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158 posts categorized "Stock news"

July 01, 2014

Mayo Clinic-linked Cardio3 making push into China

Cardio3 BioSciences, a Belgium company working closely with Mayo Clinic, recently launched a joint venture in China, the third largest pharmaceutical market in the world.

Cardiobioscience_jpegWorking with Hong Kong-based Medisun International Limited, it created Cardio3 BioSciences Asia Holdings Ltd. to make a serious push into China. As part of the deal, Medisun purchased $34 million in stock. It now owns 8 percent of the company's outstanding shares.

Cardio3 is publicly listed on the European stock markets NYSE Euronext Brussels and NYSE Euronext Paris, though it is not traded publicly in the U.S. Get_photo

The company says that $34 million will finance the U.S. clinical trials for C-Cure, Cardio3's regenerative heart treatment. Cardio3 CEO Dr. Christian Homsy flew to Rochester in January for a press conference at Mayo Clinic to announce that U.S. trial. Mayo Clinic in Rochester is one of the trial sites. Homsy gave a tentative time line of commercialization in Europe possibly by 2017 and by 2018 in the U.S.

Medisun has also committed to buy an additional $34 million shares of Cardio3 stock from existing shareholders in the next eight month at a price per share equivalent to the 10 days average preceding the offer.

This new deal means Medisun's ownership of Cardio3 has quickly leapfrogged Mayo Clinic's investment. As of June 16, Mayo Clinic owned 5.05 percent of the available shares of Cardio3. Medisun had just 4.21 percent at that point. As of June 25, Mayo Clinic controlled 3.1 percent of the shares.

Mayo Clinic researchers Dr. Andre Terzic and Dr. Atta Behfar originally developed the proprietary process of regenerating heart tissue with stem cells drawn from a patient's own bone marrow. Since 2007, Cardio3 has licensed patents and related research from Mayo Clinic. Terzic and Behfar each have a financial interest in the company.

Homsy has previously stated that he hopes to eventually base a few employees in Rochester for office and laboratory work. Cardio3 previously attempted to open a U.S. headquarters here, but that fizzled when the one person based here left.

Many consider what Cardio3 is attempting as the "holy grail" of cardiac treatments. Terzic previously described repairing faulty hearts as a "major unmet need worldwide." He estimated about one-third of all deaths stem from heart disease.

To date, the promising company has raised $121 million in equity and capital.

A recent study also estimated that the global market for such treatments could grow to $18.2 billion by 2019. The U.S. market was valued at $6.1 billion in 2012, with potential to increase to $8.49 billion by 2019.

“With this presence in Greater China, we are very proud to become the first global player in the field of cardiac regenerative medicines, aiming to commercialize our leading edge cell therapy to patients all across the globe,” stated Cardio Chairman Michel Lussier in the announcement of the venture.

Medisun Chairman Danny Wong says that his company is organizing medical conventions in August "to promote cell based medicines as well as Cardio3’s technology" in both Beijing and Shanghai.

"We are passionate about this project and I am certain that our involvement with Cardio3 as a leader in this field, combined with our local knowledge of the regulatory, healthcare and market access capabilities and expertise, will bring success to all the parties involved,” said Wong.

All the costs of Cardio3's moves in China will be funded by Medisun, with a minimum of $27 million committed during a three year period. Cardio 3 has 40 percent ownership in the joint venture, which will drop to 30 percent when clinical trials are up and running.

Success of the Phase III clinical trials that allow Cardio3 to market C-Cure in Asia would trigger  royalties ranging between 20 and 30 percent of net sales depending on total revenue of the joint venture.

May 28, 2014

Analyst speculates that Hormel may be target of takeover bid

There's a lot of merger and acquistion activity cooking in the meatier aisles of the financial markets these days.

Spammy2The latest was Pilgrim Pride's surprise move to buy Hillshire Brands. Lots of investors with stock options profited from the $6.4 billion deal and that's leading to speculation about the next meat deal to hit the grill might be.

I spotted a very speculative column today on Barron's website by Scott H. Fullman of investment research firm, Increasing Alpha, on that topic. Fullman focused Austin's favorite Fortune 500 company and the creator of Spam, Hormel Foods, as a takeover candidate.

I have no idea if his theories make sense.

Here's some from Fullman's piece:

"Often when such an acquisition takes place, we look for other candidates. One stock seeing increased interest re Spamproductscently is Hormel Foods Corp, which rose back above its 100-day moving average Tuesday and was attempting to break above its 50-day moving average, but ended the day just below it. Momentum is rising sharply and volume is higher as well.

We are seeing a slight increase in implied volatility for Hormel, even as the shares jumped. The 30-day implied volatility is up more than 0.7% for calls, and down 0.8% for puts, indicating a sharp shift in bullish sentiment.

Despite the rise, those risk premiums are still close to their 52-week lows. Clearly, other traders are having the same thought as we are.

If you are looking for a low-cost, low-dollar-risk entry, consider purchasing the Hormel July $50 calls, which are offered at 40 cents. The delta on that option, which shows the current relationship between the movement of the stock and the option, is 23%, but it is expected to rise as the call becomes closer to being at-the-money, thereby increasing the leverage of the option. If the stock rises 10% from here to $52.58, the options will be worth $2.58, for a gain of $2.18 per share, or 545%. If the shares fail to rise, you will lose 40 cents per share, or 100% of your investment.

That compares, however, to a potential loss of $1.14 for those purchasing shares if the stock reverts to Friday's closing price.

Our suggestion is to purchase an equivalent number of calls to the amount of stock you can afford to buy, thereby keeping your risk in check.

December 05, 2013

Breast cancer scanner maker, once linked to Mayo Clinic, sold to Mexican company

Qg3q4q112233Here's a potentially interesting nugget of news about San Diego-based Naviscan Inc., which was at one pointed linked with Mayo Clinic through intellectual property licenses as well as direct investment by Mayo Medical Ventures.

"… Certain Naviscan Inc. assets including intellectual property and the Naviscan Trademark" have been aquired by a Mexican medical scanner company called Compañía Mexicana de Radiología or CMR.

Not sure what that means exactly, but my guess is that CMR is now behind the steering wheel at Naviscan.

Now I don't know if Mayo Clinic still has any links with Naviscan, but it certainly did at one time. I've got calls into Mayo and Naviscan to check on that.

I wrote the Mayo Clinic-Naviscan relationship back in 2005 through 2007 or so. Sheesh, I've been doing this for a long time.

From back in November 2005:

Naviscan “entered into an agreement with Mayo Foundation for Medical Education and Research (Mayo Clinic) to clinically validate and commercialize a dynamic patented molecular imaging agent for use with Positron Emission Tomography (PET) and other imaging modalities. … Mayo Clinic has licensed the vitamin B-12 molecular imaging agent technology invented by Dr. Douglas A.Collins to Naviscan PET Systems, Inc and will receive royalties from this license. Researchers at the Mayo Clinic have published studies that cancers have high uptake of radioactive B-12, especially in breast tumors."

    --------------------
"The combination of the Mayo Clinic’s patented Vitamin B-12 molecular imaging agent and Naviscan’s high-resolution PET scanner holds great promise for the future in terms of early detection of breast cancers,” said Paul Grayson, newly-appointed CEO of Naviscan PET Systems, Inc. and a Managing Director of Sanderling Ventures. “We sought out Naviscan’s technology to strategically invest in this important imaging technology platform.” Naviscan is planning clinical trial work with Mayo Clinic and other luminary sites in the U.S. to prove the value of the PEM Flex in breast cancer patients, as well as for evaluating PEM’s role with high-risk patients.”

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From the same date in 2005:

“Naviscan PET Systems has raised a $6.5 million in Series B funding for its high resolution positron emission tomography (PET) products. The firm said that it raised the round from Sanderling Ventures, with participation from Mayo Medical Ventures."

FYI, Sanderling Ventures now leases a space in the Mayo Clinic Business Accelerator.

November 14, 2013

Rochester Medical shareholders OK acquisition

Rochester Medical Corp., Stewartville's largest employer, became a  subsidiary of New Jersey-based C.R. Bard at 8 a.m. today following Wednesday's overwhelmingly positive shareholder vote.

Votes representing 8.4 million shares were counted in a Minneapolis board room of the law firm Dorsey & Whitney. The $262 million deal was approved by a vote of 8.1 million in favor to 179,156 against. Another 12,054 abstained. Rochester Medical had 12.3 million outstanding shares that were eligible to vote.

Rochester Medical's Chief Financial Officer David Jonas said the vote tally took about 30 minutes. About 20 people attended the voted.

Shares of Rochester Medical were trading at $20 at the close of the market on Wednesday.

Representatives of C.R. Bard are scheduled to discuss their future plans at an all-employee meeting Friday morning at the catheter manufacturing facility. Rochester Medical has about 250 employees in Stewartville with a total of 400 worldwide.

While no specifics have been discussed about what will happen to the Stewartville facility or its employees, the president of Bard’s Medical Division made encouraging comments to staff in September.

"We are making this merger because we really believe you have got a ton to bring to us. These are additive, these two companies. There is not a ton of overlap," said Peter Curry, according to documents filed with the  U.S. Securities and Exchange Commission.

This acquisition marks the end of the local ownership of the 25-year-old company co-founded and run by CEO Anthony Conway and his brother, Vice President Philip Conway. The CEO has previously said that he and his brother will remain "deeply involved in the transition … ensuring that our new products will get to market in a very timely fashion."

November 06, 2013

Mayo Clinic-linked Cardio3 Biosciences stock surges

On the record, everybody always says that competition is good. I actually suspect many of the businesses that say that don't really believe that. However, here's a concrete example of competition directly bringing in money for a company.
Cardio3 BioSciences, the Belgium biotech firm based on Mayo Clinic research, saw its stock on the NYSE Euronext stock exchanges in Brussels and Paris spike this week after a competitor, Mesoblast, got the greenlight from the FDA to start clinical trials of its C3bs_logosimiliar regenerative treatment.
Cardio3's therapy uses stem cells from a patient's  bone marrow. Through a proprietary process called Cardiopoiesis, Cardio3 re-programs those cells to become heart cells. The cells are then injected back into the patient's heart to repair damaged tissue.
As a shareholder, Mayo Clinic controls 10.44 percent of Cardio3's stock, according to Cardio3.
Here's some from a Tuesday piece by Simeon Bennett of Reuters about this week's bump.

Cardio3 advanced 50 cents to 24.50 euros at the 5:35 p.m. close of trading on Euronext Brussels, giving the Mont-Saint-Guibert-based company a market value of 155.2 million euros ($209.1 million). More than 544,000 shares were traded, 38 times the three-month daily average. The stock has surged 78 percent in the past eight trading days.

Mesoblast Ltd., an Australian company that’s using similar technology, rose to an eight-month high on Nov. 1 after saying it gained Food and Drug Administration approval to start a late-stage study with its partner, Teva Pharmaceutical Industries, of its stem cell in patients with heart failure.

That development “makes us quite confident in seeing the technology as an emerging one, and more than that, an approvable one,” Arnaud Guerin, an analyst with Portzamparc Societe de Bourse in Nantes, France, said by phone today.

August 26, 2013

Fool speculates on IBM's end being nigh

The MoUrltley Fool financial services firm posted an interesting take about IBM and its possible future on its website today.

Analyst Adrian Campos wrote an article called, "Why IBM's End Could Be Near." Kind of scary sounding. I'm sure Big Blue and investors aren't too worried since it was written by a card-carrying Fool.

FYI, here's why the firm uses the Motley Fool name:

The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Here's some from Campos' article:

IBM is having a rough year, producing a negative 6% return so far. The company had a wonderful come-back in the 90s thanks to its cost reductions and shift toward software and consulting, wh130110ibmwalljan10jkich led to amazing financial performance for a decade.  And since 2002, revenue, gross profit, and operating profit have compounded at annual rates of 3%, 6%, and 12%.

However, the current situation is totally different. IBM may need a transformation and re-engineering of its business. According to many IBM fans, that shouldn't be a big problem because IBM has been able to change several times in the past: this is just another time. Bears, on the other hand, keep reminding us that this time is different. What kind of future awaits IBM shareholders in the short and long run?  

Is IBM's end near?

In the first quarter of 2013, for the first time in 8 years IBM missed earnings expectations: sales declined 5%, posing a strong risk to IBM's long-term business, as two-thirds of its revenue base is recurring.

Full-year earnings guidance of $16.70 were just $0.07 below the consensus. But these $0.07  reflected long-term changes in the main markets IBM addresses: a contraction in global demand for IBM's high-end systems & hardware, and growth limits in the private cloud computing segment. These long-term trends started hurting IBM's cash flow already in 2009 and the $0.07  should have been seen as the beginning of a series of disappointments and pain for shareholders. 

Unfortunately, the second quarter results did not show the kind of substantive change that investors were looking forward to. IBM did beat the consensus by a tiny margin.

That was just not enough.

Ibm-logoAnalysts had kept estimates low but their expectations were actually higher: they tacitly were expecting a major change in business focus, which did not seem to happen. As a result, institutions from Credit Suisse to UBS downgraded the stock. It's simple to understand the downgrades: margins were down 3% from last year. The elephant is spending the same or more money, but making much less than before. 

Now, similar results coming from other companies in the software and services sector, like Oracle, show that the whole industry is in trouble. But to make matters worse, IBM still has 34% (hardware + System Z server sales) of its revenue coming from the commodity-like hardware segment, which is even riskier than the services segment, because of increasing competition from Intel's cheap machines.

Wrong focus?

In "IBM: The End is Near,  investor Arne Alsin identified a massive paradigm shift as the root of all of IBM's problems. The industry is moving to the public cloud: low-cost yet powerful computing architecture. IBM's main products (e.g. System Z and private cloud solutions), on the other hand, depend on the old paradigm--the private cloud, a soon-to-be legacy business.

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Final foolish thoughts

I agree with Alsin in the sense that the demand for expensive, multi-million dollar systems (let them be private clouds or something else) is contracting. Companies are moving to the public cloud instead. Expensive frameworks and commodity-like x86 servers are becoming endangered species.

That being said, I also don't want to underestimate the ability of IBM to change its business radically. Big Blue has done it several times. The latest time was when it exited the PC business in 2004 by divesting its PC unit to Lenovo. This was done 2 years after HPQ acquired Compaq and at a moment where the PC business was still strong. The elephant prioritized the sustainability of the business rather than meeting the street consensus for the next quarter.

A similar strategy and radical changes of focus are in great need again. This goes beyond acquiring companies with strong exposure to the public cloud (IBM recently acquired SoftLayer for $2 billion, 5 times revenue).

Finally, there will always be demand for expensive private clouds, for institutions willing to pay 100% more in price for an additional 5% safety improvement. What IBM needs to do is to reduce the exposure to such business, as soon as possible. In the meanwhile, the safety of having institutional clients and its vast resources will allow Big Blue to survive, but don't expect superb returns during the transition. It's gonna take a while, since it's just starting!

January 24, 2013

FTC OKs 'early termination' of Hormel/ Skippy deal

It looks like the Hormel folks in Spamtown USA might be able start spreading the peanut butter goodness in the near future.

TerminationRemember the deal where Austin-based Hormel made a deal with Unilever to buy the Skippy peanut butter brand for $700 million?

Well, the Federal Trade Commission granted Hormel's request for "early termination" this week. In case, like myself, you aren't sure what 'early termination' means, here's what that means:


Any person filing an HSR form may request that the waiting period be terminated before the statutory period expires. Such a request for "early termination" will be granted only after compliance with the rules and if both the Federal Trade Commission and Department of Justice Antitrust Division have completed their review and determined not to take any enforcement action during the waiting period. In some instances, after a Request for Additional Information and Documentary Material has been issued, the investigating agency will determine that no further action is necessary and terminate the waiting period before full compliance with the Second Request is made.

So it sounds like a good thing. The deal has been given the green light to speed ahead.

Can the new peanut butter favored Spam be far away? Heh.

April 04, 2011

Hormel Foods issues $250 bond notes

The only Fortune 500 company based in Austin - Hormel Foods -issued $250 million in bonds today.

Spamproducts It seems Moody's Investors Service sees Hormel as a solid investment, because it rated the offering at A2. An A2 rating means the bonds are judged to be high quality.

Here's some from Moody's announcement of this rating and the Hormel bond offering.

Moody's Investors Service assigned an A2 rating to $250 million of 10-year senior unsecured notes issued today by Hormel Foods Corp. The rating outlook is stable.

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Spammy2 Hormel intends to use the proceeds from the notes offering for general corporate purposes. Hormel has $350 million of senior unsecured notes coming due on June 1, 2011, but has enough cash and marketable securities (about $650 million at the end of January 2011) to retire the maturing notes without refinancing.

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Hormel remains lightly leveraged with over $750 million of EBITDA, and on a proforma basis, only $250 million of funded debt and over $500 million of cash and marketable securities.

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Having worked though an industry over-supply of turkey meat last year in the Jennie-O-Turkey Store segment, Hormel is likely to generate strong performance in most of its five operating segments.

However, Moody's remains cautious about the operating environment this year for Hormel's Grocery Products segment.

While we expect that economic conditions will continue to improve gradually in 2011, price competition is likely to remain intense even as input costs rise as consumers remain sensitive to retailer prices. Thus, some of Hormel's premium categories -- such as the highly-competitive convenience meals -- could experience flat sales growth and further margin pressure in the near-term.

 

 

March 31, 2011

Rochester Medical gets green light

Stewartville's favorite silcone catheter maker, Rochester Medical, got a green light Wednesday for its $10.5 million purchase of a medical supplies company in the Netherlands.

RochmedicalcatheterBack in January, Rochester Medical announced an acquistion deal to buy a company called Laprolan B.V. from its parent firm of Fornix N.V.

Shareholders of Fornix voted to approve that deal this week. The sale is expected to close soon.

The acquisition fits with the international focus at Rochester Medical, which tallied about $42 million in sales last year.
The company exports the majority of the catheters it makes in Stewartville to European markets.

When asked if this addition could spur any expansion to the facilities in Stewartville,  Rochester Medical's CEO and president said back in January that it could eventual drive growth.

We will definitely will be expanding in Stewartville," Jim Conway said in January. "We'll need it. Just this quarter, we've expanded our domestic sales staff (based in the United States) from 12 people to 40."

January 21, 2011

IBM gives $1,000 bonuses for good 2010

 Spotted a couple articles today on InformationWeek and Bloomberg today about IBM giving non-execs $1,000 stock bonuses last year's performance.

A memo from the Big Blue Boss Sam Palmisano is reported as stating all non-executive employees who performed consistently during the execution 130110ibmwalljan10jkof the company’s 2010 strategic plan will get the bonus.

I wonder how many of the IBMers in Rochester will get this bonus?

IBM, which doesn't release any specific employee numbers any more, is not saying how many of its about 400,000 staffers will get this.

The shares will vest in 2015.