For Immediate Release
Chicago, IL – September 19, 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 Life Technologies (LIFE), Bristol-Myers Squibb (BMY), GlaxoSmithKline (GSK), Hologic (HOLX) and Suntech Power Holdings Co. Ltd. (STP).
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Here are highlights from Tuesday’s Analyst Blog:
Life Partners with Bristol-Myers
In an attempt to develop its diagnostics business, Life Technologies (LIFE) entered into a Master Development Agreement with Bristol-Myers Squibb (BMY) for companion diagnostic projects. This represents the second collaboration between the two players, who would work in the areas of oncology and other therapeutic areas. Several ongoing trials in oncology reflect the segment’s immense potential.
The collaboration with Bristol-Myers is in line with the company’s strategy of building partnerships with pharmaceutical majors for companion diagnostic development including participation in early-phase clinical trials. Life Technologies has strengthened its diagnostics franchise with two recent tuck-in acquisitions – Navigenics and Pinpoint Genomics.
The acquisition of Pinpoint Genomics provides Life Technologies with its early-stage non-small cell lung cancer test that can help doctors identify early-stage patients who are at high risk for progression into the late-stage disease. Lung cancer is currently the leading cause of cancer deaths worldwide, claiming close to 1.5 million lives every year. This 14-gene panel test has been developed to run on the qPCR platform. The company plans to launch the test as a laboratory developed test later in 2012.
On the other hand, the Navigenics deal brings in an established, CLIA-certified laboratory licensed throughout the US. This facility will be employed for design and validation of new diagnostics assays. In October 2011, the company formed a partnership to develop a companion diagnostic for GlaxoSmithKline's (GSK) MAGE-A3 cancer immunotherapy. The company also has an assay development partnership with Gen-Probe, which was recently acquired by Hologic (HOLX). Life Technologies also announced collaborations with Boston Children's Hospital and the Hospital for Sick Children in Toronto to develop the company's next generation sequencers for clinical research in pediatric diseases.
Life Technologies enjoys a strong position in the life sciences market. We are optimistic about its recent acquisitions, which we believe will strengthen its diagnostics franchise. However, economic uncertainties in Europe and unfavorable currency were the major headwinds for Life Technologies during the last reported quarter.
Our Neutral recommendation is backed by a Zacks #3 Rank (‘Hold’) in the short term.
Suntech Restructures to Lower Costs
Suntech Power Holdings Co. Ltd. (STP) has closed a portion of its solar cell production capacity in Wuxi, China for the time being. The move comes after the company plans to reduce production cost and operating expenses.
As a result of the initiative, the company’s operational solar cell capacity will be temporarily reduced to 1.8GW. However, module capacity and wafer capacity will remain at 2.4GW and 1.6GW, respectively. This consolidation process will affect approximately 1,500 employees in China. However, the company is planning to offer positions to majority of the employees at other production facilities.
Excluding non-recurring items, the company intends to reduce its operating expenses by 20% year over year. Also, the company targets to create a sustainable business model as well as return to positive operating cash flow in 2013 with the help of these attempts. The company is currently assessing the impairment charges related to the closure of facilities, severance payments and other related expenses. It plans to disclose those expenses with the third quarter of 2012 earnings results.
The need to take up such program comes in light of the preliminary U.S. anti-dumping tariff, the European anti-dumping investigation, and oversupply of solar modules. The company aims at right-sizing its production capacity and continues to make best use of the resources of the organization. The company aims to make its manufacturing base small in order to lower the production cost, increase utilization rates and improve product performance. Moreover, it expects panel cost to improve as the production will be concentrated at the company’s highest efficiency and lowest cost manufacturing facilities.
Suntech Power Holdings is one of the largest producers of crystalline solar cells and modules, serving geographically-diversified customers. The company is prudently expanding its revenue base to divergent markets around the globe, while increasing megawatts shipped. Positive factors include ongoing expansion programs, higher conversion efficiency through its Pluto technology-enabled modules, China’s subsidy program and improving operating efficiencies.
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