Eastman Kodak Company (NYSE: KODK) is facing an inquiry from the United States International Development Finance Corp, the federal agency that planned to extend it a $765 million loan to manufacture drug ingredients, the Wall Street Journal reported Monday.
What Happened: The inspector general of the agency, responsible for extending loans to businesses affected by the COVID-19 pandemic, told Senator Elizabeth Warren (D-Calif.) last Thursday of his intent to review the loan deal, a spokesperson for Warren told the Journal.
The spokesperson said the inspector general was looking into why the Rochester, New York-headquartered company was selected for the loan and “whether Trump administration officials involved in the award had any conflicts of interest, and the impact of Kodak’s lobbying effort.”
Warren expressed gladness over the inspector general’s investigations of “this massive fiasco of a deal.”
Why It Matters: Administration officials had hailed the loan agreement in July with President Donald Trump calling it “one of the most important deals in the history of U.S. pharmaceutical industries,” the Journal noted.
The Kodak deal would have reportedly helped lessen U.S. reliance on China and India for the production of drugs and also help expedite their manufacturing.
The U.S. Securities and Exchange Commission is also looking into the loan deal’s disclosure, made on July 27, which caused the company’s shares to spike 25% on the day.
The DFC paused the process last month, while Kodak said it would carry out an internal investigation to review the deal.
Price Action: Kodak shares closed 1.4% higher at $6.50 on Monday.
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College student wakes to armed police raiding dorm in false report, Texas family says
The family of a Texas university student wants answers after she woke up in her dorm to campus police drawing guns on her.
Two weeks after the Sept. 14 incident at Stephen F. Austin University, the school’s president and police chief says it is investigating the false report made on Christin Evans.
Her roommates and seven other girls falsely accused Christin, 17, of threatening to stab someone with scissors, she said, according to KHOU. The students told a resident advisor about the fake threat and police were notified, KPRC reported.
Police raided the student’s dorm at 3 a.m. with guns drawn, her parents said, according to KTRK.
“I cant sleep at night because of this. It has made me really paranoid,” Christin said in a press conference.
Her parents say text messages they received from the university’s police chief said surveillance footage proved Christin is innocent, KPRC reported.
The family believes she was a victim of swatting, KHOU reported. Swatting occurs when people play a prank on a person that leads police to believe a crime is taking place.
Christin, who is Black, may have been targeted because of her race, according to her parents, KTRK reported.
“This could have been a Breonna Taylor circumstance,” the family’s attorney, Randall Kallinen, said at the press conference, referring to a Black woman killed earlier this year by Louisville police.
Christin’s mom, LaShondra Evans, said Monday she wants justice, KTRK reported. “I want the people responsible to have consequences. They played with her life,” the mother said.
Stephen F. Austin President Dr. Scott Gordon said in a statement Monday filing a false report is a violation of the law and has directed a thorough investigation.
“Each perpetrator will be dealt with appropriately,” he stated. “My heart goes out to the young lady who was an innocent victim in this matter. We will do all we can to support her and her family through this heinous ordeal.”
John Fields, the chief of the university’s police department, said the incident involves “a racially diverse group of students” who he added will be held accountable.
Christin is still enrolled at the university but has moved out of the dorm, KHOU reported.
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Oppenheimer: These 2 Stocks Are Poised to Surge by Over 100%
When it comes to the market’s wild swings, is the glass half empty or half full? Oppenheimer’s chief investment strategist John Stoltzfus is taking the latter view.Despite the volatility that has ruled the market over the last few weeks, Stoltzfus actually likes what he’s witnessing in both the market and the economy. In particular, he points to U.S. companies that have been outperforming most other markets around the world as exciting plays, with the innovation in the U.S. reflecting a key component of his bullish thesis.“The U.S. is outperforming most of the markets around the world — whether it’s developed markets or emerging markets… We’ve taken out the froth that had come into the market in certain [mega cap] names. It may be a good opportunity to pick up some really good, high quality growth stories that are on sale right now,” Stoltzfus noted.Additionally, the strategist believes the S&P 500 could climb back to its September 2 high point, based on improving economic data. The approval of a COVID-19 vaccine as well as an election outcome that is “friendly to the domestic economy, business, job growth and the taxpayer” could also push the index higher.Turning Stoltzfus’ outlook into tangible recommendations, Oppenheimer analysts are pounding the table on two stocks, with these pros seeing over 100% upside potential in store. Running the tickers through TipRanks’ database, we wanted to find out exactly what makes them so compelling.Brickell Biotech (BBI)Focused on the development of innovative and differentiated therapeutics for the treatment of skin diseases, Brickell Biotech wants to improve the lives of patients everywhere. Given the potential of the company’s lead candidate and its $0.82 share price, Oppenheimer thinks that now is the time to pull the trigger.Sofpironium bromide (SB), a prescription treatment for axillary hyperhidrosis (AH, or excessive underarm sweating), is entering U.S. Phase 3 trials. This program will consist of two identical six-week studies, and will evaluate its ability to improve the condition per the objective (gravimetric sweat production) and subjective (HDSM-Ax) co-primary endpoints. Each is expected to last 12 months, and the first will kick off next quarter.Roughly 10 million people in the U.S. suffer from AH, with this condition interfering with daily social and professional activities. Currently, only 2.3 million receive prescription treatment, and some resort to invasive or permanent interventions like Botox, MiraDry or surgery.Oppenheimer’s Leland Gershell argues that more conservative approaches could be used to meet these medical needs. He also believes the recent entry of Eli Lilly’s competing product, Qbrexza, represents a significant step forward. That said, there’s “room for improvement” with this anti-cholinergic approach.Looking at a U.S. Phase 2b trial, the highest dose of BBI’s SB gel (15%) demonstrated 46% greater sweat reduction per gravimetric analysis compared to the placebo, with significant reductions in a validated patient-reported outcome instrument seen at all doses. Based on the trial data, efficacy is over 50% better than Qbrexza per label, despite higher baseline severity. In addition, their safety profiles were relatively similar.It should be noted that BBI will market the drug to U.S. dermatologists through a specialty salesforce of 120 representatives. According to Gershell’s estimates, uptake by 110,000 patients per year (just 5% of the currently treated AH population) translates to $200 million in gross sales. The analyst adds that patent issuance could extend market exclusivity to 2040.Adding to the good news, on September 25, BBI announced that Kaken Pharmaceutical, its development partner, got the green light to manufacture SB in Japan for the treatment of AH. Japan is the first country to approve the candidate, with the launch expected later this year.To sum it all up, Gershell stated, “By virtue of its efficacy, tolerability, and antiperspirant-like application, we believe SB offers an attractive profile in a market that offers much room for improved solutions. We encourage risk-tolerant investors to build a position ahead of upcoming newsflow.”To this end, Gershell rates BBI an Outperform (i.e. Buy) along with a $5 price target. This target conveys the analyst’s confidence in BBI’s ability to surge 502% from current levels. (To watch Gershell’s track record, click here)Looking at the consensus breakdown, 2 Buys and no Holds or Sells have been published in the last three months. As a result, BBI gets a Moderate Buy consensus rating. The $5 average price target is identical to Gershell’s. (See BBI stock analysis on TipRanks)Aldeyra Therapeutics (ALDX)As for Oppenheimer’s other pick, Aldeyra Therapeutics works to bring new treatment options for immune-related diseases to market. Based on the solid progress of its pipeline, the firm has high hopes for this healthcare name.Representing Oppenheimer, analyst Justin Kim points out that he came away from a recent conversation with the CEO even more confident in ALDX’s long-term growth prospects. Pivotal studies on reactive aldehyde species (RASP) are slated for Q4 2020, evaluating the action of reproxalap, Aldeyra’s lead therapy designed to clamp down on overactive inflammation, on tear levels of RASP over a period ranging from 1-2 days to 28 days. “Based on Phase 2a results, we are confident in the ability to replicate results in Q4 2020,” Kim stated.Given the potential of dry eye disease (DED) in the near-term, the analyst expects significant investor focus to land on clinical trial execution (Phase 3 RASP studies and safety study), which would support a potential NDA filing by the end of 2021, in Kim’s opinion. “Despite some volatility in the shares, we see a solid setup emerging as the company initiates its Phase 3 RASP studies in dry eye disease (DED),” he said.Speaking to the potential of RASP as an accepted dry eye endpoint, ALDX has experienced “a watershed moment,” with it facilitating an expedited path to registration (from traditional sign endpoints) and greater likelihood of clinical trial success, based on reproxalap’s mechanism of action (MoA) as a RASP-trap, according to Kim.He added, “Moreover, agreement on RASP could have broader implications for a commercial launch in dry eye, a market that we believe will see segmentation as more therapies with targeted MoAs become incorporated into the armamentarium.”“We continue to be impressed by the progress in achieving a potential concurrent filing for dry eye and allergic conjunctivitis (AC), appreciating the importance of a differentiated dry eye agent with action also in AC. As the dry eye therapeutic landscape increases its options, we expect greater segmentation of the heterogeneous patient population potentially beginning with reproxalap’s positioning in ‘allergic dry eye’,” the analyst concluded. For the rest of 2020, focus is likely to stay on Phase 3 study designs (assay work/development), execution and the potential readout in DED, which could set the stage for a commercial launch in DED and AC in 2022.If that wasn’t enough, based on the broader pipeline of candidates targeting PVR, inflammatory conditions and COVID-19, Kim sees “a rich environment of catalysts for the shares over the coming 12-18 months.”It should come as no surprise, then, that Kim stayed with the bulls. To this end, he kept an Outperform rating and $15 price target on the stock. Investors could be pocketing a gain of 110%, should this target be met in the twelve months ahead. (To watch Kim’s track record, click here)What does the rest of the Street have to say? Only Buy ratings, 2 to be exact, have been issued in the last three months. So, the consensus rating is a Moderate Buy. In addition, the $23.50 average price target suggests 227% upside potential from current levels. (See ALDX stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Hedge Funds Are Snapping Up
The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought CymaBay Therapeutics Inc (NASDAQ:CBAY) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Is CymaBay Therapeutics Inc (NASDAQ:CBAY) a bargain? Investors who are in the know were in a bullish mood. The number of long hedge fund positions improved by 10 lately. CymaBay Therapeutics Inc (NASDAQ:CBAY) was in 24 hedge funds’ portfolios at the end of June. The all time high for this statistics is 29. Our calculations also showed that CBAY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Peter Rathjens of Arrowstreet Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Keeping this in mind let’s take a peek at the fresh hedge fund action surrounding CymaBay Therapeutics Inc (NASDAQ:CBAY).
What does smart money think about CymaBay Therapeutics Inc (NASDAQ:CBAY)?
At Q2’s end, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 71% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards CBAY over the last 20 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Avoro Capital Advisors (venBio Select Advisor) held the most valuable stake in CymaBay Therapeutics Inc (NASDAQ:CBAY), which was worth $18.3 million at the end of the third quarter. On the second spot was D E Shaw which amassed $11.8 million worth of shares. Citadel Investment Group, Adage Capital Management, and Sio Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Foresite Capital allocated the biggest weight to CymaBay Therapeutics Inc (NASDAQ:CBAY), around 4.97% of its 13F portfolio. Sio Capital is also relatively very bullish on the stock, setting aside 2.34 percent of its 13F equity portfolio to CBAY.
As aggregate interest increased, some big names have been driving this bullishness. Foresite Capital, managed by Jim Tananbaum, established the most outsized position in CymaBay Therapeutics Inc (NASDAQ:CBAY). Foresite Capital had $5.6 million invested in the company at the end of the quarter. Julian Baker and Felix Baker’s Baker Bros. Advisors also initiated a $5.3 million position during the quarter. The other funds with brand new CBAY positions are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Steve Cohen’s Point72 Asset Management, and John W. Rende’s Copernicus Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to CymaBay Therapeutics Inc (NASDAQ:CBAY). These stocks are Alpha Pro Tech, Ltd. (NYSE:APT), Lydall, Inc. (NYSE:LDL), Protective Insurance Corporation (NASDAQ:PTVCA), Cheetah Mobile Inc (NYSE:CMCM), DermTech, Inc. (NASDAQ:DMTK), Liquidia Technologies, Inc. (NASDAQ:LQDA), and MediciNova, Inc. (NASDAQ:MNOV). This group of stocks’ market valuations are similar to CBAY’s market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position APT,8,21459,3 LDL,12,39388,-2 PTVCA,2,2466,0 CMCM,5,5040,1 DMTK,7,36073,2 LQDA,16,66073,10 MNOV,4,1742,-2 Average,7.7,24606,1.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.7 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $100 million in CBAY’s case. Liquidia Technologies, Inc. (NASDAQ:LQDA) is the most popular stock in this table. On the other hand Protective Insurance Corporation (NASDAQ:PTVCA) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks CymaBay Therapeutics Inc (NASDAQ:CBAY) is more popular among hedge funds. Our overall hedge fund sentiment score for CBAY is 84.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 21.3% in 2020 through September 25th but still managed to beat the market by 17.7 percentage points. Hedge funds were also right about betting on CBAY as the stock returned 86.5% since the end of June and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Get real-time email alerts: Follow Cymabay Therapeutics Inc. (NASDAQ:CBAY)
Disclosure: None. This article was originally published at Insider Monkey.
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