The New York Stock Exchange is seen in the background of this Wall Street sign 16 August 2007 in New York. The Dow Industrials closed in the positive numbers after dropping almost 340 points earlier in the day on concerns from investors on the bads news of credit and mortgages. (AFP Photo/Timothy A. Clary) More New York (AFP) - Wall Street stocks finished a banner October on a down note Friday, as shares of Canadian pharmaceutical company Valeant plunged again. The Dow Jones Industrial Average ended at 17,663.54, down 92.26 points (0.52 percent) for the day, but up 8.5 percent for October. The broad-based S&P 500 dropped 10.05 (0.48 percent) to 2,079.36, while the tech-rich Nasdaq Composite Index fell 20.53 (0.40 percent) to 5,053.75 Peter Cardillo, chief market economist at Rockwell Global Capital, said US stocks were "consolidating" after the October equity surge and ahead of the monthly jobs report and other key data next week. Valeant Pharmaceuticals International slumped 15.9 percent as it announced it was severing ties with mail-order pharmacy Philidor RX, which has been criticized for predatory pricing of drugs. Dow members ExxonMobil and Chevron rose by 0.6 percent and 1.1 percent respectively after reporting earnings that were much lower than a year ago, but still better than expectations. Both companies said they were cutting capital spending due to lower oil prices. Baidu, China's answer to Google, surged 10.9 percent despite a slump in profit as earnings per share came in 12 percent over expectations and the company said it expects a new travel services partnership to help drive future revenue. CVS Health fell 4.8 percent on disappointment over the pharmacy chain's 2016 outlook. Credit Suisse said the projections for 10-14 percent earnings-per-share growth suggests "momentum has slowed." Drugmaker AbbVie bolted 10.1 percent higher as third-quarter net income more than doubled to $1.2 billion due to strong sales of the arthritis medicine Humira and other drugs. Online travel site Expedia jumped 7.3 percent as third-quarter net income rose 7.6 percent to $283.2 million behind higher booking and advertising revenues. Online professional networking site LinkedIn surged 11.0 percent on a 37.2 percent rise in third-quarter revenues to $779.6 million. Bond prices rose. The yield on the 10-year US Treasury fell to 2.14 percent from 2.18 percent Thursday, while the 30-year dropped to 2.93 percent from 2.96 percent. Bond prices and yields move inversely.
Seeing monoclonal antibodies rank among the top-selling pharmaceuticals, major drug companies are investing in the next generation of engineered antibodies and antibody-drug conjugates (ADCs). In under a week, AbbVie, GlaxoSmithKline (GSK), and Takeda Pharmaceutical signed deals with small technology firms that together could be worth more than $2 billion. AbbVie will pay $40 million up front and up to $645 million in milestone payments to help Argenx develop its . . .
News Article | April 11, 2016
The U.S. Food and Drug Administration has approved a new drug targeting a subset of leukemia patients with a genetic abnormality that makes the cancer harder to treat. It approved sales of Venclexta (VEHN'-clecks-tah) for patients with chronic lymphocytic leukemia who relapsed or weren't helped by a prior treatment and are missing the part of chromosome 17 that kills cancer cells. That allows the blood cancer to worsen. Venclexta is manufactured by AbbVie Inc. of North Chicago, Illinois. AbbVie will market it overseas and will sell it in the U.S. together with Genentech, part of the Roche Group. The drug has a list price of $109,500 for the first year of treatment and slightly higher for subsequent years. Patients can get financial assistance reducing copayments to as low as $25.
The largest ever investment bet by the storied venture firm Founders Fund has paid off. The drug company AbbVie, based in Massachusetts, said it would pay $5.8 billion in cash and stock to take over Stemcentrx, a little-known biotech backed by Founders Fund and whose strategy for treating cancer we first wrote about in September. The deal includes another $4 billion in cash payments if Stemcentrx’s experimental drugs, still in clinical trials, actually pan out. According to Business Insider, the full value would make it one of the very largest acquisitions of a private, venture-backed company in history, possibly trailing only the $19 billion acquisition of WhatsApp by Facebook. The head-turning price tag reflects intense demand for new cancer drugs, but AbbVie is also taking a big risk. “I think that this deal is going to end up looking either very smart or very stupid,” writes Derek Lowe, the well-known drug blogger. About $100 billion worth of cancer drugs are sold annually worldwide and new cancer treatments dominate the list of medicines in clinical trials. Stemcentrx was unusual because its financial backers weren’t well-known biotech VCs. Instead, its largest single investor was Founders Fund, better known for backing outfits like SpaceX and Palantir Technologies, but which believed it could improve the typically low odds of drug success. Brian Singerman, a partner at Founders Fund, tells Fortune the fund managers aren’t space experts either, but still invested in Elon Musk’s SpaceX. Now the biotech “dumb money” looks pretty smart, and that could tempt other venture funds to shift their cash away from social media and software and into biotech, too. "There’s a tsunami brewing," Stuart Peterson, a founder of Artis Ventures and an early investor in Stemcentrx, told Business Insider. "[Cancer] is a big problem that’s meaningful for us on a global basis. This is where we should be focused." Stemcentrx was founded on the theory that certain cancers have stem cells that drive them to spread. It built a slick manufacturing center and a huge colony of more than 18,000 mice. The setup allowed them to try and launch a large number of drugs against different cancers. So far, it has reported results for only one drug, to treat small-cell lung cancer, but has several others in early testing. Clearly, with the sale, Stemcentrx has decided it’s not going to try to be the next Amgen or Genentech on its own. That could be seen as an astute move by Peter Thiel, the investor who leads Founders Fund, and his partners. They and other investors will net several billion dollars in profit, but are letting AbbVie now take on most of the risk, since drugs generally fail in costly human trials. As Thiel told us last year: There is disturbingly little intuition into what biotech companies are worth. If you are able to produce a drug that cures some sizable disease for which there is no cure at all, that is worth billions, or tens of billions of dollars. And if you don’t succeed it’s worth nothing.
Ten years ago, independent analyst Harry Domash focused mainly on growth stocks. He tracked dividend stocks but didn't take them very seriously, terming them "mattress stuffers." But "by the time the smoke cleared, the dividend stocks did the best, though the 'rockets' got all the attention," Domash says. That analysis -- combined with the market crash of 2008 -- persuaded Domash, based in Santa Cruz, California, to concentrate solely on dividend stocks. He now runs Dividend Detective, an analysis and advice site that mines data for stocks that provide steady, if unspectacular, cash flow. Cultivating a portfolio of dividend stocks isn't as boring as it might sound. Analysts and financial planners say it's smart to start with a set like the Dow Dividend list, which includes 30 blue-chip stocks from Apple (ticker: AAPL) to Exxon Mobil Corp. (XOM). But as you become conversant in what comprises an equity that delivers both cash through dividends and growth through appreciating value, you can formulate your own baskets of stocks that share those characteristics. Holdings that blend dividend income and moderate growth are the "core of anybody's portfolio," says David Blount, who manages Eagle equity income strategies based in St. Petersburg, Florida. "We want a robust return, a take-home for the investor, but also growth that protects against inflation." Eagle's underlying holdings for its equity income strategy portfolios deliver a yield of about 3.1 percent, roughly 50 percent more than the Standard & Poor's 500 index, Blount says. It's important to understand the key moving parts of dividend stock analysis, says Abhishek Gupte, dividend stock expert with Mitre Media, publisher of Dividend.com. The yield is a key comparison because it divides the share price by the dividend. If a share is $10 and the dividend is $1, then the yield would be 10 percent. Comparing yields lets you quickly see the comparative value of dividend stocks, but there are important caveats. If a stock's market price drops while the dividend stays the same, the yield will go up -- but the value of the stock in your portfolio will have declined, Gupte says. "You want to invest in a stock that's doing well and that has a good yield," he says. "You want relative yield to be high -- at 2 to 3 percent. People look at a yield of 8 percent and say, wow, let's invest. But that might be due to the fact that the share price is down." That explains the perennial appeal of blue-chip dividend stocks that deliver steady, unspectacular growth and steady, unspectacular dividends. They deliver value on both fronts, Gupte says. "If you're getting a blue chip with a yield of 3 percent to 3.5 percent, that's generally considered a good buy," he says. "Dividends can only grow if there are earnings growth. You want estimates of the next year's earnings to be good. You look at all these factors." Domash has identified these six dividend stocks that are well-positioned to deliver steady growth and consistent cash flow: -- Ford Motor Co. (F), which pays 4.2 percent, is likely to drive growth next year with strong domestic car and truck sales. -- AbbVie (ABBV), a pharmaceutical company with a strong pipeline of new products. AbbVie pays a 4 percent dividend, "which is good for a growth company," Domash says. -- Kraft Heinz Co. (KHC), the recently merged packaged food company, is partly owned by Berkshire Hathaway (BRK.B). It pays 3.2 percent, and growth is likely based on management's dedication to cutting costs and developing new products. -- Target Corp. (TGT) is in turnaround but still yields 3 percent. "It will do well for at least another two years," Domash says. -- Mattel (MAT) is a great example of a company that pays a relatively high dividend -- 5.5 percent -- precisely because its stock has been in the doldrums. A new CEO appears to be resurrecting Barbie and her friends. -- Wells Fargo & Co. (WFC), with its huge mortgage business and strong, plain-vanilla consumer financial services, pays 2.7 percent and is likely to keep it up, Domash says. As you become more conversant in dividend stock dynamics, you might want to look at the payout ratio, which is the proportion of earnings that the company pays to its owners through dividends. A company that earns $1,000 and pays $500 in dividends has a payout ratio of 50 percent. Dividend.com maintains a "dividend aristocrat" list that tracks stocks that have increased their dividends consecutively for more than 25 years.