Tag Archives: PFE

7 Stocks With ‘Tax Cut’ Dividend Increases on Tap

Congress and President Donald Trump passed a historic tax cut late last year, lowering the corporate tax rate from 35% to 21%. This monumental legislation should place hundreds of billions of dollars back in the hands of corporations. But which companies will put these dollars in the hands of investors as dividend increases?

Some companies will use the money saved — or repatriated from overseas — to reinvest in their businesses. Comcast Corporation (NASDAQ:CMCSA), for example, will invest $50 billion into infrastructure in the coming years.

Other companies will use the money to repurchase stock. Regrettably, those stocks are very overvalued right now.

Many companies, however, will boost their dividends to reward shareholders. This will be particularly true of companies that are already cash flow positive and are struggling to grow or would struggle anyway just given their business.

Here are seven likely candidates for dividend increases.

Dividend Increases: Apple (AAPL) Apple Inc. (AAPL)investorplace.com/wp-content/uploads/2016/05/aaplmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/05/aaplmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/05/aaplmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/05/aaplmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/05/aaplmsn-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/05/aaplmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2016/05/aaplmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/05/aaplmsn-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/05/aaplmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” /> Source: via Apple

Apple Inc. (NASDAQ:AAPL) will be one of the big winners in the tax cut game. For starters, it should be able to repatriate about $215 billion. It will also save about $2.2 billion in taxes. Now, Apple not only will have all that cash on hand, it also has free cash flow in excess of $50 billion.

What’s interesting about AAPL stock is the yield is only 1.49%, based on a $2.52 per share dividend. Apple could literally afford to plow the entire tax savings into an increased dividend — boosting it by $0.44 per share — to $2.96 per share or 1.72%.

Dividend Increases: Home Depot (HD) Why HD Stock Is Finally Too Expensiveinvestorplace.com/wp-content/uploads/2016/05/hdmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/05/hdmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/05/hdmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/05/hdmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/05/hdmsn-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/05/hdmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2016/05/hdmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/05/hdmsn-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/05/hdmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” /> Source: Mike Mozart via Flickr (Modified)

Home Depot Inc (NYSE:HD) is another huge winner in the corporate tax cut parade. HD will save close to $675 million annually.

The beauty of Home Depot is that the company is currently firing on all cylinders. They’re seeing fabulous same-store comps. And their current dividend payout is presently a mere 40% of free cash flow.

Home Depot can and should plow their entire tax savings into a dividend increase of $0.65 per share, lifting the dividend from $3.56 to $4.21 per share. That would push the yield from 1.88% to 2.22%.

Dividend Increases: Pfizer (PFE) PFE Stockinvestorplace.com/wp-content/uploads/2017/10/pfemsn-300×150.jpg 300w, investorplace.com/wp-content/uploads/2017/10/pfemsn-768×384.jpg 768w, investorplace.com/wp-content/uploads/2017/10/pfemsn-60×30.jpg 60w, investorplace.com/wp-content/uploads/2017/10/pfemsn-200×100.jpg 200w, investorplace.com/wp-content/uploads/2017/10/pfemsn-400×200.jpg 400w, investorplace.com/wp-content/uploads/2017/10/pfemsn-116×58.jpg 116w, investorplace.com/wp-content/uploads/2017/10/pfemsn-100×50.jpg 100w, investorplace.com/wp-content/uploads/2017/10/pfemsn-78×39.jpg 78w, investorplace.com/wp-content/uploads/2017/10/pfemsn-800×400.jpg 800w,https://investorplace.com/wp-content/uploads/2017/10/pfemsn-170×85.jpg 170w” sizes=”(max-width: 950px) 100vw, 950px” /> Source: Shutterstock

Pfizer Inc. (NYSE:PFE) stands to save about $150 million annually. As a big pharma company, Pfizer must continually feed its R&D machine. R&D routinely costs about $7.5 – $8.5 billion annually, yet that money comes out of its extremely robust free cash flow which runs $13 – 16 billion annually.

Figure a $.025 dividend increase on top of its already annual increase, which results in a small increase in yield from 3.75% to 3.77%. Not big, but a lot of retirement investors hold PFE stock.

Dividend Increases: Cisco (CSCO) investorplace.com/wp-content/uploads/2017/05/cscomsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/05/cscomsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/05/cscomsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/05/cscomsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/05/cscomsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/05/cscomsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/05/cscomsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/05/cscomsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/05/cscomsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/05/cscomsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” /> Source: Shutterstock

Cisco Systems, Inc. (NASDAQ:CSCO) has fallen into no/slow-growth territory with net income effectively stalling over the past couple of years. Nevertheless, CSCO stock generates about $13 billion annually in free cash flow. That’s pretty amazing, so the additional $350 million in tax savings would likely all go to increasing the dividend.

The $.07 per share increase would push the dividend from $1.16 per share to $1.23 per share, lifting the yield from 3.03% to 3.14%.

Dividend Increases: Coca-Cola (KO) The Coca-Cola Co KO stockinvestorplace.com/wp-content/uploads/2016/06/komsn2-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/06/komsn2-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/06/komsn2-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/06/komsn2-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/06/komsn2-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/06/komsn2-100×55.jpg 100w, investorplace.com/wp-content/uploads/2016/06/komsn2-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/06/komsn2-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/06/komsn2-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” /> Source: Leo Hidalgo via Flickr (Modified)

The Coca-Cola Co (NYSE:KO) has really been struggling the past few years. The world moved away from sugary drinks and toward healthier choices. Revenue is falling, as is net income.

Nevertheless, KO stock has enjoyed bountiful cash flow for decades and has almost $40 billion of cash on hand. So while business is struggling, much of the $220 million in tax savings may go to either stock repurchases or dividend increases.

If the latter, that means a $0.05 per share increase to $1.53 per share, boosting the yield from 3.23% to 3.36%.

Dividend Increases: Microsoft (MSFT) Why You Should Buy Microsoft Corporation (MSFT) Stock on the Dipinvestorplace.com/wp-content/uploads/2016/03/MSFTMSN-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/03/MSFTMSN-73×40.jpg 73w, investorplace.com/wp-content/uploads/2016/03/MSFTMSN-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/03/MSFTMSN-250×137.jpg 250w, investorplace.com/wp-content/uploads/2016/03/MSFTMSN-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/03/MSFTMSN-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/03/MSFTMSN-160×88.jpg 160w, investorplace.com/wp-content/uploads/2016/03/MSFTMSN-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/03/MSFTMSN-100×55.jpg 100w,https://investorplace.com/wp-content/uploads/2016/03/MSFTMSN-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/03/MSFTMSN-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/03/MSFTMSN-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” /> Source: Mike Mozart Via Flickr

Microsoft Corporation (NASDAQ:MSFT) will win big with the tax cut as well. Because Microsoft is finally growing earnings again, but has tons of cash and cash flow, there is no need to plow the tax savings into the business.

MSFT can also start to make big strides towards becoming an income stock. Get this — before the cut, MSFT generated $30 billion in free cash flow last year, and paid out only $11.8 billion in dividends.

Tax savings could push another $0.04 per share into the dividend, lifting it to $1.72 per share.

Dividend Increases: Boeing (BA) Boeing BA stockinvestorplace.com/wp-content/uploads/2016/04/bamsn-1-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/04/bamsn-1-73×40.jpg 73w, investorplace.com/wp-content/uploads/2016/04/bamsn-1-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/04/bamsn-1-250×137.jpg 250w, investorplace.com/wp-content/uploads/2016/04/bamsn-1-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/04/bamsn-1-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/04/bamsn-1-160×88.jpg 160w, investorplace.com/wp-content/uploads/2016/04/bamsn-1-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/04/bamsn-1-100×55.jpg 100w,https://investorplace.com/wp-content/uploads/2016/04/bamsn-1-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/04/bamsn-1-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/04/bamsn-1-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” /> Source: Phillip Capper via Flickr

Boeing Co (NYSE:BA) is another widely-held stock that’s in a sweet-spot as far as how to use its tax windfall. They aren’t saving an enormous chunk of money — about $93 million — but that still translates to a $0.16 per share dividend increase.

That would push the dividend right up to $7 per share, lifting the yield from 2.32% to 2.34%.

Lawrence Meyers is the CEO of PDL Capital, a specialty lender focusing on consumer finance and is the Manager of The Liberty Portfolio at www.thelibertyportfolio.com. He does not own any stock mentioned. He has 23 years’ experience in the stock market, and has written more than 1,800 articles on investing. Lawrence Meyers can be reached at TheLibertyPortfolio@gmail.com.

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10 Dividend Stocks You Can Set and Forget

Tired of keeping a close eye on financial news and popping in and out of positions in an effort to get the most out of an increasingly volatile market?

If so, you’re not alone. There is a solution, however, for investors who’ve become mentally exhausted thanks to a bull market that has now persisted for a stunning nine years — just buy some dividend stocks and stop watching the market every day. Go find a new hobby instead. With some stocks, you really are better off just leaving them alone and letting time do the hard work for you.

With that as the backdrop, if you don’t know how or where to start a hunt for new income-oriented holdings, here’s a look at ten great dividend stocks that would at home in almost any investor’s portfolio. They’re all more reliable than average, and represent companies that can weather almost any storm.

In no certain order…

Dividend Stocks to Buy: AT&T (T) Dividend Stocks to Buy: AT&T (T)investorplace.com/wp-content/uploads/2016/04/tmsn2-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/04/tmsn2-73×40.jpg 73w, investorplace.com/wp-content/uploads/2016/04/tmsn2-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/04/tmsn2-250×137.jpg 250w, investorplace.com/wp-content/uploads/2016/04/tmsn2-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/04/tmsn2-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/04/tmsn2-160×88.jpg 160w, investorplace.com/wp-content/uploads/2016/04/tmsn2-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/04/tmsn2-100×55.jpg 100w,https://investorplace.com/wp-content/uploads/2016/04/tmsn2-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/04/tmsn2-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/04/tmsn2-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Mike Mozart via Flickr

Dividend Yield: 5.3%

Telecom giant AT&T Inc. (NYSE:T) is an oldie but a goodie, and with uncharacteristic weakness from the stock since the middle of 2016, the dividend yield has been pumped up to an impressive 5.3%. That’s a dividend that has been paid every quarter for the past few decades, by the way, and raised like clockwork every year since 1984.

Sure, AT&T has got headaches right now, even beyond its usual competition. The deal to pair up with Time Warner Inc (NYSE:TWX) hasn’t exactly been smooth sailing. Industry insiders are relatively certain it’s going to happen despite the DOJ’s interference though, and in that AT&T is leading the race to make 5G connectivity a reality, it should be able to keep its wireless competitors in check at the same time it ramps up enrollments in its streaming cable service DirecTV Now.

AT&T looks to be firing on all cylinders.

Dividend Stocks to Buy: Blackstone Group (BX) Dividend Stocks to Buy: Blackstone Group (BX)investorplace.com/wp-content/uploads/2017/05/bxmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/05/bxmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/05/bxmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/05/bxmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/05/bxmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/05/bxmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/05/bxmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/05/bxmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/05/bxmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/05/bxmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

Dividend Yield: 6.9% over the past 12 months

Blackstone Group LP (NYSE:BX) isn’t a traditional company. In fact, it’s not a company at all. It’s an organization that owns and financially supports a variety of other companies, and in some cases gets involved in the management of them. It’s a private equity firm, but it’s so much more than just that.

Additionally, it’s good at what it does, and that’s good for income-seeking investors. While the dividend payout can vary unpredictably from one quarter to the next, broadly speaking it has been on the rise for quite some time, and a dividend of some sort has always been dished out. And if the economy heats and up in interest rates rise, much like a bank, that’s very good for Blackstone’s bottom line as it will eventually makes its way back into the pocket of shareholders.

The dividend yield of 6.8% over the last year, in the meantime, isn’t too shabby either.

Dividend Stocks to Buy: AmTrust Financial Services (AFSI) Dividend Stocks to Buy: AmTrust Financial Services (AFSI)investorplace.com/wp-content/uploads/2016/05/cashmsn2-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-100×55.jpg 100w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/05/cashmsn2-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: 401(K) 2012 via Flickr (Modified)

Dividend Yield: 6.6%

There aren’t any kinds of insurance AmTrust Financial Services Inc (NASDAQ:AFSI) doesn’t offer. In fact, life and health insurance are the only two major insurance markets AmTrust doesn’t dabble in.

That’s a two-edged sword, mind you. While the company has sidestepped the debacle of the ramifications of the Affordable Care Act and now the (more or less) end of it, Amtrust’s heavy reliance on catastrophic insurance policies meant it took a big hit when hurricanes Harvey and Irma took aim at the United States during the fall of last year. All told, the insurer swung from a profit of 61 cents per share in the same quarter a year ago to a loss of four cents per share in Q3 of 2017.

The resulting beat-down wasn’t necessary though, as it founded on a catastrophe the likes of which are rarely seen. The strong selloff from AFSI, however, has cranked its dividend yield up to a still-sustainable 6.6%.

Dividend Stocks to Buy: UBS Group (UBS) Dividend Stocks to Buy: UBS Group (UBS)investorplace.com/wp-content/uploads/2017/05/ubsmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/05/ubsmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/05/ubsmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

Dividend Yield: 3.2%

When investors go on the hunt for dividend stocks within the financial sector, Zurich-based UBS Group AG (USA) (NYSE:UBS) usually isn’t a top-of-mind name. It should be though, now more than ever … It not only had a 3.2% yield, but also a 26-cent special dividend paid out in the past year.

There’s room for dividend growth too. Analysts are looking for 2017 earnings of $1.28 per share, up from 2016’s $1.17, which is projected to grow to $1.50 in 2018. And, only about 57% of its profits are currently being passed along to shareholders as dividends.

Dividend Stocks to Buy: Two Harbors (TWO) Dividend Stocks to Buy: Two Harbors (TWO)investorplace.com/wp-content/uploads/2017/10/mortgagemsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-91×50.jpg 91w,https://investorplace.com/wp-content/uploads/2017/10/mortgagemsn-78×43.jpg 78w, investorplace.com/wp-content/uploads/2017/10/mortgagemsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: House Buy Fast via Flickr

Dividend Yield: 11.9%

Two Harbors Investment Corp (NYSE:TWO) is anything but a household name. It’s not even a company. It’s an investment company, organized as a REIT, and is an obscure one at that. Don’t let the obscurity fool you though. There’s a lot of reliability packed into this obscure mortgage REIT package too, all the way back to 2010.

More important, things could heat up for this outfit sooner than most people are expecting. As Chief Investment Officer Bill Roth commented within the last quarterly report, “We are very excited about the opportunities we see emerging for our business. With the Fed reducing their reinvestments in Agency RMBS and mortgage spreads likely to widen, owning MSR is a significant benefit to our portfolio. Yet, at wider spreads, we believe there could be a tremendous investment opportunity to add Agencies.”

It’s currently yielding 11.9%.

Dividend Stocks to Buy: Iron Mountain (IRM) Dividend Stocks to Buy: Iron Mountain (IRM)investorplace.com/wp-content/uploads/2016/06/irmmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/06/irmmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/06/irmmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/06/irmmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/06/irmmsn-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/06/irmmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2016/06/irmmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/06/irmmsn-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/06/irmmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw,728px” />Source: Orin Zebest via Flickr

Dividend Yield: 6.3%

In a world that’s increasingly centered on the digital cloud, one would think the printed documents and literal signatures on forms would be a thing of the past. And to a large degree, things are moving in that direction. If you think paper is a thing of the past though, think again. The world is still printing like crazy, and organizations still need to store it all for a myriad of reasons.

Enter Iron Mountain Incorporated (Delaware) REIT (NYSE:IRM), which as its name implies, offers secure storage of physical files for organizations that are legally required to retain them. Iron Mountain helps companies make the move from physical to digital document management, helping them solve tricky compliance problems along the way.

It even offers document shredding solutions. In all cases though, it’s a wonderful recurring revenue business, easily supporting the dividend yield of 6.3%. That dividend grows pretty regularly too.

Dividend Stocks to Buy: BP (BP) Dividend Stocks to Buy: BP (BP)investorplace.com/wp-content/uploads/2017/05/bpmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2017/05/bpmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2017/05/bpmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2017/05/bpmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2017/05/bpmsn-400×220.jpg 400w, investorplace.com/wp-content/uploads/2017/05/bpmsn-116×64.jpg 116w, investorplace.com/wp-content/uploads/2017/05/bpmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2017/05/bpmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2017/05/bpmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2017/05/bpmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Shutterstock

Dividend Yield: 5.6%

The future of BP Plc (ADR) (NYSE:BP) has more to do with the price of oil than how well the company itself is managed. But, both bode well for the company. Oil prices have rallied from less than $30 per barrel in early 2016 to a current price near $60 now, and though a little profit-taking is in the cards, the broad undertow remains a bullish one.

Crude’s rebound couldn’t have come at a better time for BP either. As of October, the dividend was and was expected to remain above per-share earnings. With crude well above BP’s breakeven price of around $47 as of August though, margins should start to widen quite nicely and leave decent-sized profit cushion for that dividend yield of 5.6%.

Dividend Stocks to Buy: Southern (SO) Dividend Stocks to Buy: Southern (SO)investorplace.com/wp-content/uploads/2016/04/somsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/04/somsn-73×40.jpg 73w, investorplace.com/wp-content/uploads/2016/04/somsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/04/somsn-250×137.jpg 250w, investorplace.com/wp-content/uploads/2016/04/somsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/04/somsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/04/somsn-160×88.jpg 160w, investorplace.com/wp-content/uploads/2016/04/somsn-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/04/somsn-100×55.jpg 100w,https://investorplace.com/wp-content/uploads/2016/04/somsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/04/somsn-78×43.jpg 78w, investorplace.com/wp-content/uploads/2016/04/somsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Desiree Kane via Flickr

Dividend Yield: 5%

No list of dividend stocks to buy would be complete without a utility stock, and no list of ownership-worthy utility stocks would omit Southern Co (NYSE:SO).

As to the former, utility stocks are cash-flow machines. In good economic times as well as bad, at a very minimum consumers keep their lights on by forking money over to their power supplier every month. As to the latter, Southern serves a total of 9 million customers peppered all across the nation, with plenty of exposure in the south and along the east coast. That kind of scale means a lot in the utility business.

It also smooths out any bumps and rough patches that could otherwise jeopardize its yield of 5%. It’s been reliably paid and steadily rising since 1948.

Dividend Stocks to Buy: Park Hotels & Resorts (PK) Dividend Stocks to Buy: Park Hotels & Resorts (PK)investorplace.com/wp-content/uploads/2016/09/officereitmsn-300×165.jpg 300w, investorplace.com/wp-content/uploads/2016/09/officereitmsn-55×30.jpg 55w, investorplace.com/wp-content/uploads/2016/09/officereitmsn-200×110.jpg 200w, investorplace.com/wp-content/uploads/2016/09/officereitmsn-162×88.jpg 162w, investorplace.com/wp-content/uploads/2016/09/officereitmsn-65×36.jpg 65w, investorplace.com/wp-content/uploads/2016/09/officereitmsn-100×55.jpg 100w, investorplace.com/wp-content/uploads/2016/09/officereitmsn-91×50.jpg 91w, investorplace.com/wp-content/uploads/2016/09/officereitmsn-78×43.jpg 78w,https://investorplace.com/wp-content/uploads/2016/09/officereitmsn-170×93.jpg 170w” sizes=”(max-width: 728px) 100vw, 728px” />Source: Anders Jildén via Unsplash

Dividend Yield: 7.7%

The name Park Hotels & Resorts Inc (NYSE:PK) may not ring a bell, but some of the hotels owned by this REIT will. It owns and operates, among others, several Hiltons, boasting 67 locales and 35,000 rooms… most aimed at the upper-scale traveler.

It doesn’t necessarily seem like the steadiest market to be in, but it’s more stable than one might imagine. A huge chunk of its hotels are in important business districts, and if the economy takes off the way it looks like it’s going to take off, that will keep Park Hotels & Resorts plenty busy for some time. Even if the economy doesn’t quite turn red-hot though, the yield of 7.7% is relatively well protected.

Dividend Stocks to Buy: Pfizer (PFE) Dividend Stocks to Buy: Pfizer (PFE)investorplace.com/wp-content/uploads/2017/10/pfemsn-300×150.jpg 300w, investorplace.com/wp-content/uploads/2017/10/pfemsn-768×384.jpg 768w, investorplace.com/wp-content/uploads/2017/10/pfemsn-60×30.jpg 60w, investorplace.com/wp-content/uploads/2017/10/pfemsn-200×100.jpg 200w, investorplace.com/wp-content/uploads/2017/10/pfemsn-400×200.jpg 400w, investorplace.com/wp-content/uploads/2017/10/pfemsn-116×58.jpg 116w, investorplace.com/wp-content/uploads/2017/10/pfemsn-100×50.jpg 100w, investorplace.com/wp-content/uploads/2017/10/pfemsn-78×39.jpg 78w, investorplace.com/wp-content/uploads/2017/10/pfemsn-800×400.jpg 800w,https://investorplace.com/wp-content/uploads/2017/10/pfemsn-170×85.jpg 170w” sizes=”(max-width: 950px) 100vw, 950px” />Source: Shutterstock

Dividend Yield: 3.7%

Last but not least, the 3.7% yield Pfizer Inc. (NYSE:PFE) currently offers doesn’t necessarily put it in the top echelon of dividend stocks, but what it lacks in income-producing potential it balances out with lots of growth potential.

One of those growth engines is Eucrisa. As Chris Lau pointed out last month, 60% of eczema patients using the treatment are repeat buyers. It could be a $2 billion drug at its peak pace. Meanwhile, arthritis drug Xeljanz is slated for an approval decision in March. Both offer new revenue stream potential.

In the meantime, its existing portfolio of products will continue to drive cash flow that funds what it pays back out to shareholders. This is the same company that owns staples like Advil as well as Lyrica, for the treatment of diabetic nerve pain and fibromyalgia.

Pfizer’s going to be fine.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.

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Intel, Microsoft Dominate DJIA Friday

December 15, 2017: Markets opened higher again Friday and continue to put up gains throughout the day. All three major equities indexes posted new intra-day highs as all sectors traded in the green, led by financials and consumer staples. WTI crude oil for January delivery settled at $57.30 a barrel, up 0.5% for the day, but down 0.1% for the week. February gold added just 40 cents on the day to settle at $1,257.50 to close the week up 0.7%. Equities were headed for a higher close shortly before the bell as the DJIA traded up 0.58% for the day, the S&P 500 traded up 0.83%, and the Nasdaq Composite traded up 1.05%.

Bitcoin futures for January traded at $XX, down 1.14%, on the CBOE about an hour before settlement after opening at $17,0800 this morning. Only about 1,000 contracts had been traded.

The DJIA stock posting the largest daily percentage gain ahead of the close Friday was Intel Corp. (NASDAQ: INTC) which traded up 3.43% at $44.74. The stock’s 52-week range is $33.23 to $47.30. Volume was about 10% above the daily average of around 27 million shares. The company had no specific news.

Microsoft Corp. (NASDAQ: MSFT) traded up 2.64% at $86.93. The stock’s 52-week range is $61.95 to $87.09 and the high was set this afternoon. Volume was about a 50% above the daily average of around 21 million shares. The company had no specific news.

Pfizer Inc. (NYSE: PFE) traded up 1.99% at $37.19. The stock’s 52-week range is $30.90 to $37.22 and the high was set this afternoon. Volume was about 25% above the daily average of around 15.7 million shares. The company’s Xeljanz drug for joint disease was approved by the FDA on Thursday.

United Technologies Corp. (NYSE: UTX) traded up 1.89% at $126.10. The stock’s 52-week range is $106.85 to $126.44 and the high was posted today. Volume was about 15% above the daily average of around 3 million. The company’s Pratt & Whitney division has won some big contracts in the last two day: one related to the Delta purchase of 100 Airbus planes and the other with the Pentagon for future maintenance of the company’s F119 engine.

Of the Dow stocks, 28 are on track to close higher Friday and just two — IBM and DowDuPont — are set to close lower.
ALSO READ: 4 Large Cap Biotech Leaders Are Huge Tax Reform Winners

Cellectis: The Next And Definitive Wave Of CAR-T

Despite recent dips related to early clinical experiences with allogeneic T-cells, Cellectis (CLLS) represents a particularly attractive buying opportunity at this time for the following three reasons: the fact that recent hiccups in preliminary data come from a limited number of patients mostly in dose-finding trials, the potential for a M&A exit given its gene-editing platform value and close collaboration with Pfizer (NYSE:PFE), and the inevitable introduction of allogeneic chimeric antigen-specific T-cell (CAR-T) cells into the CAR-T therapy space.

Current landscape of CAR-T cells is defined by autologous approaches

Two major FDA approvals in recent months for CAR-T therapies, Kymriah by Novartis (NVS) and Yescarta by Gilead/Kite (GILD), have signaled that CAR-T therapy is here to stay. Closely trailed by numerous other competitors, Kymriah and Yescarta have thrust the CAR-T space into the biopharma limelight, proving to be one of the most exciting developments in immuno-oncology in the recent decade.

Currently, the approved CAR-T therapies are autologous to the patient. This means that for each patient, the manufacturer must acquire a sample of the patients T-cells, re-engineer them to express the correct antitumor chimeric antigens, and then return them to the patient for dosing. The looming question is if this type of individual case-by-case manufacturing process will be viable as CAR-T therapies become more widely used among cancer patients.

The first issue is the manufacturing time. According to Novartis, the total time from T-cell collection to first dose of Kymriah averages about 22 days. Gileads Yescarta has announced a median turnaround time of 17 days. These turnaround times are impressive in their own right given the manufacturing process for these therapies. For most patients in this relapsed/refractory target population, however, who often have aggressive disease where treatments are unable to even control disease, waiting nearly 3 weeks for a therapy to arrive is not ideal.

The second issue is the manufacturing success rate. The complex process of creating individualized CAR-T cells naturally creates the potential for variation and error between each patients therapy, whether it is a technical error in the manufacturing process, or the discovery that there were not enough cells extracted from the patient to create a viable therapy. Yescarta has reported a 99% manufacturing success rate in one of its clinical trials, while Kymriah reported a 97% success rate. These numbers are without question impressive, but as these treatments become more widespread, the patients that do experience a manufacturing problem with their therapy will have not only lost the therapy itself but also crucial time waiting for the therapy to arrive.

These two logistical issues are additionally compounded with the question of how the turnaround time and manufacturing success rates will roll out in the real world setting. For instance, the high manufacturing success rates were reported as part of clinical trials, and it is difficult to tell whether they may change in the standard of care setting where patients and treatment procedures are monitored less intensely, and volume is higher, than in the clinical trial setting.

In short, we believe that the individualized nature of autologous CAR-T therapies creates an inherent obstacle to eventually achieving economies of scale, both in terms of manufacturing efficiency and cost. This is also exactly why we believe that the future of CAR-T therapy lies in allogeneic CAR-T cells.

Allogeneic CAR-T cells

In contrast to autologous CAR-T therapy, allogeneic CAR-T therapy involves genetically re-engineering healthy donor T-cells, outfitting them with antitumor capabilities while minimizing the potential for graft versus host disease (GvHD). In this setting, allogeneic CAR-T therapy presents itself as a very logical and natural next step in the development of the CAR-T therapy space. These allogeneic T-cells could be bought off-the-shelf for immediate access, and the more uniform nature of their production may also allow for fewer manufacturing errors, particularly regarding the issue of not receiving enough patient cells in autologous T-cell manufacturing.

One other important advantage of allogeneic T-cells with regards to its production of CAR-T therapy from one healthy donor for potentially multiple patients is the reduction of cost, especially as the manufacturing process moves towards economies of scale.

Competitive Landscape

In November 2016, an SA article was published on players in the allogeneic CAR-T space. Just in this past year, however, we have seen the addition of multiple new candidates that are on the verge of, or have already made headways into, clinical studies. So far, Cellectis is the clear leader with two products already in clinical development with early preliminary data. Incysus received IND approval for a Phase I trial with allogeneic CAR-T cells, but everything else is still in the preclinical stage.

One interesting point to note is that larger players have been fairly active in investments and collaborations with these smaller biotechs in the allogeneic T-cell space. Novartis and Kite (now Gilead), despite being the first players to launch autologous CAR-T cells, have shown interest in allogeneic CAR-T cells. Specifically, Novartis has two ongoing collaborations: Celyad (CYAD) and Intellia (NTLA) for allogeneic CAR-T development. Thus, even those who have found success in the autologous CAR-T space have acknowledged the role that allogeneic CAR-T may take in the future. In short, the populated competitive landscape for allogeneic CAR-T paired with interest demonstrated by leaders in the CAR-T therapy space signal to us that the advent of allogeneic CAR-T therapy is only a matter of time.

Competitive landscape for allogeneic CAR-T therapies

Group

Status

Cellectis/Pfizer/Servier

UCART19: Ph1 in B-cell ALL

Ph1 preliminary data in pediatric R/R B-cell ALL

Ph1 preliminary data in adult R/R B-cel ALL

UCART123: Ph1 in BPDCN and AML

Both trials halted on 9/4/17 after first patient (BPDCN) who died of cytokine release syndrome on day 9 post-treatment; first AML patient experienced grade 4 capillary leak syndrome on day 9 post-treatment, but resolved at Day 12

FDA lifts hold on 11/6/17, dose lowered

Celyad/Novartis

CYAD-101: Pre-clinical

Kite(now Gilead)/UCLA

6/26/16: allogeneic T-cell technology licensed from UCLA

Sangamo (SGMO)

Pre-clinical

Adaptimmune (ADAP)/Universal Cells

Pre-IND meeting in planning as of March 2017 corporate presentation

CRISPR Therapeutics (CRSP)/MaSTherCell

CTX10: 6/6/17 deal signed to develop and manufacture allogeneic T-cells

Poseida Therapeutics (spun out of Transposagen)/Janssen (JNJ)

P-BCMA-ALLO1: Preclinical

11/24/14: Janssen has exclusive rights to any allogeneic T-cell therapies from Transposagen

5/28/15: Transposagen deal transferred to Poseida, developing allogeneic CAR-T Therapies with Janssen

Incysus

10/17/17: IND approved for Phase I Gamma-Delta T-cells

Novartis/Intellia

1/12/15: Deal signed to give Novartis rights to use Intellias CRISPR platform for allogeneic CAR-T

Baxalta (now Shire) (SHPG)/Precision Biosciences

2/25/16: Deal signed to develop allogeneic T-cell therapies

Focus on Cellectis (CLLS): A leader in allogeneic CAR-T therapy

In partnership with Pfizer and Servier, Cellectis is currently the leader by a large margin in the race to develop allogeneic T-cells, with two products in clinical development across four indications. So far, Cellectis has been the only player which has reported any sort of clinical development experience with allogeneic T-cells. Here, we take a deeper dive into Cellectis clinical experience with their universal CAR-T (UCART) therapies as a first glance into the future of allogeneic CAR-T cells in the clinic.

UCART19 in R/R ALL

The first product is UCART19, a CAR-T therapy targeting CD19 for B-cell acute lymphoblastic leukemia (ALL). The development of UCART19 involves three parties: Pfizer, Servier, and Cellectis. Near the end of 2015, Servier acquired exclusive rights of UCART19 from Cellectis, and Pfizer eventually acquired from Servier US rights while Servier held onto rights in all other countries.

The excitement surrounding UCART19 started with a surprise announcement of UCART19 being used for compassionate use in three relapsed/refractoy (R/R) ALL patients. Data presented on 12/14/16 described two R/R ALL pediatric patients (11 months and 16 months old time of treatment) who were negative for minimal residual disease (NASDAQ:MRD) and alive 18 and 12 months, respectively, since the initial dose. The third patient was a 44-year-old who died due to progressive disease.

Phase I trials for UCART19 in pediatric and adult R/R CD19+ ALL started in mid-2016, and preliminary abstract data for the two trials were recently posted for the 2017 American Society of Hematology conference, generating mixed emotions from investors.

In the pediatric ALL cohort, data were reported on five heavily pretreated patients who all reported complete responses (CRs) post-treatment, and then went on to receive allogeneic stem cell transplants. No major unexpected safety issues were observed. The duration of response elicited by UCART19, however, was quite limited, with 2 patients relapsing 3 months post-transplant. Two other patients were in remission at the time of data collection but were still within 3 months post-transplant.

Reporting data on 6 patients, the adult ALL cohort had one patient who experienced life-threatening cytokine release syndrome, which was considered a contributory factor to their death at day 15 post-treatment. Like the pediatric trial, the adult cohort so far has shown limited duration of response.

The release of the above data on early November caused the stock to plummet over 30% from $35.01/share down to where it currently sits at $24.26/share on 12/6/17. Though initial preliminary efficacy data from these two trials appear lukewarm, we must remember that the data is generated from an extremely limited number of patients and is also currently incomplete in terms of follow-up. Additionally, the adult cohort is a dose-finding trial that has announced advancement to the next dose level.

UCART123 in BPDCN and AML

UCART123 is Cellectis second product, which targets CD123 on cancer cells. Unlike UCART19, UCART123 is wholly owned by Cellectis, and is where the company derives most of its projected value from. In July 2017, Cellectis received the IND approval to start Phase I trials in patients with blastic plasmocytoid dendritic cell neoplasm (BPDCN), an extremely rare blood malignancy, and acute myeloid leukemia (AML). The first dose of UCART123 was given on 8/17/17 to a 78-year-old man with BPDCN, who died just 9 days after his first dose due to cytokine release syndrome, a documented side effect of CAR-T therapies. In addition, the first AML patient also experienced life-threatening capillary leak syndrome, but it was resolved after a few days.

Though no GvHD was reported, the patient death prompted the FDA to halt UCART123 trials on 9/4/17. The patient death and subsequent halting of the UCART123 trials sent Cellectis stock downwards from $32.18/share to $24.96/share in a matter of days. It is important to keep in mind here for UCART123, however, as we did for UCART19, that the objective of this Phase I study is to find the maximum tolerated dose.

On 11/6/17, the FDA lifted the hold on the clinical trials, with instructions to lower the dose, and to restrict patient enrollment to those under 65 years of age.

Sum-of-the-parts evaluation

In our discounted cash flow model, we estimated peak sales of $117M in 2034 for UCART19 in R/R pediatric and adult B-cell ALL, assuming a 2022 launch, ~700 eligible patients/year, and 1 dose per patient. We assumed a market capture starting from 20% in 2022 that would grow to and plateau at 35% in 2026 and onwards, given Kymriah and Yescartas foothold in this indication. Additional assumptions included a TALEN patent expiration in 2035 to decrease market share incrementally down to 20%, a launch price of $250,000/dose, and a 15% royalty rate from Servier to reach peak revenues of $17.6M in 2034 for Cellectis. We also incorporated a fraction of potential milestone payments from Servier (up to $974M) and Pfizer (up to $2.8B) based off our assigned probability of technical and regulatory success (PTRS) for UCART19.

For UCART123 in R/R AML, BPDCN, and high risk AML, we estimated total peak sales of $4.7B in 2034, assuming a 2023 launch, TALEN patent expiration in 2035, and a launch price of $250,000/dose. For 1st line treatment in high risk AML, we assumed an eligible patient population of ~4,000/year starting in 2023, and a market capture starting at 25% at launch and growing up to 50% in 2028, before falling to 35% after patent expiration. Peak sales in 1st line high risk AML reached $926M in 2034. For R/R AML, we assumed an eligible patient population of ~16,000/year starting in 2023, with the same market capture structure as for 1st line treatment of high risk AML. Peak sales in R/R AML reached $3.7B in 2034. For BPDCN, we assumed an eligible patient population of 150/year starting in 2023, with a market capture starting from 50% at launch and growing to 75% in 2028 before dropping to 55% after the patent expiration. Peak sales in BPDCN reached $52.9M in 2034.

In all patient populations, we assumed a 0.7% annual growth rate, and a 5% yearly price increase. In our projected operating expenses, we assumed a $3,700 COGS/vial, as stated by the CEO. R&D costs were projected to be 16% of revenue, and SG&A costs were projected to be 30% of revenue. The tax rate was set at 35%. We used a 12% discount factor, and a 1% perpetual growth rate.

Based on the above assumptions and a current market price hovering over $24/share, the market is assigning a 7.5% PTRS to UCART19 and UCART123, which is significantly low in our opinion. A 15% PTRS in both assets would yield a $47.99/share price target, and a 20% PTRS would yield $63.78/share, revealing significant potential upside. The potentially most important asset that this model does not include, however, is the allogeneic T-cell gene editing platform value that Cellectis holds with TALEN, and just recently CRISPR.

With Servier holding worldwide rights to UCART19, and Pfizer holding rights to market the drug in the United States, the royalties that will ultimately end up in the hands of Cellectis are meager. In this sense, UCART19 represents more of a proof of concept asset that may grant confidence for the success of UCART123, which Cellectis still completely owns, and which represents the lions share of Cellectis current projected value. If UCART19 is shown to be successful, it may pave the path for multiple additional drug assets given Cellectis expertise in the gene editing space.

Investors may be cautious due to UCART123s toxicity profile in the first two patients treated by the drug, and UCART19s underwhelming preliminary Phase I data released in the ASH abstracts. For those concerned about the durability of response in UCART123 based off of the preliminary UCART19 data, we would like to remind investors that the two drugs are in trials for very different indications and patient subpopulations. Thus, despite concerns about the safety profile and durability of response, it is still too early to make any definitive conclusions given the dose-finding nature of the UCART123 trials and the extremely limited 11 patient clinical data that have been made available so far for UCART19.

Financials

As of 9/30/17, Cellectis holds a healthy $304.1M in cash, cash equivalents, and current financial assets. With $20.3M in R&D costs and $12.2M in SG&A costs in Q3 2017 roughly extrapolating to $130M in operating costs/year, Cellectis has a runway of a little over 2 years.

Potential exits

Many of the players in the allogeneic T-cell space have entered into collaborations with big pharma, and Cellectis is no exception. Cellectis is the current leader in the space, and also holds one of the higher profile collaborations with Pfizer and Servier. With Pfizer lagging behind its peers in the CAR-T space, and frankly in the immuno-oncology space in general (Bavencio received its first approval in May 2017), Cellectis may represent a potential asset that could allow Pfizer to leapfrog over autologous CAR-T cell therapeutics. Additionally, the exclusivity agreement with Pfizer for UCART19 ends June 2018, which may open up further discussions.

The future always comes

As the leader of the space with notable collaborations and potential exits, Cellectis is favorably positioned to take a crucial role in the disruption of CAR-T therapy. Despite early clinical hiccups, we strongly believe that the future of CAR-T therapy lies in allogeneic T-cells – it is only a matter of time. We do not believe that individualized CAR-T therapies will be sustainable in the long run as therapies are expanded to a growing list of indications. Investors should understand, however, that this is not a short-term pump and dump investment, and that there may additional hurdles to overcome as allogeneic T-cells progress in clinical development. Rather, this is an investment we would hold onto for a time frame of years, based on the long-term prediction that allogeneic T-cells will eventually become a necessary component of any CAR-T therapy.

Disclosure: I am/we are long CLLS.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Week In Review: Shanghai Pharma Acquires Cardinal’s China Drug Distribution Network For $1.2 Billion

Shanghai Pharma (SHA: 601607) paid $1.2 billion to win the bidding war for Cardinal Health’s (NYSE:CAH) China drug distribution operations. Cardinal was China’s eighth-largest drug distribution company, with $3.5 billion in 2016 China revenues, while Shanghai Pharma is number three. After the companies are combined, Shanghai Pharma will become number one. In 2010, Cardinal got a foothold in the China market by paying $440 million to acquire Zuellig Pharma, a company that in-licensed China marketing rights to western drugs.

Arcus Biosciences, a Bay Area biotech, announced a $107 million Series C financing. The round was led by GV (formerly Google Ventures) and included participation from China investors Decheng Capital, BVF Partners and Hillhouse, among others. Arcus will use the capital for two clinical programs: AB928, a first-in-class dual adenosine receptor antagonist, and AB122, a PD-1 antibody for which Arcus in-licensed ex-China rights from WuXi Biologics (HK: 2269) and Harbin Gloria Pharma (SHZ: 002437) in a $816 million deal announced in August.

Adlai Nortye, a Hangzhou company, entered a $86.6 million in-licensing agreement to develop and market a novel immuno-oncolytic virus in Greater China that was discovered by Canada’s Oncolytics Biotech (OTCQX:ONCYF). Reolysin is an intravenously delivered immuno-oncolytic virus that activates the innate and adaptive immune systems. Oncolytics plans a US Phase III trial of Reolysin in patients with HR+/HER2 metastatic breast cancer. Adlai Nortye will be responsible for all China clinical development of the candidate.

Zensun (Shanghai) Science & Technology raised $76 million from a group of investors led by SDIC Venture Capital Management, which contributed half of the funding itself. Zensun’s lead drug is Neucardin, a novel treatment for chronic heart failure that is aimed at building the heart muscle. Zensun believes the drug, which has completed several Phase II trials in China and the US, will prove to improve cardiac function rather than treating the symptoms of cardiac disease.

Cygnus Biosciences, a Beijing company developing a novel sequencing technology, raised $19.6 million in a B Round. Cygnus is built on sequencing breakthroughs that it acquired from a Peking University team. Combining an innovative fluorogenic sequencing method with an information theory error-correction algorithm, Cygnus’s technology offers error-free sequences of up to 200 base pairs. The financing was led by Zhonguancun Development Group and Shanghai Creation Investment Management.

Pfizer (NYSE:PFE) sold its 49% stake in a China generic drug JV it formed five years ago with Zhejiang Hisun Pharma (SHA: 600267). The company sold the stake to Sapphire I Holdings at an undisclosed price. In 2016, Pfizer signaled it intended to end the partnership because the JV’s profits had not lived up to expectations. In 2012, when the JV was formed, it was said to be worth $545 million, with both companies contributing assets to the JV, not cash.

Corestone Biosciences, a Beijing novel medical device startup, formed a JV with Respiratory Motion of Boston. The JV will manufacture and offer a new generation of respiratory volume monitors, based on Respiratory Motion’s ExSpiron platform, in China and other global markets. The ExSpiron monitors are intended for post-operative hospital care and home use. Founded by industry veterans, CorestoneBio plans to focus on anesthesia and pain management.

Shanghai Pharma (SHA: 600607) told Bloomberg that it wants to keep doing international deals to expand its portfolio of drug offerings. The company plans to acquire specialty drugs from foreign manufacturers, products that target cancer and cardiovascular disorders, along with branded generics from US or European (especially Switzerland or Germany) pharmas. It also hopes to acquire foreign manufacturing facilities and to sell its own products in large western markets. The news follows Shanghai Pharma’s announcement yesterday that it will acquire Cardinal Health’s China drug distribution business for $1.2 billion.

Trials and Approvals

Ascentage Pharma, a China-US company, reported the US FDA accepted its IND submission to begin clinical trials of APG-1387, a novel small molecule targeting pathways that inhibit apoptosis. Ascentage hopes to test the candidate in patients with advanced solid tumors and hematologic malignancies. If approved for human testing, APG-1387 will be the second of Ascentage’s apoptosis-promoting candidates to start US and China clinical trials. Ascentage is headquartered in Hong Kong with an R&D lab in Shanghai and a lab-manufacturing facility in Taizhou’s China Medical City.

Kunshan RiboQuark Pharma has dosed the first person in a China trial of a siRNA ocular neuroprotectant therapy. The therapeutic (QPI-1007) treats a “stroke in the eye,” known more technically as acute non-arteritic ischemic optic neuropathy (NAION). QPI-1007 temporarily inhibits expression of the apoptotic protein, Caspase 2. RiboQuark is a JV formed by two siRNA companies: Ribo Life Science, headquartered in Kunshan, Jiangsu Province, and Quark Pharma, a US-Israeli company.

Disclosure: None

Editor’s Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

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