The Zacks Analyst Blog Highlights: DuPont, Dow Chemical, Eastman Chemical, Celanese and Aeterna Zentaris
CHICAGO, Dec. 3, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the DuPont (NYSE:DD-Free Report), Dow Chemical (NYSE:DOW-Free Report), Eastman Chemical (NYSE:EMN-Free Report), Celanese (NYSE:CE-Free Report) and Aeterna Zentaris Inc. (Nasdaq:AEZS-Free Report).
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Here are highlights from Monday's Analyst Blog:
American Chemistry Data: Solid Growth for 2014
The American Chemistry Council's ("ACC") recently released monthly report on its first-of-its-kind economic indicator points to steady, but restrained economic growth in the U.S. next year.
The report shows that the Chemical Activity Barometer ("CAB"), the Washington-based chemical industry trade group's macroeconomic indicator, crept up 0.1% over a month ago to 93.6 in November on a three-month moving average basis. This follows a 0.3% rise in October, suggesting sustained but conservative growth in 2014.
The CAB composite index consists of indicators drawn from an array of chemicals and sectors associated with the production of chlorine and other alkalies, pigments, plastic resins and other selected basic industrial chemicals. The index helps in spotting the trends in the U.S. economy within sectors such as housing, retail and automobiles that are closely connected to the chemical industry. It has a positive correlation with Federal Reserve's Industrial Production index.
The index, which helps anticipate the waxes and wanes in the U.S. economy, registered a 2.8% year over year gain in November and remains at its acme since June 2008.
While the fundamentals of the U.S. economy appear to be healthy, the effects of fiscal impasse in Washington are weighing on domestic economic growth. Following an intense political squabble, the U.S. Senate hashed out a last-ditch deal on Oct 16 that ended the 16-day government shutdown and rescued the nation from a debt default.
The deal would fund the government until Jan 15, 2014, and extend borrowing through Feb 7. However, a long-term budget deal must be hammered out before Dec 13. With the deadline slowly approaching, the U.S. economy has not shown any signs of concern yet, according to ACC chief economist Dr. Kevin Swift.
Swift added that improvement in production-related indicators, healthy equity prices and a recovery in U.S. exports point to a steady economic growth in 2014. Moreover, he noted that healthy retail sales amid the holiday season showcase the correlation between sales and the consumption of polyethylene resins used in packaging.
Demand for chemical products takes place early in the supply chain and changes in chemical production serves as a barometer to gauge the trends in the broader economy.
The roughly $770 billion chemical industry has been consistently leading the U.S. economy's business cycle due to its early position in the supply chain. The industry is heavily linked to the overall condition of the U.S. economy.
Last year, Europe's debt predicament, weak U.S. manufacturing along with sluggish activity in China and other key emerging markets weighed on companies in the chemical space including majors such as DuPont (NYSE:DD-Free Report), Dow Chemical (NYSE:DOW-Free Report), Eastman Chemical (NYSE:EMN-Free Report) and Celanese (NYSE:CE-Free Report).
While lingering crisis in Europe coupled with other industry-specific challenges continues to pose downside risks, the global chemical industry is expected to fare relatively better this year and the next. Strength across agriculture, automotive and aerospace and a recovery in the housing market augur well for the industry.
Aeterna Zentaris Closes IPO
Aeterna Zentaris Inc. (Nasdaq:AEZS-Free Report) generated net proceeds of $13.7 million from its public offering of 13.1 million units. Each unit consists of one common share and one whole warrant to purchase one common share, at a purchase price of $1.15 per unit. Each warrant is exercisable at $1.60 per share for a period of five years. The offering commenced on Nov 19, 2013 and was priced at $1.15 next day.
The net proceeds from these offerings will be used by the company to finance its research and development activities, including the development of the candidates, AEZS-108 and AEZS-130. The balance will be used for general corporate purposes and working capital requirements.
The company is dosing patients in its phase III study on AEZS-108 (zoptarelin doxorubicin) for the treatment of endometrial cancer in women who are not responding to platinum/taxane-based chemotherapy. We note that AEZS-108 is being evaluated under the U.S. Food and Drug Administration's (FDA) Special Protocol Assessment (SPA) in the phase III trial.
The open-label, randomized, multi-center (North America, Europe, Israel and other countries), phase III trial will enroll approximately 500 patients. The primary efficacy endpoint of the trial is significant improvement in median overall survival.
AEZS-108 is also being evaluated for several other indications including ovarian cancer (phase II completed), prostate cancer (phase II), and breast cancer (phase II)
On Nov 5, 2013, Aeterna Zentaris announced that it has submitted a New Drug Application (NDA) to the FDA for AEZS-130 for treating adult growth hormone deficiency.
Aeterna Zentaris carries a Zacks Rank #1 (Strong Buy).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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