May 26, 2022

ElksGolf

Travelling Tomorrow

Hot Stocks: Travel stocks rally; SRRA, ATRS jump on merger deals; NSTG plunges


Stocks rebounded from recent weakness on Wednesday, as bargain hunting among beaten-down growth stocks pushed the major averages higher. The Nasdaq led the advance, climbing about 2% on the day.

Travel stocks contributed to the upswing. An upbeat earnings report from Delta Air Lines raised hopes of a blockbuster travel season this summer. American Airlines (AAL), Southwest (LUV), Marriott International (MAR) and Hyatt Hotels (H) all finished higher.

M&A activity also represented a major catalyst for some of the day’s standout gainers. Sierra Oncology (NASDAQ:SRRA) and Antares Pharma (NASDAQ:ATRS) both rallied on separate deals to be acquired.

Turning to the downside, NanoString Technologies (NSTG) lost a third of its value on a disappointing preliminary revenue figure. Meanwhile, Bicycle Therapeutics (BCYC) continued a recent downturn, extending its 52-week low.

Sector In Focus

Strong earnings from Delta Air Lines sparked a general rally in travel stocks. The company signaled a healthy summer travel season after two years impacted by rigid COVID restrictions.

DAL finished the day higher by 6%, prompting rallies in many of its competitors. American Airlines (AAL) jumped nearly 11%, while Southwest (LUV) posted a 7.5% advance.

The gains extended beyond the airlines as well. In the hotel space, Marriott International (MAR) advanced about 7.5%. At the same time, Hyatt Hotels (H) rose almost 7%.

Standout Gainer

A merger deal sparked a wave of buying in shares of Antares Pharma (ATRS). The stock jumped 49% after agreeing to get acquired by Halozyme Therapeutics (HALO) for about $960M.

Under the deal, ATRS will receive a purchase price of $5.60 per share in cash. HALO said the acquisition will immediately add to revenue and non-GAAP earnings in 2022.

ATRS skyrocketed $1.84 in Wednesday’s trading, concluding the session at $5.58. The stock also set an intraday 52-week high of $5.59.

Standout Loser

NanoString Technologies (NSTG) suffered a massive sell-off after the release of disappointing revenue figures. The stock dropped almost 34%, reaching a new 52-week low.

The developer of translational research tools reported preliminary total product and service revenue of about $31M in Q1. That was well below the firm’s earlier forecast of $34M to $38M. It also missed the nearly $36M that analysts had predicted.

Commenting on the results, the company blamed what it called “uneven sales execution,” as well as the ongoing impact of a realignment it put into place earlier in the year.

NSTG closed Wednesday’s trading at $21.87, a decline of $11.08 on the session. The stock also reached an intraday 52-week low of $21.46.

Notable New High

Sierra Oncology (SRRA) soared nearly 39% on news that it has agreed to be acquired by pharma giant GlaxoSmithKline (GSK) in a $1.9B deal. With the rally, shares reached a new 52-week high.

The deal calls for a purchase price of $55 per share in cash. With the transaction, GSK will acquire momelotinib, SRRA’s main drug candidate. The product recently hit the primary goal in a Phase 3 trial in myelofibrosis, a type of bone marrow cancer.

SRRA posted a gain of $15.23, finishing the session at $54.75. During the session, shares reached an intraday 52-week high of $54.97.

The stock reached a 52-week low of $14.91 in late January but quickly bounced off that level. The stock has nearly quadrupled since then, rising 267%.

Notable New Low

After jumping nearly 25% last Friday on early-stage data from an investigative bladder cancer treatment, shares of Bicycle Therapeutics (BCYC) have steadily dropped over the last several days, reaching a series of new lows.

The declines have come amid uncertainty among analysts about the prospects for the drug candidate.

The product, known as BT8009, came under scrutiny on Tuesday by B. Riley, which downgraded the stock based on an uncertain regulatory path for the drug. The firm cut its rating on BCYC to Neutral from Buy, citing input from a physician-scientist focused on treating patients with genitourinary malignancies.

Spurred by the downgrade, BCYC dropped about 3.5% on Wednesday, finishing the session at $24.04. The stock also reached an intraday 52-week low of $21.53.

Wednesday’s slide followed a 39% plunge on Monday and a further 14% drop the next day. The stock had reached a 52-week high of $62.08 in late 2021.

For more of the day’s biggest movers, click over to Seeking Alpha’s On The Move section.



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