Gapping up
In reaction to earnings/guidance:
- WOLF +22.2%, CSIQ +6.5%, BJ +5.8%, CSCO +5.3%, KEYS +4.3%, MSGS +3%, NTES +2.7%, NICE +2.1%, SNPS +1.8%
News:
- BROG +17.1% (says majority shareholder, BPGIC Holdings, would like to take company private)
- DCP +6.5% (PSX increases its economic interest in DCP from 28.26% to 43.31%; also makes offer to acquire all publicy held common units of DCP for $34.75/unit; also PSX realigns economic and governance interests in DCP)
- KIND +4.9% (director purchases shares)
- INNV +4.9% (names new Chief Medical Officer)
- HLTH +3.5% (clinical study demonstrates that its point of care molecular COVID-19 test is as accurate as a centralized lab-based RT-PCR)
- QDEL +2.5% (authorizes new $300 mln share repurchase program)
- WGO +1.5% (increases dividend by 50%; also authorizes new $350 mln share repurchase program)
- RCEL +1.5% (RECELL System Data to be presented at conference)
- BCRX +1.1% (announces that the Saudi Food and Drug Authority has approved oral, once-daily ORLADEYO to prevent attacks of hereditary angioedema in adults and pediatric patients 12 years of age and older in Saudi Arabia)
- AVAV +0.9% (acquires Planck Aerosystems)
Early premarket gappers
- Gapping up:
- WOLF +22.9%, CSCO +5%, KIND +4.9%, INNV +4.9%, KEYS +3.5%, NICE +3.3%, CSIQ +3%, QDEL +2.5%, NTES +2.5%, WGO +2.4%, RCEL +1.5%, FUBO +1.1%, AMCR +0.8%, APRN +0.7%
- Gapping down:
- BBBY -14.3%, EAR -8.6%, HUT -4.7%, GME -3.9%, SQM -3.8%, PHG -1.1%, AVAV -1%, HYZN -0.9%, MANU -0.8%, PRGO -0.8%
Ending Bad Cholesterol With a Single Injection—an Opportunity for the Brave
Verve’s effort is gradually making clinical progress and would be a significant upgrade from statins and other available medicines
More than 200 million people around the world take statins with brand names such as Lipitor and Crestor daily to lower their bad cholesterol, known as LDL. Unfortunately, a majority fail to stick with their daily pills, putting them at risk of heart disease.
A biotech company formed by one of the top heart-disease experts wants to change that with a single injection that would permanently reduce bad cholesterol.
It is a treatment based on a Nobel-prize-winning gene-editing technology known as Crispr. But unlike the traditional Crispr approach, which acts like a pair of scissors to make a cut to the DNA, Verve VERV -2.82% is employing a new technology known as base editing, which acts more like a pencil and eraser, substituting a single letter of DNA for another. The gene Verve seeks to edit, PCSK9, regulates LDL levels in the body.
While the treatment is highly experimental and the chance of failure is high, early results look promising. The company raised $259 million last month at a time when early-stage biotechs are struggling to tap the capital markets. It also recently struck a deal with the larger biotech Vertex to develop a treatment for liver disease, giving it yet another source of cash during turbulent times for small biotech companies.
Verve’s chief executive and co-founder is the cardiologist Sekar Kathiresan, a former professor at Harvard Medical School and former director of the Massachusetts General Hospital Center for Genomic Medicine. Dr. Kathiresan left academia to form a company inspired by his own discoveries around natural mutations that lower LDL.
While the gene-editing approach could in theory apply to anyone at risk of heart disease, Verve’s strategy for now is to focus on patients suffering from an inherited form of high cholesterol known as familial hypercholesterolemia, or FH, which increases the likelihood of having coronary heart disease at a younger age.
Earlier this summer a New Zealand patient suffering from the condition was the first to receive the injection. Another 39 patients are set to be tested with different doses over coming months, with results starting to read out next year. The injections previously reduced bad cholesterol in monkeys by over 60%.
It is a very long shot and will take years of testing, but the start of the process in New Zealand marked a step forward for the gene-editing space. Verve’s next step is to seek approval to begin trials in the U.S., where the Food and Drug Administration has set a high bar for conducting gene-editing trials where alternative therapies already exist. FDA-approved treatments for high cholesterol currently include not only statins but newer injections targeting PCSK9.
Dr. Kathiresan says Verve has been in talks with the FDA and is confident the company can meet the high bar for a trial in the U.S., though some analysts are skeptical. The company will submit a clinical trial application in the U.S. and the U.K. later this year.
“The bottom line right now is that despite all the treatments available, roughly 3% of patients with FH are actually at the right LDL level,” says Dr. Kathiresan. “So there’s still a huge unmet need, despite the fact that there’s all these medications out there.”
Even if Verve’s technology works, it would be up against recently approved injections. The shots from Amgen Inc. and Sanofi SA must be taken every few weeks while a new Novartis injection is taken twice a year. None of the drugs have so far become blockbusters, partly because insurers balked at their price and they require repeated injections to be effective. To win over insurers, doctors and patients, Verve would have to offer its therapy at an attractive price.
Kostas Biliouris, an analyst at BMO Capital Markets, says the company might be able to charge $90,000 for a one-time treatment, which is equivalent to about 15 years of PCSK9 injections at $6,000 yearly. The price could be lower and the market limited to a subset of the million or so patients with FH in the U.S. But, if the company were to expand into the broader heart-disease market, Mr. Biliouris reckons potential revenue could reach billions of dollars annually. Its market value net of cash is just below $2 billion today.
The other big challenge would be persuading patients to accept the risk of permanently altering their genes. Dr. Kathiresan says it is important to remember that this procedure doesn’t edit inheritable genomes but rather makes changes to a patient’s own body, like placing a stent.
“This kind of editing that we’re doing, it’s not that different from some surgical procedures because we’re not passing on the edit to future generations,” he says.
Verve’s technology is a scientific moonshot, at the forefront of a novel approach to medicine whose risks are still largely unclear. Verve’s stock has more than tripled from a June low of $11.14 but it is still trading at about half its peak of $74 last year when biotechnology was more in favor.
For those with appetite for some risk, though, the payoff could be large.
China’s largest property group warns of 70% plunge in profit
Country Garden’s plight highlights ‘humongous moral hazard’ for Beijing from cash-strapped developers
EEarnings at Chinese property developer Country Garden fell as much as 70 per cent in the first half of the year, as the country’s largest real estate group by sales was drawn into a crisis that has raged through the heavily indebted sector.
Core profit could have dropped to between Rmb4.5bn and Rmb5bn ($6634mn-$736mn) in the first six months of 2022, down from Rmb15.2bn a year earlier, according to a filing on Thursday.
Country Garden, which lost its last investment-grade rating after Fitch downgraded it to junk status on Tuesday, cited a market downturn, the effects of the coronavirus pandemic and foreign exchange losses for the fall in earnings. Unlike a growing number of its highly leveraged peers, Country Garden has not defaulted on its debts.
The Chinese property sector has been rattled by a liquidity crisis following the high-profile collapse of Evergrande, the world’s most-indebted developer, last year.
Country Garden had managed to retain access to offshore bond markets for refinancing, helping the group maintain some stability at a time when tens of thousands of Chinese homebuyers are refusing to pay mortgages on unfinished apartments.
However, as Beijing has sought to revive the sector with refinancing loans, there are signs that confidence in Country Garden is receding.
The company’s Hong Kong-listed shares slumped as much as 15 per cent during a single trading session in July, wiping about $1.7bn from its market value, after it announced a heavily discounted capital raising.
Alicia García Herrero, chief economist for Asia-Pacific at French investment bank Natixis, said Country Garden was suffering from worsening investor sentiment towards the sector. There are fears of falling prices as demand wanes and new apartments remain uncompleted, with cash-strapped developers running out of money.
“Now even Country Garden couldn’t basically proceed with presales for new projects because the contagion is so extreme,” she said.
China’s economic planners have for months been moving to unwind efforts to deleverage the sector and encourage people to buy new houses. China’s central bankers have eased lending rules and cut interest rates in a bid to combat the downturn.
Shares in Chinese property companies, including Country Garden, rose sharply earlier this week on reports that Beijing may order state-run groups to guarantee some developer bonds issued in the country’s onshore market.
While García Herrero expects such policy loosening would continue, investors are also watching for clearer signs of direct state support for private sector property developers facing a liquidity crunch.
“The government’s strategy is not to extend the bailout to the worst performers . . . will they go beyond this for good names? My sense is that it’s going to be very risky because it’s a humongous moral hazard, which will then go into other sectors.”
Has Bridgewater’s big European short been squeezed?
The €10bn bet against European stocks is no more
Bridgewater’s big short on European stocks is no more. Well, almost.
In June we reported that the $150bn-in assets firm had been building a chunky short position in Europe. At its peak it totalled 33 disclosed short positions worth more than €10bn in aggregate, according to data group Breakout Point, across a range of companies in countries including France, Germany and Spain.
However, as of Wednesday all but one of these positions had been reduced below the 0.5 per cent disclosure threshold, with only Banco Santander at 0.59 per cent remaining.
Quite how investors should interpret this latest move is unclear (and Bridgewater declined to comment to FT Alphaville).
For starters, the shorts had been held at just above the disclosure threshold. It is unclear if the positions have now been taken off completely or simply reduced to just below the threshold.
Also uncertain is the extent to which these positions form part of a larger trade with different legs. Deducing trading strategies and investment theses from patchy public data is often a fool’s errand. However, given the stocks that were shorted are all components of the Euro Stoxx 50, the firm appears to be replicating the index – at least in part – potentially as a way of taking a particular position and very possibly hedged in some form.
But as Breakout Point highlights, this is the third iteration of this huge short position and has ended during a short squeeze in stock markets. The Euro Stoxx 50 has rallied almost 9 per cent since June, when Bridgewater’s position appears to have been built. That indicates that they lost money on the trades and were maybe forced into paring back the shorts.
The firm, founded by Ray Dalio and now led by Nir Bar Dea and Mark Bertolini, is having a strong year, helped by bets that the Fed and the market were behind the curve on inflation. It has been negative on a range of assets this year including US equities.
Given the world’s biggest hedge fund firm sees still trading opportunities from the Fed tightening monetary policy into a weakening economy, according to a person familiar with the firm’s positions, this is unlikely to be an overly bullish move by Bridgewater.
- GSK (GS71 TH) +7.9%
- Erste (EBO TH) +1.2%
- Thyssenkrupp (TKA TH) +1%
- TUI (TUI1 TH) +0.9%
- Poste Italiane (7PI TH) +0.9%
- Poste Italiane Rated New Buy at Berenberg; PT 12 euros
- Uniper (UN01 TH) +0.8%
- Uniper’s Swedish Oil-Fired Power Plant Suffers Partial Outage
- Sanofi (SNW TH) +0.8%
- Rolls-Royce (RRU TH) +0.7%
- Zalando (ZAL TH) +0.7%
- Equinor (DNQ TH) -0.9%
- Equinor ASA: Announcement of dividend per share in NOK for first quarter 2022
- BNP Paribas (BNP TH) -0.9%
- Adyen (1N8 TH) -2.6%
- Adyen 1H Net Revenue Misses Estimates
DAX:
- Continental (CON TH) +0.9%
MDAX:
- Thyssenkrupp (TKA TH) +1.4%
- Uniper (UN01 TH) +1%
- Uniper’s Swedish Oil-Fired Power Plant Suffers Partial Outage
- Encavis (ECV TH) -1.3%
SDAX:
- Shop Apotheke (SAE TH) +3.2%
- Zur Rose 1H Adjusted Ebitda Loss CHF49.2M Vs. Loss CHF42.9M Y/y
- Salzgitter (SZG TH) +1.7%
- Deutz (DEZ TH) +1.2%
>>> Up
* Atlantic Sapphire ASA Raised to Buy at Fearnley; PT 27 kroner
* Devolver Digital Raised to Buy at Berenberg; PT 80 pence
* HSBC Raised to Buy at Shore Capital; PT 695 pence
* Imperial Brands Raised to Buy at UBS
* Salmon Evolution Raised to Buy at Fearnley; PT 12 kroner
>>> Down
* Borregaard Cut to Hold at Berenberg; PT 150 kroner
* IMCD Cut to Sell at Deutsche Bank; PT 116 euros
* ITM Power Cut to Sell at Goldman; PT 220 pence
* Sitowise Group Cut to Accumulate at Inderes; PT 6.50 euros
* Sievi Capital Cut to Accumulate at Inderes; PT 1.50 euros
>>> Initiation
* Poste Italiane Rated New Buy at Berenberg; PT 12 euros
* Proximar Seafood Rated New Buy at Fearnley; PT 12 kroner
* SDX Energy Reinstated Buy at Stifel; PT 21 pence
>>> Call
* AutoStore’s Strong 2Q, In-Line Guide Both Positive: Jefferies
* Borregaard Cut to Hold at Berenberg on Limited Growth Potential
* *CITI STRATEGISTS RAISE EUROPEAN TELECOMS TO OVERWEIGHT (*)
* IMCD Currently ‘Over-Earning,’ Cut to Sell at Deutsche Bank
* New Legislation ‘Big Deal’ For Clean Tech, Morgan Stanley Says
Asian stocks fell and Treasuries rose after Federal Reserve minutes showed officials face a delicate balancing act to quell inflation while averting recession and as investors weighed a dim Chinese economic outlook.
Losses in Japan, China and a Hong Kong tech index sapped on an Asian equity gauge. US contracts wavered after Wall Street shares declined for the first time in four days, including a more than 1% drop in the Nasdaq 100 index. Fed officials saw a need to eventually dial back the pace of interest-rate increases and warned against over-tightening that could hurt the economy, but also flagged the risk of inflation pressures becoming entrenched. The advance in Treasuries lowered the 10-year yield to about 2.87%. A dollar gauge was steady. Australia’s currency weakened following an unexpected tumble in employment numbers. Swaps tied to Fed policy meeting dates indicated lower odds of a 75 basis points hike next month as opposed to a half-point move. Expectations of slower policy tightening and a pivot to cuts later next year have already contributed to a 12% jump in global stocks from June lows. The question is whether that’s too optimistic. A darker scenario is of persistent price pressures forcing restrictive borrowing costs even as the economy shrinks. Goldman Sachs Group Inc. economists downgraded their forecast for China’s full-year expansion to 3% from 3.3%. The nation is hamstrung by a property crisis, rolling Covid curbs and lately stressed power supply. The US and Taiwan started formal negotiations on a bilateral trade initiative, a step which risks inflaming already high tensions with China. Oil hovered around $88 a barrel, gold advanced and Bitcoin was little changed. US After Hours CSCO +4.6%, WOLF +19.1% higher on earnings; BBBY falls -15% as RC Ventures files to sell stake; BBWI -1.8% lower on earnings
Nikkei -0,86% Hang Seng -0,60% CSI -0,89% Shanghai -0,48% Shenzen -0,38%
Eur$ 1,0171 CNH 6,8025 CNY 6,7884 JPY 135,04 GBP 1,2036 CHF 0,9519 RUB 60,4176 TRY 17,9468 WTI$ 88,21 Gold 1,762,64 BTC 23,445 ETH 1,850,10
S&P -0,22% Nasdaq -0,31% EuroStoxx +0,05% FTSE +0,17% Dax +0,13% SMI -0,03%
Macro :
- Fed Minutes Note More Tightening Coming, Risks of Overdoing It
- Mubadala-Backed UAE Firm Sets Up $10 Billion Fund for Tech Deals
- Goldman Sachs, Nomura Cut China GDP Forecasts as Outlook Darkens
Keep an eye on :
- ADYEN NA : Adyen 1H Net Revenue Misses Estimates
- AMBEA SS : Ambea 2Q Operating Profit Beats Estimates
- ANG LN : Angling Direct Sees Earnings Marginally Below Market Views
- AAPL US : Apple Targets Sept. 7 for IPhone 14 Launch in Flurry of Devices
- AUTO NO : AutoStore 2Q Adjusted Ebitda Beats Estimates
- BAMNB NA : BAM 1H Revenue EU3.33B Vs. EU3.63B Y/y
- BCVN SW : BC Vaudoise Assets Under Management CHF107.2B Vs. CHF112.89B H/H
- CTM SS : Catena Media 2Q Ebitda EU7.31M Vs. EU12.7M Y/y
- CETK SS : Ctek Offering of 4.9m Shares by Holder Altor Fund III Prices
- EMMN SW : Emmi FY Ebit Forecast Misses Estimates
- ALERS FP : Eurobio Scientific to Acquire GenDx for EU135m Cash
- EURN BB : Euronav, Tanker Peers Rise as Optimism Grows Over Freight Rates
- RACE IM : Ferrari Prioritizes Combustion Profit to Pay for BEV Transition
- FME GY : Vifor Fresenius MCRP Says UK’s NICE Recommends Tavneos
- GN DC : GN Store Nord Narrows FY Hearing Organic Revenue Growth Forecast
- MANU US : Apollo in Talks to Buy Manchester United Stake: Daily Mail
- MSLH LN : Marshalls 1H Ebitda GBP45.7M Vs. GBP56.4M Y/y
- MBTN SW : Meyer Burger 1H Sales CHF56.7M Vs. CHF18.0M Y/y
- NLFSK DC : Nilfisk 2Q Revenue Beats Estimates
- PHIA NA : FDA Received More Medical Device Reports For Philips June Recall
- RNK LN : Rank Group FY Adjusted EPS Misses Estimates
- SFQ GY : SAF-Holland Completes Offer for Sweden’s Haldex
- SAN FP : Arvinas Sinks After Sanofi Ends Cancer Drug’s Development
- SAP GY : Francisco Partners to Buy Litmos From SAP, No Terms
- SFZN SW : Siegfried 1H Sales Beats Estimates
- SIP BB : Sipef 1H EPS $6.15 Vs. $4.18 Y/y
- TEF SM : Telefonica in Talks to Sell Peru Fiber Stake to KKR: Expansion
- VLA FP : Valneva Says US DoD Won’t Use 2nd Option Year for Ixiaro Vaccine
- VEI NO : Veidekke 2Q Ebitda Meets Estimates
- VIFN SW : Vifor Fresenius MCRP Says UK’s NICE Recommends Tavneos
- ROSE SW : Zur Rose 1H Adjusted Ebitda Loss CHF49.2M Vs. Loss CHF42.9M Y/y
Crappy chargers and sky-high prices are huge roadblocks to EV adoption
In the U.S., most electric vehicle owners say that public chargers are easy to use. That is, when they actually work.
A new J.D. Power survey finds that, while public charging stations are a tad easier to come by these days, faulty chargers are souring the experience and hampering EV adoption. That’s no good, because the planet is only getting hotter and EVs are expected to play a key role in reducing greenhouse gas emissions in the transportation sector.
Out of 11,554 owners of battery electric and plug-in hybrid vehicles who were surveyed by J.D. Power, one in five said they “ended up not charging their vehicle during their visit,” the report said. And of the drivers who did not charge, “72% indicated that it was due to the station malfunctioning or being out of service.” The findings echo a smaller UC Berkeley study that made headlines earlier this year.
Beyond defective chargers, the survey looked into several other factors, such as price and “ease of payment.”
Overall, J.D. Power found that EV owners in the U.S. are less satisfied with public level 2 chargers in 2022 than they were last year. Using a 1,000-point scale, EV drivers gave level 2 stations an average score of 633, down from 643 in 2021. Level 2 chargers can fill up a battery-electric vehicle in as little as four hours, far outpacing a standard residential outlet (40-plus hours).
In contrast, the J.D. Power study found that satisfaction with Level 3 chargers — also known as DC fast chargers — had remained flat year over year, at an average score of 674. Level 3 chargers can fill an EV’s battery level to 80% in as little as 20 minutes, but they’re a lot rarer.
As for price, the survey found that charging costs had weighed down driver satisfaction scores across the board. Belying that point, a separate survey of 2,040 U.S. adults (paid for by EV financing company Tenet) found that a staggering “81% believe buying electric is too expensive.”
Among EV charging companies, Tesla led the pack in J.D. Power’s survey as the most-liked station operator, while EVgo and Blink brought up the rear.