NEW YORK, NY / ACCESSWIRE / July 24, 2018 / Both Reata Pharmaceuticals and LifePoint were trading significantly higher on strong trading volume after Wall Street learned about positive developments from both companies. Reata soared higher on encouraging mid-stage trial results while LifePoint moved higher on merger news.
RDI Initiates Coverage on:
Reata Pharmaceuticals, Inc.
LifePoint Health, Inc.
Reata Pharmaceuticals, Inc. shares closed up nearly 65% yesterday on around 4.1 million shares traded. Average trading volume for the stock is a little under 300,000 shares. The stock hit a new high of $78 after reporting mid-stage trial results for a drug in development for rare forms of chronic kidney disease. The company reported results from two Phase 2 studies of bardoxolone methyl (bardoxolone) in patients with chronic kidney disease (CKD). Per the company's press release, Reata reported positive one-year results for the Phase 2 portion of CARDINAL, a study of bardoxolone in patients with CKD due to Alport syndrome, and positive final results for the Phase 2 autosomal dominant polycystic kidney disease (ADPKD) cohort of PHOENIX. CEO Warren Huff commented, "The results announced today add to the large body of clinical evidence that bardoxolone treatment has the potential to prevent or delay kidney failure in rare forms of chronic kidney disease. Importantly, today's CARDINAL data demonstrate that one year of bardoxolone treatment can improve kidney function in Alport syndrome patients that have had progressive loss of kidney function while on standard of care. Further, the magnitude of the observed retained eGFR benefit after withdrawal of drug versus the historical rate of eGFR loss suggests that the Phase 3 portion of CARDINAL is conservatively powered with respect to the key secondary endpoint of retained eGFR benefit. Additionally, the eGFR increase at Week 12 observed in patients with ADPKD suggests that long-term improvements from treatment with bardoxolone in other forms of CKD may translate to patients with ADPKD." In other news, the company announced proposed public offering of 3 million class A common stock.
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LifePoint Health, Inc. shares closed up 35.49% on about 11.2 million shares traded on Monday. Average trading volume is around 700,000 shares. Shares were on fire after it was revealed that LifePoint and RCCH HealthCare Partners, which is owned by certain funds managed by affiliates of private equity fund Apollo Global Management, LLC (APO) have entered into a definitive agreement to merge. Apollo Global Management will pay around $5.6 billion to buy LifePoint and will combine it with RCCH HealthCare Partners, a health system operator. As part of the deal, LifePoint shareholders will get $65 in cash for each share. The deal is worth roughly $2.7 billion after deducting $2.9 billion in net debt and minority interest. Merrill Lynch analysts wrote, "We believe that LPNT makes some sense as a leveraged buyout (LBO) as it could create some opportunity to sell assets and cut costs. Meanwhile, Apollo could potentially create some synergies that other buyers could not by merging LPNT with its current non-urban hospital operations." LifePoint has also cancelled its previously scheduled second quarter 2018 earnings conference call and web simulcast for Friday, July 27, 2018.
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