A roundup of some of the North American equities making moves in both directions today
On the rise
Berkshire Hathaway Inc. (BRK.A-N) rose 2.4 per cent after it said on Sunday its energy unit will buy Dominion Energy Inc.’s (D-N) natural gas transmission and storage network for US$4-billion, helping billionaire Chairman Warren Buffett reduce his conglomerate’s cash pile while letting Dominion focus on utilities operations.
The transaction announced on Sunday includes more than 7,700 miles (12,390 km) of natural gas transmission lines and 900 billion cubic feet of gas storage.
Berkshire Hathaway Energy is buying Dominion Energy Transmission, Questar Pipeline, Carolina Gas Transmission, 50 per cent of the Iroquois Gas Transmission System, and 25 per cent of the Cove Point liquefied natural gas facility in Maryland.
Dominion will retain 50 per cent of Cove Point. Brookfield Asset Management Inc. (BAM.A-T) owns 25 per cent.
The Berkshire unit will also assume US$5.7-billion of debt, giving the transaction a US$9.7-billion enterprise value. It expects a fourth-quarter closing, pending regulatory approvals.
“We are very proud to be adding such a great portfolio of natural gas assets to our already strong energy business,” Mr. Buffett said in a statement.
Dominion shares were down 11 per cent, while Brookfield Asset Management was up 1.5 per cent in Toronto.
Separately, Dominion Energy Inc. and Duke Energy Corp. (DUK-N) said on Sunday they decided to abandon the US$8-billion Atlantic Coast Pipeline project after a long delay to clear legal roadblocks almost doubled its estimated cost.
Duke shares were lower by 2.5 per cent
Despite a favorable ruling by the United States Supreme Court in June, the two companies said it was not enough to justify the project’s economic viability given the increased legal uncertainty and anticipated delays.
The court ruling, which granted the federal government authority to allow the natural gas pipeline to cross under the popular Appalachian Trail in rural Virginia, was a solution to only one of several hurdles facing the project.
“This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States,” the statement added, quoting Dominion Chief Executive Thomas Farrell and Duke CEO Lynn Good.
According to Dominion and Duke, the cost for the ACP project increased to US$8-billion from the original estimate of US$4.5-US$5.0-billion.
Ride-sharing company Uber Technologies Inc. (UBER-N) gained 6 per cent after announcing it has offered to buy Postmates Inc in a US$2.65-billion all-stock deal, looking to expand its reach in the food-delivery services arena while more people order at home due to coronavirus-led restrictions.
Uber, under pressure as its core ride-hailing business reels from lockdowns across the globe, offered a premium of about 10 per cent on Postmates’ last valuation of US$2.4-billion. Postmates in September raised US$225-million in a private fundraising round.
Uber currently estimates that it will issue about 84 million shares of common stock for 100 per cent of the fully diluted equity of Postmates, the company said in a statement.
The boards of both companies have approved the transaction, and stockholders representing a majority of Postmates’ outstanding shares have committed to support the transaction, it added.
Postmates operates in 4,200 U.S. cities delivering food and other products from restaurants and stores to customers’ doorstep. One of the many taglines reads - “Have chips but no guac? Postmate it.”
ATB Capital Markets analyst David Kideckel said: “We view this announcement as positive, indicating one of many ways FAF can benefit from the partnership with ATD. Moreover, we view this pilot program as an indication that the partnership is progressing well and that both companies are strategically aligned.”
Drugmaker Mylan NV (MYL-Q) increased 3.8 per cent in the wake of saying on Monday it would launch its generic version of Gilead Sciences Inc’s COVID-19 treatment remdesivir in India this month at 4,800 rupees (US$64.31) per 100 mg vial, as infections surge in the world’s third worst-hit country.
The Drug Controller General of India (DCGI) approved Mylan’s remdesivir version, to be called Desrem, for the treatment of suspected or laboratory confirmed severe incidences of COVID-19 in adults and children, the company said in a statement.
Mylan’s version comes after two Indian drugmakers, Cipla Ltd and privately-held Hetero Labs Ltd, launched their generic versions of the drug.
Cipla will price its version, Cipremi, at less than 5,000 rupees, while Hetero has priced its version, Covifor, at 5,400 rupees.
Gilead has priced remdesivir at US$2,340 per patient for wealthier nations. It has agreed to send nearly all of its supply of the drug to the United States over the next three months, stirring concerns about availability elsewhere.
Becton Dickinson and Co. (BDX-N) rose 2.3 per cent after the U.S. Food and Drug Administration has granted emergency use authorization (EUA) for its COVID-19 antigen test that can be administered at the point of care and produce results within 15 minutes, the company said on Monday.
Antigen tests are a relatively new type of test for COVID-19 that work by scanning for proteins that can be found on or inside a virus.
The FDA has touted the tests as an important tool for combating the pandemic because they can be produced quickly, at relatively low costs, and test patients in a variety of settings.
The regulator approved in May the first COVID-19 antibody test, which is made by Quidel Corp.
Becton Dickinson’s test can be used on its existing BD Veritor System platform, which is employed in about 25,000 healthcare facilities across the United States.
Regeneron Pharmaceuticals Inc. (REGN-Q) said on Monday it began late-stage clinical trials to assess the effectiveness of its antibody cocktail in preventing and treating COVID-19, sending its shares up nearly 1 per cent.
The trial, run jointly with the National Institute of Allergy and Infectious Diseases (NIAID), would test REGN-COV2′s ability to prevent infection in those who have had close exposure to a COVID-19 patient.
REGN-COV2, an experimental therapy, has also entered into mid-to-late stage phase of two trials testing its effectiveness in hospitalized and non-hospitalized COVID-19 patients, Regeneron said.
Regeneron is among the few front-runners who have begun human trials testing their experimental therapies to fight COVID-19, including Gilead Sciences, Eli Lilly and AbbVie.
Regeneron in June began human trial of the antibody cocktail as a treatment for COVID-19, with an “adaptive” design to quickly move to include thousands of patients.
On the decline
Bellus Health Inc. (BLU-T) shares were down by more than 72 per cent on Monday after the company announced that Phase 2 Relief trial of BLU-5937 in patients with refractory chronic cough “did not achieve statistical significance for the primary endpoint of reduction in placebo-adjusted cough frequency at any dose tested.”
“In the Relief trial, we observed data that we believe is competitive within the P2X3 class, including the reduction in cough frequency shown in patients with higher cough counts and a low taste effect. While we had hoped to see more response in the lower cough patients, BLU-5937 and other P2X3 antagonists may have the most benefit in patients with a greater disease burden,” said Roberto Bellini, CEO of Bellus Health, in a release. “We believe the Phase 2 data support moving BLU-5937 forward into an adaptive Phase 2b trial enriched for higher cough count patients. We expect to begin this trial in the fourth quarter of 2020.”
Cineplex Inc. (CGX-T) were down 5.5 per cent after Britain’s Cineworld saying on Monday it plans to make a counter-claim for damages and losses following a failed acquisition.
The Canadian company has sued Cineworld, seeking damages after the British cinema operator scrapped its $1.65 billion buyout deal last month.
The Cineplex claim seeks damages, including about $2.18-billion that Cineworld would have paid upon the closing of the deal.
Cineworld said on Monday it did not breach any obligations or duties, adding if Cineplex’s claim is successful, it would be limited to its costs and expenses incurred as part of the deal.
The company would not be assessed by reference to the consideration that was payable as part of the deal agreement, Cineworld said.
The Regal cinema owner on June 12 abandoned the deal, citing what it termed the Canadian company’s breaches in the merger agreement.
The company said it has decided to voluntarily suspend operations at the facility for two weeks.
With files from Brenda Bouw, staff and wires