CHICAGO, April 12, 2012 /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 Goldman Sachs Group Inc. (NYSE: GS), Lloyd's (NYSE: LYG), Bank of America Corporation (NYSE: BAC), JPMorgan Chase & Company (NYSE: JPM) and Amgen (Nasdaq: AMGN).
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Here are highlights from Wednesday's Analyst Blog:
Goldman Acquires Ariel Reinsurance
The Goldman Sachs Group Inc. (NYSE: GS) completed the purchase of Ariel Reinsurance's Bermuda-based insurance and reinsurance operations from Ariel Holdings Ltd. The terms of this deal were undisclosed.
Goldman will combine the acquired business with its existing Lloyd's business. The combined entity will work as part of Goldman Sachs Reinsurance Group (GSRG) with the brand name Ariel Reinsurance (Ariel Re). GSRG covers the property and casualty reinsurance business in London.
Founded in 2005, Ariel Holdings Ltd. provides a wide range of property and casualty insurance and reinsurance products to companies and policyholders across the globe. It focuses on achieving above-average economic returns for the risks taken and maintains adequate financial availability to meet the requirements of underwriting businesses.
Managers at Ariel Re find the acquisition quite opportunistic. They look forward to the combined business with superior underwriting of track records at both. They also expect strong performance to continue. However, the deal excludes Ariel's credit and surety business operated at the Zurich branch office, and Atrium Underwriting Group at Lloyd's (NYSE: LYG).
As a part of deal, GSRG's Lloyd's syndicate will reinsure the current business of Ariel Reinsurance. In the combined structure, most of Bermuda-based Ariel Re's staff will remain employed.
The acquisition will expand Goldman's property and casualty coverage, and the name of Ariel franchise will help the company to serve its clients in a better way.
Through acquisitions and global expansions, Goldman is trying to grab every opportunity to leverage its strong reputation in corporate trust market. The expansion mode of the company is mounting since the beginning of 2012.
The acquisition spree of Goldman indicates that the company is moving ahead on the path of improving its financial position. Like other Wall Street biggies such as Bank of America Corporation (NYSE: BAC) and JPMorgan Chase & Company (NYSE: JPM), the company has been buckled under the weakness in the wider economy and the fundamental pressures on the banking sector. Completion of deals like this will enable the bank to enjoy a better position in the ongoing uncertain global economic scenario compared to its peers.
Goldman currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we also maintain our long-term Neutral recommendation on the stock.
Amgen Reaches for KAI Pharma
Amgen (Nasdaq: AMGN) recently announced its intention to acquire privately-held KAI Pharmaceuticals. With this acquisition, Amgen will gain global rights (excluding Japan) to KAI Pharmaceuticals' lead pipeline candidate, KAI-4169.
Terms of the Agreement
Amgen will make a cash payment of $315 million for the acquisition. The company has already loaned an undisclosed amount to support KAI Pharmaceuticals' phase III development plans for KAI-4169.
KAI-4169, the lead candidate at KAI Pharmaceuticals, is being evaluated for the treatment of secondary hyperparathyroidism (SHPT) in chronic kidney disease (CKD) patients on dialysis. SHPT is a common and serious complication for the above patient population.
KAI Pharmaceuticals has already presented encouraging phase IIa data on the candidate. Patients in the KAI-4169 arm experienced a sustained reduction in parathyroid hormone (PTH), phosphorus, calcium and FGF-23.
KAI-4169 was found to be well tolerated with adverse events including nausea, headache, anxiety and vomiting. While there were no discontinuations due to adverse events, the incidence of gastrointestinal adverse events was similar in both the KAI-4169 and placebo arms.
KAI-4169 is currently in a second phase II study which is being conducted in CKD patients on dialysis.
KAI Pharmaceuticals has a partnership with Ono Pharmaceutical Co., Ltd. for the development and commercialization of KAI-4169 in Japan. KAI Pharmaceuticals is also evaluating the use of KAI-4169 in pre-hemodialysis applications.
We note that Amgen already has a presence in the CKD market in the form of Sensipar (EU trade name: Mimpara). Sensipar, approved for the treatment of CKD patients on dialysis who suffer from SHPT, posted sales of $808 million in 2011.
By developing KAI-4169, Amgen is most likely looking to maintain its share in this market once Sensipar loses patent protection. KAI-4169 could represent a different and convenient treatment option for patients as it is being developed as an intravenous (IV) formulation that will be administered at the time of dialysis while Sensipar is a tablet. However, KAI-4169 is yet to enter phase III development and is still a few years from commercialization.
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