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Monday’s Pre-Market: Here’s What You Need to Know Before the Market Opens

U.S. stock futures were mixed on Monday as S&P 500 recorded an all-time high at the end of last week, reflecting the third consecutive week of gains.

Dow futures were trading around 0.1% lower, while Nasdaq and S&P futures had gained about 0.3% and 0.1%, respectively, at the time of writing.

HEXO (HEXO), Motorcar Parts Of America (MPAA), and Optical Cable Corp. (OCC) are expected to report earnings before the market opens, while RF Industries (RFIL) is expected to report after the market close.

Enochian Biosciences Inc (ENOB) was the most actively traded stock in pre-market trading as well as the biggest gainer as the stock skyrocketed 128% at the time of writing. Recently, the biopharmaceutical company’s pre-IND (Investigational New Drug) request for a probable functional treatment of HIV has been accepted by the FDA.

Enochian’s Executive Vice Chairperson of the Board Dr. Mark Dybul commented, “As an HIV researcher, clinician and past leader of large, global HIV programs, I am very excited by the FDA’s decision to provide responses to the Pre-IND submission. Because the promising early results are only in one person, it is important to study the approach in a larger population. In addition, because many people achieve suppression with antiviral treatment, it is key to extend the evaluation to that specific group. Pre-IND is an important step to exploring the possibility of testing this novel NK-GDT treatment.”

Avenue Therapeutics Inc (ATXI) was the biggest laggard in pre-market trading, as the stock plunged more than 43% at the time of writing. Recently, the pharmaceutical company received a second complete response letter (CRL) from the U.S. Food and Drug Administration (FDA) related to its New Drug Application (NDA), which sought approval for IV tramadol.

Per the CRL, the delayed and unpredictable onset of analgesia with IV tramadol does not support its benefit as a monotherapy to treat patients in acute pain. Furthermore, there is inadequate information to support that IV tramadol along with other analgesics indicated safety and effectiveness for the intended patient population. However, no Chemistry, Manufacturing and Controls (CMC) issues were identified by the U.S. regulator in the CRL.

Disagreeing with the FDA’s explanation of the data in the NDA, the company intends to continue to seek regulatory approval for IV tramadol.

In M&A news, KKR & Co., Inc. (KKR), a global investment firm, inked a deal to snap up an $800 million aviation loan portfolio from CIT Group Inc. (CIT). The loan portfolio, which spans over 50 loans for around 60 commercial aircraft, has an average yield in the mid-single digits and a remaining average term of approximately four years.

KKR’s Private Credit Partner and Co-head Dan Pietrzak said, “The purchase of this loan portfolio from CIT will be used to seed the launch of our aviation lending business in partnership with AV AirFinance. This transaction marks an exciting new expansion of our asset-based finance strategy into directly originated and held commercial aviation loans, and we believe AV AirFinance is well positioned to become a premier lender for the global commercial aviation market.”

Meanwhile, Element Solutions Inc (ESI), a diversified specialty chemicals production corporation, inked a binding offer to acquire Coventya Holding, a company that develops, manufactures, and distributes specialty chemicals for the surface finishing industry. The all-cash deal of €420 million is expected to close in the third or fourth quarter of this year, subject to certain approvals. Coventya is expected to generate annual sales of €160 million and adjusted EBITDA of over €30 million for the Fiscal Year 2021.

Element Solutions CEO Benjamin Gliklich commented, “This acquisition should translate to positive outcomes for both companies, their customers and shareholders. On a pro forma basis, we expect the acquisition to add approximately $0.07 to our annualized adjusted EPS before synergies, representing accretion of approximately 5% based on our previously announced adjusted EPS guidance of $1.30 for the full year 2021… We expect at least €13 million in annual synergies to be realized over the two years following the close of the transaction.”

Furthermore, computer systems design service company Nvidia Corporation (NVDA) has agreed to buy DeepMap, Inc, a private company focused on building high-definition maps to help autonomous vehicles (AV) navigate safely. The transaction, which awaits certain approvals, is likely to close in the third quarter of FY2021. Financial terms of the deal were kept under wraps.

Through this acquisition, the mapping and localization abilities of NVIDIA DRIVE, the company’s autonomous vehicles development platform, will be strengthened by DeepMap’s technology. Moreover, the precision required by an AV to navigate itself safely will be enhanced.

Nvidia’s Automotive VP and GM Ali Kani said, “DeepMap is expected to extend our mapping products, help us scale worldwide map operations and expand our full self-driving expertise.”

In other news, Moderna (MRNA), the pharmaceutical and biotechnology company, and Tabuk Pharmaceuticals, a fully-owned subsidiary of Saudi pharmaceuticals company Astra Industrial Group have inked a deal. According to the agreement, the COVID-19 Vaccine and future variant-specific booster candidates of the former will be marketed by the latter in Saudi Arabia. Furthermore, Tabuk is entitled to opportunities in the near term to distribute other authorized Moderna mRNA products. The financial terms of the deal have not been disclosed.

Moderna CEO Stephane Bancel said, “We appreciate the collaboration of Tabuk Pharmaceuticals in this new partnership in Saudi Arabia. It is thanks to partnerships such as these that we are able to expand access to our vaccine globally, and we hope it will support the availability of our COVID-19 vaccine for the benefit of the people of Saudi Arabia.”

Meanwhile, a major American manufacturer of diagnostic healthcare products Quidel Corp.’s (QDEL) Sofia Q device received an amended emergency use authorization (EUA) from the FDA. Sofia Q is a Fluorescent Immunoassay Analyzer (FIA) from the company’s Sofia product portfolio, which provides the same accuracy in SARS Antigen testing as Sofia and Sofia 2 and delivers automated results in 15 minutes.

Quidel CEO Douglas Bryant said, “Sofia Q is our latest powerful diagnostic instrument designed to democratize access to the many benefits of our Sofia SARS rapid antigen tests and, ultimately, our full portfolio of Sofia tests for influenza, RSV, Strep, and other conditions. We designed Sofia Q to be very affordably priced and conducive to widespread adoption across the ever-expanding global point-of-care and telemedicine marketplace.”