Has Barnes Group (B) Outpaced Other Industrial Products Stocks This Year?
The biggest news this week was Novartis’ NVS announcement of its plans to spin off its eye care division, Alcon, into a new public company. The Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) gave positive recommendations for granting marketing approval to several drugs this week. AstraZeneca’s AZN relatively new cancer drugs, Lynparza and Imfinzi, were granted marketing approval in Japan.
Recap of the Week’s Most Important Stories
Novartis to Spin Off Alcon: Novartis announced its intention to spin off its eye care division, Alcon, into a separately-traded standalone company.
Novartis had acquired Alcon in 2011. Novartis was conducting a strategic review of this business for long, which included retaining the business or a separation via sale, spin-off or an initial public offering.
The decision to spin off Alcon looks prudent as the business was not performing per management’s expectations. Alcon management believes that creating a standalone company via a capital markets exit could create additional shareholder value. The divestiture of this unit should also help Novartis focus on its drugs business. Novartis plans to retain ophthalmic pharmaceuticals as part of its pharmaceuticals portfolio.
Concurrently, the company announced that it will initiate a share buyback program of $5 billion to be executed by the end of 2019. (Read more: Novartis to Spin Off Alcon as Separate Trading Company)
CHMP Gives Positive Opinion to Several Drugs: Bristol Myers’ BMY PD-1 inhibitor, Opdivo gained a positive CHMP opinion, recommending expanded approval for the adjuvant treatment of adult patients with melanoma. The CHMP also gave a nod to AstraZeneca’s new formulation of once-weekly Bydureon in a pre-filled BCise device to help improve glycaemic control. This new formulation is already approved in the United States. Sanofi (SNY) also gained positive CHMP opinion for Cablivi (caplacizumab) for treatment of a rare blood disorder called acquired thrombotic thrombocytopenic purpura. Cablivi was added to Sanofi’s portfolio with its latest acquisition of Ablynx. Novartis’ filing looking for label expansion of its CAR-T therapy, Kymriah, for two B-cell malignancies was also given a positive opinion by the CHMP. The final decision by the European Union on these products is expected in the coming months.
AstraZeneca Gains Japan Approvals for Two New Cancer Drugs: AstraZeneca’s PARP inhibitor, Lynparza gained approval for the second indication in Japan. Lynparza (olaparib) tablets, which are already approved for advanced ovarian cancer, are now approved in Japan for the treatment of patients with unresectable or recurrent BRCA-mutated metastatic breast cancer in patients who have received prior chemotherapy.
Also, AstraZeneca’s new PD-L1 inhibitor was approved by the Japanese regulatory authorities for locally-advanced unresectable non-small cell lung cancer (NSCLC). Imfinzi is already approved in the United States in this indication while an application in the EU is under review, with a decision expected in the second half. (Read more: AstraZeneca’s Two New Cancer Drugs Get Approval in Japan)
Merck’s Keytruda sBLA Gets Priority Review: Merck’s MRK supplemental biologics license application (sBLA) looking to expand the label of Keytruda for first-line treatment of metastatic squamous NSCLC —a difficult-to-treat lung cancer patient population —was granted priority review by the FDA. The FDA’s decision is expected on Oct 30. The sBLA filing was based on data from the KEYNOTE-407 study. We remind investors that data presented from this study stole the limelight at the annual meeting of the American Society of Clinical Oncology earlier this month. Data from the study showed that the combination of Keytruda plus chemotherapy led to significant improvement in both overall survival (OS) and progression-free survival regardless of PD-L1 expression. (Read more: Merck’s Keytruda Gets Priority Review in Difficult Lung Cancer)
Bristol-Myers Leukemia Drug Gets EU Nod for Expanded Indication: Bristol-Myers announced that the European Commission has given marketing approval to its leukemia drug Sprycel for a new patient population and as a new formulation. Sprycel is now approved in a powder formulation for administration in pediatric patients with Philadelphia chromosome-positive (Ph+) chronic myeloid leukemia (CML) in chronic phase (CP).
Adamis Gets a Strong Partner in Novartis: Adamis Pharmaceuticals ADMP announced an exclusive distribution and commercialization agreement with Novartis for its Symjepi Injection (0.3 mg) marketed for the emergency treatment of acute allergic reactions, including anaphylaxis. With the deal, Novartis’ generic arm, Sandoz, gained commercial rights to Symjepi in the United States, in exchange for an upfront fee and potential performance-based milestone payments. Both companies will share the profits equally. Meanwhile, upon approval, Sandoz will also get commercial rights for Symjepi Injection 0.15mg, which is presently under FDA review. Shares of Adamis surged 50% on the day this partnership with the Swiss Pharma giant was announced. (Read more: Adamis Surges Following Novartis Deal for Symjepi)
The NYSE ARCA Pharmaceutical Index rose 2.3% in the last four trading sessions.
Large Cap Pharmaceuticals Industry 5YR % Return
Large Cap Pharmaceuticals Industry 5YR % Return
Here is how the seven major stocks performed in the last four trading sessions:
All the stocks recorded an increase last week with Glaxo GSK gaining the most (3%)
In the past six months too, Glaxo has been the biggest gainer (8.9%) while J&J JNJ declined the most (11.9%).
(See the last pharma stock roundup here: Pharma Stock Roundup: PTCT Unveils Promising Data, RHHBY to Acquire Rest of FMI)
What's Next in the Pharma World?
Watch out for the earnings of some of the bigwigs of the pharma world later this month beginning with J&J on Jul 17.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
AstraZeneca PLC (AZN) : Free Stock Analysis Report
Bristol-Myers Squibb Company (BMY) : Free Stock Analysis Report
Novartis AG (NVS) : Free Stock Analysis Report
Johnson & Johnson (JNJ) : Free Stock Analysis Report
GlaxoSmithKline plc (GSK) : Free Stock Analysis Report
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
Adamis Pharmaceuticals Corporation (ADMP) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research