Skydance-Paramount Merger Clears Bronfman Hurdle

Good morning. It's August 27th, and today we’ll look at Eli Lilly’s move to reduce the price of its weight-loss drug Zepbound, the latest on the Skydance-Paramount merger, and three stocks that are surging in premarket trade.

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The Dow hit a positive note on Monday, while a decline in tech stocks and gains in the energy sector hinted at a market shift. The S&P 500 and Nasdaq both ended the day in the red.

Futures

Stock futures are steady today as investors await NVIDIA’s earnings.

What to Watch

American Woodmark (NASDAQ: AMWD) will share its earnings update in the premarket session today.

Watch out for the S&P Case-Shiller Home Price Index for 20 cities at 9:00 a.m. and the Consumer Confidence Index for August at 10:00 a.m.

Several firms, including SentinelOne (NYSE: S), PVH (NYSE: PVH), Box (NYSE: BOX), nCino (NASDAQ: NCNO), and Nordstrom (NYSE: JWN), will declare their quarterly reports during the aftermarket session.

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Pharmaceuticals

Eli Lilly Cuts Price of Zepbound to Expand Access and Combat Counterfeit Drugs

Eli Lilly has launched a new, more affordable version of its weight-loss drug Zepbound, priced at nearly half its usual cost, to broaden access for patients without insurance coverage, such as those on Medicare.

The move comes as demand for Zepbound continues to surge and concerns over counterfeit versions of the drug rise. The new offering includes 2.5-milligram and 5-milligram single-dose vials priced at $399 and $549 per month, respectively, available through the company's direct-to-consumer website, LillyDirect.

Patients typically begin treatment with a lower dose and gradually increase it to maintain weight loss. Unlike the more expensive autoinjector pens, these new vials require patients to draw up the medication using a syringe, which Eli Lilly says will help expand supply capacity due to simpler manufacturing processes.

This price reduction is particularly beneficial for those who need to pay out-of-pocket for the medication and are enrolled in health plans that do not cover obesity treatments. Eli Lilly has emphasized the importance of offering a transparent and predictable price, free from third-party supply chain markups.

Technology

Skydance-Paramount Merger to Proceed After Bronfman Withdraws Offer

The anticipated merger between Paramount and Skydance is set to proceed after Edgar Bronfman Jr. withdrew his competing offer for the entertainment giant.

Bronfman, the executive chairman of Fubo and former CEO of Warner Music, informed Paramount’s special committee of directors on Monday night that he would not move forward with his bid, which had been increased to $6 billion.

Paramount had previously agreed to merge with Skydance, a deal that promises to inject much-needed capital into the historic studio. The merger is expected to bolster Paramount, which has faced challenges adapting to the evolving entertainment landscape.

Skydance, led by founder David Ellison, has been a key player in some of Paramount's recent successes, including blockbuster films like "Top Gun: Maverick" and the "Mission Impossible" series installments.

The merger, valued at around $28 billion, is set to close in September 2025, pending regulatory approval. This deal marks a significant step forward for both companies, with Skydance emerging as a major force in Hollywood.

Retail

American Woodmark Shares Tumble 6% After Earnings Miss

American Woodmark Corporation reported earnings below analysts’ expectations, causing its shares to plummet by 6.38% in premarket trading.

The cabinet manufacturer reported earnings per share of $1.89 for the quarter ending July 31, missing the consensus estimate of $2.40. Revenue declined by 7.9% year-over-year, coming in at $459.1 million, below the anticipated $476.6 million.

The company attributed the disappointing results to a weaker-than-expected demand in the remodeling market, a trend that CEO Scott Culbreth expects to persist.

Additionally, there has been a noticeable slowdown in new construction single-family starts, further impacting the company’s outlook. As a result, American Woodmark is anticipating a low single-digit decline in net sales for fiscal 2025 compared to the previous year.

For the full fiscal year, the company provided guidance for adjusted EBITDA to fall within the range of $225 million to $245 million.

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Trinity Biotech plc [TRIB] - Last Close: $2.03

Trinity Biotech's stock is surging by 77.5% in premarket trade today.

The company raised its 2024 sales guidance for TrinScreen HIV last evening to $10 million, up from $8 million, due to increased orders and expanded production capacity.

John Gillard, President and CEO of the firm, expressed satisfaction with the company's ability to scale production to meet global needs, particularly in regions with high demand for rapid HIV testing.

He also noted that the company has boosted its production of the FDA-cleared viral transport medium FlexTrans™ in response to the WHO's recent declaration of a Public Health Emergency of International Concern (PHEIC) for mpox, anticipating further demand increases.

Addex Therapeutics Ltd [ADXN] - Last Close: $7.66

Addex Therapeutics is up by nearly 32% in premarket trading after announcing the selection of clinical candidates from its GABAB-positive allosteric modulator (PAM) research collaboration with Indivior.

Under the agreement, Addex could receive up to $330 million based on achieving regulatory, clinical, and commercial milestones, along with tiered royalties on net sales.

Addex also selected a compound to advance independently for treating chronic cough.

Smart For Life, Inc. [SMFL] - Last Close: $1.08

Smart for Life is skyrocketing by 53% so far in premarket trading following yesterday's update on its acquisition strategy and potential growth prospects.

The company is negotiating four profitable acquisitions, including Purely Optimal Nutrition and other supplement and manufacturing brands.

These moves are part of Smart for Life's post-restructuring strategy to expand its presence in the nutraceutical industry.

Chairman A.J. Cervantes, Jr., and CEO Darren Minton emphasized the company's commitment to reaching a $100 million revenue goal through both organic growth and strategic acquisitions.

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Everything Else

• Scotiabank reported lower Q3 earnings amid rising credit risk.

• Zuckerberg has criticized the government’s influence on Meta’s COVID content moderation.

• Ryanair's summer fleet expansion is at risk due to Boeing delivery delays.

• Libya's oil output has been slashed as the crisis over its central bank deepens.

• JD.com’s stock is surging after the announcement of a $5 billion repurchase program.

• UBS Wealth Management has raised the U.S. recession probability to 25% amid job market concerns.

• HP will receive $50 million from the U.S. for its Oregon semiconductor project.

• PDD Holdings has dropped by 29% after a weak economic forecast.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Adam Garcia
Elite Trade Club

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