The Zacks Analyst Blog Highlights:RocheHoldings Ltd, GlaxoSmithKline, Ford, General Motors Companyand Nissan Motor Co
CHICAGO, Nov. 13, 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 Roche Holdings Ltd. (RHHBY), GlaxoSmithKline (GSK), Ford (F), General Motors Company (GM) and Nissan Motor Co. (NSANY).
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Here are highlights from Tuesday's Analyst Blog:
Priority Review for Roche Candidate
Roche Holdings Ltd. (RHHBY) recently announced that it has received priority review for its oncology candidate, trastuzumab emtansine (T-DM1) in the US.
In August 2012, Roche had filed a Biologics License Application (BLA) for trastuzumab emtansine for the treatment of HER2-positive unresectable locally advanced or metastatic breast cancer patients who have received prior treatment with Herceptin (trastuzumab) and taxane-based chemotherapy. Roche has partnered with ImmunoGen, Inc. (IMGN) for the candidate.
Priority review status means that the US Food and Drug Administration (FDA) will review the marketing application within 6 months instead of the standard 10 months. A response should be out by February 26, 2013.
The approval of trastuzumab emtansine will strengthen Roche's HER2 franchise. Last month, Roche had announced additional results from its phase III EMILIA study, which was conducted with trastuzumab emtansine. The study compared trastuzumab emtansine to GlaxoSmithKline's (GSK) Tykerb (lapatinib) along with Xeloda (capecitabine) in HER2-positive unresectable locally advanced or metastatic breast cancer patients who were previously treated with Herceptin and taxane chemotherapy.
Results showed that patients who were treated with trastuzumab emtansine survived longer (risk of death was reduced by 32%) than those who were treated with the combination of lapatinib and Xeloda. Median overall survival was higher in the trastuzumab emtansine arm compared to patients receiving lapatinib and Xeloda (30.9 months vs. 25.1 months).
Roche also submitted a marketing authorization application for trastuzumab emtansine to the European Medicines Agency (EMA) for use in treatment-experienced HER2-positive metastatic breast cancer patients.
Our Recommendation
Roche carries a Zacks #2 Rank (Buy rating) in the short run. We are pleased with the company's progress with its oncology candidates. In the fourth quarter of 2012, Roche plans to initiate a phase III trial evaluating the combination of the MEK inhibitor (RG 7421) and Zelboraf BRAF mutation-positive metastatic melanoma. Successful development and commercialization of these products will aid Roche's top line.
Ford Builds New Plug-In in Michigan
Ford Motor Co. (F) started producing its new plug-in hybrid C-Max Energi at its retooled Michigan assembly plant that is capable of manufacturing vehicles based on multiple platforms. The automaker overhauled the 55-year-old plant in 2009 by spending $550 million that used to roll out Expedition and Lincoln Navigator full-size SUVs.
According to Ford, the Michigan plant is the only existing plant in the world that produces gas-powered, hybrid, plug-in hybrid and electric cars all on the same production line due to its advanced retooling and trained workers capable of producing a wider range of models. Currently, the plant can produce five body styles on two platforms, including gas-powered versions of the Ford Focus compact car.
Unlike its peers, Ford has undertaken "One Manufacturing" strategy, which aims at producing multiple models from plants across the world in order to save production costs and fast adaptation to changes in consumer tastes. In contrast, Ford's cross town rival General Motors Company (GM) and Japan's Nissan Motor Co. (NSANY) produce their Chevrolet Volt and Nissan Leaf, respectively, at plants having standalone platforms.
According to Jim Tetreault – head of manufacturing in North America, this flexible manufacturing style becomes possible, especially at plants that produce cars, sedans and crossovers and not trucks, which have different designing requirements. Ford anticipates producing 4.5 models at each of its plants by 2015, up from 3.6 models currently.
Apart from Michigan, Ford's plant in Oakville, Ontario can deliver three body styles on two platforms and in Louisville, Kentucky, six styles on three platforms. The company now intends to make its other plants capable of producing vehicles based on multiple platforms; however, doing so, the company might face challenges in modifying fuel economy and safety requirements.
Ford, a Zacks #3 Rank (Hold) company, posted a 17.6% rise in earnings per share to 40 cents in the third quarter of the year from 34 cents a year ago, driven by impressive results in its North American operation and, to some extent, its Asian operation. With this, the company has also beaten the Zacks Consensus Estimate by 10 cents per share. Total profit rose 15.6% to $1.6 billion from $1.4 billion a year ago.
However, total revenue in the quarter slid 3.0% to $32.1 billion due to lower revenues in South America, Europe and Financial Services operations that offset the marginal improvement in revenues in North America and Asia. However, revenues were higher than the Zacks Consensus Estimate of $31.0 billion for the quarter.
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