Major benchmarks ran out of holiday cheer on Monday, as trade concerns contributed to a downbeat mood on Wall Street. Some sluggish economic numbers from the manufacturing sector also weighed on market sentiment, casting doubt on what has generally been a positive outlook on the economy from the most recent slate of earnings releases over the past couple of months. Even with indexes falling, though, some companies had good news that sent their share prices higher. AK Steel (AKS), Kodiak Sciences (KOD -5.34%), and Sorrento Therapeutics (SRNE -9.94%) were among the top performers. Here's why they did so well.
Tariffs lift AK Steel
Shares of AK Steel climbed more than 4% after President Trump reinstated tariffs on steel from Argentina and Brazil. The U.S. president said that the move came in response to the two South American countries having seen their currencies fall significantly against the U.S. dollar, giving their agricultural sector an advantage in the global markets compared to U.S.-grown products. The 25% tariff won't necessarily have a big impact on the steel industry, as Brazil and Argentina don't represent a huge portion of imports of the metal. Yet the news was welcome for AK Steel, which can now expect slightly higher prices after having had to deal with rising raw materials costs that have squeezed profits.
Kodiak makes a big sale
Kodiak Sciences saw its stock soar 72% after the biopharmaceutical company announced a major agreement involving royalties on a key retinal disease treatment. Biotech investment company Baker Bros. Advisors agreed to pay $225 million in exchange for a 4.5% royalty on sales of KSI-301, which Kodiak is developing to treat ailments including age-related macular degeneration and diabetic eye diseases. Kodiak will receive $100 million when the deal closes, with the remaining $125 million coming after Kodiak reaches 50% enrollment in clinical studies of KSI-301. Shareholders have to be pleased that the agreement involves no stock dilution, helping them avoid a common problem for biotech investors.
Speculation surrounds Sorrento
Finally, shares of Sorrento Therapeutics gained 17%. The drugmaker's stock has soared recently, after the company said last week that it had rejected two separate unsolicited acquisition offers from other companies in the industry. With offer prices between $3 and $5 per share, Sorrento nevertheless said that the offers undervalued the company, and it appears likely that Sorrento will pursue licensing deals or partnerships with larger peers rather than selling itself outright. Even with the gains, though, Sorrento is still down more than 60% from where it traded in early 2018, and that leaves a lot for the company to prove going forward.