NEW YORK (
) -- Shares of
Lilly Gets FDA Breakthrough Status for Alzheimer's Drug
Eli Lilly received FDA breakthrough status for its donanemab Alzheimer's drug, speeding the agency's review of the product. The shares are higher.
Bed Bath & Beyond Leaps on Bank of America Upgrade, Fading 'Meme' Interest
BofA analyst Curtis Nagle says Bed Bath & Beyond shares are trading closer to their pre 'meme mania' levels, and represent good retail sector value.
plunged in extended trading after the education company withdrew its outlook for fiscal 2011 and said it expects a "significant" year-over-year decline in enrollment in the current quarter.
The news may be a harbinger of things to come for the other publicly traded education companies, as Apollo cited the increased regulatory scrutiny the sector is receiving as the main reason it was abandoning its forecast. The Department of Education is pushing to put in place new guidelines for federal funding of private schools and whether or not such schools adequately prepare students to get jobs after graduation has become a topic of intense debate.
Apollo Group's stock was last quoted at $42.23, down 14.7%, on volume of roughly 3.4 million, according to
. Based on their regular session close at $49.50, the shares were already off about 17% so far in 2010.
Apollo operates the University of Phoenix, which offers both online courses as well as campus classes, and its decision to completely back off its outlook reads like an acknowledgment that public image of the for-profit education companies may have taken an irreparable hit.
"Some of the industry challenges include ongoing regulatory and other scrutiny which has led to heightened media attention, much of which has portrayed the sector in an unflattering light," it said in its press release. "Given the transitional state of the business, and the uncertain regulatory environment, the
Company is withdrawing its prior preliminary business outlook for fiscal 2011."
Apollo's results for the fourth quarter ended in August came in slightly ahead of Wall Street's consensus view but the company's new enrollment figures always get plenty of attention so the year-over-year decline to 92,000 in the latest period from last year's total of 102,000 would have been troubling enough.
On the company's conference call, Apollo executives reportedly projected a 40% drop in new enrollment for the first quarter from last year's equivalent period, according to
. New enrollment totaled 98,100 for the three months ended Nov. 30, 2009, so that would put Apollo on track to add under 60,000 students.
The Senate held a hearing on the subject of the private education companies in late September after the Department of Education
on the "gainful employment" portion of new funding regulations. The DoE said at the time it still expects to have the regulations in place by July 2012, as originally planned.
The rest of the sector was taking a hit in extended trades as well, including
Career Education Corp.
, down nearly 7% to $18.80;
, quoted 7% lower at $46.99;
, off 8% to $60.61;
, falling 6.6% to $16.01;
, tumbling 5.6% to $148.24;
Grand Canyon Education
, losing 4.6% to $21.89; and
, down 6.2% to $5.65.
Other names to watch in Thursday's session include
Universal Technical Institute
American Public Education Inc.
Capella Education Co.
Lincoln Educational Services Co.
Written by Michael Baron in New York.
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