Samsung Electronics shares slide as Note 7 recall takes toll

SEOUL


Samsung Electronics Co Ltd’s (005930.KS) shares fell to their lowest level in nearly two months on Monday after the tech giant told customers to switch off and return their new Galaxy Note 7 smartphones due to fire-prone batteries. Investors had wiped 15.9 trillion won (14.3 billion) off the South Korean firm’s market capitalization as of 0303 GMT, as a series of warnings from regulators and airlines around the world raised fears for the future of the flagship device.
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“Some said initially the Galaxy Note 7 could be the best smartphone ever, but now it’s possible the phone will go down as the worst ever,” IBK Securities analyst Lee Seung-woo said, predicting weak sales in the fourth quarter.

Samsung Electronics’ common shares were down 6.3 percent to 1,476,000 won each after touching their lowest level since July 12, and were on track for their biggest daily percentage drop in more than four years.  Analysts said the recall could torpedo Galaxy Note 7 sales and have a lasting impact on the $211 billion company’s brand image, which could derail a recovery in its smartphone market share against rivals like Apple Inc (AAPL.O).

The global smartphone leader on Saturday urged all customers to turn off their Note 7s and return them as soon as possible as part of the recall which it voluntarily initiated on Sept. 2.  The recall is unprecedented for Samsung, which prides itself on its manufacturing prowess. Some analysts estimate the firm might lose $5 billion won worth of revenue after accounting for recall costs. The company had said it had sold 2.5 million Galaxy Note 7s that need to be replaced.

Nomura said it had cut its forecast for Samsung’s third-quarter mobile operating profit by 900 billion won to 3.1 trillion won in the wake of the Note 7 recall.  “Even if Samsung puts Note 7s with new batteries in the market it won’t sell as well as it had initially,” HMC Investment analyst Greg Roh said.
The Note 7 problems are a major blow to Samsung’s efforts to build on the strong sales of its Galaxy S7 smartphones launched in March.

The firm was beginning to claw back smartphone market share and had tried to pre-empt Apple by launching the almost $900 Note 7 on Aug. 19, about a month ahead of the latest iPhone release.
The recall forced Samsung to halt sales indefinitely in markets such as the United States and push back launches in other regions such as Europe. –  (Reuters) 

Global stocks, bonds suffer central bank anxiety attack

SYDNEY


Asian shares suffered their sharpest setback since June on Monday as investors were rattled by rising bond yields and talk the Federal Reserve might be serious about lifting U.S. interest rates as early as next week. European bourses were also tipped to open with losses stretching from 1.4 percent for the FTSE .FTSE to 2.2 percent for the DAX .GDAXI.
Reports that the Bank of Japan was considering ways to steepen the Japanese yield curve, along with worries that central banks more generally were running short of fresh stimulus options, hit sovereign debt and risk appetite globally.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 2.4 percent, pulling away from a 13-month peak. It was the largest daily drop since the frenzy caused by Britain’s vote in late June to leave the European Union.
On a technical basis the index had been overbought in recent sessions, leaving it vulnerable to a pullback. Hong Kong .HSI, Shanghai .CSI300 and Australian stocks followed with falls of more than 2 percent.

The Nikkei 225 .N225 lost 2 percent as the safe haven yen firmed and selling in bonds drove yields on 20-year JGBs to the highest since March. Traders were unsure how the BOJ would try to steepen the yield curve if it goes down that path at a policy review later this month, but markets are worried that tapering of its buying in long-dated bonds could be among the options.

EMini futures for the S&P 500 ESc1, traded in Chicago during Asian hours, swung 0.6 percent lower, though Treasuries were finding safe-haven demand. Some Fed members have been trying to convince markets that the September meeting would be “live” for a hike, even though futures <0#FF:> only imply a one-in-four chance of a move.
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No less than three Fed officials are expected to speak later in the day, including board member and noted dove Lael Brainard. Any hint of hawkishness would likely further pressure bonds and equities.
“Market participants are wondering if maybe she (Brainard) is being wheeled out to give the market one last warning of a rate hike at next week’s meeting,” said Marshall Gittler, head of research at broker FXPRIMUS. “The thinking is that if someone as dovish as she is starts talking like a hawk, people will notice. Her speech will be closely examined.”

Such risks led Wall Street’s fear gauge, the VIX index .VIX, to its highest close since late June on Friday. The Dow .DJI shed 2.13 percent on Friday, while the S&P 500 .SPX lost 2.45 percent and the Nasdaq .IXIC 2.54 percent. Super-low yields have made returns on equities seem relatively more attractive in comparison, so any sustained climb in yields would likely weigh on stock valuations. The yield on benchmark German debt DE10YT=RR, for instance, had turned positive for the first time since July 22 and ended at 0.02 percent, its highest since June 23. Yields on U.S. 10-year and 30-year paper hit 11-week peaks.

In the forex market, the sudden bout of risk aversion benefited perceived havens such as the yen while hitting carry trades in higher yielding currencies including the Australian dollar. The Aussie has lost 1.5 percent against the yen in two sessions to stand at 77.21 AUDJPY=, while the Japanese currency was firm on the U.S. dollar at 102.55 JPY=. The euro was sidelined on the dollar at $1.1242 EUR= after weak German trade data dragged it down from $1.1271 on Friday. The dollar index .DXY, which tracks it against a basket of six currencies, eased fractionally to 95.265.

Adding to the jittery mood on Monday was news that Democratic candidate Hillary Clinton fell ill at a Sept. 11 memorial ceremony and had been diagnosed with pneumonia. Markets have generally assumed Clinton would win the presidency and have not truly considered the implications, both economic and for national security, should Donald Trump prevail. Geopolitical concerns had already been inflamed by North Korea’s fifth and biggest nuclear test, ratcheting up a threat that its rivals and the United Nations have been powerless to contain.

North Korea has completed preparations for another nuclear test, South Korea’s Yonhap News Agency reported on Monday, citing South Korean government sources. In commodities, oil prices extended Friday’s 4 percent fall in Asia after reports showed increasing oil drilling activity in the United States, indicating that producers can operate profitably around current levels and bring on new supply.
Brent crude LCOc1 was off 68 cents, or about 1.4 percent, at $47.33 a barrel, while U.S. crude CLc1 lost 75 cents to $45.13.

Oil prices fall as U.S. drillers add new rigs, speculators cut long positions

SINGAPORE


Crude prices fell over 1.5 percent on Monday after U.S. oil drillers added rigs to look for new production as producers adapt to cheaper crude, with speculators cutting positions betting on further price rises. Brent crude futures LOCOc1 were trading at $47.29 per barrel at 0200 GMT (10:00 p.m. EDT), down 72 cents, or 1.5 percent, from their last settlement.

U.S. West Texas Intermediate futures CLc1 were down 80 cents, or 1.74 percent, at $45.08 a barrel.
Traders said the price falls on Monday and Friday were a result of increasing oil drilling activity in the United States, which indicated that producers can operate profitably around current levels.
“Each dollar is being used far more efficiently and, as a result, $50 oil appears much more palatable,” Barclays bank said in a note to clients.

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U.S. drillers added oil rigs for a tenth week in the past 11, according to a Baker Hughes rig count report on Friday. It was the longest streak without rig cuts since 2011. Speculative oil traders also became less confident of higher oil prices, cutting their net long U.S. crude futures and options positions for a second consecutive week last week, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Oil’s near 5-percent price decline since Sept. 8 partly reverses a 10-percent rally early in the month, which was fueled by speculation that oil exporters could cap production.

Algeria’s energy minister said there is a consensus among OPEC and non-OPEC members about the need to stabilize the oil market to support prices, state news agency APS reported on Saturday.
OPEC Secretary-General Mohammed Barkindo told APS that OPEC was not seeking a definite price range for oil but rather “sustainable stability” for the market.

Moves toward clinching a global deal on stabilizing crude output come five months after similar talks for a production freeze failed when Saudi Arabia insisted that Iran join the pact.

Tehran says it supports any measures to stabilize the market, but has stopped short of committing to output restraint before its production reaches 4 million barrels per day, the level at which it says it was pumping before the imposition of Western sanctions which were lifted last January.

Even if exporters agree on freezing output around current levels, analysts said that would do little to raise prices as most exporters are pumping out oil at or near record levels, and have adapted to do so at lower prices.

European stocks rocked by return of volatility after summer lull

LONDON


European stocks fell sharply on Friday, dropping suddenly in afternoon trade following a sell-off on Wall Street as investors reacted to less dovish than expected signals from central bankers on both sides of the Atlantic. The pan-European STOXX 600 index was down 1.1 percent, the biggest one-day fall for the index since the start of August, after a summer which has seen a tight trading range persist for two months.

The fall added to a pullback from the previous session after some investors expressed disappointment at the fact that the European Central Bank (ECB) had not discussed an extension of the timetable for its economic stimulus programme at its policy meeting on Thursday. European stocks fell sharply along with Wall Street after U.S. Federal Reserve official Eric Rosengren, traditionally viewed as a dove, said there were risks associated with not raising rates soon. Some traders said a nuclear test by North Korea had also hit sentiment. The dollar rose as investors speculated that a September rate hike had become more likely, and German 10-year bond yields rose above zero for the first time since June as investors assessed the difficulties that central banks face.

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“The lack of action by the ECB yesterday and the comments by (president) Mario Draghi put equity market participants on edge a little bit,” said Manoj Ladwa, head of trading at TJM Partners.
Europe’s STOXX 600 had hit an eight-month high on Monday, but ended the week down 1.4 percent.
U.S. volatility index VIX, which is a crude measure of investor caution, surged to its highest level since July. The European equivalent ticked up to a lesser extent, to a one-week high. Falls were broad based, with every sector bar financials, which have suffered from lower interest rates, in negative territory.
Retail stocks fell 2.1 percent, led by a 4.6 percent drop in Inchcape after Exane BNP Paribas cut its rating on the stock to neutral from outperform.

Novo Nordisk fell 2.2 percent after JP Morgan cut its rating on the stock to “neutral” from “overweight”.
Shares in British pub operator Greene King fell 6 percent, the top STOXX 600 faller, after the company warned trading conditions could get tougher following Britain’s ‘Brexit’ vote in June to quit the European Union.
Shares in French company Rubis – which specialises in the petroleum and chemicals sector and operates storage facilities – rose 7.7 percent to a record high after posting higher interim profits.

Dollar starts week on the back foot, risk aversion buoys yen

TOKYO


The dollar began the week on the back foot on Monday as a bout of risk aversion underpinned the yen, though losses were limited as the U.S. currency garnered some support on renewed talk of a possible rate hike by the Federal Reserve as early as this month.
The safe-haven yen benefited from a broad drop in equities, with Tokyo’s Nikkei .N225 slipping to a two-week low. The dollar was down 0.3 percent at 102.445 yen JPY=, while the euro slipped 0.2 percent to 115.15 yen EURJPY=.

The currency market also kept an eye on the sell-off in global bonds, with perceived limits to central bank policies having taken German and Japanese sovereign bond yields to multi-month highs. U.S. Treasury yields have also tracked their global peers higher.
“The rise in global bond yields are being seen as a negative factor by the risk asset markets, which in turn is supporting the yen and capping the dollar,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

The Bank of Japan is now studying several options to steepen the bond yield curve, say sources familiar with its thinking, as authorities desperately seek out policy tools to revive an economy that has failed to emerge from stagnation despite years of massive stimulus.

While the stock market’s fall was the main driver behind the yen’s firmer showing, the Japanese currency also benefited from its safe haven status in reaction to Democratic candidate Hillary Clinton falling ill at a Sept. 11 memorial ceremony and diagnosed with pneumonia.

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Markets have generally assumed Clinton would win the presidency and have not truly considered the implications, both economic and for national security, should Donald Trump prevail.

Last week’s nuclear test by North Korea, its fifth and biggest, has already unsettled global markets. And on Monday South Korea’s Yonhap News Agency cited South Korean government sources saying North Korea has completed preparations for another test. Disappointment at the European Central Bank’s failure to deliver more stimulus last week has weighed on euro zone bond markets.

Against the dollar, the euro edged up 0.1 percent to $1.1239 EUR=. A spate of Fed speakers kept hopes alive for a September rate hike, despite some recently disappointing economic data including only a modest rise in U.S. nonfarm payrolls.  After Boston Federal Reserve President Eric Rosengrenspoke on Friday, odds on a rate hike in September rose to 30percent probability from 24 percent before his comments.

Monday is the final day on which U.S policymakers can speak in public before the “blackout period” begins a week before the Sep. 20-21 meeting. Fed governor Lael Brainard was suddenly scheduled late last week to give a talk in Chicago on Monday.  “Market participants are wondering if maybe she’s being wheeled out to give the market one last warning of a rate hike at next week’s meeting,” Marshall Gittler, head of investment research at FXPrimus, said in a note.

“The thinking is that if someone as dovish as she is starts talking like a hawk, people will notice,” Gittler said. Speculators increased their bets on the U.S. dollar for the first time in six weeks in the week ended Sept. 6, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday.
Japanese yen net long positions fell to their lowest level since mid-August. The prevailing risk off mood did not bode well for antipodean currencies. The Australian dollar was down 0.3 percent at $0.7524 AUD=D4 and the New Zealand dollar was little changed at $0.7316 NZD=D4 after losing 1 percent the previous day.– (Reuters) 

Gold near two-month lows on rate hike worries

LONDON


Gold on Wednesday held near two-month lows hit in the previous session, with the dollar firm after upbeat U.S. data and as investors waited for nonfarm payroll numbers later this week for clues on the timing of a Federal Reserve rate hike.

Spot gold was little changed at $1,310.48 per ounce at 0104 GMT. The metal fell 1 percent to hit $1,308.65 on Tuesday, its lowest since June 28. U.S. gold futures slipped 0.2 percent to $1,313.90. Fed Chair Janet Yellen said on Friday the case for higher rates was strengthening, though she gave little clarity on the timing of a move. In an interview on Tuesday, Vice Chair Stanley Fischer said the U.S. job market is nearly at full strength and that the pace of rate increases by the Fed will depend on how well the economy is doing.

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U.S. consumer confidence rose to an 11-month high in August, with households more upbeat about the labour market, in a further sign that the economy was regaining steam after faltering in the first half of the year.  Friday’s nonfarm report for August, as well as other data, could reinforce hawkish messages from Yellen and other Fed officials. The dollar hovered near a three-week high against a basket of currencies on Wednesday. The dollar index was little changed at 96.073 after rising to 96.143 overnight, its highest since Aug. 9.

Gold is highly-sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.12 percent to 955.40 tonnes on Tuesday.

Oil prices dip on stronger dollar; rise in U.S. crude stocks data

SINGAPORE


Crude oil futures fell in early trade on Wednesday as the U.S. dollar held around three-week highs and industry stocks data indicated a build in U.S. crude inventories.

International Brent crude oil futures LCOc1 were trading at $48.27 (36.9025 pounds) per barrel at 0052 GMT, down 10 cents, or 0.2 percent, from their previous close.

U.S. West Texas Intermediate (WTI) crude futures were down 16 cents, or 0.4 percent, at $46.19 a barrel.

The U.S. dollar index, which measures the currency against a basket of six majors, rose as high as 96.143 .DXY, its highest level since Aug. 9, on Tuesday.

A stronger greenback makes dollar-priced commodities like oil more expensive for holders of other currencies and possibly capping demand.

The dollar strengthened after recent hawkish comments by Fed Chair Janet Yellen and Vice Chair Stanley Fischer boosted expectations that a rate hike by the U.S. central bank at its September policy meeting could be on the horizon.

“The pullback in commodity prices is likely to continue in the short term with a stronger USD and weaker fundamentals,” Australian bank ANZ said in a note.

 

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U.S. crude stocks rose by 942,000 barrels in the week to Aug. 26 to 525.2 million, nearly in line with analysts’ expectations for an increase of 921,000 barrels, data from industry group the American Petroleum Institute showed on Tuesday.

Official U.S. oil inventories data published by the EIA is due for release on Wednesday.

Concerns over refinery production outages caused by storm threats in the Gulf of Mexico have done little to support prices as a product glut in the United States persists.

“Prices didn’t receive any support from news that nearly a quarter of the capacity in the Gulf of Mexico has been shut due to storms,” ANZ bank said.

Dollar rises to two-week high ahead of U.S. jobs data

NEW YORK


The dollar strengthened on Tuesday to a two-week high against a basket of currencies as investors looked ahead to crucial jobs data this week for clues on when the Federal Reserve will next raise interest rates. Hawkish comments on Friday by Fed Chair Janet Yellen and Vice Chair Stanley Fischer have increased expectations the U.S. central bank could hike at its September policy meeting, though most investors and economists view a single increase at the December meeting as more likely.

The next key indicator is Friday’s jobs report for August, which is expected to show that employers added 180,000 jobs in the month, according to the median estimate of 89 economists polled by Reuters.

“We had a bit more hawkish tone from Yellen at Jackson Hole and that was reinforced by Fischer,” said Mark McCormick, North American head of FX strategy at TD Securities in Toronto.

“The market is refocusing itself on the upcoming data releases and I think that’s helping a rethink of where the Federal Reserve’s going to be in the second half of the year,” he said.

Friday’s jobs data will be preceded on Wednesday by the ADP National Employment Report of private-sector payrolls. Fischer, who said that the data could weigh on any rates decision, gave no fresh clues in a television interview on Tuesday. He said the U.S. job market is nearly at full strength and the pace of Fed rate increases will depend on how well the economy is doing.

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The dollar index, which measures the currency against a basket of six majors, rose to 95.899, its highest level since Aug. 12. The greenback gained 0.68 percent against the yen to 102.59 , the highest level since Aug. 8. The yen was also pegged back by comments from policymakers worried about its recent strength.

Japanese Chief Cabinet Secretary Yoshihide Suga told Reuters in an interview on Tuesday that the government will respond “appropriately” to unwelcome yen gains that hurt economic growth.

Koichi Hamada, an adviser to Prime Minister Shinzo Abe, said the Bank of Japan could consider buying foreign bonds as an option to weaken the yen, if government intervention in the currency market is deemed by the United States to be exchange rate manipulation.
 

Turnall downsizes after slumping to $1.8 mln loss

HARARE


Turnall Holdings has re-sized its business operations to align with the current level of working capital while seeking further funding. The move which is directed at cutting operational costs entails the subsequent placement of its Harare sheet making plant under care and maintenance as well as retrenchment of staff.

Turnall managing director Caleb Musodza told analysts a total of 80 employees had been retrenched and the operation which took effect in July will enable the company to meet current and short term market requirements while also producing an acceptable gross margin and optimising the use of working capital.

Musodza added that downsizing of operations was an imperative move as the company is currently failing to secure loans from local banks as a result of a weak balance sheet.

Turnall incurred a $1.8 mln loss for the half year ended 30 June 2016 on the back of inadequate funding for operations as well as foreign payments challenges which resulted in low production levels. This was against a profit of $399 754 in the comparable year ago period. Sales volumes at 18 480 tonnes declined 37% from 29 435 tonnes recorded last year.  Revenue at $8.73 mln was 38% below prior year in line with volume decline.

Gross profit margins declined to 9% in the first half from 22% in prior year. During the period under review capacity utilisation at 20% also contributed to the decline in gross profit.

“Capacity utilization was at 20% and we experienced erratic raw material supply and payments to foreign suppliers as a result of the loss incurred.  Total equity declined 39% to $3.37 mln in the first half from $5.52 mln in the first half of 2016 as a result of the loss incurred,” said FD Kenias Horonga.

“Reclassification of FBC management fees, additional CABS Dimaf loan of $1 mln and repayments of loans since the start of year of $1.1 mln resulted in a 46% increase in the loans figure to $8.29 mln from $5.66 mln in 2015 while payables declined 10% to $23,82mln in H1 from $26,54mln in 2015,”added Horonga.

Looking forward Musodza said he expected a positive revenue base in the last half of the year although funds are going to be weighed down by once off retrenchment costs and impairment costs. As such the company was expected to only return to profitability in 2017 and beyond.

“F16 is expected to deliver positive operating profit, but an overall loss position due to the once off retrenchment and plant impairment cost. Based on the implemented streamlined operations setup, projections into the financial year 2017 and beyond show a steady growth in profitability,” he said.

Musodza said the company had secured Dimaf funding in May and although the funds came a little late than expected, the capital injection had doubled the company’s production.

He added that Turnall had successfully recovered a debt amounting to $800 000, which had been previously written off.

“We deployed Dimaf funding to improve our working capital position and production has been on an upward trend since May. We are now producing twice in terms of tonnage than the first four months of the year.

“We however also faced challenges in terms of foreign raw materials repayments, we import fibre from Russia and materials from Italy but foreign currency problems had an impact and production was below than we expected,” he said.
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Our Thoughts on Turnall

Just when the market was expecting a turnaround from Turnall, the latest results all but showed that the company is far from fully recovering. Coupled with that a lot of corporate governance issues are being raised at the moment (perhaps by bitter employees) ranging from asset stripping to mismanagement of funds. With a negative working capital, amounting to $13 mln, the company is failing to fund its operations. Efforts to get funding through other financial channels have also failed to bear fruit because the company has a weak balance sheet. The Group has a current ratio of less than 0.50.

With insufficient working capital, coupled with difficulties in obtaining foreign exchange, production has not been up to the desired levels. The result has been an increase in production costs per unit thus significantly eroding margins from 22% to 9%. Insufficient working capital can easily lead to limited production as was the case in the first five months of the year. Such a scenario will have a negative impact on the company’s stakeholders such as suppliers, customers and bankers etc.

Fortunately, management seems to be equal to the task and has since adopted a lean business model. To that effect one sheet-making machine has been put under care and maintenance. Other cost cutting measures including retrenchments have also been implemented and the company is now targeting a return to operating profit by year end. Unfortunately, the inevitable decision to adopt a lean business model means Turnall is giving away market share. Once the market is accustomed to a different product it will be very difficult for Turnall to regain that market share as was the case with other companies such as Cairns.

The focus in the medium term needs to be shifted towards growing the export market so that there is meaningful contribution to group revenue. This is the company’s future and we strongly advocate for the company to incline itself business model towards the export markets. Tanzania, Angola, DRC, and other countries within the region have been investing heavily in capital projects and present some opportunities for growth.

Pfizer boosts cancer drug pipeline with $14 billion Medivation deal

NEW YORK


Pfizer Inc (PFE.N) said on Monday it would buy U.S. cancer drug company Medivation Inc (MDVN.O) in a deal valued at about $14 billion, adding blockbuster prostate cancer drug Xtandi to its portfolio.

Medivation shares were up 20 percent at $80.56 in premarket trade, just shy of the offer price of $81.50 per share in cash.

The offer is at a substantial premium to Sanofi SA’s (SASY.PA) initial offer to buy Medivation for $52.50 in April that pushed the San Francisco-based company to put itself up for sale. The deal comes four months after Pfizer and Ireland-based Allergan Plc scrapped their $160 billion merger. Pfizer has since bought Anacor Pharmaceuticals Inc ANAC.O in a $5.2 billion deal to add an eczema gel to its portfolio.

The deals hints at a shift in Pfizer’s M&A strategy from lowering taxes – the rationale behind the failed Allergan deal – to strengthen its drugs portfolio ahead of a decision on selling or spinning off its generic drugs business by late 2016. Pfizer, whose oncology offerings include breast cancer drug Ibrance and several other promising immuno-oncology products, will now get access to Xtandi as well as Talazoparib, another breast cancer treatment under development.

Xtandi, which generated U.S. net sales of $330.3 million in the second quarter, has posted double-digit growth, putting Medivation on track to achieve its target of more than 50 percent in revenue growth for the year.

Japanese drugmaker Astellas Pharma Inc (4503.T) owns the rights to sell Xtandi outside the United States.

“We believe the combination of Xtandi and talazoparib has the potential to be a uniquely value-added combination in the treatment of prostate cancer and should be closely watched,” Leerink analysts wrote in a client note.

Reuters had reported that Pfizer, Merck & Co Inc (MRK.N), Celgene Corp (CELG.O) and Gilead Sciences Inc (GILD.O) had submitted expressions of interest to buy Medivation.

“Given the already very high price being discussed, the difficult public relationship between Medivation and Sanofi … we see a higher bid as very unlikely, but not impossible,” RBC Capital Partners wrote in a client note ahead of the announcement.

Sanofi said while it recognized the potential strategic benefits of a combination with Medivation, it was a “disciplined acquirer and remained committed to acting in the best interests of Sanofi shareholders.”

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Pfizer said it expects to complete the acquisition, which was approved by boards of both companies, in the third or the fourth quarter.

Pfizer’s financial advisers were Guggenheim Securities and Centerview Partners, with Ropes & Gray LLP providing legal counsel.

J.P. Morgan Securities and Evercore were Medivation’s financial advisers, while Cooley LLP and Wachtell, Lipton, Rosen & Katz served as its legal advisers.

Pfizer shares were marginally down at $34.80 in premarket.

Up to Friday’s close, Medivation shares had risen about 58 percent since Sanofi’s first offer. (REUTERS)