Humira Approved for Pediatric Patients with AU

AbbVie receives CHMP positive opinion for Humira for pediatric patients with AU

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AbbVie (ABBV) said that the European Committee for Medicinal Products for Human Use of the European Medicines Agency has granted a positive opinion for #HUMIRA for the treatment of chronic non-infectious anterior uveitis in pediatric patients from two years of age who have had an inadequate response to or are intolerant to conventional therapy, or in whom conventional therapy is inappropriate.

The #CHMP opinion is based on results from the SYCAMORE clinical trial, a randomized controlled study of the clinical effectiveness and safety of HUMIRA combined with methotrexate versus methotrexate plus placebo for the treatment of active JIA-associated uveitis.

It was sponsored by the University Hospitals Bristol NHS Foundation Trust and coordinated by the Clinical Trials Research Centre at the University of Liverpool.

The Independent Data Safety and Monitoring Committee recommended unmasking the trial early after 90 randomized patients with active JIA-associated uveitis showed that HUMIRA combined with methotrexate controlled ocular inflammation better and was associated with a significantly lower rate of treatment failure than placebo.

The review of the marketing authorization application is being conducted under the centralized licensing procedure.

A marketing authorization decision is anticipated by September.

If approved, the authorization will be valid in all 28 member states of the European Union, as well as Iceland, Liechtenstein and Norway.

HUMIRA was approved by the European Medicines Agency for the treatment of non-infectious intermediate, posterior and panuveitis in adults in June 2016.

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Amazon Investigated by FTC for Deceptive Pricing

FTC exploring possible deceptive discounting by Amazon

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The FTC is exploring allegations of potential deceptive discounting by Amazon (AMZN), Reuters reports, citing a source close to the investigation.

The FTC is investigating a complaint brought by Consumer Watchdog, an advocacy group which looked at around 1,000 products on Amazon’s website last month and found that Amazon put reference prices on about 46% of them; an analysis by Consumer Watchdog found that in more than half of products with reference prices, Amazon’s reference prices were higher than it had sold the same product in the previous three months, Reuters says.

The FTC is looking into the allegations as part of its review of Amazon’s proposed acquisition of Whole Foods (WFM).

Amazon said in a statement that Consumer Watchdog’s study was “deeply flawed,” calling the conclusions “flat out wrong.”

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RLJ Lodging Trust Says No to $3 Billion Purchase Offer

Blackstone made $3B offer to buy RLJ Lodging Trust, WSJ says

Blackstone Group (BX) made an approximately $3B offer to purchase RLJ Lodging Trust (RLH), which if successful would end the real estate investment trust’s plans to acquire FelCor Lodging Trust (FCH), the Wall Street Journal reports, citing people familiar with the matter.

RLJ disclosed that it had received an unsolicited proposal on June 12 from a private-equity firm but the company rejected the offer as “not reasonably likely” to be superior to its acquisition of FelCor, resulting in the private-equity firm twice raising its offer, which reached $25.50 a share on June 23, but then dropping its offer on July 6 to the original price of $24 following a review of RLJ, which rejected that offer.

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Zynerba is Worth Watching

Watch Zynerba ahead of trial data on its its ZYN002 for in adult epilepsy patients

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With #Zynerba Pharmaceuticals (ZYNE) expected to release data from a Phase 2 trial over the next several weeks,#Jefferies analyst Biren #Amin recently argued that a positive update could lead the shares north of $65-$75. However, a lack of treatment effect could drop the stock to $4-$5.

CANNABIDIOL GEL

Over the coming weeks, Zynerba is expected to announce data from its ZYN002 #cannabidiol, or #CBD, gel Phase 2 STAR 1 trial in adult epilepsy patients with refractory focal seizures.

ZYN002 is a synthetic CBD formulated as a permeation-enhanced gel for transdermal delivery.

BINARY EVENT

In a research note to investors, Jefferies’ Amin pointed out that the STAR-1 trial represents a “critical catalyst” for Zynerba as it provides the first proof of concept for transdermally delivered CBD.

Given investors naturally compare the program to GW Pharmaceuticals’ (GWPH) #Epidiolex, and oral CBD, the analyst believes a better comparison would be to therapies tested in patients with partial-onset seizures who are uncontrolled on their current therapy.

Additionally, Amin noted that while the study is designed for a 20% treatment effect over a placebo, an effect greater than 15% could be considered clinically relevant. A key question that remains unanswerable is the extent of activity observed with ZYN002 given this is the first study evaluating efficacy in epilepsy patients, he contended.

He told investors that positive data could lead to shares north of $65-$75, but a lack of treatment effect could drop shares to $4-$5. The analyst assumes ZYN002 is successfully developed and launched for refractory epilepsy in 2019.

Amin reiterated a Buy rating and a $32 price target on the shares.

PRICE ACTION

In Thursday’s trading, shares of Zynerba dropped 2% to $18.81. Over the last month the stock is up 10%, but over the last three months it has declined nearly 24%.

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BankMutual Sold for $482 Milion

Associated Banc-Corp to acquire BankMutual for $10.38 per share

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Associated Banc-Corp (ASB) and Bank Mutual (BKMU) (“Bank Mutual”) announced that they have entered into a definitive agreement under which Bank Mutual will merge with and into Associated. Bank Mutual’s bank subsidiary will also merge with and into Associated’s bank subsidiary, Associated Bank, N.A.

The all stock transaction is valued at approximately $482M, based on Associated’s July 19 closing stock price of $24.60 per share.

Under the terms of the merger agreement, which has been unanimously approved by the boards of directors of both companies, Bank Mutual shareholders will receive 0.422 shares of Associated common stock for each share of Bank Mutual common stock.

The per common share consideration is valued at $10.38 per share based on the closing price of Associated common stock on July 19.

Subject to customary closing conditions, including regulatory approvals and approval by the Bank Mutual shareholders, the transaction is expected to close in the first quarter of 2018.

Associated expects this acquisition to be accretive to earnings per common share in 2019, excluding one-time charges, and expects the transaction to deliver strong returns on capital.

The transaction is expected to produce less than 1% tangible book value per share dilution at closing.

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Hyperloop Goes to Washington!

Musk gets verbal approval to build NYC to D.C. hyperloop 

 

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Elon Musk just tweeted, “Just received verbal govt approval for The Boring Company to build an underground NY-Phil-Balt-DC Hyperloop.

NY-DC in 29 mins. City center to city center in each case, with up to a dozen or more entry/exit elevators in each city.”

Musk, among his other endeavors, is the CEO of #Tesla (TSLA).

A #hyperloop is a mode of passenger and/or freight transportation, first named as such in an open-source vactrain design released by a joint team from Tesla and SpaceX. Drawing heavily from Goddard’s vactrain, a hyperloop comprises a sealed tube or system of tubes through which a pod may travel free of air resistance or friction conveying people or objects at optimal rates of speed and acceleration.

Elon Musk’s version of the concept, first publicly mentioned in 2012, incorporates reduced-pressure tubes in which pressurized capsules ride on an air bearings driven by linear induction motors and air compressors.

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OTHER STOCKS TO WATCH

ANSYS, Inc.  (ANSS) develops and markets engineering simulation software and services used by engineers, designers, researchers, and students in the aerospace and defense, automotive, industrial equipment, electronics, biomedical, energy, materials and chemical processing, and semiconductors industries and academia worldwide.

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European Central Bank Keeps Rates Unchanged

ECB leaves key interest rates unchanged

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The Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively.

The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases.

Regarding non-standard monetary policy measures, the Governing Council confirms that the net asset purchases, at the current monthly pace of EUR 60B, are intended to run until the end of December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim.

The net purchases are made alongside reinvestments of the principal payments from maturing securities purchased under the asset purchase program.

If the outlook becomes less favorable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the program in terms of size and/or duration.

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Stocks to Watch – Ironwood Pharmaceuticals

Ironwood IW-3718 Phase IIb trial meets primary endpoint

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Ironwood Pharmaceuticals (IRWD) announced positive top-line data from a Phase IIb clinical trial evaluating IW-3718 in adult patients with uncontrolled #gastroesophageal #reflux disease.

The trial met its primary endpoint, indicating that twice-daily, oral dosing of IW-3718 1500 mg plus a proton pump inhibitor significantly reduced heartburn severity in patients with uncontrolled GERD compared to patients treated with a PPI alone.

Further, more than half of patients treated with IW-3718 1500 mg plus a PPI achieved a clinically meaningful reduction in heartburn severity. IW-3718 1500 mg was well tolerated in the trial.

#Ironwood plans to have end of Phase II meetings with the U.S. Food and Drug Administration, after which the company expects to advance IW-3718 1500 mg into Phase III development in 2H18.

#IW-3718 is a novel formulation of a bile acid sequestrant designed to release in the stomach over an extended period of time, bind to bile that refluxes into the stomach, and potentially provide symptomatic relief in uncontrolled GERD.

Data from the Phase IIb trial showed a dose response across the primary and key secondary endpoints, with the most pronounced response observed at the highest dose of IW-3718 studied. Top-line data were as follows: Percent Change from Baseline to Week 8 in Weekly Heartburn Severity: patients treated with IW-3718 1500 mg plus a PPI showed a mean decrease of 58% from baseline in heartburn severity compared to 46% in patients treated with a PPI alone.

Clinically Meaningful Degree of Improvement in Weekly #Heartburn Severity: a 45% reduction in weekly heartburn severity was determined to be clinically meaningful for patients in this study based on patient-reported outcome measures.

Heartburn Responder: a heartburn responder was defined as a patient who experienced at least a 45% reduction from baseline in heartburn severity for at least four out of eight weeks, including at least one of the last two weeks. 52.9% of patients treated with IW-3718 1500 mg plus a PPI were heartburn responders, compared to 37.1% of patients treated with a PPI alone.

Percent Change from Baseline to Week 8 in Weekly Regurgitation Frequency: patients treated with IW-3718 1500 mg plus a PPI showed a mean decrease of 55.4% from baseline in regurgitation frequency compared to 37.9% in patients treated with a PPI alone. There were no treatment-related serious adverse events reported with IW-3718 1500 mg.

SIDE EFFECTS

The most common adverse event reported overall was constipation, which was reported in 7.4% of patients on IW-3718 1500 mg plus a PPI compared to 7.1% of patients on a PPI alone. All constipation adverse events reported were mild or moderate in severity.

Discontinuation rates due to adverse events were less than 5% and similar across treatment groups.

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Avista Sold for $5.3 Billion Cash

Avista acquired by Hydro One for $53 per share

 

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Hydro One Limited and and Avista Corp. (AVA) dustry-leading regulated utilities with over 230 years of collective operational experience as well as shared corporate cultures and values.

The combined entity will safely and reliably serve more than two million retail and industrial customers and hold assets throughout North America including Ontario, Washington, Oregon, Idaho, Montana and Alaska.

“This marks a proud moment for Canadian champions as we grow our business into a North American leader,” said Mayo Schmidt, President and CEO, Hydro One Limited.

“This transaction demonstrates the power and value of the transition into an investor-owned utility, by allowing for healthy expansion into new lines of regulated utility business and new jurisdictions, such as the U.S. Pacific Northwest which is experiencing customer and economic growth.”

“With a focus on operational excellence and building our earnings streams, we are positioned for long-term, sustainable growth,” said Schmidt.

“We are further accomplishing this goal by bringing together two companies with shared cultures and industry expertise to create a North American regulated utility leader. This combination means greater scale, diversity and financial flexibility.”

Hydro One has a uniquely strong track record consolidating electricity utilities. Since the IPO, Hydro One has also delivered on cost savings and efficiencies for shareholders and customers.

Through the company’s energy conservation programs, Hydro One has helped customers and municipalities save 700 GWh year-to-date.

“Since our initial public offering, we have significantly enhanced our current operations while exploring opportunities that extend and diversify our regulated assets,” said #MayoSchmidt.

“We constantly seek to deliver exceptional value to shareholders, customers, and the communities we serve through stable, increasing regulated returns, exceptional service, and community engagement.”

This strategic combination demonstrates the value of consolidation by bringing together two highly complementary platforms to create one of North America’s largest regulated utilities, meaningfully enhancing both shareholder and customer value.

In addition, over time, non-headcount efficiencies will be realized through collaboration and sharing of best practices on IT, innovation and supply chain purchasing, all of which will further enhance cost savings.

No workforce reductions are anticipated as a result of this transaction for either Avista or #HydroOne.

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Stocks to Watch – Changes to S&P Indices

ResMed, Packaging Corp., A.O. Smith, Duke set to join S&P 500 at open on 7/26

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S&P MidCap 400 constituents ResMed (RMD), Packaging Corporation of America (PKG), A.O. Smith Corp. (AOS) and Duke Realty Corp. (DRE) will replace Mallinckrodt (MNK), Murphy Oil (MUR), Bed Bath & Beyond (BBBY) and Transocean (RIG) respectively, in the S&P 500 effective prior to the open of trading on Wednesday, July 26.

MGM Resorts Int’l. (MGM) will replace Reynolds American Inc. (RAI) in the S&P 500. British American Tobacco plc  is acquiring Reynolds American in a deal expected to be completed on July 25, pending final conditions.

Mallinckrodt, Murphy Oil, Bed Bath & Beyond and Transocean will replace ResMed, Packaging Corporation of America, A.O. Smith and Duke Realty, respectively in the S&P MidCap 400.

All stocks moving to the S&P 500 have total market capitalizations above $10B making them more representative of the large-cap market space.

All stocks moving to the S&P MidCap 400 have total market capitalizations below $4.5B making them more representative of the mid-cap market space.

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Scripps, Discovery Deal Questioned by Analysts

Scripps, Discovery deal odds debated as reported talks boost media space

Shares of Scripps Networks (SNI) and Discovery Communications (DISCA) are on the rise following reports from both The Wall Street Journal and Reuters that the media companies are in talks to merge.

While research firm #Citi sees a deal as likely, Credit Suisse analyst Omar Sheikh believes the Journal’s initial report has “low credibility.”

MERGER TALKS

Yesterday, The Wall Street Journal said that Discovery Communications is in discussions to merge with Scripps Networks. A similar report from Reuters added that Viacom (VIAB) also had held talks to buy Scripps.

CREDIT SUISSE QUESTIONS DEAL CHANCES

Commenting on the news, Credit Suisse’s #Sheikh told investors that he believes the Journal’s report “looks vague,” and his initial view is that it has “low credibility.”

Combining the two portfolios of unscripted cable networks has some industrial logic, but previously reported discussions between the companies probably came to nothing because the price and structure of a transaction could not be agreed upon, the analyst contended, adding that he struggles to see what might have changed now. Sheikh reiterated an Underperform rating and a $24 price target on Discovery’s shares.

BULLISH ON DEAL

Citi analyst Jason #Bazinet, on the other hand, told investors that he views the reports as “credible” and finds it likely that Discovery and Scripps Networks reach an agreement. Furthermore, Bazinet argued that the pressures on the traditional cable network ecosystem are acute enough and valuations are low enough that he can see merits to this potential combination. Assuming a 20% premium is offered to Scripps, a deal would likely be about 10% accretive to Discovery, Bazinet noted, citing his M&A math.

Meanwhile, #JPMorgan analyst Alexia #Quadrani said she sees both a strategic and financial rationale for a merger between Scripps Networks and Discovery Communications, pointing out that a combined company would have greater leverage with domestic distributors and advertisers. Discovery could also help Scripps with its international rollout, #Quadrani contended, adding that there is potential for cost and tax synergies.

However, she believes that with no terms mentioned in any of the press reports on the deal talks, it is difficult to evaluate any potential transaction. Further, the analyst noted that the speculation “may end up just being chatter” coming out of last week’s media executive conference in Sun Valley. Nonetheless, Quadrani believes the press reports should have a “very positive influence” on media stocks, which she noted have been out of favor. The analyst expects to see particular outperformance from heavily shorted media names such as AMC Networks (AMCX).

PRICE ACTION

In Wednesday afternoon trading, shares of Scripps Networks have jumped almost 15% to $76.87, while Discovery Communications’ stock has gained 4% to $27.09 and AMC Networks is up 4% to $59.25.

Other media names, including 21st Century Fox (FOXA), Viacom and Disney (DIS), are also higher in afternoon trading.

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Apple Patents 911 Finger, Call for Help Discretely

Apple patents way to call 911 emergency with fingerprint without assailant knowing

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On Tuesday, the United States Patent and Trademark Office published a patent by Apple for a method to execute a command in an electronic device through a fingerprint.

PATENT

The patent abstract is as follows:

“A device has a touch processing module that processes touch screen input to determine if the manner in which the input was entered indicates that the user intends for execution of a particular command. In one embodiment, the module may acquire fingerprint data from the user’s input and analyze the data to determine if the input was entered with a particular finger or finger sequence.

In another embodiment, the module may also acquire timing data from the user’s entry of a plurality of inputs and analyze the timing data to determine if the touch screen input was entered with a particular timing or cadence. The module may also acquire force data from the user’s entry of a plurality of touch screen inputs and analyze the force data to determine to determine if the touch screen input was entered with a particular force.”

In other words Apple has invented a process for an individual to call 911 emergency secretly using your fingerprint.

Thus, in a situation where the device owner is forced to unlock or otherwise use his phone by an assailant, contacting emergency services in the conventional manner may not be practical. Accordingly, in conventional systems, a user is unable to comply with an assailant’s commands, while at the same time discreetly contacting emergency services.”

For example, the user may program the electronic device to recognize input entered with her pinky finger as a command to place a “911” call or otherwise contact emergency services.

In another example, the user may program the electronic device to recognize input entered with a particular sequence of fingers, such as pinky-ring-pinky, as a command to make an emergency call. Thus, regardless of what routine command the user is ostensibly entering, if the user enters the routine command with the predetermined finger or finger sequence, the user is also entering the predetermined command.

For example, a user may be ostensibly be unlocking her device, but by doing so with her predetermined “911 finger” she is also calling the police.”

It is doubtful that this feature will be available in the upcoming iPhone 8 model.

AAPL last traded at $151.15.

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Vertex Higher on its Cystic Fibrosis Drug

Vertex jumps after ‘wowing’ analysts with cystic fibrosis data

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Shares of Vertex (VRTX) are on the rise after the company reported positive data from Phase 1 and Phase 2 studies of three different triple combination regimens in people with cystic fibrosis who have one #F508del mutation and one minimal function mutation.

Reacting to the news, several Wall Street analysts upgraded the stock to buy-equivalent ratings and raised their price targets on the shares.

BUY VERTEX

In a research note to investors this morning, Janney Capital analyst Debjit Chattopadhyay upgraded Vertex to Buy, stating that the Phase 2 data for its three triple combination programs in CF were “significantly above the most optimistic expectations.”

The analyst argued that the quality of the data should allow Vertex to potentially accelerate commercialization under the “New FDA” and importantly sets the bar very high for competition. Citing its “potential dominance of CF,” Chattopadhyay said he thinks Vertex becomes the “most logical large-cap M&A target.”

Chattopadhyay was not the only analyst upgrading the stock this morning.

His peer at Cowen also upgraded Vertex to Outperform, saying efficacy data from its triple regimens showed “breakthrough-quality” results, and will very likely “dramatically” improve the quality of life and extend the life span of 80% of the 75K patients with CF worldwide.

Phil Nadeau pointed out that he expects a launch in 2021 and $10B in franchise sales in 2025. The analyst raised his price target on the shares to $200 as he sees a 10-year path of revenue growth for Vertex.

Meanwhile, Barclays analyst Geoff Meacham told investors that he thought the Phase 2 data in CF was an “unequivocal success and constitutes a major de-risking event.” Citing more confidence in the viability of the triple combo and the likely accelerated development path, the analyst upgraded Vertex to Overweight and raised his price target on the stock to $180.

Also this morning, Raymond James analyst Laura Chico upgraded Vertex to Outperform, with a $181 price target, citing the “compelling” efficacy data for its triple-combo CF regimens.

WOW: JPMorgan analyst Cory Kasimov began his research note with “Wow. Just wow,” following last night’s data release from Vertex.

To say that the initial results for Vertex’s triple combinations beat expectations would be an understatement, Kasimov told investors, adding that the data not only sets up well to reach a large majority of the CF patient population, but also greatly increases the competitive hurdle while also enhancing the scarcity value of the company. He raised his price target on the shares to $175 and reiterated an Overweight rating on the name.

Credit Suisse, Stifel, Citi and Piper Jaffray also raised their price targets on the stock following the data release.

OTHERS TO WATCH

Competitor Galapagos (GLPG) is sliding in morning trading following Vertex’s CF data announcement.

However, commenting on the news, H.C. Wainwright analyst Andrew Fein said the data may also be “encouraging” in a roundabout way for Galapagos and another smaller company exploring an add-on to a CF doublet combo, Proteostasis (PTI).

If increasing the dosing of the Vertex compounds does not differentiate them further in efficacy, then this consistency in benefit “may truly be a class phenomenon,” and similar results should be expected from any competitor add-on agent out there, he suggested.

PRICE ACTION

In Wednesday’s trading, shares of Vertex (VRTX) have gained about 22% to $161.26, while Galapagos and Proteostasis have dropped over 4% and 3%, respectively.

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RB Foods Sold for $4.2 Billion

McCormick to acquire RB Foods from Reckitt Benckiser for $4.2B

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McCormick (MKC) announced that it has signed a definitive agreement to acquire Reckitt Benckiser’s Food Division, RB Foods, from Reckitt Benckiser (RBGLY) for $4.2B, subject to certain customary purchase price adjustments.

The addition of Frank’s RedHot Hot Sauce, French’s Mustard and other iconic, market-leading products strengthens McCormick’s leadership in the attractive Condiments category and advances the company’s vision to Bring the Joy of Flavor to Life.

Combined pro forma 2017 annual net sales are expected to be approximately $5B with significant margin accretion.

McCormick will integrate RB Foods into its Consumer and Industrial segments and will retain the brand names of French’s, Frank’s RedHot and Cattlemen’s.

“The acquisition of RB Foods strengthens McCormick’s flavor leadership with the addition of the iconic #French’s and #Frank’s RedHot brands to our portfolio, which will become our number two and number three brands, respectively,” said Lawrence Kurzius, Chairman, President and CEO.

“RB Foods’ focus on creating products with simple, high-quality ingredients makes it a perfect match for McCormick as we continue to capitalize on the growing consumer interest in healthy, flavorful eating.

The addition of Frank’s RedHot Hot Sauce, the clear consumer favorite in an attractive and high-growth category, French’s Mustard and the other beloved products enables McCormick to become a one-stop shop for condiment, spice and seasoning needs, providing our customers and consumers with an even more diverse and complete flavor product offering.

RB Foods’ track record of creating market-leading products and its dedicated state-of-the-art manufacturing facility are a strong complementary fit that we expect will strengthen McCormick’s business opportunities as we expand our presence in condiments, a core category for the company in the U.S. and internationally.”

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Media Stocks to Watch

Discovery Communications, Scripps in talks to merge, WSJ reports

Discovery Communications (DISCA) is in discussions to merge with Scripps Networks (SNI), the Wall Street Journal reports, citing people familiar with the situation.

Terms of the negotiations could not be learned, the Journal says.

According to S&P Global Market Intelligence, Discovery has a market valuation of roughly $15B, while Scripps is valued at $8.8B, the report says.

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