GSK on Tuesday said it has agreed to pay $2.1 billion upfront, with potentially a further $1.2 billion coming, to acquire Boston, Massachusetts-based Affinivax.
Affinivax is a clinical-stage biopharmaceutical company focused on developing a novel class of pneumococcal vaccines.
‘The proposed acquisition further strengthens our vaccines R&D pipeline, provides access to a new, potentially disruptive technology, and broadens GSK’s existing scientific footprint in the Boston area,’ GSK’s Chief Scientific Officer Hal Barron said.
GSK said Affinivax was attractive for its next-generation 24-valent pneumococcal vaccine candidate, as well as multiple antigen presenting system, which GSK described as novel technology.
The deal is expected to close in the third quarter of 2022.
GSK also reaffirmed for ’new GSK’ - the part remaining after the spin-off of its consumer arm - its full-year 2022 guidance and the medium-term outlook for 2021 to 2026 of more than 5% sales and 10% adjusted operating profit compound annual growth rate at constant currency.
GSK shares were up 0.8% early Tuesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.1% at 7,604.67
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Hang Seng: up 0.8% at 21,296.94
Nikkei 225: closed down 0.3% at 27,279.80
S&P/ASX 200: closed down 1.0% at 7,211.20
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US financial markets closed Monday for Memorial Day holiday.
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EUR: down at $1.0743 ($1.0780)
GBP: down at $1.2616 ($1.2640)
USD: up at JP¥127.88 (JP¥127.60)
Gold: down at $1,855.50 per ounce ($1,857.80)
Oil (Brent): down at $119.22 a barrel ($120.20)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday’s key economic events still to come
0955 CEST Germany labour market statistics
1100 CEST EU consumer price index
0930 BST UK mortgage approvals
0900 EDT US house price index
1000 EDT US consumer confidence index
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UK Prime Minister Boris Johnson is facing increasing hostility from his own members of Parliament, with Tory whips said to be discussing how to fight back if rebels trigger an all-important confidence vote. A steady stream of Tories have backed a ballot to decide the PM’s future, or called for Johnson to step down, with three new names surfacing on Monday and a fourth MP resubmitting a letter of no confidence he previously withdrew in light of the Ukraine crisis. The Telegraph reported that Conservative whips are now in talks about how to respond if the letter tally reaches 54, which would force 1922 Committee Chair Graham Brady to call a vote. All Tory MPs will be contacted at once if the threshold is reached, according to one whip, the newspaper said, as part of a move to save the PM’s job.
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The battle for control of the eastern Ukrainian city of Severodonetsk has reportedly entered its decisive phase, the Ukrainian general staff announced in its Tuesday situation report. Russian forces were ‘carrying out offensives in the area of the villages of Severodonetsk and Toshkivka in the Severodonetsk region,’ the report said. Further Russian ground assaults were reported from the region of Bakhmut to the west, with Russian forces attacking the villages of Zolote, Komyshuvakha, Berestove, Pokrovske and Dolomitne. The situation report said the attacks had been unsuccessful so far. The attacks around Bakhmut were apparently intended to cut off the last remaining Ukrainian-held city in the Luhansk region, Severodonetsk, as well as Lysychansk, its neighbour across the river.
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Russia’s Gazprom said its has halted gas supplies to the Netherlands after Dutch energy firm GasTerra refused to pay in rubles following the Russian military offensive in Ukraine. ‘Gazprom has completely stopped gas supplies to GasTerra due to non-payment in rubles,’ the Russian gas supplier said in a statement.
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BROKER RATING CHANGES
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RBC cuts boohoo price target to 80 (150) pence - ’sector perform’
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RBC cuts THG price target to 215 (500) pence - ’outperform’
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RBC cuts Asos price target to 3,200 (7,200) pence - ’outperform’
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COMPANIES - FTSE 100
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B&M European Value Retail has promoted its current chief financial officer to take over from departing Chief Executive Simon Arora. Current CFO Alex Russo will succeed Arora in ‘due course’, B&M said. ‘The board will now consider the most appropriate handover plan. A process to recruit a successor to Alex as CFO has already begun. In the meantime, both Simon and Alex will remain in their existing roles in order to minimise disruption to the business. A further announcement will be made when appropriate,’ B&M added. Turning to its results, B&M reported flat annual profit despite a decline in revenue. For the 52 weeks ended March 26, pretax profit was stable at £525 million, while revenue slipped to £4.67 billion from £4.80 billion the year prior. B&M recommended a final dividend of 11.5 pence, slipping from the 13.0p final payout offered last year. The total dividend was cut to 16.5p from 17.3p.
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COMPANIES - FTSE 250
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Water utility Pennon Group said its annual results were in line with internal expectations. For the year ended March 31, pretax profit slipped to £127.7 million from £132.1 million the year before. Total revenue improved to £792.3 million from £624.1 million. Pennon said the revenue growth was driven by non-household demand and contract wins from Pennon Water Services, while the FTSE 250-listed firm bemoaned that growth in underlying earnings was being more than offset by increased interest charges on index-linked debt. ‘Performance across the group continues to be operationally resilient, delivering against South West Water and Bristol Water’s business plan commitments, and driving growth at Pennon Water Services, realising benefits for all stakeholders,’ it said. Pennon raised its final dividend by 9.6% to 26.83p, taking its total dividend to 38.53p, an 8.2% increase on the 35.61p paid for the year prior.
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COMPANIES - SMALL CAP
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Johannesburg-based Gold Fields has agreed to buy Toronto-based Yamana Gold in an all-share offer valued at around $6.7 billion. Yamana shareholders will receive 0.6 of a new Gold Fields share for each Yamana share held. The transaction represents a premium of 34% to the 10-day volume weighted average traded price of Yamana shares on the New York Stock Exchange of $5.20 on Friday last week, based on Gold Fields American depositary shares’ 10-day average of $11.59. Yamana shareholders will receive either newly issued shares in Gold Fields, which are listed on the Johannesburg Stock Exchange, or newly issued Gold Fields’ American depositary shares, which trade on the NYSE. The Yamana board has unanimously approved the takeover and is recommending the deal to its shareholders.
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Secure Trust Bank has agreed to offload a £84.7 million loan portfolio to Intrum UK Finance. STB’s subsidiary Debt Managers held the portfolio, agreeing to sell it for £94.0 million. ‘Secure Trust Bank expects that the sale will generate a net profit benefit in the current financial year and release around £72 million of risk weighted assets, with the associated capital release being reinvested into Secure Trust Bank’s remaining specialist lending businesses and for other general corporate purposes,’ the lender added.
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COMPANIES - GLOBAL
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Credit Suisse is in the process of looking at options to strengthen its capital following a series of losses, which have eroded its financial buffers, Reuters reported. Citing ‘two people with knowledge of the matter’, Reuters said the size of the increase likely will exceed fr.1 billion; however this has not been finalised, one of the people said. One person said one option would be to sell shares to a few existing investors, according to Reuters; another is to sell one of its businesses, such as Credit Suisse’s asset management division. ‘Credit Suisse is currently not considering raising additional equity capital,’ the bank told Reuters in a statement.
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Tuesday’s shareholder meetings
GYG PLC - AGM
JTC PLC - AGM
Lookers PLC - AGM
McColl’s Retail Group PLC - AGM
Microlise Group PLC - AGM
PageGroup PLC - AGM
Petershill Partners PLC - AGM
Sportech PLC - AGM
Tekcapital PLC - AGM
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