The Zacks Analyst Blog Highlights:Comcast, Level 3 Communications, Netflix, Time Warner Cable and Spectrum Pharmaceuticals
CHICAGO, July 19, 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 Comcast Corporation (Nasdaq:CMCSA-Free Report), Level 3 Communications, Inc. (NYSE:LVLT-Free Report), Netflix, Inc. (Nasdaq:NFLX-Free Report), Time Warner Cable Inc. (NYSE:TWC-Free Report) and Spectrum Pharmaceuticals, Inc. (Nasdaq:SPPI-Free Report).
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Here are highlights from Thursday's Analyst Blog:
Comcast Settles Dispute with Level 3
Comcast Corporation (Nasdaq:CMCSA-Free Report) – the largest cable multi-service operator (MSO) in the U.S. – settled the three-year old dispute with international service provider, Level 3 Communications, Inc. (NYSE:LVLT-Free Report), through an agreement.
The dispute started in Dec. 2010, when Comcast asked for a higher fee from Level 3 Communications for its peering agreement.
Generally, peering service is offered free of cost. However, higher delivery of HD video content is gradually changing the peering pact between the Internet service providers as huge bandwidth is consumed to deliver such content.
So, when Level 3 Communications became the backbone service provider of streaming company
Netflix, Inc.
-
), data transmission gradually increased. As a result, Comcast started demanding higher fees.
There is also another factor which we believe may have caused Comcast to hike its rates. Cheaper video streaming services from Netflix has resulted in continuous drop in Comcast's video subscribers.
Hence, we believe that this might be a strategic move from Comcast to inflate the service charges of Netflix by demanding higher fees from its backbone service provider Level 3.
This agreement will benefit Comcast in two ways. Firstly, it will minimize the threat arising from Netflix's cheaper streaming services. Secondly, it will ease network congestion.
During the last two years, Level 3 Communications has struck similar deals with the country's second-largest cable operator,
Time Warner Cable Inc.
-
), and Cox Communication.
We believe that the agreement with Level 3 will not only improve Comcast's top line but will also bring some changes to its business model.
Currently, Comcast Corporation carries a Zacks Rank #3 (Hold).
Spectra Pharma Looking to Expand
Spectrum Pharmaceuticals, Inc. (Nasdaq:SPPI-Free Report) recently acquired more than 90% of the outstanding shares of Calif. based Talon Therapeutics for an upfront cash consideration of $11.3 million. Spectrum Pharma expects to acquire all shares of Talon's common stock shortly.
Apart from the upfront cash payment, Spectrum Pharma will also issue 3 million shares of its common stock to Talon stockholders to cancel out the outstanding indebtedness under Talon's credit facility. The shareholders of Talon are also entitled to receive contingent value rights (CVRs) of up to $195 million in cash payments on achieving certain milestones related to Talon's Marqibo and Menadione Topical Lotion, which will be added to Spectrum Pharma's portfolio following the acquisition.
Spectrum Pharma will gain worldwide rights to Marqibo following the completion of the acquisition. Marqibo is currently approved in the US for the treatment of adults suffering from Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) in second or greater relapse or whose disease has progressed after two or more anti-leukemia therapies.
Spectrum Pharma intends to launch Marqibo later this year. The same sales force which currently sells Spectrum Pharma's Folotyn and Zevalin is expected to be utilized for Marqibo. Folotyn and Zevalin are currently approved for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma (PTCL) and non-Hodgkin's lymphoma (NHL), respectively. Folotyn and Zevalin contributed around $9.9 million and $7.6 million, respectively, to Spectrum Pharma's total revenues recorded in the first quarter of 2013.
The addition of Marqibo will boost Spectrum Pharma's oncology portfolio. Marqibo is also being developed in a phase III study for the treatment of non-Hodgkin's lymphoma. Marqibo has shown encouraging results in its mid-stage trials in this indication.
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