Novadaq Technologies Inc.
Novadaq Technologies Inc. (NASDAQ:NVDQ) shares are skyrocketing 95% to $11.70, following the news that Stryker (NYSE:SYK) had reached a definitive agreement to acquire all the issued and outstanding shares in Novadaq for $11.75 per share, or $701 million, a 96% premium based on NOVADAQ’s share price at the close of Friday’s trading.
BTIG analyst Sean Lavin commented, “While competition did not materialize to the extent we feared, commercial execution has lagged and shares slid back to ~$6 on missed guidance and lowered Street expectations from a high of ~$24 at one point. Stryker is the logical acquirer for Novadaq since it sells video equipment into operating rooms and has its own fluorescence option that lacks the Novadaq’s technology. We believe adding NVDQ’s IP to Stryker will allow SYK to better grow the fluorescence field and we feel SYK is the most equipped company to do so. We feel that ~8.4x TTM revenue is a bit steep but SYK likely wants to avoid shareholders voting against the acquisition and may be because of a process (We do not know if one was held). We do not expect another bidder to come in. We also do not expect any FTC issues with this acquisition.”
Lavin reiterates a Neutral rating on Novadaq shares, while no price target was provided.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Sean Lavin has a yearly average return of 11.2% and a 60% success rate. Lavin has a average return when recommending NVDQ, and is ranked #304 out of 4570 analysts.
Out of the 4 analysts polled by TipRanks in the past 12 months, 2 rate Novadaq stock a Buy, while 2 rate the stock a Hold. With a downside potential of 12%, the stock’s consensus target price stands at $10.33.
Clovis Oncology Inc
Clovis Oncology Inc (NASDAQ:CLVS) shares jumped nearly 50% in Monday’s trading session after the drug maker announces positive top-line results from Phase 3 ARIEL 3 study of Rubraca in the 2L ovarian maintenance setting. The trial successfully met the series of primary endpoints of improving PFS in tBRCA, HRD+ve, and the all-comer (ITT) patient populations compared with placebo on an investigator assessed basis. The trial also showed significant improvement by independent (BICR) review, which is a key secondary point.
Chardan analyst Madhu Kumar commented, “The ARIEL3 data is a near best-case for Rubraca, showing similar efficacy to other PARPis. While we had previously exhibited some caution on Rubraca ahead of the results in ARIEL3 (“ARIEL3 could fail in an absolute sense (e.g. trial failure) or in a relative sense (e.g. trial success with efficacy inferior to niraparib and/or Lynparza)” from our 15 March 2017 note), today’s results show clear efficacy in the maintenance setting of ovarian cancer. Namely the key secondary endpoint of PFS by independent central review showed differences in the tBRCAmut population of 26.8 vs. 5.4 months for Rubraca vs. placebo, which is as good or better to the PFS benefit seen with Zejula from unrated Tesaro in germline BRCA1/2-mutant (gBRCA) patients (21.0 vs. 5.5 months), and comparable to the PFS benefit seen with Lynparza from unrated AstraZeneca in gBRCA patients (30.2 vs. 5.5 months).”
As such, Kumar upgraded shares of Clovis Oncology from Sell to Hold, while lifting the price target to $50 (from $36). According to TipRanks.com, Kumar has a yearly average return of 3.6% and a 55% success rate. Kumar has a -12.5% average return when recommending CLVS, and is ranked #1871 out of 4570 analysts.