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The Zacks Analyst Blog Highlights: Bayer, Seattle Genetics, Roche, Actelion and Anadarko Petroleum

Zacks Equity Research

For Immediate Release
 
Chicago, IL – November 29, 2013 – 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 the Bayer ( BAYRY- Free Report), Seattle Genetics Inc. ( SGEN- Free Report), Roche ( RHHBY- Free Report), Actelion Ltd. ( ALIOF- Free Report) and Anadarko Petroleum Corp. ( APC- Free Report).
 
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .

Here are highlights from Wednesday’s Analyst Blog:

Bayer Eyes Norwegian Oncology Firm
 
The HealthCare segment at Bayer ( BAYRY- Free Report) offered a preliminary acquisition proposal to a Norway-based oncology firm, Algeta ASA. The news was confirmed by the Board of Directors at Algeta. Bayer has offered NOK 336 (approx. $55.11) per share for Algeta.
 
The companies are currently in discussion and only time will tell whether the preliminary proposal will convert into a concrete agreement. We remind investors that Bayer’s association with Algeta goes back to 2009 when the companies entered into a partnership agreement to develop and commercialize their oncology drug Xofigo (radium-223) in the global markets.
 
Bayer has been pretty active on acquisition and collaboration this year, especially to boost its oncology portfolio. In Oct 2013, Bayer entered into a master collaboration agreement with Sysmex Inostics, a diagnostic company, for the development of companion diagnostics for targeted oncology therapies. As per the agreement, Sysmex Inostics’ innovative blood-based companion diagnostic solutions will be used to develop Bayer’s anti-cancer agents.
 
Moreover, in Jun 2013, the company inked a collaboration agreement with Seattle Genetics Inc. ( SGEN- Free Report) to gain worldwide rights to Seattle Genetics’ auristatin-based antibody-drug conjugate ( ADC) technology along with antibodies to several oncology targets. As per the terms of the deal, Bayer will be responsible for the development, manufacturing and commercialization of all products under the agreement.
 
We are encouraged by the company’s efforts to boost its oncology portfolio by acquisitions and collaborations. However, companies like Roche ( RHHBY- Free Report) have a strong presence in the oncology market at this moment.
 
Bayer, a large-cap pharma stock, presently carries a Zacks Rank #2 (Buy). Some other stocks worth considering include Actelion Ltd. ( ALIOF- Free Report). Actelion holds a Zacks Rank #1 (Strong Buy).
 
Anadarko Downgraded from Outperform
 
On Nov 26, 2013, we downgraded our recommendation on Anadarko Petroleum Corp. ( APC- Free Report) to Neutral from Outperform. The oil and gas exploration as well as production operator currently carries a Zacks Rank #3 (Hold).
 
Why the Downgrade?
 
The downgrade takes into account the company’s spiraling operating costs and volatility in oil and gas prices. Anadarko’s third quarter 2013 earnings lagged our expectations significantly as profit declined 15.6% from the year-ago quarter.
 
These negative factors have been reflected in downward estimate revisions. In the last 30 days, the Zacks Consensus Estimate for 2013 decreased by 21 cents to $4.29 per share.
 
Causes of Concern
 
The renewed spurt of political conflict in Mozambique could jeopardize the company’s multi-billion dollar exploration initiatives and might deter its future investment opportunities in the region. Moreover, foreign exchange restrictions and fluctuation in international currency relative to the U.S. dollar are factors that might constrain the company’s performance.
 
Furthermore, Anadarko’s operations are subject to risks related to unexpected natural disasters. The Colorado flood in Sep 2013 affected Anadarko’s activities leading to the shut-down of 675 operated wells in the region. Its deep sea operations are time consuming, resulting in lags in production which could lead to increased costs.
 
However, the company’s expanding interest in the Gulf of Mexico’s Coronado discovery and service startup of the Texas pipeline asset are expected to lend substantial upside.

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