Stocks continued to move higher Wednesday following the release of a key manufacturing index that indicates that economic growth is picking up. The Dow Jones Industrial Average (^DJI +0.19%) and the S&P 500 (^GSPC +0.19%) both closed at record highs.
Today's stock market
| Index | Percentage Change | Point Change |
|---|---|---|
| Dow | 0.40% | 98.67 |
| S&P 500 | 0.64% | 17.25 |
Data source: Yahoo! Finance.
Energy stocks surged higher as the price of crude oil topped $61 for the first time since mid-2015. The Energy Select Sector SPDR ETF (XLE +2.64%) rose 1.5%.
As for individual companies and their stocks, Dominion Energy (D +1.08%) wants to buy SCANA Corporation (SCG +0.00%) and give a big refund to the latter's customers, and Sangamo Therapeutics (SGMO +5.22%) is teaming up with Pfizer to fight amyotrophic lateral sclerosis, otherwise known as Lou Gehrig's disease.
Image source: Getty Images.
Dominion moves to buy struggling utility
Utility giant Dominion Energy announced that it was buying troubled South Carolina utility SCANA in an all-stock deal worth $14.6 billion including assumed debt, causing SCANA shares to soar 22.6% and Dominion's to drop 3.9%. The agreement also includes relief for SCANA's electric customers, who have borne costs for a failed nuclear power plant project. In what Dominion Chairman and CEO Thomas Ferrell called "the largest utility customer cash refund in history," $1.3 billion in payments will be made within 90 days of the merger's closing, an average of $1,000 per residential customer.
SCANA shareholders will receive 0.669 shares of Dominion Energy stock for each SCANA share, representing a 30.6% premium for SCANA shareholders based on an average of recent share prices. Dominion believes that the transaction will be immediately accretive to the company's earnings, and will increase Dominion Energy's compounded annual EPS target growth rate through 2020 to 8% or higher.
The agreement gets SCANA out of a difficult situation, as the cancellation of the partially finished nuclear plant had politicians and ratepayers up in arms and caused the stock to lose 46% of its value in 2017. Dominion gets a valuable expansion opportunity in the Southeast, but it is now saddled with a half-completed nuclear power plant and likely plenty of legal and political battles still ahead, which may be why its investors were not quick to embrace the deal. The merger is contingent on SCANA shareholders' approval, as well as clearance from regulatory agencies.
Sangamo and Pfizer expand gene editing relationship
Sangamo Therapeutics, a biotech specializing in gene editing, and Pfizer announced a collaboration to develop a gene therapy to treat amyotrophic lateral sclerosis (ALS) and frontotemporal lobar degeneration (FTLD). Shares of Sangamo rose 6.5% initially on the news before settling down to a 0.9% loss at the close. ALS and FTLD are neurodegenerative genetic diseases that currently have no cure.
Pfizer is making a $12 million upfront payment to have Sangamo use the latter's zinc finger technology to develop a drug candidate that will seek out the mutated gene responsible for the disorders, bind to it, and suppress the expression of the gene. Under the terms of the agreement, Sangamo is eligible to receive potential development and commercial milestone payments of up to $150 million, as well as tiered royalties on net sales.
"We are excited to continue our collaborative relationship with Pfizer with this new program using Sangamo's zinc finger protein technology to develop a potential gene therapy for patients with certain forms of ALS and FTLD, devastating diseases with very limited treatment options," said Dr. Sandy Macrae, Sangamo CEO. "The precision and flexibility of zinc finger proteins enables targeting of virtually any genetic mutation."
Biotech investors will no doubt be hearing more and more about gene editing in 2018, as early drug candidates are beginning to make their way into clinical testing. Sangamo and Pfizer also announced last year that they are collaborating on a gene therapy for hemophilia A and that candidate is currently in a phase 1/2 trial.
