AstraZeneca signs licensing deal with LEO Pharma, Balfour Beatty wins Caltrain contract

The FTSE 100 is expected to open 30.5 points lower on Tuesday morning, after closing up 0.36% at 6,941.19 on Monday.

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AstraZeneca has completed a licensing agreement with LEO Pharma, a specialist in dermatology care, for the global licence to monoclonal antibody tralokinumab in skin diseases. Upon completion of the agreement, LEO Pharma made a payment to AstraZeneca of $115m for the exclusive, global rights to tralokinumab in atopic dermatitis and any future additional dermatology indications. Tralokinumab is an IL-13 monoclonal antibody that has completed a Phase IIb trial for the treatment of patients with inflammatory skin disease, atopic dermatitis.

Although first-half revenue was lower for Antofagasta, the Chilean copper mining colossus improved earnings and kept its dividend flat thanks to some heavy cost cutting. "A 24.7% reduction in operating costs offset the decline in the copper price and lower sales volumes resulting in EBITDA of $571.6m, 2.3% higher than in the same period last year," said chief executive Iván Arriagada.

International infrastructure group Balfour Beatty announced on Tuesday that it has been awarded a $697m contract to undertake electrification of the 52-mile Caltrain rail corridor between San Francisco and San Jose, in preparation for the future operation of high speed trains. The FTSE 250 firm said it is the largest contract secured by Balfour Beatty in the United States. The electrification of the line is being undertaken to bring cleaner, high performance electric vehicles to Caltrain's fleet, Balfour Beatty said, allowing for a more frequent service. “Our extensive experience in managing complex rail projects leaves us well qualified to deliver this significant scheme,” said group chief executive Leo Quinn.

Newspaper round-up

The pound dropped close to its lowest levels since the Brexit vote as markets braced themselves for hard evidence this week that the UK economy has been knocked off course by the decision to leave the EU. Sterling dropped half a per cent to $1.2874 against the dollar, dipping to its July 11 low and close to the $1.2798 it reached on July 6, which was the lowest since 1985. Bearish sentiment intensified as markets prepared for a blizzard of official UK economic news on inflation, employment, retail sales and the health of the public finances, offering the first indication of the state of the economy since the referendum vote. - The Times

Damage to the economy caused by Brexit will more than offset the modest wage gains for British-born workers in low-paid jobs caused by cutting net migration to the tens of thousands a year, a study has found. A report by the Resolution Foundation thinktank said there would be a small pay increase to native-born employees in sectors such as security and cleaning if there was a big cut in the number of workers arriving in Britain from overseas. - Guardian

British ministers are stepping up efforts to reassure Scotland that its interests will be defended during Brexit negotiations and to damp calls for Scottish independence. Andrew Dunlop, Scotland minister, arrived in Inverness on Monday to discuss Brexit with sectors including tourism, energy and food and drink, while David Mundell, Scotland secretary, met local governments last week and will visit Borders farmers on Wednesday. - Financial Times

Britain’s blue-chip companies handed their shareholders five times more cash than they paid into their own pension schemes last year despite the fund deficits ballooning on the back of falling interest rates. FTSE 100 businesses paid dividends worth £71.8bn for 2015, sharply higher than the previous year and close to £30bn more than the collective shortfall in their pension schemes of £42.3bn, according to actuary Lane Clark & Peacock. At the same time, the UK’s biggest listed businesses made contributions to their defined-benefit pension schemes of £13.3bn, less than a fifth of what their shareholders received. - The Times

Thousands of Sports Direct warehouse workers are set to receive back pay totalling about £1m after the retailer admitted breaking the law by not paying the national minimum wage. The sportswear chain and its employment agencies are also facing fines of up to £2m imposed by the Department for Business, Energy and Industrial Strategy (BEIS) after they were found to have been underpaying some of the country’s lowest-paid workers for four years. - Guardian

US close

US stocks gained on Monday as oil prices edged higher and investors shrugged off weaker-than-expected manufacturing data.

The S&P 500 added 0.28% to 2,190.15, the Dow Jones Industrial Average gained 0.32% to 18,636.05, and the Nasdaq 100 climbed 0.42% to 4,827.12.

Oil prices also rallied on hopes of action by OPEC to stabilise the market ahead of a meeting next month.

West Texas Intermediate was last up 1.98% at $45.29 per barrel and Brent crude increased 2.25% to $48.05.

In economic data, the Empire State manufacturing index for August fell to negative 4.2 from 0.55 in July. Economists had expected a reading of 2.

“Overall, we think manufacturing is now expanding slowly, but no boom is in prospect,” said Pantheon Macroeconomics.

Meanwhile, the National Association of Home Builders said builder confidence rose in August as positive job growth in July offset weak GDP reports.

The index for builder sentiment increased two points to 60 from a downwardly-revised reading of 58 in July, as expected by analysts.