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Thursday’s Pre-Market: Here’s What You Need to Know Before the Market Opens

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·4 min read
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U.S. stock futures dipped on Thursday as investors await data related to the pace of recovery in the labor market. The weekly unemployment claims report and the Philadelphia Fed business outlook report for June will be released today.

S&P, Dow, and Nasdaq futures were in red at the time of writing, with 0.3%, 0.2%, and 0.4% lower trading, respectively.

Commercial Metals Company (CMC), Jabil Circuit (JBL), and Kroger Company (KR) are expected to report earnings before the market opens, while Dynagas LNG Partners LP (DLNG), Adobe (ADBE), and Smith & Wesson Brands, Inc. (SWBI) are expected to report after the market close.

Midatech Pharma Plc (MTP) was the most actively traded stock in pre-market trading. Recently, the R&D biotechnology company, which is focused on improving the bio-delivery and biodistribution of medicines, disclosed breakthrough in vitro data. The data reflects Q-Sphera’s capability in the formulation of proteins into long-acting injectable products, along with progress across multiple other programs. Per the company, these results offer opportunities for its Q-Sphera technology.

KULR Technology Group Inc (KULR) was the biggest gainer in pre-market trading as the stock jumped 65.2% at the time of writing. Recently, the developer of next-generation lithium-ion battery safety and thermal management technologies revealed that it has been granted special permission by the U.S. Department of Transportation (DoT) to transport the prototype lithium cells and batteries aboard cargo aircrafts.

The special permit authorizes the manufacture, mark, sale, and use of KULR's specially designed packaging for the transportation of prototype lithium cells and batteries. It also permits them to transport prototype lithium cells and batteries contained in or packed with equipment, the company said.

KULR’s President and COO Keith Cochran said, “KULR's packaging was approved by the US DoT based on its ability to contain potential hazards in the unlikely event that a cell or battery would experience a thermal event. KULR's newly issued special permit allows customers to safely ship prototype batteries that are necessary to advance innovation and contribute to the development of alternative green energy sources.”

CureVac (CVAC) was the biggest laggard in pre-market trading, as the stock plunged 45.8% at the time of writing. Recently, the clinical-stage biopharmaceutical company disclosed results of its second interim analysis of its international pivotal Phase 2b/3 study in about 40,000 subjects (the HERALD study) of CureVac's first-generation COVID-19 vaccine candidate, CVnCoV. At the interim analysis, CVnCoV reflected only 47% interim vaccine efficacy against COVID-19 disease of any severity, and failed to meet pre-specified statistical success criteria.

CureVac CEO Dr. Franz-Werner Haas said, “While we were hoping for a stronger interim outcome, we recognize that demonstrating high efficacy in this unprecedented broad diversity of variants is challenging. As we are continuing toward the final analysis with a minimum of 80 additional cases, the overall vaccine efficacy may change. In addition, the variant-rich environment underlines the importance of developing next-generation vaccines as new virus variants continue to emerge.”

In earnings news, Lennar Corporation (LEN), the home construction company, reported better-than-expected fiscal second-quarter (ended May 31) results. Net earnings of $2.95 per share surpassed analysts’ expectations of $2.36 per share. It also compares favorably with the net earnings of $1.65 recorded in the same quarter last year.

Revenues came in at $6.4 billion, beating analysts’ estimates of $5.88 billion and surged 22% from the year-ago period. Notably, the company witnessed new orders of 17,157 homes during the quarter, a 32% increase. New home deliveries of 14,493 homes were up 14% year-over-year.

Lennar’s co-CEO Jon Jaffe commented, “We continue to focus on production costs and cycle times as the homebuilding industry ramps up to meet growing demand. Lennar is uniquely positioned with our size, scale and production oriented Everything’s Included business model to mitigate the well documented industry supply challenges.”

In M&A news, Elanco Animal Health (ELAN) will snap up Kindred Biosciences (KIN), a biopharmaceutical company, for $9.25 per share, which represents an approximate value of $440 million. This price signifies a premium of 52% based on the 30-day average.

Through this acquisition, Elanco’s expansion plans will speed up its lucrative pet health space, especially in the burgeoning billion-dollar dermatology category. The deal is likely to add an incremental $100 million to the previous innovation revenue guidance range of $500 million to $600 million by 2025, while also offering attractive opportunities thereafter. The acquisition is expected to close during the third quarter of 2021, subject to certain regulatory approvals.

Elanco CEO Jeff Simmons said, “This highly complementary combination is focused in one of the most exciting spaces in pet health, and one where we see a strategic imperative to build a differentiated competitive offering.”

Meanwhile, Viavi Solutions (VIAV) proposes to snap up all outstanding subordinate voting shares and multiple voting shares of EXFO Inc for a total value of $430 million. The transaction values the company at $7.50 a share, representing a 103% premium to the June 4 closing price. The price tag also represents a 25% premium to the $6 consideration offered under the “Going Private Transaction."

If the merger is consummated, the combined company is likely to be a leader in communications, tests, and measurement over the next decade. Furthermore, the combined entity will be able to invest in opportunistic growth areas while achieving greater operating leverage. However, the proposed merger faces opposition from EXFO’s majority shareholder, Germain Lamonde, who insists not considering any alternative change of control transaction.

Extended Stay America (STAY), along with its paired-share REIT, ESH Hospitality, Inc., has closed the deal under which they have been acquired by funds managed by Blackstone Real Estate Partners (Blackstone) and Starwood Capital Group. They were acquired for $20.50 per paired share in a cash deal worth $6 billion. In March, an agreement was signed by STAY to be taken private in a 50/50 joint venture between Blackstone Real Estate Partners and private investment firm Starwood Capital Group.

In other news, one of the biggest car manufacturers and a global leader in battery and fuel cell technology, General Motors Co., (GM) disclosed an increase in its Electric Vehicle (EV) and Autonomous Vehicle (AV) spending by 75% to $35 billion through 2025.

General Motors CEO Mary Barra commented, “GM is targeting annual global EV sales of more than 1 million by 2025, and we are increasing our investment to scale faster because we see momentum building in the United States for electrification, along with customer demand for our product portfolio.”