Biogen's stock rises 4% after company releases new data on late-stage Alzheimer's drug - CNBC

The exterior of the headquarters of biotechnology company Biogen in Cambridge, MA is pictured on March 21, 2019.

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Biogen shares rose Thursday after the biotech firm offered more data on its late-stage Alzheimer's drug, aducanumab.

The data, presented at the Clinical Trials on Alzheimer's Disease conference, offered almost no new results from what the company previously released in October. However, analysts who parsed through it said the lack of any new negatives in the report means they expect the company will take the data to the Food and Drug Administration.

"The data is so confusing," said Jared Holz, a health-care strategist at Jefferies, adding the report did show a slightly better response to the drug at higher doses.

Dr. Eric Siemers, an Alzheimer's expert who previously led Alzheimer's research at Eli Lilly, also noted the company offered a more detailed look but "almost the same as they showed" previously.

Shares of Biogen were up more than 4% after falling 3% immediately on the news. Prior to the announcement, Biogen shares were halted at $286.83. The stock, which had a market value of nearly $52 billion at the time, is down nearly 5% since the start of the year.

The drug targets a compound in the brain known as beta-amyloid, which is thought to play a role in the devastating disease.

In March, Biogen pulled the plug on its drug after an analysis from an independent audit revealed the experimental medicine was unlikely to work. The news sent its stock tumbling. However, shares of the Cambridge, Massachusetts-based company soared on Oct. 22 after the drugmaker shocked investors by announcing it was seeking regulatory approval for the drug after all.

Biogen said at the time that a new analysis of a larger data set showed that aducanumab "reduced clinical decline in patients with early Alzheimer's disease" and patients who received the drug "experienced significant benefits on measures of cognition and function such as memory, orientation, and language."

The findings in October were met with skepticism from investors and analysts who said the results may have just been by chance. Some analysts remained skeptical after Thursday's results from the two late-stage studies, saying it raised more questions.

Salim Syed, a senior biotech analyst at Mizuho Securities, said in a note to clients that the new data is "not impressive," adding it "represents a highly selected patients population that may not be representative of a real world."

Experts discussing the results on a panel Thursday were largely positive.

Sharon Cohen, a primary investigator on Biogen's trial, said the data is "is exhilarating not just to the scientific community but to our patients as well."

There are currently no drugs approved that can reverse the mental decline from Alzheimer's, which is the sixth leading cause of death in the U.S. The FDA has approved Alzheimer's drugs aimed at helping symptoms, not actually reversing or slowing the disease itself.

— CNBC's Meg Tirrell contributed to this report.

This is a developing story. Please check back for updates.

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2019-12-05 17:16:00Z
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This stock bear is waiting for one clear signal to jump back into markets - MarketWatch

A previous version of this column misspelled the name of pro-basketball player LeBron James. The story has been corrected.

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The water’s fine?

Stock market bears have had few breaks this year.

The S&P 500 SPX, +0.07%  has nabbed 26 record closes this year, while the Dow DJIA, +0.04%  counts 15, and pullbacks have often been quickly met by investors ready to buy. The pendulum swinging back toward more optimistic U.S.-China trade talk means a few more records could be reached in 2019.

Our call of the day comes from JonesTrading’s chief market strategist Michael O’Rourke, an unrepentant bear who sees little reason to dive in now, even if he has missed gains this year.

“We have been in an environment of deteriorating stock fundamentals, a weak global economy and a decelerating U.S. economy, against a backdrop of a historically expensive market,” he tells MarketWatch. Despite strong gains, the S&P 500 is just under 10% above its 2018 high, while the Russell 2000 RUT, +0.70%  is below its 2018 high.”

As for his call: “I will turn positive on the equity market when valuations are more attractive and aligned with economic and earnings growth.”

What has happened in the past couple of years is that company earnings growth has been “artificial,” driven by the administration’s tax cuts, he argues. That should mean that investors should assign a lower valuation, but they aren’t doing that, which is “dangerous.”

“I will become more constructive on the equity market as it begins to approach that historic 15x to 16x earnings multiple within a stable economic environment,” says O’Rourke. And right now, the forward price/earnings ratio—a popular method of valuing a stock’s worth—for the S&P 500 is right around 20.

Does he regret missing out on the stock’s gains? “I have a long-term process that is intended to be bullish when there is tremendous long-term opportunity and bearish when there is notable long-term risk,” O’Rourke said. He believes the Federal Reserve’s lengthy accommodative monetary policy has skewed business and investment cycles.

The market

Dow YM00, +0.28%, S&P 500 ES00, +0.25% and Nasdaq NQ00, +0.34%  futures are climbing, and European stocks SXXP, +0.21% are up, while Asian equities ADOW, +0.42% rose as well. Oil CLF20, +0.87%  is up as the Organization of the Petroleum Exporting Countries gets underway.

The chart

Look for the S&P 500 to rally to 3,200 and up in the first half of next year, say JP Morgan strategists Jason Hunter and Alix Tepper Floman, who provide our chart of the day.

JP Morgan

They don’t think bears have a grip on this stock market, despite the pullbacks triggered by geopolitical headlines this year. Investors will likely get tempted into the market around the support level of 3,020 to 3,055, says the team.

The buzz

In the latest on trade, China says Washington must roll back tariffs if the two sides want to reach a deal.

The Federal Trade Commission is widening an Amazon AMZN, -0.51%  probe to include its cloud services unit, reports Bloomberg. Neither side would comment on the article.

Saudi Aramco may become the world’s biggest IPO, if the energy group prices shares at the top end of an expected range.

Shares of Slack WORK, -0.92%  are climbing after the online communications service earnings disappointed, but its outlook didn’t. Dollar General DG, +0.91%  shares are up after the cut-price retailer topped estimates and raised guidance.

The economy

A day ahead of U.S. payrolls data, jobless claims came in below expectations and the trade deficit fell on weak Chinese imports. Still to come are factory orders.

Random reads

A U.S. sailor kills two people and himself at Pearl Harbor shipyard.

Dying teen has one wish—to shake hands with basketball superstar LeBron James.

Air New Zealand is experimenting with edible coffee cups.

Strikes and protests over the government’s retirement reforms paralyze France.

This art sale is literally bananas.

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2019-12-05 14:22:00Z
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GM, LG Chem to create $2.3 billion battery cell venture for electric vehicles, to create 1,100 jobs in Ohio - CNBC

Mary Barra, Chairman and CEO of General Motors.

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DETROIT – General Motors and LG Chem will invest up to $2.3 billion by 2023 to form a joint venture for production of battery cells for electric vehicles in Ohio.

The companies plan to build a battery cell factory in the Lordstown-area of northeast Ohio. Construction of the plant, which is expected to be among the largest in the world, is expected to begin in mid-2020.

The facility, according to GM, is expected to create 1,100 new jobs for the area, which lost thousands of jobs when the automaker shuttered its Lordstown assembly plant and sold it to an all-electric vehicle startup earlier this year.

The joint venture at this time plans to exclusively supply batteries for GM's next-generation of EVs, which GM has said is expected to arrive in 2021. The joint venture could supply other companies in the future.

GM CEO and Chairman Mary Barra, in a statement, said the new plant "will play a key role" in GM's plans for "a world with zero emissions," which includes at least 20 new all-electric vehicles by 2023.

The plant, according to GM, is expected to drive cost per kilowatt hours, a key metric for making electric vehicles more affordable, to "industry-leading levels."

The plant's annual capacity is expected to be more than 30 gigawatt hours "with flexibility for expansion," according to GM.

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2019-12-05 14:00:00Z
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United's Oscar Munoz to step down as CEO, President Scott Kirby will take over - CNBC

United Airlines announced Thursday that CEO Oscar Munoz will turn over day-to-day management of the airline next spring to President Scott Kirby, who will become company's chief executive officer.

The change happens in May, when Munoz becomes executive chairman, succeeding Jane Garvey, 75, who is retiring from the board.

The announcement ends speculation Kirby could be hired to replace Doug Parker as CEO of American Airlines, where shares are down 26% in the last year. Kirby was Parker's top lieutenant for a decade as Parker merged America West with U.S. Air and later merged U.S. Air with American, creating the nation's largest airline. Kirby said in October he would not be leaving United.

GP: Oscar Munoz, chief executive officer of United Continental Holdings Inc., speaks during a Bloomberg Television interview in Chicago, Illinois, U.S., on Wednesday, April 24, 2019.

Jim Young | Bloomberg | Getty Images

A spokesperson for United told CNBC that rumors of the 52-year-old Kirby possibly leaving United did not play a role in the decision to elevate him to chief executive. Instead, the company said, the board and Munoz felt it was time to begin the process of a smooth transition to the next CEO.

"With United in a stronger position than ever, now is the right time to begin the process of turning over the baton to a new leader," Munoz said in Thursday's announcement.

The move is one many in the airline industry and on Wall Street have anticipated for some time. Kirby, who was hired by Munoz in 2016 with a mandate to improve the airline's execution, has been a driving force in improving United's performance and profit growth during the last two years.

In a videotaped message sent to United employees announcing the leadership change, Kirby thanked Munoz for hiring him in 2016. "I will be a much better executive today, will be a much better CEO and a better person, for what I learned from you and following in the footsteps of an incredible leader," Kirby said.

Munoz tenure: Turmoil then growth

Munoz, 60, will turn over the CEO job with United in much better shape than the day he took the job four years ago. Back then, Munoz, who was on the United board, was suddenly tapped to run the airline after Jeff Smisek was forced to resign as CEO due to a federal investigation into United adding flights to influence decisions made by a New York Port Authority official.

Within a month of becoming CEO, Munoz suffered a heart attack that forced him to take a medical leave. In early 2016 Munoz received a heart transplant, keeping him out of work for weeks.

When he returned, Munoz found an airline trailing its competitors in almost every important metric, including earnings growth, profit margin and customer service. Things got worse in April 2017, when a major scandal erupted after security officers dragged a passenger off a United flight that was oversold.

Video of the passenger, Dr. David Dao, being pulled down the aisle was played repeatedly on news reports around the world. United was blasted not only for forcibly having a passenger kicked off a flight, but also for how poorly it handled the crisis. Munoz made things worse when his initial comments about what happened were criticized as being cold and uncaring. "This is an upsetting event to all of us here at United. I apologize for having to re-accommodate these customers," Munoz said in a statement the morning after the incident. It took several days before Munoz and United changed their tone and fully apologized to Dao.

By then, the damage was done. Munoz's handling of the crisis prompted the United board to drop plans to elevate him to chairman. The CEO vowed to improve customer service and its image of treating passengers with indifference. That reputation was reinforced in early 2018 when a United flight attendant had a passenger put a pet dog in an overhead bin, where it died during a flight from New York to Houston. Once again, news reports portrayed United as a heartless airline. Within hours, Munoz issued a public apology and once again said his airline would do better.

Adding capacity, soaring in 2019

By early 2018, United was doing better in many areas, largely because of Kirby's initiatives. After years of cutting routes and service in smaller cities around the U.S., United switched started to aggressively increase capacity. It added flights from secondary cities like Rochester, Minnesota, to United's hubs, especially Chicago, Denver and Houston. The idea was that boosting traffic through hubs would lead to greater efficiencies and higher profit margins.

While many feared Kirby's plan would spark fare wars and dilute earnings, analyst Hunter Keay from Wolfe Research said the strategy was vintage Kirby, "Arguably, United has no choice but to either shrink drastically or to pursue this path, and Scott Kirby wasn't hired to shrink anything," Keay told clients.

The strategy has paid off with United growing its net profit from $2.1 billion in 2017 to $2.5 billion last year. In 2019 United has already earned $2.3 billion through the third quarter and raised its full-year earnings guidance in October.

Kirby's CEO strategy: Improve execution

After 20 years in the airline business where he has consistently boosted revenues and margins, Kirby is widely viewed as one of the best in the industry at making routes and operations more profitable.

As CEO, he'll oversee the third consecutive year where United grows capacity 4% to 6%. As has been a hallmark of his growth strategies in the past, Kirby is likely to further leverage traffic through United's hubs. And while the airline's profit margins have improved, they still trail Delta's.

In short, Kirby still has plenty of room to grow United's profits, especially if he can further improve United's performance when it comes to customer service. "I love the fact that almost every time I get feedback from employees, 99.9% of the time it is something about how do we make this airline better for our customers," Kirby said in a video e-mailed to employees. "That is an incredible amount of energy, innovations and creativity, and that's the foundation that a great airline is built on."

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2019-12-05 13:01:00Z
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Another big luxury deal may be brewing - CNN

Kering, the owner of luxury brands including Gucci and Yves Saint Laurent, has held exploratory talks to buy Italian apparel company Moncler, according to Bloomberg.

Moncler is best known for its puffy winter coats. Its shares shot up by 9% on Thursday, while Kering stock posted a more modest rise of 1.3%. When asked about the report, Kering (PPRUF) declined to comment.

Moncler said in a statement that its chairman and CEO, Remo Ruffini, interacts "from time to time" with "other sector participants, including the Kering group, in order to explore strategic potential opportunities."

"At the moment, however, there is not any concrete hypothesis under consideration," the company added.

What's so great about Moncler (MONRF)? Our colleagues at CNN Style point to its innovative approach to leadership: One project involves asking multiple creative directors to produce individual collections that are released on a rolling calendar. This allows new products to be marketed on a monthly instead of seasonal basis.

Should the deal be completed, it would help Kering compete with rival French luxury group LVMH. The owner of Louis Vuitton and Christian Dior announced last month that it would buy Tiffany & Co. in a deal that values the jeweller at about $16.2 billion.

LVMH (LVMHF) on a roll: The luxury conglomerate led by billionaire Bernard Arnault is having a great year, with shares increasing nearly 55% so far. Earlier in 2019, LVMH acquired Rihanna's Fenty and Fenty Beauty fashion and cosmetics lines, which have enjoyed huge success with a diverse swath of young women.

It's all working out well for Arnault. With a fortune of $106 billion, he could soon overtake Jeff Bezos and Bill Gates to become the world's richest person.

Time for the biggest IPO ever?

Saudi Arabia's state oil company is poised to price what could be the biggest IPO in history.

Saudi Aramco said last month that it was aiming to sell about 1.5% of its 200 billion shares in a partial privatization for between 30 riyals ($8) and 32 riyals ($8.53) each. A final decision on price is expected to be announced on Thursday.

The competition: Alibaba's (BABA) 2014 debut on the New York Stock Exchange, so far the world's biggest IPO, raised $25 billion. Aramco will top that if the price is set at the top of its range.

High expectations: The Saudi government initially discussed floating 5% of the company in 2018 in the hope of raising as much as $100 billion. It was looking at international markets such as New York or London, as well as Riyadh.

Yet the project was shelved amid concerns about legal complications in the United States, as well as doubts about the $2 trillion valuation reportedly sought by Saudi Crown Prince Mohammed bin Salman.

The deal was revived earlier this year after Aramco pulled off a successful international bond sale. But international investors are less convinced about buying Aramco stock: Among their concerns: Low oil prices, the climate crisis and geopolitical risks.

Meanwhile, in Vienna: OPEC and its allies are once again being forced to consider dramatic action to avert a crash in oil prices.

The cartel led by Saudi Arabia is reportedly working towards an agreement with OPEC producers and others including Russia to extend and deepen production cuts designed to put a floor beneath prices. Meetings take place Thursday and Friday.

If the group fails to cut production, the world oil market will be oversupplied by about 800,000 barrels per day during the first half of 2020, according to consulting firm Rystad Energy.

The ensuing supply glut would spark a "significant oil price correction," driving Brent crude into the low $40s for a short period of time, Rystad predicted. That represents a plunge of about 30% from current levels of nearly $63 a barrel.

Silicon Valley faces a major loss in trade talks

Tech companies have long relied on just a few sentences of US law — Section 230 of the 1996 Communications Decency Act — to avoid legal trouble over what internet users write and post on their platforms.

The legal provision has proved hugely valuable to the industry, helping to give rise to Facebook, Instagram and Twitter by ensuring that the platforms would not be held responsible for the actions of their users.

According to the Wall Street Journal, internet companies have been lobbying for the legal protections to be included in the new US trade agreement with Mexico and Canada. But in a sign of growing skepticism in Washington toward Big Tech, House Speaker Nancy Pelosi, who represents San Francisco in Congress, is pushing to strip them out of the deal.

Another sign of discontent: Several US civil rights leaders recently invited to Facebook CEO Mark Zuckerberg's home have slammed what they say is a "lackluster response" to their concerns.

"Our communities are being targeted by bad actors on Facebook and the company has a moral obligation to fix this ongoing problem," the group said in a statement. "Facebook's lackluster response to our serious concerns is devoid of any commitments to implement substantive measures and changes to its policies."

Dollar General (DG), Kroger (KR) and Tiffany & Co. report earnings before US markets open. American Outdoor Brands (AOBC) and Ulta Beauty (ULTA) will follow after the close.

Also today:

The US trade balance for October arrives at 8:30 a.m. ET.

Coming tomorrow: The US jobs report for November will give fresh insight into America's economic health.

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2019-12-05 11:29:00Z
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Takata airbag fault forces recall of another 1.4 million vehicles - CNN

These cars were recalled on Wednesday, authorities in the United States said.

As with the wider ongoing recall, the new fault can cause airbag inflators to explode, under-inflate or spew out shrapnel at passengers, raising the risk of serious injury or death, according to the National Highway Traffic Safety Administration.

The airbags involved in the latest recall were found to have "a manufacturing issue," and were fitted to "some brands of 1995-2000 vehicles," the agency said in a notice posted on its website. It gave no further details.

Takata produced and sold around 4.5 million of the airbags with the new fault globally in the late 1990s, but only a fraction of the vehicles fitted with them are likely still being driven, according to government documents.

As many as 41.6 million vehicles with Takata airbags have been recalled in the United States so far, according to the US Department of Transportation. In total, 34 auto brands have been affected, from Ferrari (RACE)to Ford (F).

Ruptured airbags have been linked to at least 29 deaths and hundreds of injuries around the globe, according to the Australian government.

The crisis caused Takata to file for bankruptcy in 2017. The Japanese company then sold most of its operations to Key Safety Systems, a Chinese-owned company based in Michigan, for $1.6 billion.

US federal safety regulators have previously said that it could take until 2023 for the recall to be complete — a full 15 years after the first car was ordered back to the workshop.

In the coming month, Takata will be working with automakers to assess which vehicles could be affected by its latest problem, according to US authorities.

"As this work progresses, numerous vehicle recalls will likely be announced," they said.

— Chris Isidore contributed to this report.

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2019-12-05 10:13:00Z
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How Trump's Trade War Went From Method to Madness - Bloomberg

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2019-12-05 11:00:01Z
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