Johnson & Johnson: Updated Phase 2 CAPTIVATE study results demonstrate sustained clinical benefit
Closing Stock Market Summary
Today's trade featured a negative bias driven by normal consolidation activity after this week's record closing highs. Decliners led advancers by a 3-to-1 margin at the NYSE and by a 5-to-2 margin at the Nasdaq. The three major indices closed little changed from yesterday, though, thanks to gains in some mega cap stocks.
NVIDIA (NVDA 131.88, +2.27, +1.8%), Alphabet (GOOG 178.37, +1.63, +0.9%), Microsoft (MSFT 442.57, +0.99, +0.2%), Meta Platforms (META 504.16, +0.56, +0.1%), and Broadcom (AVGO 1735.04, +56.05, +3.3%) are winning standouts from the mega cap space.
The top performing stock in the S&P 500 was Adobe (ADBE 525.31, +66.57, +14.5%), which closed sharply higher following pleasing earnings results and guidance.
Gains in the aforementioned names propelled their respective S&P 500 sectors to positive territory today while the eight sectors closed with losses ranging from 0.1% (health care) to 1.0% (industrials). The information technology (+0.5%), and communication services (+0.6%) sectors were the top performers.
The broad selling activity left the equal-weighted S&P 500 with a 0.6% decline. The overall downside bias was catalyzed by political uncertainty around the French election, which stirred speculation about an EU exit move if France's left-wing bloc wins, along with growth concerns following a weak consumer sentiment report for June.
The preliminary reading for the June University of Michigan Index of Consumer Sentiment showed an unexpected drop in consumer sentiment (actual 65.5; expected 73.0; prior 69.1) and a rise in long-run inflation expectations to 3.1% from 3.0%.
The Treasury market didn't react much to the report, though. The 2-yr note yield settled unchanged from yesterday at 4.69% and the 10-yr note yield fell two basis points to 4.22%.
- Nasdaq Composite: +17.8% YTD
- S&P 500:+13.9% YTD
- S&P Midcap 400: +4.1% YTD
- Dow Jones Industrial Average: +2.4% YTD
- Russell 2000: -1.0% YTD
Reviewing today's economic data:
- May Import Prices -0.4%; Prior 0.9%
- May Import Prices ex-oil -0.3%; Prior 0.7%
- May Export Prices -0.6%; Prior was revised to 0.6% from 0.5%
- May Export Prices ex-ag. -0.8%; Prior 0.7%
- January Univ. of Michigan Consumer Sentiment - Prelim 65.6 (consensus 73.0); Prior 69.1
- The key takeaway from the report is that consumers' assessment of their personal finances slipped due to high prices and weakening incomes. That could presage some weakening spending activity.
Looking ahead, there is no US economic data of note on Monday. Tuesday's calendar features the May Retail Sales report and the May Industrial Production and Capacity Utilization report. As a reminder, markets will be closed on Wednesday in observation of Juneteenth.
Makeovers and M&A: how the UK pub sector is recovering
Environment remains tough but several groups are doing deals
The Tokenhouse pub in the City of London is buzzing with office workers relaxing with after-work pints on an early Thursday evening, now the busiest night of the week.
“We still haven’t got Mondays and Fridays back,” admits Benjamin Relph, who manages the pub owned by Fuller, Smith & Turner, nodding to how many of its clientele now work from home on those days. But he is hopeful that the Uefa European football championship, which begins on Friday, will provide a boost, encouraging customers to arrive earlier and stay longer while watching matches on the Tokenhouse’s seven large screens.
Meanwhile, footfall has recovered to pre-pandemic levels between Tuesdays and Thursdays as more people return to the office. “By the end of this year, we’ll be much more comfortable with how City pubs are performing,” Relph added.
Relief cannot come soon enough. The pub sector has endured a difficult time over the past four years, emerging from Covid-19 lockdowns into a period of surging inflation, labour shortages and a cost of living crisis that has put a squeeze on punters.
Many of those headwinds are now easing to some degree, with events such as the Euro championship and Paris Olympics also expected to provide a boost.
But the overall picture remains strained with the number of pubs reducing each year. More than 1,200 shut their doors for the last time in 2023, according to the Campaign for Real Ale, equivalent to 3 per cent of the overall 46,500 pubs currently trading.
Yet many of the bigger, stronger groups are taking advantage of the tough environment to do deals, scooping up portfolios either from smaller operators or pockets of outlets from rivals.
Admiral Taverns, which runs 1,400 pubs and is owned by real estate private equity group Proprium Capital Partners, will acquire 37 Fuller’s pubs this month for £18.3mn. It is also spending £28mn on refurbishments in the coming year.
“We think there were a number of bidders involved and it was competitive,” said Chris Jowsey, chief executive of Admiral. “There is certainly a growing sense of optimism [after] growth has been hampered over the last few years.”
Punch Pubs said in April it had acquired 24 pubs from the Milton Three pub group, which fell into administration in November, in a deal believed to be worth about £15mn. Meanwhile, Mitchells & Butlers announced last month the acquisition of Italian restaurant chain Pesto Restaurants, which has 10 outlets, for up to £15mn.
There are predictions of more deals ahead. Saxon Moseley, head of leisure and hospitality at RSM UK, said the environment “presents an opportunity for well-funded larger operators to go out and acquire sites, maybe at a discount”.
One senior industry executive said he expects “the sector will probably do consolidation between some of the big block companies” should interest rates come down, as anticipated, in the next couple of years.
Others are refurbishing their sites, adding an outdoor space or expanding seating areas, to attract new guests and tempt regulars to come more frequently.
Heineken plans to pour about £40mn annually into refurbishing its 2,400-strong estate, which operates under the Star Pubs and Bars arm, while Greene King will invest £40mn in a new brewery in Bury St Edmunds to replace an existing facility there by 2027.
Fuller’s, which this week unveiled a more than 60 per cent rise in full-year pre-tax profits to £20.5mn, plans to invest £30mn in its properties during the current fiscal year after spending £27mn the year before.
JD Wetherspoon increased its capital expenditure on new and existing pubs by a quarter to £44mn in its latest half-year as it adds gardens and extra space. The group said in May that sales continued their “steady recovery from the pandemic” with annual profits expected to be towards “the top of market expectations”.
Pub chains are “becoming more bullish in investments, as they are much more confident on what they see for margins”, said Roberta Ciaccia, an analyst at Investec. Wetherspoons’s half-year operating margin, for example, was 6.8 per cent, up from 4.1 per cent a year earlier.
But even Wetherspoons is being ruthless in disposing of underperforming sites. It sold or closed 13 pubs in the six months to January while only opening two others, reducing its estate from 825 to 814.
“Pub companies are also regaining confidence through restructuring and estate rationalisation to create leaner, more profitable portfolios,” said Maggie Davis from food and drink research firm Lumina Intelligence.
The picture on costs remains mixed. Companies say energy costs have been abating while food price inflation, which hit a peak of 23 per cent in December 2022 and hovered around 20 per cent for much of last year, has pulled back significantly. It stood at 6.7 per cent in April, according to the Foodservice Price Index report prepared by Prestige Purchasing and CGA.
However, labour costs are higher following the almost 10 per cent increase in the National Living Wage in April. “I think [the increase] is much larger than it needed to be,” said Simon Emeny, Fuller’s chief executive, although he said it was not a big concern.
Indeed, increased wages are in some ways a positive thing for pubs, argued David McDowall, the chief executive of Stonegate — the UK’s biggest pub group, which owns brands such as the Slug and Lettuce.
“The positive that we can take from the recent national living wage increase is a little more money in our guests’ pockets,” he said.
Throughout last year, both “wet” pubs — in which drinking is the main point — and restaurant pubs have had year-on-year monthly sales increases that mostly surpassed hospitality groups, including restaurants and bars, according to the CGA RSM Hospitality Business Tracker.
The segments had 7.9 per cent and 6.2 per cent growth, respectively, in March, compared with 5.2 per cent for the hospitality sector overall — although the figures all turned negative in April due to rainy weather throughout the UK. What is driving sales are pubs in suburban and residential areas, companies say.
For now — and with UK drinkers predicted to spend an extra £94mn during the Euro 2024 tournament, according to the British Beer and Pub Association — there is some sense the sector has turned a corner.
“There’s still a real appetite among the British public to go to the pub,” said Jowsey. “The challenge in our sector is to translate that revenue into profit, because the cost of doing business is still pretty high.”
OpenAI’s Japanese Rival Gets $1 Billion Valuation From Silicon Valley Investors
The Takeaway
• NEA, Lux and Khosla are co-leading a new round for Sakana AI
• The Tokyo-based startup wants to be the OpenAI of Japan
• It was valued at $200 million in January
In their hunt for artificial intelligence investments, U.S. venture capitalists are looking past Silicon Valley at foreign AI startups, betting that locally developed large-language models will outperform imports from the U.S.
The latest to win their affections is Sakana AI, a Tokyo-based large-language model developer. Founded last year by alumni of Google’s DeepMind, Sakana is raising around $100 million in a new financing co-led by New Enterprise Associates and existing investors Lux Capital and Khosla Ventures, according to three people with direct knowledge of the deal. The round values the company, which does not yet generate revenue, at approximately $1 billion, the people said.
The funding has not closed and the terms could change. Sakana cofounders David Ha and Llion Jones did not respond to a request for comment.
Sakana’s new funding comes on the heels of a breakthrough announced in March, when it released research showing how to develop large-language models for less money, as well as an LLM that solves math problems in Japanese and models that can generate and understand images and text in Japanese. It has released some of its models as open-source software, but not a product that consumers can access similar to OpenAI’s ChatGPT. It’s still unclear how the company will make money.
U.S. AI developers are already establishing a presence in Japan. In April, OpenAI announced that it opened up an office in Tokyo as a way to expand Asia operations. It also hired Tadao Nagasaki as president of OpenAI Japan and gave local businesses access to a model that is optimized for the Japanese language.
The new funding for Sakana comes amid a rash of investment interest for AI startups developing models focused on specific geographies.
Earlier this month, the Paris-based AI startup Mistral, which has styled itself as the “OpenAI of Europe,” raised $650 million at a $6 billion valuation from U.S. investors including Lightspeed Venture Partners and General Catalyst, for instance. Nikkei Asia earlier reported Sakana was in talks with the U.S. VC investors for a $1 billion round.
‘DeepMind of Japan’
Sakana was founded last year by Ha and Jones, who co-authored the Google research paper that outlined the transformer model architecture that underlies today’s most popular LLMs like OpenAI’s GPT and Anthropic’s Claude. Ha previously told The Information that he intended to build a “DeepMind of Japan.”
“If we had started Sakana AI in the Bay Area, it would have been a strategic blunder, because we would have looked more like everyone else and it would have been very hard to differentiate,” Ha said.
In January, Sakana raised a $30 million seed round led by Lux Capital and included a mix of Japanese investors, including Sony Group and NTT Group as well as Japan-focused venture firms such as Geodesic. The round valued the company at $200 million, according to two of the people with direct knowledge.
Sakana also has received a boost from the Japanese government, which chose Sakana as one of a handful of companies and labs to receive grants to gain access to a large amount of computing power.
The startup is also part of a growing number of upstarts looking to challenge the traditional transformer architecture. Transformers, which are particularly capital and compute-intensive to train and run, are notorious for producing errors known as hallucinations, which make them difficult to use in high-stakes business settings. Recent research has also suggested that as transformer models get better, they will require increasingly more training data—and, therefore, capital—to eke extra performance out of them.
Instead, Sakana is building foundation models inspired by concepts found in nature. (Its name is derived from a Japanese word “meant to invoke the idea of a school of fish coming together and forming a coherent entity from simple rules,” a reference to the company’s unique approach to building “nature-inspired intelligence.”)
For example, the company has experimented with “model merging,” in which researchers combine two or more models trained for different purposes to create a single model that exhibits the strengths of the original model without needing additional training—a similar concept to evolution in nature.
The Week’s 10 Biggest Funding Rounds: Massive Rounds By Cruise And AlphaSense Lead Way
After a few slow weeks, things picked up slightly concerning big funding deals. Most surprisingly is the fact the week was led by an autonomous driving startup — an industry left for dead by some. AI, biotech, space tech and cybersecurity also saw good-sized raises. Perhaps things are heating up as we head into summer.
1. Cruise, $850M, autonomous cars: In for a penny, in for a pound. That clearly seems to be how General Motors feels about Cruise. The auto giant agreed to pump another $850 million into the San Francisco-based startup. Cruise’s saga has been well documented. In 2021, Cruise snagged the largest round of any venture-backed U.S. startup when it upsized a round to $2.75 billion, valuing the company at more than $30 billion. However, the tide started to turn in early 2022, when SoftBank did not release a promised $1.35 billion to Cruise as part of an agreed-upon deal when the autonomous carmaker completed a commercial deployment of vehicles. Instead, General Motors acquired SoftBank’s equity ownership stake in Cruise for $2.1 billion. Then, late last year, Cruise suspended its self-driving taxi program across the country after losing its permit to operate in San Francisco due to an incident with a pedestrian. That announcement came almost exactly a year after another autonomous vehicle startup — Ford Motor-backed Argo AI — shuttered after raising $3.6 billion in funding from investors such as Ford Motor, Volkswagen Group and Lyft. Cruise is now restarting its driving programs in Phoenix, Dallas and Houston. Clearly GM is betting — big — the autonomous driving and robotaxi market comes back.
2. AlphaSense, $650M, artificial intelligence: AI-driven market intelligence platform AlphaSense raised $650 million in funding co-led by Viking Global Investors and BDT & MSD Partners at a $4 billion valuation — a 75% increase from just nine months ago. As part of the deal, AlphaSense acquired expert research startup Tegus for $930 million. Last September, the comopany locked up a $150 million Series E led by Bond Capital at a $2.5 billion valuation — an increase of nearly 30% from its $100 million round at a $1.8 billion valuation in April last year. The New York-based startup’s market intelligence and search platform — powered by AI and natural language processing — helps clients form corporate and investment strategies. In total, the company has now raised $1.4 billion since its founding, per Crunchbase.
3. Santa Ana Bio, $125M, biotech: Biotech bounces back this week with a couple nine-figure rounds. First up is Alameda, California-based Santa Ana Bio, an immunology company developing therapies for patients with autoimmune and inflammatory diseases, which emerged from stealth with a $125 million Series B round led by GV. Founded in 2021, the company has raised $168 million, per Crunchbase.
4. Alzheon, $100M, biotech: Alzheon was the next biotech to raise big this week. The startup raised a $100 million Series E led by Alerce Medical Technology Partners. The Framingham, Massachusetts-based firm is developing medicines for Alzheimer’s disease and other neurodegenerative disorders. Founded in 2013, the company has raised $237 million, per Crunchbase.
5. Apex, $95M, space: Spacecraft manufacturing company Apex locked up a $95 million Series B led by XYZ Venture Capital and CRV to ramp up its production of satellite buses. The Los Angeles-based space tech startup is helping streamline the approach to satellites with the ability to mass produce spacecraft buses — the main body and structural component of satellites — to help growing demand from customers like the U.S. Department of Defense. The new cash will allow the company to increase production to meet customer demand — following the launch of Apex’s first bus in March. Funding to VC-backed space tech startups seems to be on the uptick this year, per Crunchbase data. Last year, space tech startups raised $5.8 billion. However, through less than half of this year, such startups have already seen $3.3 billion roll into their coffers. Founded in 2022, the company has raised $122 million, per Crunchbase.
6. Cyberhaven, $88M, cybersecurity: Cybersecurity funding has shown some life recently and this week showed more proof of that trend. San Jose, California-based Cyberhaven, a data detection and response platform, raised an $88 million Series C led by Adams Street Partners and Khosla Ventures. The round comes after a year in which the company saw a 200% growth in new bookings. Founded in 2016, the company has raised nearly $137 million, per Crunchbase.
7. InduPro, $85M, biotech: Seattle-based InduPro, developing therapeutics for the treatment of cancer and autoimmune diseases, closed an $85 million Series A co-led by The Column Group and Vida Ventures. Founded in 2022, this is the company’s first announced round, per Crunchbase.
8. (tied) Enveda Biosciences, $50M, biotech: Boulder, Colorado-based Enveda Biosciences, a biotechnology company using AI to engineer medicines from plants, announced a new $55 million round. No lead investor was announced, but Microsoft is a new investor in the company. Founded in 2019, Enveda says it has raised $230 million.
8. (tied) Canary Technologies, $50M, hospitality: San Francisco-based Canary Technologies, a management platform for hotels, closed a $50 million Series C led by Insight Partners. Founded in 2017, Canary has now raised nearly $100 million, per the company.
10. Posh AI, $45M, artificial intelligence: Boston-based Posh AI, a conversational AI platform for the banking industry, raised a $45 million round led by Curql. Founded in 2018, the company has raised nearly $73 million, per Crunchbase.
Big global deals
Another large AI round occurred in Europe.
- Paris-based Mistral AI finally secured its much talked about round that values the OpenAI and Anthropic competitor at $6 billion, per a report in the Financial Times. According to the report, Mistral AI raised $500 million in equity and $140 million in debt.
Poltrona Frau Corners Bespoke Auto Market With First Foreign Acquisition
WWD chats with the CEO of Poltrona Frau Interiors in Motion unit about the potential of joining forces with the U.K.'s KJ Ryan.
MILAN — Famous for its plush chairs and couches, Tolentino-based Poltrona Frau has created luxe interiors for the best auto names in the business: Ferrari, Lamborghini, McLaren and Jaguar Land Rover among them. With its first foreign acquisition, a majority stake in the U.K.’s KJ Ryan Ltd., Poltrona Frau aims to become a leader in the bespoke luxury car business.
Poltrona Frau Interiors in Motion chief executive officer Ervino Riccobon told WWD that the acquisition is strategic and will help the business reach its goal to grow the unit’s sales in the double digits over the next few years. “We aspire to grow…but without diluting our strategic focus with regard to highly customized and bespoke interiors that require craftsmanship and knowledge of materials,” Riccobon said in an interview Friday, adding that the unit has an investment plan in play “to support both capacity increase and acquisition of technological know-how in specific process, like the ones to manufacture safety components.”
Poltrona Frau, which is part of the Haworth Lifestyle Group galaxy of brands, announced Thursday that it reached an agreement to acquire a majority stake in the Coventry, U.K.-based KJ Ryan. The British firm is a regarded maker of high-end interior components for luxury cars. KJ Ryan will now be part of the Interiors in Motion Business Unit of Poltrona Frau.
The acquisition is key for Poltrona Frau as it marks the first acquisition in a foreign market since its founding 112 years ago. In terms of the Interiors in Motion business unit, it is the very first acquisition.
Together, the Interiors in Motion unit and KJ Ryan hope to become a European leader in the development and manufacturing of interiors for luxury and bespoke vehicles and aim to reach a projected turnover of about 120 million euros, with a combined force of more than 600 employees and three manufacturing plants across Italy and the U.K. KJ Ryan was founded by Kevin Ryan in 2007.
Poltrona Frau has been a crucial player in Italy’s transportation industry, especially since the establishment of its Interiors in Motion Business unit in the mid-’80s, Riccobon explained.
Over the years, the unit, equipped with master craftsmen and sophisticated artisanal techniques, has developed innovative leathers and other technical materials, such as high-performing fabrics. In addition they have also manufactured premium interiors for the automotive, rail transport and offshore navigation sectors.
Dario Rinero, CEO of Haworth Lifestyle, highlighted the potential of the bespoke auto interior segment.
“We believe KJ Ryan is well positioned to capitalize on continuous industry tailwind and we look forward to continuing this expansion and success story,” Rinero said in a statement. Fellow furniture and lighting brands Cappellini, Cassina, Janus et Cie, Luminaire, Ceccotti Collezioni, Karakter, Luxury Living Group, Interni and Zanotta are also part of Haworth.
In the annual Bain-Altagamma Luxury Goods Worldwide Market Study released in January of this year, the luxury car market outpaced other luxury segments due to bouyant demand, driven in part by rising demand for customized solutions.
“Sales of luxury cars, the biggest portion of the overall market, hit a new record, reaching an estimated 635 billion euros [in 2023], 12 percent more than 2022. The absolute luxury segment grew the fastest due to increased demand for ultra-customized solutions.…All brands continue to push to establish more direct relationships with their clients to enhance both the purchase and after-sales experiences,” the report said.
Global Fashion Week Dates Are Set for September
The dates to show the spring 2025 ready-to-wear collections have been determined.
The dates have been set for the next round of global fashion weeks.
The Council of Fashion Designers of America, Camera Nazionale della Moda Italiana, the British Fashion Council and the Federation de la Haute Couture et de la Mode have set the dates for September and the 2025 seasons for New York, London, Milan and Paris.
The New York shows will be held Sept. 6 through Sept. 11; the London shows are Sept. 12 through Sept. 17; Milan shows take place Sept. 17 through Sept. 23, and the Paris shows will be held Sept. 23 through Oct. 1.
For 2025, New York has set its show dates for Feb. 13 through Feb. 18, and Sept. 11 through Sept. 16.
For the fall 2025 shows, London Fashion Week is Feb. 20 to 24, Milan is Feb. 25 to March 3, and Paris is March 3 to 11.