Plus, LVMH is scrapping its bid for Tiffany, Lululemon delivered an earnings beat, and Walmart is testing drone delivery for grocery items.
Stocks were higher to start Wednesday with the Dow adding 404 points, or 1.5%. The S&P 500 gained 1.7%, while the Nasdaq advanced 2%.
AstraZeneca shares are down this morning after the company said it has halted its late-stage trial for a potential coronavirus vaccine due to safety concerns. “This is a routine action which has to happen whenever there is a potentially unexplained illness in one of the trials, while it is investigated, ensuring we maintain the integrity of the trials. In large trials illnesses will happen by chance but must be independently reviewed to check this carefully,” the company said in a statement, adding that it is trying to expedite the review to “minimize any potential impact on the trial timeline.” White House coronavirus advisor Dr. Anthony Fauci said that it’s “not uncommon” that AstraZeneca is holding up its coronavirus vaccine trial for a safety review, but the “serious adverse event” with one of the participants is “unfortunate.” “This particular candidate from the AstraZeneca company had a serious adverse event, which means you put the rest of the enrollment of individual volunteers on hold until you can work out precisely what went on,” Fauci said in an interview with Gayle King on CBS This Morning. He added that the company would typically alert other sites of the trial to be on watch for similar adverse events “and then you proceed cautiously.”
Scrapped. Louis Vuitton owner LVMH said it is scrapping its $16.2 billion acquisition of Tiffany, a deal that would have been the biggest ever in the luxury industry. LVMH said the merger agreement signed last November provides for a closing deadline no later than November 20, 2020, but Tiffany had requested the date be extended to December 31, 2020. LVMH said in a statement that it won’t be able to complete the acquisition of Tiffany “as it stands,” and that it needs additional time to assess any impact from potential U.S. tariffs on French goods, and therefore can’t close the deal before the end of the year after the French minister of foreign affairs directed it to defer the deal until after January 6 due to a threat from the U.S. to tax French goods. The Wall Street Journal has reported that Tiffany has filed a lawsuit in Delaware to enforce the acquisition agreement, saying the request from the French government has no basis in law.
In earnings news, Lululemon reported surprise revenue growth in its fiscal second quarter as shoppers stocked up on workout apparel amid the coronavirus pandemic. Lululemon CEO Calvin McDonald said the retailer is “cautiously optimistic” about the rest of this year, even though the company is not offer a 2020 outlook at this time. The athletic apparel retailer reported earnings per share of $0.74 on revenue of $902.9 million, compared to analysts’ expectations for earnings of $0.55 per share on revenue of $842.5 million. Slack reported fiscal second quarter results and full-year guidance that beat analysts expectations, though shares were lower given that revenue in the quarter came in below 50% on an annualized basis. Slack reported adjusted earnings per share of $0.00 on revenue of $215.9 million, compared to expectations for a loss of $0.03 per share on revenue of $209.1 million.
Walmart said today that it will run a drone pilot project for delivery of grocery and household products along with end-to-end delivery firm Flytrex, as the big-box retailer looks to beef up its delivery business. This comes after Amazon received approval for its drone delivery service from the FAA late last month. “We now that it will be come time before we see millions of packages delivered via drone. That still feels like a bit of science fiction,” said Tom Ward, Walmart senior vice-president, customer products, said in a statement. Walmart said it will begin testing cloud-controlled drones picking up and dropping off select items beginning today.
And Home Depot said today that it has adapted its holiday shopping season for the coronavirus era. Among the changes announced, the home improvement retailer said in a post on its website that its Black Friday specials will stretch on for nearly two months, rather than take place on a single day to avoid crowds at its stores, and said it will put promotions on its mobile app first to nudge customers into shopping there first. Other retailers have said they will extend the holiday season or switch up their routines to better support shoppers amid the pandemic. Best Buy and Target have said they will begin holiday promotions earlier than in previous years, and Walmart said it has developed a new online tool that will allow kids to try toys virtually since in-store demos and events are cancelled this year.
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Albireo Pharma Inc (NASDAQ: ALBO): Albireo Pharm shares skyrocketed 79% yesterday after it announced positive topline results from PEDFIC 1, a global Phase 3 clinical trial evaluating the efficacy and safety of odevixibat and the largest study ever conducted in PFIC1 and PFIC2. PEDFIC 1 met its two primary endpoints, demonstrating that odevixibat reduced serum bile acid responses (sBAs) (p=0.003) and improved pruritus assessments (p=0.004) with a single digit diarrhea rate. “The successful clinical application of IBAT inhibition is all about the ability to lower bile acids and reduce diarrhea rates. Odevixibat reduced bile acids in both PFIC1 and PFIC2 patients and demonstrated a clinically meaningful outcome in pruritus. This is exciting news for children suffering from PFIC who, if odevixibat is approved, may soon have an easy to take, once-daily drug for their life-threatening liver disease,” said Ron Cooper, President and Chief Executive Officer of Albireo. “These strong results from PEDFIC 1 increase our confidence in the ongoing BOLD pivotal trial in biliary atresia and the Alagille syndrome study planned for later this year.”