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AbbVie’s Newly Licensed Drug Scores Against Crohn’s Disease

Big Pharma AbbVie ( ABBV ) said Tuesday that a recently licensed drug candidate succeeded in a phase-two trial of Crohn’s disease, as the company seeks to refresh its blockbuster immunology franchise. In the late morning at the Digestive Disease Week conference in San Diego, AbbVie’s researchers presented results from an ongoing phase-two study of risankizumab, a drug AbbVie licensed from Boehringer Ingelheim during the first quarter, in Crohn’s disease. They said that after 12 weeks of treatment, 24% to 37% of patients were in remission — depending on the dose — compared with just 15% in the placebo group. The treated group also had fewer adverse events than the placebo group. Risankizumab is one of a newer group of drugs targeting interleukins, small proteins in cells associated with inflammation, among the proteins is TNF, or tumor necrosis factor. “These results are particularly encouraging because of the difficult-to-treat population within the study,” researcher Brian Feagan said in a statement. “Our patients had endoscopically confirmed moderate or more severe disease activity at study entry and the majority had previously failed treatment with one or more TNF antagonists.” The most popular TNF blocker happens to be Humira, AbbVie’s flagship drug treating Crohn’s disease as well as other immunological conditions like rheumatoid arthritis and psoriasis. Humira’s patents are under fire , however, and last week AbbVie’s stock tumbled when the patent board agreed to review a challenge to a methods patent brought by Coherus BioSciences ( CHRS ). Other drugs targeting interleukins include Novartis ‘ ( NVS ) Cosentyx, launched early last year for psoriasis, as well as Eli Lilly ‘s ( LLY ) Taltz, approved for psoriasis in March. Those drugs target interleukin (IL) 17, while risankizumab targets IL-23 through a novel mechanism of action. “The efficacy of this drug looks to be as good (as), or perhaps even better than IL-17,” Evercore ISI analyst John Scotti said in a video for clients recorded May 3. “And remember, Cosentyx peak sales in consensus right now are about $4 billion.” AbbVie stock was up 2.5% in afternoon trading on the stock market today , near 61, and shares in the past week have found support at the 50-day moving average line.

Tesla Short Seller Issues Scathing Warning Of Pending ‘Death Spiral’

Loading the player… Tesla Motors ( TSLA ) shares got slammed several weeks ago after analysts doubted the electric carmaker’s bullish production guidance. Now that the stock has tried to recover, bears want to take the driver’s seat again. Devonshire Research Group is shorting the stock and on Tuesday issued a report that says Tesla “has the potential to enter a death spiral” if it fails to deliver on its “bold claims on return and/or product value.” The investment firm also said Tesla “has engaged in aggressive accounting that calls to mind the experiences of Enron and WorldCom.” A Tesla spokeswoman directed IBD to the company’s latest shareholder letter, which explained that Tesla’s non-GAAP financial measures recognize revenue and related costs when customers take delivery of their cars. Other carmakers book revenue when vehicles are sold into dealership inventory rather than to end customers, it noted. BofA Sees 30% Downside And on Monday, Bank of America resumed coverage on Tesla with an underperform rating and 155 price target, which is about 30% lower than current prices. With the company’s recent equity offering, the analyst warned of further dilution to the stock, given Tesla’s cash burn rate. Tesla’s 2018 production goal was also called “optimistic at best.” Still, other Wall Street analysts have said the target is achievable and applauded Tesla for its leadership in autonomous driving technology. Global Equities Research said that suppliers are becoming more and more interested in working with Tesla, with the current supplier activity level at its Fremont, Calif., factory almost twice the level seen in December. Tesla Stock Hits Resistance Despite the negative reports, Tesla shares are holding up in the stock market today , rising 0.5%. But in Monday’s session, Tesla’s attempt to retake the key 200-day line failed as it hit resistance there. Shares are trading 24% below their high reached last July. Nvidia On Fire Meanwhile, Tesla chip supplier Nvidia ( NVDA ) is still on fire. Nvidia shares are hitting another new high Tuesday as they rise 2.2% and are extended 37% past a cup-with-handle buy point cleared in March. Mobileye Retakes 50-Day Tesla partner Mobileye ( MBLY ), which is working on autonomous driving capabilities, is trying to retake its 50-day moving average with a 1% gain. Mobileye stock is trading 42% below its all-time high reached last August. Alphabet Retakes 200-Day And Google owner Alphabet ( GOOGL ), which is also developing a self-driving car, is retaking its 200-day line as it climbs 2.2% in above-average volume. It’s still trading below its 50-day line, but a flat base with a 791.05 buy point has now taken shape.

Will Apple iPhone 7 Sell, With Bigger Upgrade Coming Next Year?

Apple ( AAPL ) shares have gotten a lift this week on reports of higher-than-expected production orders for the upcoming iPhone 7. But Wall Street is starting to wrestle with worries that iPhone users might skip that modest upgrade and wait for next year’s expected radical redesign. The iPhone 7, likely to be released in September, is expected to look much like the current iPhone 6S series, but with a thinner body, faster processor and better camera. It also could be the first waterproof iPhone. But next year’s iPhone 8 is rumored to use an OLED display, which offers richer colors, darker blacks and lower power consumption. OLED displays also are thinner than LCD screens and are flexible, allowing new design options. The iPhone 8 could feature an all-glass, curved screen design. It might even eliminate the physical home button in favor of the pressure-sensitive screen, according to tech news reports. Universal Display ( OLED ) stock climbed to a record high Tuesday on the iPhone 8 speculation. Universal Display is a key supplier of technology and materials for OLED displays. Universal Display climbed as much as 5.8% to 64.83 in intraday trading on the stock market today . In afternoon trading, it was up 5%, near 64.50. Apple shares were up 1.4%, below 98, in afternoon trading Tuesday. Semiconductor equipment manufacturer Applied Materials ( AMAT ) also is benefiting from interest in OLED. Last week, Applied Materials said its Q2 display orders rose a whopping 483%, driven by demand for machines used to manufacture OLED displays. With rumors rampant about the iPhone 8, smartphone users looking to upgrade will have to decide whether to get a more traditional-looking iPhone 7 or hold out for the revamped iPhone 8. Consumers Won’t Skip iPhone 7 Upgrade: Wells Fargo Wells Fargo Securities analyst Maynard Um said in a research report Monday that he doesn’t believe next year’s iPhone will hold back upgrades during the iPhone 7 cycle. “While it is reasonable to assume Apple may introduce an iconic iPhone in 2017, we believe it is not a foregone conclusion that the consumers will skip the iPhone 7 upgrade in 2016,” Um said. “The core of our premise revolves around continued competition for subscribers as two-year contracts come up for renewal.” If wireless carriers continue to run aggressive promotions to reduce subscriber churn and to attract new customers coming off two-year contracts, there may be strong incentives for people to upgrade, Um said. Um has an outperform rating on Apple stock, with a fair value of 120 to 130. Despite encouraging iPhone 7 production reports , UBS analyst Steven Milunovich is cautious. He recently lowered his iPhone forecast to unit growth of 2% for fiscal 2017, down from 4% previously. Apple’s fiscal 2017 starts on Sept. 25. For fiscal 2018, during the iPhone 8 cycle, he expects unit sales growth of 15%. Milunovich rates Apple stock as buy, with a 12-month price target of 115. “A lack of differentiation in the iPhone 7 will cause the upgrade cycle to lengthen,” he said in a report. “Although it’s possible that Apple has a ‘gee-whiz’ upgrade in store for the iPhone 7, the absence of leaks makes it unlikely.” RELATED: Universal Display Spikes On iPhone OLED Prospects Apple Begins Retail Refresh With San Francisco Store