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- Chinese real estate stocks were among the leaders to the downside during Tuesday's weak session on Wall Street. Concerns surrounding Shimao Group (OTCPK:SIOPF) sparked losses across the industry, including notable retreats from Nam Tai Property (NYSE:NTP) and MDJM (NASDAQ:MDJH).
- The drug development sector represented another source of outsized losses during the day. Both Adagio Therapeutics (NASDAQ:ADGI) and Cabaletta Bio (NASDAQ:CABA) dropped more than 70% on separate disappointments from their development programs.
- Turning to some of the day's standout gainers, Terminix (NYSE:TMX) spiked on a $6.7B takeover deal, while a settlement with an activist investor sent Centene (NYSE:CNC) to a fresh high.
Sector In Focus
- An analyst downgrade put pressure on the beleaguered Chinese real estate sector. Shimao Group (OTCPK:SIOPF) recovered a large share of its early losses, but still closed lower by 5%. Meanwhile, Nam Tai Property (NTP) dropped about 13% and MDJM (MDJH) retreated 8%.
- J.P. Morgan cut its rating on Shimao Group (OTCPK:SIOPF) following reports that the company faced liquidity concerns.
- The sector has been under stress over the past several months, amid concerns that debt problems at sector heavyweight Evergrande (OTCPK:EGRNF) (OTCPK:EGRNY) will drag down the entire industry.
Standout Gainer
- Pest control company Terminix (TMX) soared 18% on news that the company has signed a $6.7B merger deal with UK-based Rentokil.
- The purchase price equates to $55 per share, to be paid in cash and stock. TMX shareholders will receive 20% of the amount in Rentokil shares, meaning they will own about 26% of the combined company.
- TMX spiked at the start of the session on news of the deal and moderated a bit during morning trading. The stock eventually closed at $44.15, a gain of $6.84 on the day.
- Even with the substantial gain, shares remain approximately 25% below the purchase price contemplated in the deal.
Standout Loser
- Adagio Therapeutics (ADGI) suffered a major setback for its COVID therapy in the fight against the Omicron variant. As a result, shares tumbled nearly 79%
- The company revealed that lab results showed that the neutralizing activity for its ADG20 product plunged over 300-fold when tested against the Omicron strain. As a result of the findings, the firm paused patient enrollment for a Phase 2/3 trial of the monoclonal antibody therapy.
- ADGI declined $27 on the session to finish at $7.26. Earlier in the day, the stock had reached an intraday 52-week low of $6.30.
- Shares had initially spiked in late November when the identification of the Omicron variant was made public. Those gains happened amid hope that ADG20 would hold its efficacy against the new strain of the virus. With Tuesday's decline, the stock has more than reversed that rally.
Notable New High
- Centene (CNC) advanced nearly 5% on news that the company has reached a deal with an activist investor, leading to an overhaul of the firm's board of directors and the pending retirement of its long-time CEO. With the gain, the stock set a fresh 52-week high.
- The managed care company revealed that it has signed a pact with Politan Capital Management that will lead to the appointment of five new directors. The settlement will also see the retirement of Michael Neidorff as CEO, a post he's held since 1996.
- Neidorff will step down from his management role at some point next year. His successor will be named by the new board, which will look at both internal and external candidates.
- CNC finished the session at $81.85, an advance of $3.70. Tuesday's rally added to an upswing that began in mid-October.
- The stock is up about 36% over the past year.
Notable New Low
- Cabaletta Bio (CABA) cratered on Tuesday, dropping 73% and setting a new 52-week low. The precipitous drop followed the release of data from an early-stage trial of its DSG3-CAART therapy. The product was being tested as a treatment for pemphigus vulgaris, a rare autoimmune disease.
- In the Phase 1 study, the company said two out of three patients receiving 20 million DSG3-CAART cells (the lowest dose measured in the study) showed disease activity scores that worsened within six months.
- CABA plummeted $9.15 to close at $3.36. Shares also set an intraday 52-week low of $3.05.
- Looking for more of Wall Street's biggest movers? Turn to SA's On The Move sector.