Optimer Pharmaceuticals is a global biopharmaceutical company that focuses on developing and commercializing innovative hospital specialty products. Optimer developed and commercialized Dificid (fidaxomicin), an antibiotic for the treatment of Clostridium difficile-associated diarrhea (CDAD). The company has also received marketing authorization for fidaxomicin tablets in Canada, and in the European Union under the trade name Dificlir.
Reiterate BUY, $22 target on expectation of steady revenue growth driven by unmet need and Dificid’s superior efficacy in Clostridium difficileassociated diarrhea (CDAD). We feel there is still unmet need given relapse rates associated with other Tx, rising incidence of CDAD, and growing severity of the disease. We think the pharmaco-economics of Dificid Tx will drive uptake over time, despite premium pricing.
Our $22 target is based on a DCF of Dificid/Dificlir sales and royalties.
Flat sales are expected on seasonality. Due to lower rate of infections, antibiotic use, and hospitalizations, CDAD is less prevalent in the summer, thus we are not surprised by recent swings in weekly TRx and NRx. Despite seasonality, Rx’s have rebounded from (and not repeated) June weakness with 8% and 13% m/m growth in July and August .
Expact a strong sales pattern in the fall season, and the Oct. start of NTAP program. As use of antibiotics increases during cold & flu season, the incidence of CDAD rises (Fig. 2). Combined with NTAP approval to 1) reduce cost burden and 2) increase awareness of Dificid given CMS endorsement of the drug and its superiority, we expect steady, robust growth in Dificid Rx in the coming months.
But on weakness – Q3 miss; could be good entry point with strong fall IMS data to drive upside. OPTR is down ~8% in Sept. and we think IMS data trends will improve in H2/12 to 1) drive appreciation into Q3 results and 2) limit/shorten any weakness at the quarter .
Google stock can continue its recent momentum on the basis of 1) better CPC trends creating an upward bias to revenue estimates in future periods, 2) continued dissipation of MMI-related apprehension and 3) multiple expansion. We slightly tweak our EPS-neutral MMI estimates and raise our price target to $850.
CPC tends can continue momentum or expansion. Our CPC tracker indicates that overall CPCs expanded slightly sequentially in both July and August, driven by higher desktop CPC, moderating shift to mobile, and flat mobile CPCs.
Investors believe that it is likely EPS-neutral at worst, and potentially accretive after sizeable recent expense reductions. We tweak our MMI estimates accordingly.
Apple’s will continue attempts to come between iOS users and Google’s search engine. This impacts long-term potential but not near-term estimates, and we argue that GOOG gets little credit for its mobile opportunity anyway.
We are raising our price target from $700 to $850. Our EPS estimates are unchanged, but we have rolled our PT over to 2013 estimates and
raised our target multiple from 16x to 18x, discounted back one year.
Global uranium miner and nuclear reactor maker AREVA announced that it has signed contracts to supply more than 30,000 tonnes of natural uranium to France’s power group EDF from 2014 to 2035, in what will be one of its largest ever uranium deliveries, the companies said. Highlighting that these contracts further consolidate AREVA’s position as a key partner to the world’s leading supplier of nuclear power, and secure EDF’s natural uranium supply over the very long-term.
Commenting on the deal, Henri Proglio, Chairman and CEO of EDF, stated, “These agreements are part of the implementation of the strategic partnership established with AREVA at the start of the year. They represent an essential contribution to the EDF Group‘s security of supply and demonstrate the unity of the French nuclear sector.”
Ur-Energy (URE : TSX : $0.99)
In the last couple trading days, volume has picked up significantly in shares of Ur-Energy. The company has been patiently waiting multiple years to receive the final permit needed before commencing construction at its Lost Creek uranium project in Wyoming.
In late August, Ur-Energy shares jumped after the company announced that it had received its Lost Creek Final Environmental Impact Statement (EIS) from the U.S. Bureau of Land Management (BLM). The Final EIS is not a decision document and the company stated that the Record of Decision (final hurdle!) is expected to be signed shortly after the Final EIS availability period closes thirty 30 days from receiving the Final EIS (August 17).
Also of note, a couple weeks ago it was reported by a local Wyoming news service that the Wyoming Business Council had voted to support Ur-Energy’s request for $34 million in State-funded bonds. One Bay Street analyst commenting at the time, noted that the funds from the bonds “will be used for the construction of the Lost Creek mine and should provide adequate funding to bring the project into production.” The analyst further added, “If Ur-Energy receives the bonds as anticipated, this will alleviate most of our balance sheet concerns.”
Gevo seeks to produce isobutanol, a key building block in the production of valuable chemicals and fuels, from a variety of cellulosic and non-cellulosic carbohydrate sources containing fermentable sugars.
As is typical with the commercial ramp of new production technologies, process refinements and optimization efforts take time to fully implement. While the Street could be disappointed with management’s more cautious approach (production targets pushed to ’13), we stay positively focused on the longer-term risk/reward.
Our target goes to $6.00 on higher execution risk and push-out of profitability estimates.
Not a total surprise, Gevo announced plans to temporarily shift Luverne production back to ethanol (preserving cash) while further optimizing
the isobutanol process (using lessons learned from recent start-up).
Prior targets for year-end (monthly run-rate of ~500K-1.2M gallons) thus get pushed to ’13 as related adjustments for sterilization and process control get implemented. As a reminder, positive EBITDA for Luverne is targeted at ~750K-1M gallons.
Our Street-low estimates adjust accordingly, while we expect to gain additional clarity following this Friday’s plant tour. Specifically, our 2012 estimates tweak to $31.9M/$(2.05) from $29.3M/$(2.03), while 2013E goes to $29.4M/$(1.58) from $53.0M/$(1.37) and 2014E to $77.4M/$(0.85) from $101.5M/ $(0.74).
We derive our $6 target (from $8) by applying a 3x EV/sales multiple to our 2014 revenue estimate of $77M, discounted back two years at 20%.
Judging by the recent trading volumes observed in energy stocks, a bullish sentiment seems to have captivated traders and investors. This sector has faced some challenges in the last couple of years, particularly with regard to tension in the Middle East, disappointing news from solar power outfits, and oil prices that have not fully recovered from their record levels in 2008. Still, 2012 has been a good year for energy traders, and recent developments in this sector point to a bullish future for investors.
The first two weeks of September were very positive for investors following benchmark indicators such as China‘s CSI 300 Energy Index, as well as the NYSE Arca Oil Index. One of the highlights took place on Friday, September 21st with Chevron (NYSE:CVX). The bullish sentiment has been keen on this stock, and a brief run-up of crude oil prices helped the California-based company reach its all-time high of $118.53, before ticking down to close at $117.80.
Prior to Chevron’s strong performance on Friday, the NYSE Arca Oil Index had experienced a drop after two weeks of solid gains, particularly after the announcement by the United States Federal Reserve Board of that nation’s intention to engage in a third round of quantitative easing. Chairman Ben Bernanke‘s announcement was well-received by energy regulators in China, who approved their own version of a stimulus focused directly on massive infrastructure projects. These two interventions by two major central banks are expected to boost the prices of raw materials, commodities and energy around the world.
Just like the NYSE Arca Oil Index, the CSI Energy 300 posted gains in September, although the Arca Oil Index ended the third week of September lower due to earlier missteps by other oil service companies. This setback is a reminder to energy traders that the sector is still very vulnerable in terms of volatility, but the overall sentiment remains bullish.
Chevron is getting high marks from various analysts. Its record high on Friday was fueled by a report issued by J.P. Morgan Equity Research the day before. According to J.P. Morgan, Chevron’s performance merits a price target of $123 per share, a full $3 higher than previously estimated. Other analysts from Oppenheimer and Barclays essentially echoed the sentiment by J.P. Morgan.
Investors interested in Chevron may also want to consider Superior Energy Services (NYSE:SPN), an affordable providers of services to the oil and gas drilling industries. Recent share prices for Superior Energy have hovered around $24, but analysts from Williams Financial Group recently issued a price target of $30 based on recent acquisitions that will put the company in line with larger global competitors in the long-term.
The First Trust North American Energy Infrastructure ETF (NAR:EMLP) has been the most popular energy ETF this year according to a recent report published in Barron’s. Investors who are bullish on this ETF share some strong beliefs in a recovery of the American economy that will be fueled by the energy sector. This is not such a far-fetched position, considering the factors the U.S. needs for such a recovery to take place:
Global demand for fuel should increase or otherwise stabilize.
Oil service companies will have easy access to capital.
The American energy infrastructure will continue to grow.
Interests rates will remain low.
Of all the factors above, investors can take solace in the fact that the U.S. Federal Reserve has strong motivations for doing everything possible to keep interest rates low. That is one of the major motivations behind QE3, and that will make it easier for energy companies to borrow funds to finance their projects. Global demand for fuel cannot be seen as a guarantee, but the administration of President Barack Obama announced in August that seven energy infrastructure projects would be expedited in the U.S. These projects, however, are of the clean energy variety.
In the end, the long-term bullish trend on the energy sector may end up shifting its focus to other energy sources as stock brokers and investors continue to look for an edge. Oil is the most significant factor in the current bullish equation, but investors should keep in mind that China has a lot riding on coal production, while the U.S. is significantly stepping up domestic production of shale gas.
Caterpillar said profit will be $12 to $18 a share, compared with a previous projection of $15 to $20. While a global recession remains possible, Caterpillar is forecasting moderate and “anemic” growth through 2015, Chairman and Chief Executive OfficerDoug Oberhelman said today in a presentation to analysts at the MINExpo industry conference in Las Vegas. Construction activity in emerging markets will probably show modest improvements, he said.
“We’ve seen a slowing in economic growth that was more than we expected,” he said. “We think ‘13 could look like 2012 in terms of worldwide economic growth.’’
Oberhelman has bet on a continuation of growth in commodity demand by buying mining-equipment maker Bucyrus International Inc. for $8.6 billion last year and agreeing in November to acquire ERA Mining Machinery Ltd. in China. His plans are coming under pressure as mining companies cut capital expenditures after economic expansion slowed in China, the world’s largest user of coal and metals.
Global mining capital expenditures will drop 14 percent through 2014 from a peak of $136 billion this year, JPMorgan Chase & Co. said in a Sept. 21 report. BHP Billiton Ltd., the world’s biggest mining company, last month delayed an estimated $68 billion of projects. Australian iron-ore producer Fortescue Metals Group Ltd. on Sept. 4 cut its full-year spending forecast by 26 percent to $4.6 billion.
Caterpillar fell 2.2 percent to $88.87 at 6:30 p.m. after the close of regular trading in New York. The shares are almost unchanged for this year while the Dow Jones Industrial Average, of which Caterpillar is a member, has advanced 11 percent