nvestors appeared to be in a good mood on Monday morning. Based on stock index futures, it was likely that major market benchmarks would hold onto their gains from last week and even make modest moves higher. The Nasdaq Composite seemed particularly well positioned, with indications suggesting a rise of as much as half a percent early Monday.
Electric vehicles (EVs) remain an important driver of economic growth, and XPeng (XPEV 15.28%) reported that a new model got off to a roaring start over the weekend. However, the jump in the Chinese EV maker’s stock was modest compared to the much larger move for Chinook Therapeutics (KDNY 56.94%), whose shares skyrocketed on news of an agreement to purchase the biotech specialist. Read on to learn the details behind both companies and their latest stock-price gains.
XPeng has buyers excited
Shares of XPeng climbed 9% in premarket trading on Monday morning. The Chinese electric vehicle maker has seen its stock fall sharply over the past year as competition in the industry heats up, but investors were pleased to see a new vehicle model get a positive reception from consumers over the weekend.
XPeng started showing consumers its new G6 SUV model late last week, and would-be buyers flooded into the company’s stores to look at the new vehicle. Apparently, many of them were impressed, because XPeng said that it got over 25,000 orders for G6 vehicles in the first 72 hours it started accepting them.
The G6 has several attractive features. Its range of nearly 470 miles is appealing to those who need to drive long distances on a single charge, while its high-voltage internal electrical system gives the G6 fast-charging capabilities that are increasingly important as more EVs hit the road. Pre-sale prices are also lower than what Tesla (TSLA 1.05%) is charging for its Model Y in China right now.
There are plenty of automakers in China vying for supremacy in the fast-growing EV segment, and XPeng can’t declare victory yet. Nevertheless, for shareholders who have hoped for a positive catalyst, the new G6 could be at least one step in the right direction for XPeng.
Chinook gets an offer it can’t refuse
Shares of Chinook Therapeutics got a much larger boost early Monday. The stock soared nearly 60% as the biotech company entered into an acquisition agreement with a much larger industry peer.
Chinook said it had entered into a merger agreement with Novartis (NVS -1.22%) that values the smaller company at $3.2 billion. Under the terms of the agreement, Chinook shareholders will receive $40 per share in cash up front for their stock, and they’ll also receive contingent value rights (CVRs) that will extend beyond the closing date of the merger.Collapse
NYSE: NVS
Novartis Ag
Today’s Change
(-1.22%) -$1.23
Current Price
$99.70YTD1W1M3M6M1Y5YPRICEVS S&P
NVS
KEY DATA POINTS
Market Cap
$201B
Day’s Range
$99.69 – $100.88
52wk Range
$74.09 – $105.56
Volume
1,544,606
Avg Vol
2,256,006
Gross Margin
69.62%
Dividend Yield
3.47%
Chinook’s lead product candidate is atrasentan, the rights to which it obtained from AbbVie (ABBV -0.31%) in early 2020. Over the past few years, Chinook has done research using atrasentan with patients suffering from various forms of kidney disease, advancing into stage 3 trials. The CVRs that Chinook shareholders would receive under the merger agreement will pay as much as $4 per share in additional future payments if atrasentan gets regulatory approvals for treating IgA nephropathy and focal segmental glomerulosclerosis.
The news is a positive for shareholders who participated in Chinook’s reverse merger with Aduro Biotech in late 2020, as the stock has climbed steadily since then. For the much larger Novartis, the acquisition should help bolster an already impressive pipeline of candidate treatments.
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