investments, though expensive, will drive growth and position it as a technology leader in the upcoming quarters as well.
We maintain a Neutral recommendation on Monsanto in the long run. However, the company holds a Zacks #2 Rank, which translates into a short-term rating of Buy. The Zacks Consensus Estimate for the company is pegged at a loss of 44 cents for the fiscal fourth quarter of 2012.
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Read the analyst report on JNJ
Read the analyst report on NVS
Read the analyst report on GSK
Read the analyst report on MON
Read the analyst report on SYT
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