The Zacks Analyst Blog Highlights: Elan, Alkermes, Biogen Idec, Valeant Pharmaceuticals and Duke Energy

Feb 05, 2013, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Feb. 5, 2013 /PRNewswire/ -- 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 Elan Corporation plc (NYSE: ELN), Alkermes plc (Nasdaq: ALKS), Biogen Idec. (Nasdaq: BIIB), Valeant Pharmaceuticals (NYSE: VRX) and Duke Energy Corporation (NYSE: DUK).


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Here are highlights from Monday's Analyst Blog:

Elan to Sell Remaining Alkermes Stake

Elan Corporation plc (NYSE: ELN) recently decided to sell its remaining 7.8 million ordinary shares in Alkermes plc (Nasdaq: ALKS) pursuant to Rule 144 under the US Securities Act of 1933. The sale is expected to close on Feb 6, 2013.

In Mar 2012, Elan had sold 24.15 million shares, or 76% of its stake in Alkermes. Excluding underwriter fees, Elan had recorded net proceeds of approximately $381 million from the transaction.

Elan had acquired the shares of Alkermes in Sep 2011 following the merger of its Elan Drug Technologies (EDT) segment with Alkermes. The merged entity, known as Alkermes plc, is headquartered in Dublin, Ireland. As per the terms of the deal, Alkermes made a cash payment of $500 million apart from giving Elan 31.9 million of its ordinary shares.

Following the divestiture of the EDT segment, Elan is focused solely on the BioNeurology Division, which is driven by Tysabri (natalizumab), the principal growth driver at Elan. Tysabri is approved for the treatment of multiple sclerosis (MS) and Crohn's disease and is developed in collaboration with Biogen Idec. (Nasdaq: BIIB).

Last month, Elan along with Biogen submitted applications to the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA) seeking to update Tysabri's label, as a first line treatment for patients suffering from certain relapsing forms of MS who have tested negative for antibodies to the JC virus (JCV).

Elan recorded total Tysabri sales of $306.6 million, up 9.8% year over year in the third quarter of 2012. We remind investors that the company is set to report its fourth quarter and full year 2012 financial results on Feb 6, 2013. The company expects 2012 revenue to be around $1.2 billion, in line with the Zacks Consensus Estimate.

Elan carries a Zacks Rank #2 (Buy). However, other pharma stocks such as Valeant Pharmaceuticals (NYSE: VRX) carry a Zacks Rank #1 (Strong Buy). Meanwhile, Alkermes also carries a Zacks Rank #1 (Strong Buy).

Duke Energy Shedding Coal Plants

Duke Energy Corporation (NYSE: DUK) announced that its Buck and Riverbend steam stations, coal-fired power plants in the Charlotte area, will retire two years earlier than scheduled. Earlier, both stations had been slated for retirement in Apr 2015 in apprehension of upcoming federal environmental regulations. However, the company elected to retire Buck Units 5 and 6 and Riverbend Units 4 through 7 on Apr 1, 2013. A total of 65 employees work at these plants.

The aforementioned units have been operating infrequently in recent years and in the future would have operated even less with the recent completion of new, more efficient plants and low natural gas prices.

Of late, the company has been investing in new plants, retiring older plants as well as working on modernization and upgrade of plants to reduce emissions across its service area. Since 2007, the company has invested approximately $6 billion in new plants and has retired up to 6,800 megawatts of older coal capacity. All the more, it has invested another $7.5 billion for plant upgrades.

These developments indicate the company's commitment to meeting electricity needs through advanced and cleaner generation while fetching revenues at the same time. Also, the acquisition of Progress Energy Inc. seems to be a smart move made by the company. It has increased the company's ability to build new power plants to meet future greenhouse-gas emissions limits.

However, valuation continues to be restrained by a number of factors, including the present unfavorable macro backdrop, predominantly fossil-fuel based generation assets, tepid demand for electricity, foreign currency exchange volatility, pending regulatory cases and the aftermath of Hurricane Sandy. New Jersey, where Duke Energy has about 65% of its customers, was hit hardest by Sandy. Other hard-hit states include Connecticut, West Virginia, New York and Rhode Island. Duke Energy presently retains a short-term Zacks Rank #3 (Hold).

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