Traders' Buzz: Three Stocks in Focus

The share price of Array Biopharma Inc soared 40.79% on Friday after the drug developer said it entered into a definitive agreement with Novartis Pharma AG, whereby, it will buy global rights to a potential cancer treatment in late-stage clinical testing. The deal is contingent on the closing of the Novartis/Glaxo transactions that it announced on April 22, 2014, which will be completed in the first half of 2015.

The new agreement will keep in place the materials terms of Array/Novartis agreement signed in April to regain global rights to the Phase 3 MEK inhibitor binimetinib.

Regarding the deal for encorafenib or LGX818, a BRAF inhibitor currently in Phase 3 development, there are no milestone payments or royalties to be paid by either party. However, the Boulder, Colorado, company said the deal involves a de minimis payment due to Novartis from Array.

Under the terms of the agreement, Novartis will offer transitional regulatory, clinical development and manufacturing services. In addition, Array will be assigned or licensed all patent and other intellectual property rights Novartis owns relating to encorafenib. Array agreed to obtain an experienced partner with an aim to get help with both global development and European commercialization of encorafenib and binimetinib.

Infinera Corp shares marked a seven-year high Friday after the communications hardware manufacturer late Thursday lifted its outlook and reported Q4 earnings that came in ahead of analysts’ estimates.

The fiber-optics supplier posted adjusted EPS of 13 cents versus a penny loss in the year-earlier quarter, beating the consensus estimate of 11 cents.

Revenue jumped 34% to $186.3 million and topped expectations of $181.2 million. It scored the 5th consecutive quarter of increasing year-over-year sales growth.

“The company bucked the seasonal trend (in every metric), entering the year with a very robust demand and backlog levels it never experienced before, of over $100 million,” wrote Dmitry Netis, an analyst with William Blair, in a research report.

Infinera expects Q1 revenue in a range of $180 million to $190 million, up 30% at the midpoint. Analysts currently expect $169 million. It boosted EPS forecast by 2 cents from a 3-cent profit to between 8 cents and 12 cents, in Q1 2014 .

Pandora Media Inc saw big gains after analysts at Rosenblatt Securities started the stock with a buy rating and price target of 20, saying the Internet radio company is “effectively selling radio ads” with its ramped-up direct sales force.

Analyst Martin Pyykkonen notes Pandora’s “ad load rate is gradually increasing, while still floating under a tolerable range well below terrestrial ad load rates.

Pandora is serving 6 ads per hour in 2015 as compared to four per hour last year, Pyykkonen said. “Pandora’s national load rate average at no more than 203 minutes per hour is still well under the nearly intolerable terrestrial radio (ad) load of 15 minutes or greater per hour of audio ads,” he said.

The company’s presense into automobile entertainment systems “should be an upside driver for Pandora, especially for local audio ads,” he said. As it has 9.5 million activated auto listeners, “the auto OEM and local auto dealer market presents upside for Pandora’s usage growth,” Pyykkonen said.

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