Today’s top stories include AstraZeneca’s billion-dollar deal with biotech firm TeneoTwo, the EU’s plans to ease IPO rules to attract tech investment, and Sequoia Capital’s $9bn bet on Chinese startups. Meanwhile in Tuesday’s headlines, easyJet stock slumped after its COO quit and UBS offers its stock picks in an economic downturn.
AstraZeneca boosts oncology portfolio
AstraZeneca [AZN.L] announced on Monday that it plans to buy biotech firm TeneoTwo in a deal worth up to $1.27bn. The acquisition will boost its oncology offering, adding TeneoTwo’s blood cancer drug to its portfolio. Anas Younes, AstraZeneca's senior vice president of haematology R&D, said the experimental treatment “will enable us to explore novel combinations that have the potential to become new standards of care in this setting.” The news failed to lift the stock, however, which fell 0.5% in intraday trading on Tuesday.
EU eyes looser IPO rules
At last week’s European Innovation Area Summit, Mariya Gabriel, the commissioner in charge of research and innovation, argued that “Europe needs to draw in institutional investors to invest in deep-tech innovations”. According to Bloomberg, the EU will relax and simplify IPO rules in the hope of increasing the number of tech startups listing on the bloc’s stock exchanges and attracting $47bn in private money. This is expected to include countries matching regulations regarding dual-class share structures — they currently set their own.
Sequoia doubles its China bet
At a time when investors have been pulling out of Chinese equities over lockdown and concerns about the slowing economy, Sequoia Capital China has literally doubled down on its bet on the country’s tech startups. As first reported by The Information, it has raised $9bn of capital, having initially forecast raising $5bn. The investment firm has previously put money into ecommerce giant Pinduoduo [PDD] and delivery platform Meituan [3690.HK].
EasyJet COO quits amid pressure
Budget airline easyJet [EZJ.L] nosedived to a 52-week low on Tuesday amid growing consternation over cancelled flights and the resignation of its COO Peter Bellew on Monday. In June, trade union Unite urged Bellew to take control of the cancellation crisis and said there was a “lack of leadership”. “Everyone at easyJet remains absolutely focused on delivering a safe and reliable operation this summer,” commented CEO, Johan Lundgren, on Bellew’s departure.
UBS’s downturn consumer picks
With the S&P 500 in bear market territory, UBS analyst Keith Parker has screened the index for consumer names that it would expect to do well in a downturn. The list of stocks includes companies whose inventory minus sales growth year-over-year is greater than zero. Names included are JM Smucker [SJM], with a Q1 2022 inventory versus sales growth rate of 10%, and Boston Beer [SAM], with a rate of 22%.
Spotlight on uranium
The price of uranium has continued to rise in recent months, far outperforming precious metals and other commodities. This has shone a spotlight on uranium miners. While Cameco [CCJ], NexGen Energy [NXE] and Uranium Energy [UEC] have all delivered excellent growth recently, they’re also reporting losses, which could put their share prices under pressure in the near term.
Barclays buys Kensington Mortgages
The Barclays [BARC.L] share price has dipped in recent days following a mixed reaction to the banking group's decision to acquire Kensington Mortgages for £2.3bn at a time when recession fears could weigh negatively on lending. Russ Mould, investment director at AJ Bell, questioned the timing of the deal due to “cracks appearing in the property market”. Nevertheless, analysts remain bullish on the stock’s outlook in general.
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