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Zacks’ Updates: Gilead Sciences, Inc. (GILD), Twitter Inc (TWTR), Tesla Motors Inc (TSLA)

Gilead Sciences, Inc.

Gilead Sciences, Inc. (NASDAQ:GILD) has come up with two important corporate announcements – the company’s third tenofovir alafenamide (TAF)-based HIV drug, Descovy, has gained FDA approval and it has struck deal to acquire Acetyl-CoA Carboxylase (ACC) inhibitor program from a privately held MA-based biotech company, Nimbus Therapeutics.

Gilead announced that the FDA has approved Descovy as a fixed-dose combination for the treatment of HIV. Descovy comprises Gilead’s Emtriva (200 mg; emtricitabine) and TAF (25 mg). The FDA approved Descovy in combination with other antiretroviral agents for the treatment of HIV-1 infection in adults and pediatric patients aged 12 years and above. However, Descovy was not approved for use as pre-exposure prophylaxis to reduce the risk of sexually acquired HIV-1 in adults at high risk.

Moreover, Descovy’s U.S. approval was accompanied with a boxed warning regarding the risks of lactic acidosis/severe hepatomegaly with steatosis, and post-treatment acute exacerbation of hepatitis B.

We note that Gilead has two other TAF-based regimens that recently gained FDA approval for the treatment of HIV-1 infection – Odefsey and Genvoya. While Genvoya is already approved in the EU, Descovy and Odefsey are under review in the same, where a decision could be out in the second and third quarters of 2016, respectively.

HIV is one of the primary areas of focus for the company. Gilead’s has a couple of additional TAF-based single-tablet regimens in its pipeline.

In addition, Gilead and Nimbus Therapeutics have announced a definitive agreement, under which Gilead will acquire Nimbus Apollo, Inc., a wholly owned subsidiary of Nimbus Therapeutics.

With this acquisition, Gilead will gain access to Nimbus’ ACC inhibitor program. The program consists of a lead candidate, NDI-010976 (an ACC inhibitor), and other preclinical ACC inhibitors for the treatment of non-alcoholic steatohepatitis (NASH), and for the potential treatment of hepatocellular carcinoma and other diseases.

Earlier this year, NDI-010976 was granted Fast Track status by the FDA. Meanwhile, phase I data on the candidate will be presented at the annual meeting of the European Association for the Study of the Liver next month.

The deal will see Gilead shelling out an upfront payment of $400 million plus $800 million in development-related milestones over time. Once the acquisition closes, Nimbus Apollo will become a wholly owned subsidiary of Gilead. While Nimbus Therapeutics will retain ownership of its other research and development subsidiaries, Gilead will be completely responsible for the future development and commercialization of NDI-010976 and other ACC inhibitors.

The acquisition is in line with the Gilead’s strategy of strengthening its presence in the liver diseases market. The company already has a strong position in this market owing to its blockbuster hepatitis C virus drugs, Harvoni and Sovaldi. Moreover, the ACC program would boost the company’s NASH pipeline, which currently comprises simtuzumab, GS-4977 and GS-9674.

Per the information provided by Gilead in its press release, NASH, a serious liver disease, affects up to 15 million people in the U.S. and could lead to more serious conditions like inflammation, hepatocellular injury, progressive fibrosis and cirrhosis. It is expected to become the leading cause for liver transplantation by 2020.

Twitter Inc

National Football League commissioner Roger Goodell announced Tuesday that the league has granted the rights to stream its Thursday night games to Twitter Inc (NYSE:TWTR). Goodell actually tweeted the announcement yesterday morning.

The social media site won in a bidding war against Facebook Inc (NASDAQ:FB),, Inc. (NASDAQ:AMZN), and Verizon Communications Inc. (NYSE:VZ), among others.

“Twitter is where live events unfold and is the right partner for the NFL as we take the latest step in serving fans around the world live NFL football,” Goodell said in a statement.

The NFL did not announce the terms of the deal with Twitter. However, the league did say that all Thursday night games will be free on Twitter, and the rights package will also include highlights and pre-game Periscope broadcasts.

“This is about transforming the fan experience with football. People watch NFL games with Twitter,” said Twitter CEO Jack Dorsey. “Now they’ll be able to watch right on Twitter Thursday nights.”

It’s also important to note that this is not an exclusive rights package. In February, the NFL sold the rights to five Thursday night games to CBS, and all Thursday night games are also broadcast on the NFL Network.

The NFL is America’s highest grossing sports league, bringing in about $13 billion in revenue last season. Twitter investors will be happy to welcome the cash cow that is American football, as the company is desperate for new revenue streams.

While it remains to be seen just how much Twitter paid for the rights, this deal is most likely going to be good news for Twitter investors in the long-run. Twitter’s user growth has been stagnant, but this deal will allow the company to further capitalize on its existing users. Furthermore, Twitter is now a valuable outlet for cord-cutters looking to get their NFL fix.

Twitter stock dipped at market open Tuesday, but shares quickly bounced back to their previous close. Of course, the NFL season is a couple quarters away, so it make take some time to see the impact of this deal on the company’s bottom line.

Tesla Motors Inc

Tesla Motors Inc (NASDAQ:TSLA) delivered 12,420 Model S and 2,400 Model X vehicles in the first quarter of 2016. This is significantly lower than its projection of 16,000 vehicle deliveries as well as 17,400 units delivered in the fourth quarter of 2015. However, the first-quarter 2016 deliveries represent a 50% improvement over the first quarter of 2015.

Per Tesla, the lower-than-expected deliveries were a result of low production of Model X in the first two months due to parts shortage. However, production improved significantly to 750 Model X per week by the end of March. This will aid deliveries in the second quarter.

As a result of the ramp-up in production by the end of the first quarter, Tesla reaffirmed its full-year delivery guidance of 80,000–90,000 units.

Meanwhile, Tesla stated that there might be a marginal revision (less than 1%) in the first-quarter delivery figure as it counts a delivery only after the vehicle is handed over to the end customer and the paperwork is accurate. The company further clarified that its quarterly financial results do not depend solely on vehicle deliveries, but also on other factors such as cost of sales, foreign exchange movements and mix of directly leased vehicles.

Tesla started reporting its quarterly vehicle delivery data from the first quarter of 2015 in order to dispel incorrect estimates usually made using erroneous information sources. The electric carmaker now reports its vehicle delivery volume within three days of every quarter end.



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