Why Allergan, eBay, Dynavax, KBR, and More Are Trending

It’s a red day on Wall Street, as all three major indexes are off by around 0.35%, potentially due to some market participants remaining on the sidelines until the Deutsche Bank AG (USA) (NYSE:DB) uncertainty is finally settled. Although traditional wisdom says that either the U.S. government will settle for a relatively-painless amount or that the German government will bail the bank out, stranger things have happened before.

In this article, we’ll take a look at why Allergan plc Ordinary Shares (NYSE:AGN), AstraZeneca plc (ADR) (NYSE:AZN), eBay Inc (NASDAQ:EBAY), KBR, Inc. (NYSE:KBR), and Dynavax Technologies Corporation (NASDAQ:DVAX) are capturing investors’ attention this morning. In order to make a more complete analysis, we’ll also check SEC filings to see what the smart money thinks of each stock.

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Two drug companies are in the spotlight today after Allergan plc Ordinary Shares (NYSE:AGN) entered into an exclusive license agreement with AstraZeneca plc (ADR) (NYSE:AZN) to obtain the global development and commercialization rights to the latter’s MEDI2070 inflammatory disorder development program. Under the terms of the deal, Allergan will pay AstraZeneca an upfront payment of $250 million and up to $1.27 billion in potential launch and sales-based milestone disbursements over a period of up to 15 years. MEDI2070 is an anti-IL-23 monoclonal antibody in Phase IIb clinical development for the treatment of patients with moderate-to-severe Crohn’s disease. It is also Phase II ready for ulcerative colitis and other associated conditions.

Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 131 of them were long Allergan plc Ordinary Shares (NYSE:AGN) on June 30, while 24  of them were shareholders of AstraZeneca plc (ADR) (NYSE:AZN).

eBay Inc (NASDAQ:EBAY) shares are almost 2% in the red after Facebook Inc (NASDAQ:FB) introduced ‘Marketplace’, which is intended to allow the social media giant to compete against eBay and Craigslist in the e-commerce realm. Facebook’s Marketplace feature is a revamped, more mobile-focused version of its previous Classified/Marketplace function, and could take market share away from eBay in the long run given Facebook’s massive daily user-base and its strong engagement. Jim Simons‘ Renaissance Technologies bumped up its holding in eBay Inc (NASDAQ:EBAY) by 59% during the second quarter to just over 3 million shares as of June 30.

On the next page, we’ll find out why KBR Inc and Dynavax Technologies are heading in opposite directions this morning.

KBR, Inc. (NYSE:KBR) shares have retreated by 12% this morning after the company updated its earnings guidance for 2016 to reflect certain increases in expenses needed to complete various engineering, procurement and construction projects. Due to those increases, KBR’s management now expects 2016 EPS to come in at between $0.30 and $0.50 per diluted share, well beneath the prior range of $1.20-to-$1.45 (when excluding legal costs associated with certain legacy government contracts). 24 funds in our system had a long position in KBR, Inc. (NYSE:KBR) as of the most recent 13F reporting period, down by four funds from the March reporting period.

Dynavax Technologies Corporation (NASDAQ:DVAX) is 20% in the green after the company disclosed in a Form 8-K filing that it received anticipated requests for information from the FDA review team concerning its pending BLA for HEPLISAV-B. The company is working with the FDA so that the agency can complete its review by the PDUFA action date of December 15, 2016. The smart money was relatively bullish on Dynavax Technologies Corporation (NASDAQ:DVAX) as of June 30, as 23 funds that we track were long $184.69 million worth of Dynavax Technologies Corporation (NASDAQ:DVAX) shares, or 32.90% of the drug company’s float.

Disclosure: None