Merck to Buy Acceleron Pharma for $11.5 Billion
Topic of the day
Merck & Co. (+1,3%) has agreed to buy Acceleron Pharma Inc. for $11.5 billion, bolstering the pharmaceutical giant’s rare-disease business. The cash deal values Acceleron at $180 a share, the companies said Thursday. The deal is one of Merck’s biggest and represents a bet on treatments for respiratory and blood diseases that Acceleron specializes in. Shares of Acceleron rose dramatically last week, increasing from a closing price of $139.55 on Sept. 20 to $167.65 on Sept 24. On Thursday, Acceleron lost 1.9% after jumping 25.7% since 20 September. Acceleron’s crown jewel is an experimental drug for pulmonary arterial hypertension, a disease caused by high pressure in the blood vessels leading from the heart to the lungs. The condition leads to less oxygen in the blood. Companies including Johnson & Johnson sell pulmonary arterial hypertension therapies. Yet Acceleron’s drug, called sotatercept, promises to be the first that doesn’t just treat symptoms and slow down the disease, but could potentially stop it. Merck beat out other potential suitors for Acceleron, said a person familiar with the matter, including Bristol-Myers Squibb Co., which already owns a big stake in the company. The companies expect the deal to close in the fourth quarter.
After the two previous days with initially heavy losses and then a similar recovery, things were calmer on the Swiss stock exchange on Thursday - at least with regard to the SMI. It closed 0.1 per cent up at 11,642 points. Among the 20 SMI stocks, there were 11 price losers and 9 price winners. 36.49 (Wednesday: 31.66) million shares were traded. The price fluctuations of both the winners and losers did not go beyond the 1.2 per cent plus for Roche. The Swiss pharmaceutical company had reported a trial success with its Covid-19 drug Ronapreve. According to the report, the results showed a "significant" reduction in viral load. Among the second-tier stocks, Sulzer was in focus, with its share price plunging almost 35 per cent, or 47.90 francs. Sulzer spin-off Medmix got off to a bad start on the stock market. The first price was 45 francs, which corresponds to an implied market capitalisation of 1.857 billion francs. In early trading, the stock fell low to 41.60 francs and closed at 44 francs. The precision equipment manufacturer is the result of a spin-off from the Sulzer industrial group, which took the form of a spin-off in which existing Sulzer shareholders received one Medmix share in addition to each Sulzer share. Adjusted for the spin-off, Sulzer was down just under 3 percent.
European equity markets fell on Thursday as investors opted for caution ahead of a vote in Congress on the next US budget. The Stoxx Europe 600 index fell 0.1% to 456.4 points. In Paris, the CAC 40 and SBF 120 were down 0.6% and 0.5%, respectively. In Frankfurt, the DAX 40 lost 0.4% and the FTSE 100 in London dropped 0.1%. Eutelsat (+15%) said it had rejected an "unsolicited, preliminary and non-binding" takeover proposal from businessman Patrick Drahi for €12.10 per share. In the wake of Eutelsat, shares in its Luxembourg-based, Paris-listed rival SES rose 5%. European airline shares fell, hurt by fears of rising fuel costs. Air France-KLM gave up 7.5% in Paris, Lufthansa lost 4.6% in Frankfurt while easyJet and IAG gave up 2% and 3.9% respectively in London. McPhy (+2%) will supply 16 megawatts of high power electrolysis to the Centrale Electrique de l'Ouest Guyanais (CEOG). Gianbeppi Fortis, chairman of the board of Solutions 30 (-5.3%) confirmed his "ambition to strengthen [the] shareholder structure" of the digital assistance service provider on Wednesday in a conference call with journalists. British spirits maker Diageo (+1.1% in London) said its financial year to the end of June 2022 is off to a good start and that its organic operating margin should benefit from the continued recovery in sales volumes. Swedish fashion group H&M (-3.3% in Stockholm) will resume dividend payments after a larger than expected rise in third quarter net profit. The group has proposed a dividend of SEK 6.50 per share, to be paid in November this year. Shares of Sweden-based cloud computing company Sinch AB added 4.7% after it said it had acquired email-delivery platform Pathwire. Semiconductor equipment maker ASML Holding said it expected to see higher revenue by 2025 due to strong demand for electronics; shares rose 3.1% in Amsterdam trading.
A selloff in shares of cyclical companies drove major indexes lower Thursday, capping a tumultuous September that marked the S&P 500’s worst month since March 2020. All three major U.S. indexes finished the day lower after a choppy session. Stocks jumped to start the day, but then quickly wobbled and turned negative, with losses accelerating in the final minutes of trading. The Dow Jones Industrial Average fell 546.80 points, or 1.6%, to end at 33843.92, weighed down by losses in companies ranging from machinery giant Caterpillar to home-improvement retailer Home Depot. The S&P 500 lost 51.92 points, or 1.2%, to finish at 4307.54. The Nasdaq Composite edged down 63.86 points, or 0.4%, to 14448.58. After a long stretch of gains for the U.S. stock market this year, September was the month when percolating investor anxiety finally came to a head, forcing all three major indexes lower. The S&P 500 tumbled 4.8% in September, its largest monthly decline since March 2020, when the coronavirus pandemic spurred a selloff. The Dow Jones Industrial Average slid 4.3% for September, while the Nasdaq fell 5.3%. Investors have navigated more uncertainties lately, including concerns that higher inflation—driven in part by supply-chain issues—will stick around longer than expected. Also dogging markets recently were fears of contagion from debt-laden property developer China Evergrande Group, as well as data that has shown that U.S. economic growth is starting to slow. Continuing wrangling in Washington has weighed on investors’ minds, too. Congress on Thursday passed a bill extending government funding through Dec. 3. On Thursday, many growth stocks were the ones to outperform, while financials, industrials and consumer-staples stocks suffered. Netflix gained $11.28, or 1.9%, to end at $610.34, while Advanced Micro Devices jumped by $2.55, or 2.5%, to finish at $102.90. Shares of companies ranging from Alaska Air Group to building-materials supplier Martin Marietta Materials, in contrast, pulled back, with both losing more than 3%. In corporate news, shares of Virgin Galactic Holdings gained $2.74, or 12%, to end at $25.30 after the top U.S. aviation safety regulator said it had cleared the company to operate space flights, again.
The stock exchanges in East Asia start October with heavy price losses. The stock exchanges in Shanghai and Hong Kong are closed on Friday for the bank holidays. In Shanghai, the holiday break lasts until Thursday next week. On the Tokyo stock market, the Nikkei 225 index falls by 2.4 per cent. In Seoul, the Kospi loses 1.6 per cent.
Last week, the Federal Reserve signaled it would start to reduce bond buying as soon as November and possibly begin to raise interest rates next year. The expectation for interest-rate increases and higher inflation - also reflected in rising oil and commodities prices - has led some investors to sell government bonds, whose yields have been near historically low levels. The selloff cooled Thursday, with the yield on the benchmark 10-year Treasury note ticking down to 1.528% from 1.540% Wednesday.
Berenberg lowers Endesa target to EUR 19.50 - Hold
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Metzler increases Fraport target to EUR 76 (72) - Buy
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