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ASX 200 drops, Trump has COVID-19, Mesoblast (ASX:MSB) share price sinks

ASX 200
Credit: Cimexus

The S&P/ASX 200 Index (ASX: XJO) dropped by 1.4% today to 5,791 points after investors learned that President Trump has COVID-19.

Here are the highlights from the ASX 200 today:

Mesoblast Limited (ASX: MSB)

The Mesoblast share price sunk heavily today after some disappointing news in the US, falling by 37.2%.

It was hoping for approval from the US Food and Drug Administration (FDA) for biologics license application (BLA) for remestemcel-L for the treatment of pediatric steroid-refractory acute graft versus host disease (SR-aGVHD).

The FDA recommended that Mesoblast conduct at least one additional randomised, controlled study in adults and/or children to provide further evidence of the effectiveness of remestemcel-L for SR-aGVHD. This was despite the Oncologic Drugs Advisory Committee (ODAC) of the FDA voting 9:1 that the available data supported the efficacy of remestemcel-L for SR-aGVHD.

As there are currently no approved treatments for the life-threatening condition in children under 12, the ASX 2oo share will urgently request a type A meeting with the FDA (which is expected within 30 days) to discuss a potential accelerated approval with a post-approval condition for additional study.

The FDA also identified a need for further scientific rationale to demonstrate the relationship of potency measurements to the product’s biologic activity.

Mesoblast CEO Dr Silviu Itescu said: “We are working tirelessly to bring remestemcel-L to patients with life threatening inflammatory conditions, including SR-aGVHD and COVID-19 ARDS.”

Breville Group Ltd (ASX: BRG)

Breville has revealed an acquisition worth US$60 million. The Breville share price fell 0.6% today.

It’s buying Seattle-based coffee grinding company Baratza. It was established in 1999 and is known for designing and distributing premium coffee grinders for the North American and international markets.

The ASX 200 business said that acquisition will be complementary to its existing premium coffee business and brings together two of the world’s leading companies in the design and global distribution of coffee products.

Of the US$60 million, US$43 million will be paid by cash from existing reservices and another US$17 million will be funded by issuing new shares of Breville.

Breville Group CEO, Jim Clayton, said: “We are excited by the opportunity to bring Baratza into the Breville family. Our combined experience will unlock dynamic revenue synergies for both businesses, that share a passion for innovation and an unwavering commitment to enhancing the consumer experience.”

Qube Holdings Ltd (ASX: QUB)

Qube has been busy looking to monetise its Moorebank Logistics Park. 

The process has received strong interest from a number of parties, and following initial expressions of interest, a short list of parties was selected to proceed to the second stage of the process.

Qube has received a number of non-binding indicative offers from “high quality” counterparties in the second stage of the process. Qube decided the best thing to do would be to enter into a period of exclusivity with a preferred partner.

That partner is LOGOS Property Group, an Asian Pacific specialist with $13.8 billion of assets under management (AUM). While work on the transaction is progressing, it is still a non-binding indicative proposal and there are number of conditions, including the agreement of the precise details and scope of the monetisation structure, completion of due diligence and documentation.

The two partners are now doing the work necessary for the agreement to go ahead.

Qube said it would only go ahead with the transaction if it can realise appropriate value. Qube expects to know whether or not to proceed by the end of the 2020 calendar year.

The Qube share price was flat today.

Collins Foods Ltd (ASX: CKF)

ASX 200 fast food business Collins Foods has announced that it’s shutting all of its Sizzler Australia stores, but the Asian Sizzler licencing will continue. The Collins Foods share price dropped 1.7% today. 

Whilst the company was profitable before COVID-19, Collins Foods hasn’t seen a return to profitability from Sizzler, though KFC and Taco Bell have rebounded.

Around 600 staff have been offered redundancy packages and access to outplacement support, though it’s looking to redeploy people to its KFC and Taco Bell networks.

Collins Foods CEO Drew O’Malley said: “This has been a difficult decision for Collins Foods, especially given the impact it will have on our dedicated Sizzler employees and customers in Australia.

“As a casual dining concept, Sizzler has been the brand in our portfolio most impacted by the COVID-19 pandemic. The ongoing impact of COVID-19 on revenues has meant that unfortunately, these restaurants have not established a clear path to profitability in the foreseeable future.

“In FY20, Sizzler Australia revenues accounted for less than 3% of Collins Foods’ total revenue. While the Sizzler Australia closure will allow us to minimise current-year and future losses, there will be some one-off closure costs that will be reflected in the upcoming half-year results.”

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Collins Foods Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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