A bright start to the week: With a wave of deal announcements reigniting investor optimism, S&P 500 futures are currently rising 1.14%, with Dow Jones futures up 0.86% and Nasdaq futures up an impressive 1.54%. Tech stocks are performing well so far this morning, with market-leaders Apple up 2.4% and Tesla surging 2.64%.
Deal bonanza: Nvidia shares are rising 6% in Monday’s pre-market, after confirming an agreement to snap up the chip design company Arm Holdings from Softbank in a cash-stock deal valued at $40 billion. The graphic chip behemoth said that the boards of all three parties have approved the transaction. Nvidia will pay $12 billion in cash and $21.5 billion in common stock.
“We believe the acquisition represents a big risk but with potential huge awards” says Needham’s Rajvindra Gill. He notes that Arm IP is ubiquitous in the mobile phone and tablet markets with 95% share, but worries about the anti-trust factors as Arm is the “Arms-dealer” in the semiconductor industry with a long list of customers, which include NVDA competitors.
Gilead is currently down 2% after agreeing to buy Immunomedics for $88 per share in cash. The transaction values IMMU at about $21 billion- a 108% premium to IMMU’s closing price on Friday. The agreement brings Gilead Trodelvy, a first-in-class Trop-2 directed antibody-drug conjugate that was granted accelerated approval by the FDA in April for metastatic triple-negative breast cancer (mTNBC).
JP Morgan’s Cory Kasimov says Trodelvy has blockbuster potential in multiple solid tumor indications- telling investors “this is the type of tangible deal Gilead needs to try and inject some much needed growth into its future outlook.” But he adds that “with a $21B price tag for a deal around a single asset that won’t be accretive for at least 3 years, there’s sure to be some sticker shock.”
Meanwhile ByteDance is pursuing a partnership with Oracle as a way to avoid the sale of US operations of its TikTok business, writes Reuters. According to the Reuters report, Oracle will become ByteDance’s preferred technology partner and will take control of TikTok’s US operations. Additionally, Oracle is also in talks to take an equity stake in TikTok’s US assets. ORCL is now soaring 7% in pre-market trading.
Nestlé S.A. has announced that it has now made a cash tender offer to buy all outstanding shares of food-allergy specialist Aimmune Therapeutics for $34.50 per share in cash. Stifel Nicolaus analyst Derek Archila notes that Nestlé already owns ~20% of AIMT’s outstanding shares. “Given the challenging launch thus far for Palforzia largely due to COVID19 and its cash runway, we think this is an ideal outcome for [AIMT] investors” he said.
And to round it all off, ViacomCBS is reportedly on the cusp of selling CNET Media Group to Red Ventures for $500M, the Wall Street Journal reports.
Corona updates: Phase three trials for the AstraZeneca/ Oxford coronavirus vaccine, AZD1222, have now resumed in the UK following confirmation by the Medicines Health Regulatory Authority (MHRA) that it was safe to restart.
Johnson & Johnson will also kick off Phase 2 trials of its COVID-19 vaccine candidate in Spain on Monday, according to the trial’s unit head Alberto Borobia. The first stage of the Phase 2 trial study of J&J’s vaccine, which will be conducted across three hospitals in Spain, is expected to be concluded by Sept. 22, Borobia told Spanish news agency Servimedia.
Also in the spotlight this morning: Pfizer’s vaccine candidate BNT162b2 could be available to Americans by the end of the year if the ongoing trials show that it is safe and effective, reports CNBC. Pfizer CEO Albert Bourla told CBS that key data from Pfizer’s late-stage trial will be ready to submit to the US FDA by the end of October.
And if the application is approved, then Pfizer is prepared to distribute “hundreds of thousands of doses.” He revealed that the company has already invested $1.5 billion for the development of the potential vaccine. If it does not work, Bourla says: “At the end of the day, it’s only money. But that will not break the company, although it’s going to be painful.”
Dynavax Technologies has announced that it will supply its CpG 1018 adjuvant for Valneva’s SARS-CoV-2 vaccine candidate, VLA2001. It will supply enough CpG 1018 to produce up to 100 million doses of vaccine in 2021, and Valneva has the option to purchase up to an additional 90 million doses through 2025.
And finally, Bloomberg reports that Amazon is hiring 100,000 full and part-time employees across the U.S. and Canada, with wages starting at $15 an hour. “We are opening 100 buildings this month alone across new fulfilment and sortation centers, delivery stations, and other sites,” said Dave Clark, AMZN’s Senior VP of Worldwide Operations.
