Taking the occasional loss comes part and parcel with investing on the stock market. And there's no doubt that Air…

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Investors of MEI Pharma (MEIP) trudged off to the 4th of July celebrations in a downbeat mood. In last week’s final session, shares declined by 18.5%.The announcement that MEI and its collaboration partner, the Helsinn Group, prematurely ended a Phase 3 trial of pracinostat in acute myeloid leukemia (AML) was to blame for the sell-off. Interim data showed that the candidate’s use most likely won’t lead to better overall survival rates for AML patients.While the news was greeted by surprise at investment firm BTIG, the trial’s abrupt ending does not overly concern company analyst Thomas Shrader.Contributing only 6% to the 5-star analyst’s model for the biotech, Shrader has another reason “patients and investors should care.” This reason is MEI’s potential treatment for patients with relapsed or refractory follicular lymphoma (FL), which is currently in a Phase 2 trial.With the trial ongoing and expected to be fully enrolled by 1H21, Shrader’s base case involves the approval of ME-401 for FL in 2021. While MEI-401 is a PI3 delta inhibitor and belongs to a class of drugs that has been considered risky in the past, recent data supports Shrader’s bullish thesis.“Overall, we see ME-401 in a good place in the B-Cell malignancy landscape with a very powerful PI3K inhibitor they have learned to dose safely at a time when powerful drugs are increasingly viewed favorably in earlier lines. The drug's non-overlapping safety profile with other's in the overall B-Cell malignancy arena (BTK and MDM-2 inhibitors) also suggests combinations are more likely to have acceptable safety profiles… We still like the story, and we are raising our probability of success (POS) for ME-401 in FL to 75% from 60% based on recent data,” Shrader explained.To this end, Shrader maintained a Buy rating along with a $5.50 price target. Investors could be taking home a 64% gain, should Shrader’s thesis play out over the coming months. (To watch Shrader’s track record, click here)The rest of the Street backs up the BTIG analyst’s call. All 6 analysts tracked over the past three months rate MEI a Buy. With an average price target of $9.75, there’s massive upside potential of 185% in the year ahead. (See MEI Pharma stock analysis on TipRanks)To find good ideas for biotech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. More recent articles from Smarter Analyst: * 3 Coronavirus Penny Stocks With Triple-Digit Upside Potential * The Rise of E-Commerce and Cloud Services Positions Amazon (AMZN) for the Win * Facebook Faces More Ad Boycotts, But This Analyst Expects Minimal Impact * 3 "Strong Buy" Penny Stocks With Explosive Upside Ahead

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(Bloomberg Opinion) — Transparency and public trust are essential to effective bank regulation. These guiding principles were severely compromised in the years leading up to the 2008 financial crisis. Instead of simple, straightforward metrics of bank solvency, capital requirements became an exercise in gamesmanship. Regulators deferred to banks’ own opaque and incomprehensible models of risk to determine how much capital they needed, deeming them “well-capitalized” when the banks were anything but. Reforms adopted after the crisis wisely added simpler, objective capital standards, complemented by stress tests that publicize whether large banks have sufficient capacity to weather severe economic conditions.Unfortunately, last month’s confusing and vague pronouncements by the Federal Reserve of this year’s stress test results undermined those principles. Instead of reassuring the public, they have created more uncertainty as to the strength of the banking system.Much criticism has centered on the failure of the Fed to publish bank-specific results under its “enhanced sensitivity analysis,” which took into account worsening economic scenarios caused by the Covid-19 pandemic. The stress scenarios the Fed had announced in February were not as severe as the path the economy is on now. But the Fed only published bank-specific results under February’s now essentially irrelevant assumptions.Less noticed, but we feel equally important, was the failure of the Fed to publish an enhanced sensitivity analysis using a simpler, more reliable measure of financial strength called the leverage ratio. Instead, the Fed relied solely on banks’ “risk-based ratios,” which seek to measure capital adequacy in relation to judgments about the riskiness of banks’ assets. Risk-based ratios failed spectacularly in the lead up to the financial crisis as large banks took huge, highly leveraged stakes in securities and derivatives tied to mortgages because they and their regulators deemed those assets low risk.After the crisis, global consensus emerged that regulators should backstop risk-based capital rules with leverage ratios, which proved to be more reliable indicators of solvency during the financial crisis. For the largest banks, these supplemental leverage ratios require a minimum of 5% equity funding for the banking organization, and 6% for subsidiaries insured by the Federal Deposit Insurance Corp.A review of the bank-specific results published by the Fed using February’s pre-pandemic assumptions shows that some large banks would be operating with thin capital margins even under those more benign scenarios. For instance, Goldman Sachs’s supplemental leverage ratio dipped as low as 3.5%; Morgan Stanley, 4.5%; JPMorgan Chase, 5.1%. Unfortunately, we don’t know how these and other large banks will fare under the more-distressed conditions caused by the pandemic. The Fed’s enhanced sensitivity assessment only disclosed aggregate risk-based ratios. These ranged from 9.5% for a “V-shaped” recovery to 7.7% for a more severe “W,” with the bottom 25th percentile of banks going as low as 4.8% in a “W” scenario. Leverage ratios are typically less than half of banks’ risk-based measures. Indeed, a major concern about risk-based ratios is that they imply capital levels greater than they actually are. Thus, it is likely there were a number of banks with stress leverage ratios below 3% in the Fed’s sensitivity analysis, far too thin to keep them lending and solvent without government support.The failure to disclose leverage ratios in the pandemic sensitivity analysis is consistent with the Fed’s rulemaking in March to eliminate leverage requirements from their stress tests. Unfortunately, it is not the only step regulators have taken to marginalize leverage ratios. They have also allowed large banks to remove “safe assets” such as Treasury securities and reserve deposits from the supplemental leverage ratios calculation. But the relatively low requirements were calibrated based on the assumption that they would apply to all of a banks’ assets, including safe assets as well as risky exposures such as uncleared derivatives and leveraged loans. Removing safe assets without raising the required ratio will eventually lead to significant reductions in capital minimums, according to regulators’ estimates: $76 billion for banking organizations and more than $55 billion for their insured subsidiaries.Regulators have said this step was necessary to “support credit to households and businesses.” But this is hard to reconcile with their refusal to request suspension of bank dividend payments. (They did finally impose a modest cap, which will still permit most banks to continue paying dividends at their first quarter levels.) Retaining that capital would give banks the ability to expand support for the real economy without weakening their capital position. FDIC-insured banks paid $30 billion in dividends to their holding companies in the first quarter. If that $30 billion had stayed on banks’ balance sheets, it could have supported nearly a half trillion dollars in additional capacity to take new deposits and make loans.Moreover, we challenge whether this change will further its stated goal to increase Main Street lending. It will instead create incentives to reduce lending. A number of banks will most likely need to improve their capital ratios as a result of the Fed’s continued stress assessments. But to do so, they can simply cut back on loans, which have relatively high risk-based capital requirements, and shift into U.S. Treasuries, which now have no capital requirements. They will be able to boost their risk-based ratios without having to curb dividends or issue new equity.Regulators have said removing Treasury securities and reserve deposits from the leverage ratio calculation is temporary, but bank lobbyists are expected to seek legislation making it permanent as part of the next stimulus package. Banking advocates are also pushing regulators to finalize pending changes to the supplemental leverage ratios which would reduce required capital at the eight largest FDIC-insured banks by $121 billion, or 20% on average. If the banking lobby is successful, we fear there won’t be much left of meaningful leverage restrictions.Bank capital funding requirements are not unnecessary red tape as bank lobbyists try to portray them. They are essential to financial stability. Studies show that highly capitalized banks do a better job of lending than highly leveraged ones, especially during economic stress. The previous financial crisis demonstrated how unreliable risk-based ratios can be and the need to backstop them with overarching leverage constraints on large financial institutions. Greater reliance on simpler, transparent leverage ratios was central to regaining public trust in the solvency and resilience of the banking system. Their demise will force the public to rely on the Fed’s and big banks’ complex and nontransparent risk models. Bank capital levels will once again become an insiders’ game.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Sheila Bair was chair of the Federal Deposit Insurance Corp. from 2006 to 2011.Thomas Hoenig was vice chair of the Federal Deposit Insurance Corp. from 2012 to 2018.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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(Bloomberg) — Sunrun Inc., America’s biggest rooftop-solar company, is set to become a behemoth through a $1.46 billion takeover of its rival Vivint Solar Inc. Shares of both companies surged.The agreement announced late Monday is one of the industry’s biggest. It comes after Tesla Inc.’s 2016 purchase of debt-plagued SolarCity Corp. and the failed 2015 acquisition of Vivint by SunEdison Inc., the clean-energy giant that went bankrupt soon after.The second major U.S. energy deal in as many days — following Berkshire Hathaway Inc.’s $4 billion purchase of Dominion Energy Inc. assets — also threatens to further weaken Tesla’s grip on the rooftop-solar market and could inspire more sector consolidation. Sunrun and Vivint combined provide about 75% of new residential solar leases each quarter, according to BloombergNEF.“Sunrun will be freaking big,” Joe Osha, an analyst at JMP Securities, said in an interview. “They are clearly looking for ways to get scale and efficiency.”Sunrun shares rose 16% at 9:44 a.m. in New York. Vivint climbed 29%.The deal, subject to approvals, values Blackstone Group Inc.-backed Vivint at $3.2 billion including debt. It comes as America’s rooftop-solar industry works its way back from the worst of the coronavirus pandemic. Door-to-door sales — a key marketing strategy for installers — practically ceased as states imposed lockdowns, while installations were slowed or canceled.“Now was a perfect time because we have been through the Covid test,” Sunrun Chief Executive Officer Lynn Jurich said on a conference call Tuesday.There’s evidence that the sector may be rebounding. Investor enthusiasm for rooftop-solar equities has surged after March lows, companies have lined up financings in recent weeks, and there have been efforts to ramp up the digitization of operations.Amid the pandemic, rooftop solar “could be an industry that picks up faster than others,” Hugh Bromley, an analyst at BNEF, said in an interview. “People are staying home thinking about renovations and they’re seeing their power bills increase while they’re running the air conditioner around the clock.”Rooftop KingSunrun has been America’s largest rooftop-solar company for more than two years, edging aside Tesla, which had inherited the throne from longtime king SolarCity. Tesla’s market-share has shrunk since the acquisition amid strategic shifts and competition from rooftop rivals including Sunnova Energy International Inc. and SunPower Corp.New leases and power-purchase agreements represented about 27% of American residential-solar systems prior to the pandemic. Marketing is usually the biggest expense for American installers, and the companies said in a statement Monday that the deal will create $90 million in annual “cost synergies.”The acquisition, which is expected to close in the fourth quarter, is an all-stock transaction, under which each share of Vivint will be exchanged for 0.55 shares of Sunrun. The combined company would have an enterprise value of $9.2 billion, they said Monday.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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United’s reservations for travel within the coming month quickly began to slide after New York, New Jersey and Connecticut said last month they would require people arriving from hot-spot states to quarantine for 14 days, the report said. The slump was most pronounced at United’s Newark hub, where near-term net bookings were just about 16% of year-ago levels as of July 1, the Journal said. Earlier this month, United said it was adding nearly 25,000 domestic and international flights in August, tripling the number it flew in June, while standing ready to shift plans if recent spikes in COVID-19 cases hurt demand.

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American Airlines is telling the U.S. Department of Transportation your pet dog cannot apply for a credit card. Nor can you apply for a credit card using other fraudulent means. Lawyers for the airline made that clear this week in a 53-page document alleging some loyalty program members recently took part in an "elaborate scheme […]

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Nio Shares charged over 20% higher Monday on better-than-expected June sales.

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A look at the shareholders of Overstock.com, Inc. (NASDAQ:OSTK) can tell us which group is most powerful. Institutions…

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Shares in Novavax (NVAX) are currently jumping 42% in pre-market trading after the biotech company said that it has been granted $1.6 billion by the U.S. government to fund the development of a potential coronavirus vaccine.The stock is soaring to $116.53 in Tuesday’s pre-market trading as Novavax announced that it has been selected to participate in Operation Warp Speed (OWS), a U.S. government program that seeks to begin supplying millions of doses of a safe, effective vaccine for COVID-19 in 2021. As part of the program, Novavax has been awarded with the funding to complete its late-stage clinical development, including a pivotal Phase 3 clinical trial of its COVID-19 candidate NVX‑CoV2373 and supply 100 million doses of the vaccine as early as late 2020.“The pandemic has caused an unprecedented public health crisis. We are honored to partner with Operation Warp Speed to move our vaccine candidate forward with extraordinary urgency in the quest to provide vital protection to our nation’s population,” said Novavax CEO Stanley C. Erck. “We are grateful to the U.S. government for its confidence in our technology platform, and are working tirelessly to develop and produce a vaccine for this global health crisis.”NVX‑CoV2373 consists of a stable, prefusion protein made using its proprietary nanoparticle technology and includes Novavax’ proprietary Matrix‑M adjuvant. In May, Novavax initiated a Phase 1/2 clinical trial of NVX-CoV2373 in 130 healthy participants 18 to 59 years of age began in Australia. Preliminary immunogenicity and safety results from the trial are expected at the end of July, and the Phase 2 portion to assess immunity, safety, and COVID-19 disease reduction is expected to begin thereafter. The Phase 1/2 clinical trial is being supported by an up-to $388 million funding arrangement with the Coalition for Epidemic Preparedness Innovations (CEPI).In the run-up to developing a coronavirus vaccine, the stock has this year gone up almost 20 times in value. However, shares dropped 5% this month, prompting B. Riley FBR analyst Mayank Mamtani to recommend investors take advantage of the stock weakness.At the same time, Mamtani reiterated his Buy rating on the stock with a $106 price target, suggesting that despite this year’s rally shares are poised to gain another 33% over the coming 12 months.The rest of the Street shares Mamtani’s outlook. The Strong Buy analyst consensus is backed up by 4 Buy ratings versus 1 Hold rating. Meanwhile, the $75.80 average price target indicates 4.6% downside potential from current levels. (See Novavax stock analysis on TipRanks).Related News: Cellectis Sinks 13% In Extended Trading After FDA Halts Cancer Clinical Trial Chembio Gains 12% After-Hours On New Covid-19 BARDA Contract Gilead’s Covid-19 Remdesivir Therapy Gets Conditional European Nod More recent articles from Smarter Analyst: * Microsoft Mulls Acquisition of Warner Bros.’ Gaming Unit – Report * Microsoft To Reveal New Games Lineup With Xbox Series X Event This Month  * Otonomy Pops 15% in Pre-Market Fueled By Otividex Data, Positive Results From Tinnitus Candidate * Bellus Health Craters 72% On Chronic Cough Miss; Analyst Still Says Buy

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(Bloomberg) — Bayer AG’s plan for moving on from its Roundup legal woes hit a snag barely two weeks after it announced a settlement of claims against the weedkiller when a judge expressed skepticism over part of the proposal.U.S. District Judge Vince Chhabria wrote in a court filing Monday that a proposed system for dealing with future lawsuits over the herbicide is problematic. Shares of Bayer, which inherited the weedkiller through its purchase of Monsanto, fell as much as 6.9% in Frankfurt, the most intraday since March 23.The judge’s misgivings center on a plan to create a class of future claims as part of the nearly $11 billion settlement. Any change to that portion of the proposal wouldn’t necessarily affect the rest of the deal, in which the company agreed to resolve about 125,000 existing lawsuits.About 30,000 claims, contending that Roundup caused non-Hodgkin’s lymphoma, are not yet subject to deals between plaintiffs and Bayer. Some U.S. plaintiffs’ lawyers are vowing to file another wave of new suits that could add tens of thousands to that total.Chhabria set a July 24 hearing to consider the class-action proposal, which he said he’s “tentatively inclined” to reject. That portion of the plan would establish a scientific panel to determine whether Roundup’s active ingredient causes cancer, while still potentially allowing users of the herbicide to press claims.Concerned InvestorsThe judge’s filing reinforces concerns from investors that Bayer’s Roundup deal isn’t enough to get it beyond the mountain of litigation, Alistair Campbell, an analyst at Liberum Capital, said in a note. While Bayer’s market valuation is “deeply discounted” right now, that situation probably won’t change until the company can convince the market that it’s finally resolved the Roundup legal headache.Bayer said late Monday the class proposal is still on the table. The company — whose shares are down about 9% since it announced the settlement on June 24 — insists that Roundup is safe and has appealed three U.S. verdicts against it.“We appreciate the judge’s order raising his preliminary concerns with the proposed class settlement, which we take seriously and will address” at the hearing, Chris Loder, a U.S.-based spokesman for the Leverkusen, Germany-based drugmaker, said in an interview.Future Cases“Thankfully, Judge Chhabria has seen the ruthless plan as an outrageous attempt to deprive every future victim of Monsanto’s killer Roundup of their right to fair and full compensation and to a jury trial,” Tom Kline and Jason Itkin, plaintiffs attorneys for users of the weedkiller who haven’t settled their suits, said in an emailed statement Tuesday.The futures class was the brainchild of Bayers’ lawyers and some plaintiffs’ attorneys , including San Francisco-based Elizabeth Cabraser and Samuel Issacharoff, a New York University law professor, according to court filings. It took a year of “unrelenting” settlement negotiations to come up with the plan, Cabraser said in a court filing. It’s designed to provide funds to Roundup cancer patients in financial need and finance a review of the science underlying the cancer claims.William Dodero, Bayer’s global head of litigation, said at a press conference last month he couldn’t predict how many new Roundup cases will emerge and need to be included in the futures class. He said the class will feature an independent science panel that will decide whether glyphosate –- Roundup’s active ingredient — is a carcinogen rather than leave the decision to individual judges and juries.Read More: Bayer Isn’t Out of the Roundup Woods as 30,000 Claims RemainThree California juries orderered Bayer to pay billions of dollars in combined damages based on findings that glyphosate caused the plaintiffs’ cancers. Those awards ultimately were reduced to about $190 million.The science panel is designed to have independent experts make the decision on the chemical’s toxicity, Dodero said.“They will be selected by the parties by mutual agreement, and if there is not mutual agreement each party will select two; the four will select the remaining fifth,” he said last month. “They will be objective and a blue-ribbon panel to fully assess the evidence.”If the panel finds glyphosate is not a carcinogen, then class members would be barred from recovering from their cases, according to court filings. Conversely, if the panel says the chemical can cause cancer, future Roundup users could proceed with their suits.Sticking PointThat’s one of the sticking points with the class-action mechanism, Chhabria said.“It’s questionable whether it would be constitutional (or otherwise lawful) to delegate the function of deciding the general causation question (that is, whether and at what dose Roundup is capable of causing cancer) from judges and juries to a panel of scientists,” he said.He also questioned whether there is an incentive to join the class for future Roundup claimants, who would have five months after the class is approved to opt out of it.“Why would a potential class member want to replace a jury trial and the right to seek punitive damages with the process contemplated by the settlement agreement?” the judge asked.He also said the proposal has procedural drawbacks in making sure all potential future Roundup claimants have proper notice that they must decide within five months whether to become part of the class.NFL Comparison“Given the diffuse, contingent, and indeterminate nature of the proposed class, it seems unlikely that most class members would have an opportunity to consider in a meaningful way (if at all) whether it is in their best interest to join the class,” he said.The Roundup litigation isn’t the first to generate a settlement that addresses future claims.But unlike the National Football League’s 2014 concussion settlement — slated to provide at least $765 million to ex-players suffering from brain injuries now and in the future –- the Roundup futures class doesn’t apply to a “narrow and readily identifiable” set of claimants, Chhabria said. The NFL’s futures class won approval from an appeals court in 2016.“A class that includes all Roundup users who will get cancer in the future is very different,” the judge said. “For example, the idea that a migrant farmworker or someone who is employed part time by a small gardening business would receive proper notification (much less the opportunity to consider their options in a meaningful way) is dubious.”The consolidated case is In re: Roundup Products Liability Litigation, MDL 2741, U.S. District Court, Northern District of California (San Francisco).(Updates with analyst commentary in sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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