Incyte Downgraded - Analyst Notes Intense Competition, Particularly In Larger Markets

The S&P 500 Index today is up +0.10%, the Dow Jones Industrials Index is up +0.03%, and the Nasdaq 100 Index is up by +0.25%.

Stocks today have erased knee-jerk gains after the initial 2:00 PM Eastern announcement and are trading close to the flat line again after the FOMC opted to cut interest rates by 50 basis points. The markets will now look to today’s post-meeting comments from Fed Chair Powell to see why policymakers bypassed a more typical -25 bps cut in the fed funds target range and opted for a larger -50 bps rate cut instead. Also, fresh quarterly projections in the form of the Fed’s “dot plot” will offer further insight into the path of interest rates and the economy.

Today’s reports showed that US housing starts and building permits for August were better than expected, bolstering the prospects for a soft landing and supporting stocks. US MBA mortgage applications rose +14.2% in the week ended September 13, with the purchase mortgage sub-index rising +5.4% and the refinancing mortgage sub-index rising +24.2%. The average 30-year fixed rate mortgage fell -14 bp to a 2-year low of 6.15% from 6.29% in the prior week.

US Aug housing starts rose +9.6% m/m to a 4-month high of 1.356 million, stronger than expectations of 1.318 million. Aug building permits, a proxy for future construction, rose +4.9% m/m to a 5-month high of 1.475 million, stronger than expectations of 1.410 million.

Hawkish comments earlier today from former St. Louis Fed President Bullard weighed on bonds and stocks when he said the Fed should cut interest rates by -25 bp today as the case for a -50 bp rate cut is "overblown."

The markets are discounting the chances at 100% for a -25 bp rate cut at the conclusion of today’s FOMC meeting and at 64% for a -50 bp rate cut at that meeting.

Overseas stock markets today are mixed. The Euro Stoxx 50 is down -0.36%. China's Shanghai Composite recovered from a 7-1/4 month low and closed up +0.49%. Japan's Nikkei Stock 225 closed up +0.49%.

Interest Rates

December 10-year T-notes (ZNZ24) today are down -11 ticks. The 10-year T-note yield is up +4.7 bp at 3.693%. Dec T-notes today are moderately lower on negative carryover from a slide in European government bonds to 1-week lows. T-notes also fell on today’s stronger-than-expected US Aug housing starts and building permits reports. In addition, rising inflation expectations are bearish for T-notes after the 10-year breakeven inflation rate today rose to a 2-week high of 2.133%.

European government bond yields today are moving higher. The 10-year German bund yield climbed to a 1-week high of 2.195% and is up +4.9 bp at 2.192%. The 10-year UK gilt yield rose to a 1-week high of 3.854% and is up +8.5 bp at 3.852%.

ECB Governing Council member Villeroy de Galhau said, "The ECB has cut interest rates twice and should continue to cut them," as victory over inflation is "within sight."

Swaps are discounting the chances of a -25 bp rate cut by the ECB at 32% for the October 17 meeting.

US Stock Movers

Super Micro Computer is up more than +2% after Needham & Co. initiated coverage on the stock with a recommendation of buy with a price target of $600.

VF Corp is up more than +3% after Barclays upgraded the stock to overweight from equal weight with a price target of $22.

Victoria’s Secret & Co is up more than +3% after Barclays upgraded the stock to equal weight from underweight.

GE Healthcare is up more than +2% after BTIG upgraded the stock to buy from neutral with a price target of $100.

United States Steel is up more than +1% after a US security panel granted Nippon Steel permission to refile its plans to purchase the company for $14.1 billion.

Extra Space Storage is up more than +1% after Jeffries upgraded the stock to buy from hold with a price target of $204.

ResMed is down more than -4% to lead losers in the S&P 500 after Wolfe Research downgraded the stock to underperform from peer perform with a price target of $180.

Cencora is down more than -2% after Bank of America Global Research downgraded the stock to neutral from buy.

DaVita is down more than -1% on signs of insider selling after an SEC filing showed CEO Rodriguez sold $9.86 million of shares on Monday.

Workday is down more than -1% to lead losers in the Nasdaq 100 after Needham & Co. cut their price target on the stock to $300 from $350.

Hilton Grand Vacations is down more than -2% after Goldman Sachs initiated coverage on the stock with a sell recommendation and a price target of $31.

Incyte Corp is down more than -1% after Truist Securities downgraded the stock to hold from buy.

Earnings Reports (9/18/2024)

Ennis Inc (EBF), General Mills Inc (GIS), Steelcase Inc (SCS).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

The Swiss Market Index ended Wednesday trading 0.50% in the red as investors take a cautious stance on a major day for monetary policy.

The US Fed's decision is a few hours away and apart from a widely expected 25-basis-point cut in interest rates, it will also contain clues into policymakers' next moves.

"Game day has finally arrived. It's Fed day and with it a seminal moment for US monetary policy that begins the easing process after all that we've been through over recent years. Except the occasion is marred by the Fed's poor communications that have driven elevated market volatility around size and pace issues right into game day," Scotiabank said in a note.

Back in Europe, the latest on consumer prices in the UK and eurozone were released earlier in the day: the British inflation rate held steady at 2.2% and the euro area's fell to 2.2% in August.

There were no major economic data releases in Switzerland during the session but the next day will feature Switzerland's August balance of trade and the government's latest economic forecasts.

In company news, Novartis' shares were 0.01% higher after the US Food and Drug Administration approved its early breast cancer combination treatment. Meanwhile, Meyer Burger Technology shares plunged 11.77% after the photovoltaic systems maker unveiled a strategic restructuring program that included top-management changes and other layoffs.

Novartis AG released new data Wednesday from the ALITHIOS open-label extension study.

Data show first-line Kesimpta (ofatumumab) treatment for up to six years led to less disability and disease progression in recently diagnosed (≤3 years) and treatment-naïve (RDTN) people with relapsing multiple sclerosis (RMS), compared to those who switched from Sanofi SA’s Aubagio (teriflunomide).

These data will be presented at the European Committee for Treatment and Research in Multiple Sclerosis.

Also Read: Goldman Sachs Shifts Stance On Novartis, Cites Lack Of Near-Term Catalysts.

Data from the overall ALITHIOS study population showed that continuous use of Kesimpta was associated with numerically fewer six-month confirmed disability worsening (6mCDW) and progression independent of relapse activity (6mPIRA) events up to six years compared to those who switched from teriflunomide.

RDTN patients receiving continuous Kesimpta were more likely to remain free from 6mCDW than those who switched to Kesimpta from teriflunomide (83.4% vs. 76.3%).

RDTN patients receiving continuous Kesimpta were also more likely to be free of 6mPIRA vs. switching from teriflunomide (88.9% vs. 83.3%).

A separate U.S.-based single-arm OLIKOS Phase 3b study showed that at 12 months, all clinically stable RMS patients who switched from intravenous (IV) anti-CD20 therapy to Kesimpta showed no new gadolinium-enhancing (Gd+) T1 lesions, a commonly used marker of disease activity, compared to baseline.

Tuesday, the FDA approved Novartis’ Kisqali (ribociclib) in combination with an aromatase inhibitor for the adjuvant treatment of hormone receptor-positive/human epidermal growth factor receptor 2-negative stage II and III early breast cancer at high risk of recurrence, including those with node-negative disease.

The approval is based on results from the pivotal Phase 3 NATALEE trial, which showed a significant and clinically meaningful 25.1% reduction in risk of disease recurrence.

Price Action: Novartis stock is down 0.1% at $115.85 at last check Wednesday.

Read Next:

• Tupperware Seeks Bankruptcy Protection As Demand For Its Colorful Containers Fades In The E-Commerce Era

Image: Wikimedia Commons

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

The S&P 500 Index today is down by -0.04%, the Dow Jones Industrials Index is down by -0.18%, and the Nasdaq 100 Index is up by +0.07%.

Stocks today are little changed on uncertainty ahead of the FOMC’s decision on interest rates this afternoon. Today’s reports showed that US housing starts and building permits for August were better than expected, bolstering the prospects for a soft landing and supporting stocks.

The markets will look to the 2-day FOMC meeting that concludes this afternoon to see whether policymakers will decide that a -25 bp cut in the fed funds target range would be adequate for a US economy that has shown signs of losing momentum or whether they will decide on a larger -50 bp rate cut instead. Also, fresh quarterly projections in the form of the Fed’s “dot plot” will offer further insight into the path of interest rates and the economy. In addition, today’s post-meeting comments from Fed Chair Powell will be scrutinized regarding the Fed’s future policy intentions.

US MBA mortgage applications rose +14.2% in the week ended September 13, with the purchase mortgage sub-index rising +5.4% and the refinancing mortgage sub-index rising +24.2%. The average 30-year fixed rate mortgage fell -14 bp to a 2-year low of 6.15% from 6.29% in the prior week.

US Aug housing starts rose +9.6% m/m to a 4-month high of 1.356 million, stronger than expectations of 1.318 million. Aug building permits, a proxy for future construction, rose +4.9% m/m to a 5-month high of 1.475 million, stronger than expectations of 1.410 million.

Hawkish comments today from former St. Louis Fed President Bullard weighed on bonds and stocks when he said the Fed should cut interest rates by -25 bp today as the case for a -50 bp rate cut is "overblown."

The markets are discounting the chances at 100% for a -25 bp rate cut at the conclusion of today’s FOMC meeting and at 64% for a -50 bp rate cut at that meeting.

Overseas stock markets today are mixed. The Euro Stoxx 50 is down -0.36%. China's Shanghai Composite recovered from a 7-1/4 month low and closed up +0.49%. Japan's Nikkei Stock 225 closed up +0.49%.

Interest Rates

December 10-year T-notes (ZNZ24) today are down -11 ticks. The 10-year T-note yield is up +4.7 bp at 3.693%. Dec T-notes today are moderately lower on negative carryover from a slide in European government bonds to 1-week lows. T-notes also fell on today’s stronger-than-expected US Aug housing starts and building permits reports. In addition, rising inflation expectations are bearish for T-notes after the 10-year breakeven inflation rate today rose to a 2-week high of 2.133%. T-notes extended their losses after former St. Louis Fed President Bullard said the FOMC should cut interest rates by only -25 bp today.

European government bond yields today are moving higher. The 10-year German bund yield climbed to a 1-week high of 2.195% and is up +4.9 bp at 2.192%. The 10-year UK gilt yield rose to a 1-week high of 3.854% and is up +8.5 bp at 3.852%.

ECB Governing Council member Villeroy de Galhau said, "The ECB has cut interest rates twice and should continue to cut them," as victory over inflation is "within sight."

Swaps are discounting the chances of a -25 bp rate cut by the ECB at 32% for the October 17 meeting.

US Stock Movers

Super Micro Computer is up more than +2% after Needham & Co. initiated coverage on the stock with a recommendation of buy with a price target of $600.

VF Corp is up more than +3% after Barclays upgraded the stock to overweight from equal weight with a price target of $22.

Victoria’s Secret & Co is up more than +3% after Barclays upgraded the stock to equal weight from underweight.

GE Healthcare is up more than +2% after BTIG upgraded the stock to buy from neutral with a price target of $100.

United States Steel is up more than +1% after a US security panel granted Nippon Steel permission to refile its plans to purchase the company for $14.1 billion.

Extra Space Storage is up more than +1% after Jeffries upgraded the stock to buy from hold with a price target of $204.

ResMed is down more than -4% to lead losers in the S&P 500 after Wolfe Research downgraded the stock to underperform from peer perform with a price target of $180.

Cencora is down more than -2% after Bank of America Global Research downgraded the stock to neutral from buy.

DaVita is down more than -1% on signs of insider selling after an SEC filing showed CEO Rodriguez sold $9.86 million of shares on Monday.

Workday is down more than -1% to lead losers in the Nasdaq 100 after Needham & Co. cut their price target on the stock to $300 from $350.

Hilton Grand Vacations is down more than -2% after Goldman Sachs initiated coverage on the stock with a sell recommendation and a price target of $31.

Incyte Corp is down more than -1% after Truist Securities downgraded the stock to hold from buy.

Earnings Reports (9/18/2024)

Ennis Inc (EBF), General Mills Inc (GIS), Steelcase Inc (SCS).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

The S&P 500 Index today is up by +0.05%, the Dow Jones Industrials Index is down by -0.11%, and the Nasdaq 100 Index is up by +0.11%.

Stocks today are slightly higher ahead of the FOMC’s decision on interest rates this afternoon. Today’s reports showed US housing starts and building permits for August were better than expected, bolstering the prospects for a soft landing and boosting stocks.

The markets will look to the 2-day FOMC meeting that concludes this afternoon to see whether policymakers will decide that a -25 bp cut in the fed funds target range would be adequate for a US economy that has shown signs of losing momentum or whether they will decide on a larger -50 bp rate cut instead. Also, fresh quarterly projections in the form of the Fed’s “dot plot” will offer further insight into the path of interest rates and the economy. In addition, today’s post-meeting comments from Fed Chair Powell will be scrutinized regarding the Fed’s future policy intentions.

US MBA mortgage applications rose +14.2% in the week ended September 13, with the purchase mortgage sub-index rising +5.4% and the refinancing mortgage sub-index rising +24.2%. The average 30-year fixed rate mortgage fell -14 bp to a 2-year low of 6.15% from 6.29% in the prior week.

US Aug housing starts rose +9.6% m/m to a 4-month high of 1.356 million, stronger than expectations of 1.318 million. Aug building permits, a proxy for future construction, rose +4.9% m/m to a 5-month high of 1.475 million, stronger than expectations of 1.410 million.

The markets are discounting the chances at 100% for a -25 bp rate cut at the conclusion of today’s FOMC meeting and at 66% for a -50 bp rate cut at that meeting.

Overseas stock markets today are mixed. The Euro Stoxx 50 is down -0.36%. China's Shanghai Composite recovered from a 7-1/4 month low and closed up +0.49%. Japan's Nikkei Stock 225 closed up +0.49%.

Interest Rates

December 10-year T-notes (ZNZ24) today are down -9 ticks. The 10-year T-note yield is up +3.8 bp at 3.683%. Dec T-notes today are moderately lower on negative carryover from a slide in European government bonds to 1-week lows. Also, position squaring and long liquidation are weighing on T-notes ahead of this afternoon’s decision by the FOMC on interest rates. T-notes extended their losses after US Aug housing starts and building permits rose more than expected.

European government bond yields today are moving higher. The 10-year German bund yield climbed to a 1-week high of 2.185% and is up +4.1 bp at 2.184%. The 10-year UK gilt yield rose to a 1-week high of 3.837% and is up +6.8 bp to 3.836%.

ECB Governing Council member Villeroy de Galhau said, "The ECB has cut interest rates twice and should continue to cut them," as victory over inflation is "within sight."

Swaps are discounting the chances of a -25 bp rate cut by the ECB at 32% for the October 17 meeting.

US Stock Movers

Super Micro Computer is up more than +4% to lead gainers in the S&P 500 and Nasdaq 100 after Needham & Co. initiated coverage on the stock with a recommendation of buy with a price target of $600.

Cruise line operators are climbing today, with Carnival and Norwegian Cruise Line Holdings up more than +2% and Royal Caribbean Cruises Ltd up more than +1%.

VF Corp is up more than +5% after Barclays upgraded the stock to overweight from equal weight with a price target of $22.

Victoria’s Secret & Co is up more than +5% after Barclays upgraded the stock to equal weight from underweight.

United States Steel is up more than +1% after a US security panel granted Nippon Steel permission to refile its plans to purchase the company for $14.1 billion.

GE Healthcare is up more than +1% after BTIG upgraded the stock to buy from neutral with a price target of $100.

ResMed is down more than -5% to lead losers in the S&P 500 after Wolfe Research downgraded the stock to underperform from peer perform with a price target of $180.

Cencora is down more than -2% after Bank of America Global Research downgraded the stock to neutral from buy.

Incyte Corp is down more than -2% after Truist Securities downgraded the stock to hold from buy.

DaVita is down more than -2% on signs of insider selling after an SEC filing showed CEO Rodriguez sold $9.86 million of shares on Monday.

Edwards Lifesciences is down nearly -1% after Jeffries downgraded the stock to hold from buy.

Hilton Grand Vacations is down more than -1% after Goldman Sachs initiated coverage on the stock with a sell recommendation and a price target of $31.

Earnings Reports (9/18/2024)

Ennis Inc (EBF), General Mills Inc (GIS), Steelcase Inc (SCS).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

Novartis NVS announced that the FDA has approved breast cancer drug Kisqali (ribociclib) for a broader population.

The regulatory body approved Kisqali in combination with an aromatase inhibitor (AI) for the adjuvant treatment of people with hormone receptor-positive/human epidermal growth factor receptor 2-negative (HR+/HER2-) stage II and III early breast cancer (EBC) at high risk of recurrence, including those with node-negative (N0) disease.

Kisqali is a selective cyclin-dependent kinase inhibitor, a class of drugs that helps slow the progression of cancer by inhibiting two proteins — cyclin-dependent kinase 4 and 6 (CDK4/6).

The broad indication in HR+/HER2- stage II and III EBC at high risk of recurrence approximately doubles the population eligible for CDK4/6 inhibitor adjuvant therapy.

Year to date, shares of Novartis have risen 14.6% compared with the industry’s growth of 24.1%.

Broader Label for NVS’ Kisqali

The FDA approval is based on strong results from the late-stage NATALEE trial. The results showed a significant and clinically meaningful 25.1% reduction in risk of disease recurrence in a broad population of patients with HR+/HER2- stage II and III EBC treated with adjuvant Kisqali plus endocrine therapy (ET) compared to ET alone, including those with high-risk N0 disease.

The invasive disease-free survival benefit was consistently observed across all patient subgroups.

Please note that Kisqali is already approved for the treatment of metastatic breast cancer (MBC) in several countries.

The latest FDA approval of Kisqali for this early breast cancer population, including those with N0 disease, should enable NVS to offer treatment with a CDK4/6 inhibitor to a significantly broader group of patients.

NVS recently presented an updated analysis from the NATALEE trial at the European Society for Medical Oncology Congress 2024. Results showed that Kisqali caused a deepening benefit beyond the three-year treatment period and reduced the risk of recurrence by 28.5% compared to ET alone, in patients with stage II and III HR+/HER2- EBC.

Novartis will continue to evaluate NATALEE patients for long-term outcomes, including overall survival.

Kisqali: A Top Drug for NVS

Kisqali is one of the key growth drivers for NVS, which is now a pure-play innovative medicine company with a focus on core therapeutic areas — cardiovascular, renal and metabolic, immunology, neuroscience and oncology.

It is one of the leading breast cancer drugs in the United States and outside the country, with a dominant market share. The drug generated sales worth $1.3 billion in the first half of 2024.

Approximately 90% of breast cancer cases in the United States are diagnosed early (stages I-III). These patients remain at risk of cancer recurrence (in most cases as an incurable metastatic disease).

The drug's approval for a broader population should further fuel sales.

Regulatory reviews for Kisqali as an EBC treatment are ongoing worldwide, including in the EU and China.

Last year, the FDA also expanded Eli Lilly’s LLY Verzenio’s (abemaciclib) indication. Verzenio, a CDK4/6 inhibitor, was approved in combination with ET for the adjuvant treatment of HR+HER2-, node-positive, EBC at a high risk of recurrence.

Eli Lilly is witnessing a stupendous run in 2024, riding high on the success of its GLP-1 drugs — Mounjaro and Zepbound.

NVS’ Zacks Rank & A Stock to Consider

NVS currently carries a Zacks Rank #3 (Hold).

A better-ranked stock from the large-cap pharma industry is Pfizer PFE, which currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Estimates for PFE’s 2024 earnings have risen from $2.39 to $2.62 per share over the past 60 days. For 2025, the bottom-line estimate has risen from $2.75 to $2.85 over the same time frame.

Zacks Investment Research