By Swissquote Analysts
AstraZeneca to Buy U.S. Cardiorenal-Drug Maker
Topic of the day
Anglo-Swedish pharma giant AstraZeneca PLC has agreed to buy CinCor Pharma Inc., including global rights to its Baxdrostat cardiorenal drug, for an upfront transaction value of around $1.3 billion. AstraZeneca said Monday that it will initiate a tender offer to acquire all of the U.S.-listed biopharmaceutical company’s outstanding shares for a price of $26 a share in cash at the closing of the deal. In addition, the pharmaceutical company has agreed to pay an additional $10 per share in cash upon filing for approval of a Baxdrostat product. The deal is expected to close in the first quarter. AstraZeneca said the acquisition will bolster its cardiorenal pipeline by adding baxdrostat, an inhibitor that has shown promise in clinical trials lowering blood pressure in treatment-resistant hypertension. The pre cash portion of the acquisition represents a 121% premium to CinCor’s closing market price of $11.78 on Friday.
The Switzerland stock market ended on a firm note on Monday, in line with markets across Europe, as the mood remained fairly bullish on hopes the Federal Reserve will slow down the pace of its interest rate hikes following last week's data showing a contraction in U.S. service sector activity. Optimism surrounding China's reopening helped as well. The benchmark SMI ended with a gain of 68.03 points or 0.61% at 11,212.57, after moving in a narrow range between 11,152.04 and 11,234.13. Sika rallied more than 5% and Geberit climbed 4.32%. Credit Suisse and Givaudan gained about 3.25% and 3.15%, respectively. Holcim surged 2.02%. Partners Group, Sonova, ABB, UBS Group, Zurich Insurance Group and Richemont gained 1.1 to 1.62%. Swiss Re ended nearly 1% down. Roche Holding and Novartis ended lower by about 0.75% and 0.5%, respectively. In the Mid Price Index, Zur Rose soared nearly 10%. AMS climbed 5.58%. VAT Group and Straumann Holding both gained about 4%. Ems Chemie Holding, Tecan Group, Georg Fischer, Bachem Holding, Adecco, Swatch Group and SIG Combibloc also ended sharply higher.
European stocks closed higher on Monday, extending recent gains, as optimism surrounding China's reopening and expectations of slower interest rate hikes by the U.S. Federal Reserve. Markets continued to benefit from optimism about the outlook for U.S. interest rates following last Friday's weaker than expected reading on service sector activity. Investors reacted positively to news that Hong Kong and mainland China resumed quarantine-free travel over the weekend. The move signals the end of zero-Covid policy which kept borders closed for almost three years. Data showing Germany's industrial production recovering at a faster than expected pace in November, and a report showing an improvement in Eurozone investor confidence helped as well. The pan European Stoxx 600 climbed 0.88%. The U.K.'s FTSE 100 gained 0.33%, Germany's DAX surged 1.25% and France's CAC ended higher by 0.68%, while Switzerland's SMI advanced 0.61%. Among other markets in Europe, Belgium, Czech Republic, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland and Sweden ended with sharp to moderate gains. Portugal and Russia posted modest gains. Turkiye declined sharply, while Austria, Denmark and Spain closed flat. In the UK market, Antofagasta rallied 4.3%. Flutter Entertainment, Scottish Mortgage, Entain, IAG, Ocado Group, Glencore, Melrose Industries, Croda International, WPP, Segro and RS Group gained 2 to 4%. Fresnillo, Airtel Africa, Beazley, BAE Systems, Frasers Group, Persimmon and Centrica lost 2 to 3.4%. In Paris, STMicroElectronics surged 5.5%. Carrefour and Eurofins Scientific both gained nearly 5%. Unibail Rodamco, Schneider Electric, L'Oreal, Engie, Legrand, WorldLine, Bouygues, Hermes International, Saint Gobain, Vinci, LVMH, Air Liquide, Veolia, Michelin, ArcelorMittal and Pernod Ricard gained 1 to 3%. Renault, Thales, Societe Generale and Sanofi ended notably lower. In the German market, Merck, Vonovia, Sartorius, Bayer, Infineon Technologies, Deutsche Post, SAP, HelloFresh, Siemens Healthineers and HeidelbergCement gained 2 to 3.5%.
U.S. stocks pared some of their early gains Monday, with investors still weighing bets about whether the Federal Reserve might dial back its aggressive pace of increases in interest rates. The S&P 500 fell 2.99 points, or 0.1%, to close at 3892.09, after rising as much as 1.4% in morning trading. The benchmark index jumped 2.3% Friday after the monthly jobs report pointed to a slowdown in wage growth. The Dow Jones Industrial Average dropped 112.96 points, or 0.3%, to 33517.65. The tech-focused Nasdaq Composite rose 66.36 points, or 0.6%, to 10635.65. Among individual stocks, Bed Bath & Beyond surged 31 cents, or 24%, to close at $1.62 in another bout of wild trading for the company's shares. The company is preparing to file for bankruptcy within weeks, The Wall Street Journal has reported. Uber Technologies shares rose $1, or 3.8%, to $27.40 after analysts at Piper Sandler raised their target price for the ride-hailing stock. Tesla was the S&P 500's best performer, rising $6.71, or 5.9%, to close at $119.77 and extend its rebound from a two-year low that it hit last week. Regeneron Pharmaceuticals was among the biggest laggards, tumbling $56.66, or 7.7%, to $680.49 after the drug maker reported lower sales of its Eylea treatment than Wall Street was expecting. Lululemon Athletica fell $30.60, or 9.3%, to $298.66 a share after the athletic-apparel maker said it expected profit margins to fall in its fourth quarter.
On the Asian stock exchanges, interest rate worries are back on the agenda on Tuesday – the indices are consequently falling. In China, the Shanghai Composite is down 0.1 percent and the HSI in Hong Kong is down 0.3 percent. ANZ economist Xing Zhaopeng said Chinese consumers' accumulated savings from the corona pandemic are unlikely to lead to stronger consumption in 2023. Nevertheless, private consumption will recover.
U.S. Government bonds yields fell. The yield on 10-year Treasury notes fell to 3.516% from 3.570% Friday. Two-year yields slipped to 4.197% from 4.260% Friday.
UBS raises Swatch target to CHF 287 (233) – Neutral
UBS raises Richemont target to CHF 154 (146) – Buy
UBS raises LVMH target to EUR 832 (749) – Buy
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