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Tuesday was a strong day for stocks generally, as investors embraced the idea that any anticipated move in interest rates from the U.S. central bank is likely to be gradual and moderate. In response, the Dow and S&P both moved up by around 1%. Several stocks posted more impressive gains, with some of the best performers including Valeant Pharmaceuticals (BHC 0.95%), Resource Capital (ACR 1.08%), and Novavax (NVAX 2.95%).
Valeant soared more than 16% after the hard-hit specialty pharmaceutical company announced a new fulfillment agreement with drugstore giant Walgreen Boots Alliance (WBA -0.93%). In conjunction with the deal, Valeant said it would cut its prices on branded products in the dermatology and ophthalmology arenas by 10%, phasing in the cuts over the next six to nine months. In addition, Valeant agreed to distribute branded products in four different therapeutic areas through Walgreens at generic prices, seeking to compete against existing generics in those markets while passing on cost savings. Valeant CEO Michael Pearson characterized the agreements as "good for consumers, good for physicians, and good for the healthcare system," and from the positive response in Valeant's share price, it's clear that shareholders believed that the agreement were good for the stock as well.
Resource Capital jumped almost 10% as the real-estate investment trust gave its latest guidance and declared its dividend for the quarter. Resource Capital said that it expects adjusted funds from operations of $2.65 per share or higher, which amounts to more than half again the annualized rate of the $0.42 per share dividend it declared for the fourth quarter of 2015. The dividend amount is down by more than a third from its previous quarterly payout, but the REIT's share price had already fallen to anticipate the likelihood of a decrease in the income it paid to investors. With Resource Capital saying it intends to stabilize its book value at $18 per share, the REIT's shares still trade at a discount of nearly 40% even after today's rise. Still, after undergoing a 1-for-4 reverse split earlier this year, investors are likely nervous about Resource Capital's prospects, especially if interest rate hikes make its business in commercial mortgage loans and real estate more difficult.
Finally, Novavax climbed 11%. On Monday afternoon, the clinical-stage vaccine company said that it had completed the enrollment stage of its Resolve phase 3 trial of its RSV F Vaccine candidate for older adults age 60 and up. The trial will include almost 12,000 adults at 60 sites throughout the U.S., with all participants having been vaccinated in advance of the typical season for the infectious disease known as respiratory syncytial virus that acts in a similar way to influenza. CEO Stanley Erck praised the completion of the enrollment phase, calling the quick five-week turnaround "a significant achievement [that] underscores the strength of our clinical operations and management teams, as well as the support of our numerous clinical trial sites and our dedicated key opinion leaders." Novavax doesn't expect top-line data from the trial until the third quarter of next year, but investors were pleased to see signs of forward progress for the vaccine company.
