Harriet Lefton

About the Author Harriet Lefton

Harriet originates from the UK where she worked as a journalist specializing in the metal markets. She graduated from the University of Cambridge before becoming a qualified UK lawyer.

Wednesday’s Market Insights: CoLucid Pharmaceuticals Inc (CLCD), Apricus Biosciences Inc (APRI), Rex Energy Corporation (REXX), Gigamon Inc (GIMO)

CoLucid Pharmaceuticals Inc (NASDAQ:CLCD) shares are trading up 32% in Wednesday’s trading session after announcing an agreement for healthcare giant Eli Lilly (NYSE:LLY) to acquire CLCD for $46.50 per share or approximately $960 million. The transaction is expected to close by the end of the first quarter of 2017. Eli Lilly says that this all-cash transaction will enhance its existing portfolio in pain management for migraines, while adding a potential near-term launch to its late-stage pipeline.

CoLucid is developing oral drug Lasmiditan for the treatment of acute migraines. The drug has already passed one Phase 3 clinical trial and, if the second trial is positive, then the drug could be submitted for US regulatory approval in 2018. Lasmiditan was originally discovered at Lilly and was out-licensed to CoLucid in 2005.

Out of the 3 analysts polled by TipRanks (in the past 3 months), all 3 rate CLCD stock a Buy. The analysts’ 12-month price estimate for the stock stands at $47.67, with a 36.59% upside potential.

Apricus Biosciences Inc (NASDAQ:APRI) shares skyrocketed over 140% this morning after Mexico granted Apricus` commercialization partner, Ferring Pharmaceuticals, market approval for Vitaros, an on-demand topical cream for erectile dysfunction. Apricus Biosciences specializes in advancing innovative medicines in urology and rheumatology.

This is the twenty-sixth country in which the product has been approved- and Apricus CEO Richard Pascoe suggested that there could be further Ferring launches of Vitaros in Latin America throughout the year.

Last year, Apricus expanded its exclusive Vitaros distribution agreement with Ferring to certain countries in Asia (previously Sandoz`s territories), the UK (previously Takeda`s territory) and Korea. Under the agreement, Apricus received $4.5 million from Ferring, in addition to a regulatory milestone payment of $1.6 million.  Apricus is eligible to receive an additional $28 million in regulatory, launch and sales milestones, plus royalties on future net sales.

Rex Energy Corporation (NASDAQ:REXX) shares are soaring nearly 25% as of 11:37AM EST. REXX has just released its two-year financial and operational plan and provided a financial update. The oil and gas company, which has properties in the Appalachian, Illinois, and Permian regions, expects capital spend in 2017 and 2018 of $70-80 million to be aligned with cash flow from operations and asset sales. Rex Energy is also planning a debt-to-EBITDAX reduction of ~50% by the end of 2018 driven by production growth, improved basis differentials and enhanced price realizations. The company is also forecasting exit rate production growth for 2017 of 15% – 20%. However, with only four gross (1.4 net) wells expected to be placed into sales in the first half of 2017, the majority of the company’s production growth will occur in the second half of 2017.

Gigamon Inc (NYSE:GIMO) shares are trading down 28.72% in pre-market trading. The traffic visibility solutions company today announced poor preliminary results for Q4 and fiscal year which ended on Dec 31, 2016

Q4 revenue of $84.5- 85 million missed the company’s prior guidance of $91- 93 million. GAAP gross margin came in at 83-84% while non-GAAP EPS of $0.35 – $0.37 was slightly lower than the company’s prior guidance of $0.36 – $0.38.

Fiscal 2016 brought revenue of $310.3- 310.8 million, an increase of 40% year on year. GAAP gross margin came in at between 81-82% at the fourth quarter midpoint an approximate 280 basis point improvement year-over-year, while non-GAAP earnings per share of $1.22 to $1.25 represented a 50% year on year increase.

“We are disappointed our fourth quarter revenue was below our prior guidance… primarily due to lower than expected product bookings in our North America West region, as several significant existing customer accounts deferred purchasing decisions into 2017” said Paul Hooper, CEO of Gigamon, adding “Looking ahead to 2017… we will continue to invest in sales, marketing and research and development to capitalize on our opportunities in security, mobility and the cloud”.

Out of the 7 analysts polled by TipRanks (in the past 3 months), all 7 rate GIMO stock a Buy. The analysts’ 12-month price estimate for the stock stands at $55.83, which represents an impressive 72.96% upside potential from the current share price of $32.28.