>>> US Research Calls

Research Calls

  • Upgrades:
    • Advanced Micro (AMD) upgraded to Outperform from Market Perform at Northland Capital; tgt lowered to $95
    • Banco Bilbao Vizcaya Argentaria (BBVA) upgraded to Buy from Neutral at UBS
    • Banco Santander Chile (BSAC) upgraded to Neutral from Sell at UBS
    • Brookfield Infrastructure (BIP) upgraded to Outperform from Neutral at Credit Suisse; tgt $49.50
    • ShotSpotter (SSTI) upgraded to Outperform from Mkt Perform at William Blair
    • YPF Soc. Anonima (YPF) upgraded to Neutral from Sell at UBS
  • Downgrades:
    • Ameren (AEE) downgraded to Neutral from Buy at UBS; tgt raised to $96
    • Axos Financial (AX) downgraded to Neutral from Outperform at Wedbush
    • Duke Energy (DUK) downgraded to Neutral from Buy at UBS; tgt lowered to $112
    • Evergy (EVRG) downgraded to Neutral from Buy at UBS; tgt lowered to $70
    • Fortis (FTS) downgraded to Sell from Neutral at UBS
    • Huntington Banc (HBAN) downgraded to Neutral from Outperform at Wedbush; tgt $14 and removed from Best Ideas List
    • KeyCorp (KEY) downgraded to Neutral from Outperform at Wedbush; tgt lowered to $20
    • MSC Industrial (MSM) downgraded to Mkt Perform from Outperform at William Blair; tgt $67
    • National Grid (NGG) downgraded to Hold from Buy at Jefferies
    • Poshmark (POSH) downgraded to Mkt Perform from Outperform at Raymond James
    • SAP SE (SAP) downgraded to Neutral from Outperform at Exane BNP Paribas; tgt $105
    • Webster Financial (WBS) downgraded to Neutral from Outperform at Wedbush
    • Western Alliance Bancorp (WAL) downgraded to Neutral from Outperform at Wedbush
  • Others:
    • ABB Ltd (ABB) initiated with a Buy at Stifel
    • Acumen Pharmaceuticals (ABOS) initiated with a Buy at H.C. Wainwright; tgt $15
    • Alphabet A (GOOGL) removed from Best Ideas List at Wedbush
    • Amkor (AMKR) initiated with a Buy at DA Davidson; tgt $30
    • AppLovin (APP) initiated with an Overweight at KeyBanc Capital Markets; tgt $55
    • Bath & Body Works (BBWI) initiated with an Overweight at Piper Sandler; tgt $58
    • CarGurus (CARG) resumed with a Mkt Perform at JMP Securities
    • Carvana (CVNA) resumed with a Mkt Outperform at JMP Securities; tgt $35
    • Coty (COTY) initiated with a Neutral at Piper Sandler; tgt $8
    • Etsy (ETSY) initiated with an Outperform at Raymond James; tgt $100
    • FIGS, Inc. (FIGS) initiated with a Strong Buy at Raymond James; tgt $15
    • ironSource (IS) initiated with an Overweight at KeyBanc Capital Markets; tgt $3.50
    • Nutanix (NTNX) initiated with an Overweight at Barclays; tgt $19
    • Overstock.com (OSTK) initiated with a Mkt Perform at Raymond James
    • Perficient (PRFT) initiated with a Sector Outperform at Scotiabank; tgt $110
    • PropertyGuru (PGRU) initiated with a Mkt Outperform at JMP Securities; tgt $7.50
    • Rent the Runway (RENT) initiated with an Outperform at Raymond James; tgt $9
    • Revolve Group (RVLV) initiated with an Outperform at Raymond James
    • Theseus Pharmaceuticals (THRX) initiated with a Buy at H.C. Wainwright; tgt $22
    • thredUP (TDUP) initiated with an Outperform at Raymond James; tgt $7
    • Texas Instruments (TXN) initiated with a Buy at The Benchmark Company; tgt $205
    • Unity Software (U) initiated with a Sector Weight at KeyBanc Capital Markets
    • Warner Bros. Discovery (WBD) initiated with a Buy at The Benchmark Company; tgt $26
    • Zurn Water Solutions (ZWS) initiated with a Buy at Stifel; tgt $34

>>> US Gapping down

Gapping down
In reaction to earnings/guidance:

  • DCT -15.8%, SGH -14.2% (also to acquire Stratus Technologies), RH -9.2% (lowers FY22 revenue and op mgn guidance; maintains Q2 guidance), UHS -7.7%, FIZZ -4.3%, WBA -2.4%, STZ -0.7%

Other news:

  • HYPR -18.5% (CEO will step down for personal reasons)
  • CYTK -16.9% (proposes $450 mln convertible notes offering)
  • MSTR -8.2% (EU says provisional agreement reached on transparency of crypto asset transfers)
  • BITO -5.8% (EU says provisional agreement reached on transparency of crypto asset transfers)
  • THC -5.5% (in sympathy with weak UHS guidance)
  • COIN -5.1% (EU says provisional agreement reached on transparency of crypto asset transfers)
  • WSM -4.8% (in sympathy with weak RH guidance)
  • W -4.8% (in sympathy with weak RH guidance)
  • HCA -4% (in sympathy with weak UHS guidance)
  • CYH -3.8% (in sympathy with weak UHS guidance)
  • UBS -3.3% (ordered to pay $25 mln to settle SEC fraud charges, according to Reuters)
  • AADI -3.2% (receives notice from EOC Pharma of termination of License Agreement )
  • HPK -3% (stock offering)
  • LXRX -2.2% (announces positive top-line results from phase 2 study of LX9211)
  • RKLB -2.2% (Lunar Photon spacecraft successfully completes the third of seven planned orbit raising maneuvers)
  • OIS -1.8% (settles dispute with HCperf Holdings)
  • BA -1.8% (Inspector General sends letter to FAA regarding oversight of 737 Max issues)
  • WBD -1.6% (NXST nearing a deal to acquire majority control of the CW Network from WBD and PARA, according to WSJ)
  • BGNE -1.4% (Announces Late-Breaking Data at ESMO GI Showing Overall Survival Benefit for Tislelizumab Plus Chemotherapy in First-Line Advanced or Metastatic Esophageal Squamous Cell Carcinoma)
  • BILI -1.4% (shareholders approve proposed conversion to primary listing on the Hong Kong Stock Exchange; Proposed Conversion is expected to be October 3, 2022)
  • XRX -1.2% (CEO and Vice Chairman John Visentin unexpectedly passes away)

Analyst comments:

  • DUK -1.3% (downgraded to Neutral from Buy at UBS)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance:

  • POWW +5.9%, CDMO +5.5%, MLKN +5.4%, AYI +2.7%

Other news:

  • ASPN +41.8% (decides not to proceed with concurrent public offerings of common stock and green convertible senior notes due 2027)
  • SYM +17.9% (stock offering)
  • AURA +12.9% (announced that the FDA has granted Fast Track designation for belzupacap sarotalocan (AU-011), Aura's first VDC product candidate, for the treatment of Non-Muscle Invasive Bladder Cancer)
  • AVDL +9% (provides corporate update)
  • OSCR +5.2% (launches its Next Best Actions engine)
  • OMGA +4.9% (Presents New Preclinical Data Supporting the First Epigenomic Controller, OTX-2002)
  • TGAN +4.8% (stock offering)
  • BPMC +4.7% (announces $1.25 bln strategic financing collaborations with Sixth Street and Royalty Pharma (RPRX); Blueprint Medicines will receive $575 mln in total cash funded at close)
  • SAVE +1.4% (to adjourn Special Meeting of stockholders; intends to continue discussions with Frontier (ULCC) and JetBlue (JBLU))
  • BNTX +1.2% (PFE and BNTX announce new vaccine supply agreement with US govt)
  • CORT +1.1% (initiates ROSELLA, a pivotal Phase 3 trial of relacorilant plus nab-paclitaxel for ovarian cancer)
  • RPRX +1.1% (confirms it has acquired an ex-U.S. royalty interest in Gavreto (pralsetinib) from Blueprint Medicines (BPMC))

FT : Hedge funds scoop up biotech stocks after ‘catastrophic’ declines

Hedge funds scoop up biotech stocks after ‘catastrophic’ declines
Some managers expect cheaper valuations will fuel M&A activity

Hedge funds are hunting for bargains in the beaten-down biotechnology sector, betting that a vicious sell-off has run its course and that lower valuations will breathe life back into deal flow.

A Nasdaq index of biotech stocks has tumbled almost a third from its all-time high last August, as hopes about the Covid-19 pandemic boosting the industry gave way to worries about frothy share prices. The sharp sell-off has, in turn, left many companies struggling to raise new funding.

However, some hedge fund managers now believe that prices have fallen too far relative to firms’ drug development prospects and their remaining cash levels. Those investors have started buying up stocks on the cheap, or launching portfolios to capitalise on the turmoil.

“This is the worst correction [in the biotech sector] I have seen in my 22-year career”, said Michele Gesualdi, founder of London-based investment group Infinity Investment Partners. “We have never seen stress like this.”

Gesualdi’s firm, which manages $1.5bn in assets, recently launched a new fund specifically to focus on opportunities in the life sciences sector. He added that the sector is, on all metrics, “as cheap as it has ever been”.


Industry insiders attributed the sell-off in the sector in part to the departure of so-called tourist investors who do not specialise in biotech but who were hunting for returns during the early stages of the pandemic. Investors have also grown concerned about regulatory scrutiny of dealmaking and the possibility that companies may start to run out of funding.

The ensuing market reversal has proved particularly difficult for a sector that had grown accustomed to record-low interest rates and a seemingly never-ending equity bull market. Such companies’ future profits are highly valued when interest rates are near zero, but appear less so when borrowing costs rise.

“Coming out of the Covid tunnel, seeing inflation rise at [a] higher pace than predicted by any central bank, the [biotech] sector has faced unexpected adversity,” said Philippe Wolgen, chief executive of Australian biotech Clinuvel Pharmaceuticals, whose share price has fallen from almost A$45 in September to A$15 (US$10).

After a “catastrophic” fall in the sector, fund managers and bankers “are openly expressing their aversion to perpetuating these risky ventures”, he added, referring to backing companies with little prospect of revenues in the near term. However, he said investors were starting to look at “genuine business[es]” in the sector.

Mergers and acquisitions activity, meanwhile, traditionally a major support for valuations as big pharmaceutical companies look for ways of building their drugs pipeline, has also dried up. The deal count in 2022 has fallen to its lowest level for the opening six months of a year in more than a decade, according to Evaluate Pharma.

The sell-off has hit some specialist healthcare hedge funds hard. One of the highest-profile funds to suffer is New York-based Perceptive Advisors, which lost about 32 per cent last year and is down 35 per cent this year to late June, according to numbers sent to investors and a person familiar with the performance.

California-based Endurant Capital, run by Vietnamese trader Quang Pham, lost 6.8 per cent in its Health Master fund this year to the end of May, although it has made back some ground in June. Last year San Francisco-based Asymmetry Capital shut after losses, with its founder highlighting how difficult life had become for small, biotech-focused funds.

Nevertheless, some managers believe now is the right time to build exposure to the sector.

“It’s the one area where there’s been complete and utter capitulation,” said Andrew Clifford, chief executive of Sydney-based Platinum Asset Management, which manages $14bn in assets. The firm is launching an EU-regulated version of a health sciences fund it already manages, as it tries to profit from the sell-off.

SYZ Capital has also been adding to its positions in funds trading the sector, and sees opportunities in the US and, longer term, in China. “We are positive on biotech”, said Cedric Vuignier, head of liquid alternative managed funds.

UBS’s hedge fund unit O’Connor earlier this year hired a team from Alera Partners to run a new strategy betting on rising and falling prices and focused on healthcare therapeutics. The strategy is part of O’Connor’s multi-strategy fund, but could eventually be launched as a separate fund, said a person familiar with the firm’s plans.

“Healthcare is a perfect example of where we want to be exposed,” said chief investment officer Kevin Russell, who believes there is capacity for more than $1tn of deals in the sector as pharma companies try to build their drug pipeline.

Russell added that there had been “very little distinguishing between stocks” by investors.

“We think [this] is a function of a lack of experience and scientific knowledge” among investors, and should present opportunities for O’Connor to make money betting on rising and falling prices, he said.

>>> US Early premarket gappers

Early premarket gappers

  • Gapping up:
    • ASPN +51.4%, AVDL +13.2%, POWW +6.9%, CDMO +5.5%, MLKN +5.3%, OSCR +5.2%, TGAN +4.8%, SYM +4.3%, NXST +3.4%, AYI +2.6%, SAVE +1.9%, BNTX +1.5%, CORT +1.1%, HPK +0.8%
  • Gapping down:
    • HYPR -27%, DCT -19.1%, CYTK -14.9%, SGH -14.9%, MSTR -9.4%, RH -6.5%, W -6.4%, BITO -5.3%, COIN -5%, FIZZ -4.3%, WSM -3.7%, LXRX -3.1%, UBS -2.9%, RKLB -1.9%, OIS -1.8%, HOOD -1.7%, STNG -1.6%, BA -1.6%, WBD -0.9%

>>> Europe : Brokers Upgrades & Downgrades - 30th of June 2022 V2(+)

>>> Up
* Air France-KLM Raised to Buy at Citi; PT 1.50 euros (+)
* Atea Raised to Hold at Handelsbanken
* Bank of Cyprus Raised to Outperform at KBW; PT 172.29 pence
* Orsted Raised to Buy at HSBC; PT 930 kroner
* Uniper Raised to Outperform at Oddo BHF; PT 25 euros
* Virgin Money UK Raised to Overweight at Barclays; PT 200 pence

>>> Down
* Cary Group Cut to Hold at SEB Equities; PT 65 kronor (+)
* Domino's Pizza Group Cut to Sell at Liberum; PT 230 pence (+)
* EasyJet PT Cut to 360 pence from 475 pence at Citi (+)
* Graines Voltz Cut to Hold at Tradition; PT 161 euros (+)
* SAP Cut to Neutral at Exane; PT 100 euros
* Spie Cut to Hold at Stifel; PT 24 euros
* Supermarket Income Cut to Reduce at Peel Hunt; PT 115 pence
* YIT Cut to Hold at DNB Markets; PT 3.50 euros

>>> Initiation
* ABB Rated New Buy at Stifel; PT 35 Swiss francs
* Aker Carbon Capture Rated New Hold at Arctic Securities (+)
* Barry Callebaut Rated New Buy at Berenberg
* Edenred Rated New Outperform at Credit Suisse; PT 56 euros (+)
* El.En. Rated New Buy at Berenberg; PT 16.10 euros
* Nexi Rated New Outperform at Credit Suisse; PT 10.50 euros (+)
* Unity Software Rated New Sector Weight at KeyBanc
* Worldline Rated New Underperform at Credit Suisse (+)

>>> Call
* ABB Rated New Buy at Stifel; Sees Strong Growth, Higher Margins (+)
* Barry Callebaut a New Buy at Berenberg With Re-Rating Seen Ahead
* Bunzl Consensus Estimates Likely to Move Higher, Citi Says (+)
* Citi Opens Positive Catalyst Watch on WPP, Publicis Into Results
* El.En. Set For Next Phase of Growth, New Buy at Berenberg
* Just Eat Share Drop Overdone, 2Q May Bring Respite, MS Says
* National Grid Downgraded at Jefferies as Upside Looks Limited
* SAP Cut to Neutral at Exane BNP Due to Risks on Demand Side
* Uniper PT Cut to 12 euros from 15 euros at Bankhaus Metzler (+)

Business Of Fashion : Fashion’s Metaverse Reality Check

Fashion’s Metaverse Reality Check
The marketing value of digital fashion and NFTs may now be clear, but fashion brands will need to separate hype from the concrete opportunities to generate sustainable revenue streams from the metaverse.
The next frontier for brands will be to translate metaverse activities into sustainable revenue streams. (Getty Images)


KEY INSIGHTS
  • Global spending on virtual goods reached an estimated $110 billion in 2021, more than doubling the total in 2015, with around 30 percent attributed to virtual fashion.
  • Fashion companies focused on metaverse innovation and commercialisation could generate more than 5 percent of revenues from virtual activities over the next two to five years.
  • NFTs used for authentication or loyalty tokens are likely to be most relevant for fashion players in the future.


This article first appeared in The State of Fashion: Technology, an in-depth report co-published by BoF and McKinsey & Company.
Pioneers in the metaverse have shown there is a business case for fashion brands to invest in virtual worlds. Granted, a fully formed metaverse — comprising an interconnected, virtual ecosystem that overlaps with or offers an alternative to physical reality — is not yet possible given technology constraints. But brands’ experiments with metaverse principles, such as virtual fashion, extended reality, gaming and non-fungible tokens (NFTs), demonstrate the impact that virtual activities can have as marketing and community-building tools for fashion. Global spending on virtual assets reached around $110 billion in 2021 and is expected to grow at roughly the same rate as the gaming market to be worth around $135 billion or higher by 2024.
The next frontier for leading brands will be to translate unproven technologies into sustainable revenue streams, effectively separating hype from reality. Over the next two to five years, fashion brands focused on metaverse innovation and commercialisation could generate more than 5 percent of revenues by investing in virtual activities today.
Looking beyond a five-year horizon, some bullish observers expect mass consumer adoption of virtual worlds, creating the biggest opportunity for the fashion industry since e-commerce. The bears predict that the hype around the metaverse will fade as technologies fail to meet expectations or users prove reluctant to use virtual spaces as extensively as some business plans are counting on.

While it is uncertain whether a meaningful number of consumers will develop fully fledged virtual lives and spend most of their time in the metaverse, significant revenue opportunities for fashion brands will emerge.

The pace of adoption will be driven by technological advancement, the interoperability between virtual environments and social acceptance. Tech players as well as fashion start-ups and brands need to develop technologies that help evolve today’s unrefined virtual experiences into mature, immersive realities. Mass consumer adoption could be a significant hurdle — 78 percent of people who have already ventured into virtual worlds say they miss physical interaction when doing so.
As a result, many players will likely hang back to see evidence of commercialised use cases and a tangible ROI before investing. For others that want to capture the commercial opportunity, the biggest short-term revenue potential lies with virtual assets that can be traded, transferred or used for payment. We identify two clear use cases for virtual assets that have long-term potential:
AR Fashion and Virtual Skins
In virtual spaces and on social media platforms, the appetite for creating and adapting online identities is high: approximately 70 percent of US consumers from Gen-Z to Gen-X rate their digital identity as “somewhat important” or “very important.” A similar appetite for virtual goods can be found in China, where 70 percent of luxury consumers have purchased or will consider purchasing virtual assets.
Some companies are using augmented reality (AR), to enable users to alter photos and videos, and are creating digital skins to change the appearance of a user’s avatar. For example, digital fashion start-up DressX, which sells virtual clothing that can be added to a photo and posted on social media, has partnered with brands such as H&M to launch digital collections. Meanwhile, users on online gaming platforms such as Roblox update their avatars with new skins regularly, even daily in some cases. The potential revenue generation of in-game outfits and accessories can be significant. Gucci sold a virtual version of its Dionysus bag for the equivalent of $6 on Roblox, which later led to bids of more than $4,000 per bag when resold on the secondhand market.
The multi-billion-dollar gaming market will continue to offer opportunities for fashion — the market for gaming skins could reach $70 billion by 2024, up from $40 billion in 2020. Brands will need to turn to established gaming and platform partners to find inroads.
Over the next two to five years, fashion brands focused on metaverse innovation and commercialisation could generate more than 5 percent of revenues by investing in virtual activities today.
Still, as with any nascent technology, there are risks. For one, brands — particularly those in luxury — should be aware of selling “cheap” digital items that could weaken the exclusivity of their brand image. AR technology is at a relatively early phase of development, where glitchy or unwieldy applications can undermine the user experience.
Furthermore, if brands choose to partner with virtual platforms, in gaming or otherwise, the top-line opportunity may be dampened by high take rates, which could reach as high as 50 percent commission on revenues.

NFTs as Digital Twins and Loyalty Tokens
Much of the frenzy about blockchain-based NFTs has been centred around digital art collectibles, which are in some cases bought and traded for inordinate sums, driving news headlines as some observers scratch their heads. The compound annual growth rate of the value of the NFT market skyrocketed 750 percent between 2018 and 2021, from $41 million to $24.9 billion.
But the rapid rate of growth in NFT sales is already starting to moderate. Indeed, the daily trading volume on NFT marketplace OpenSea fell by 80 percent between February and March 2022. NFT sceptics suggest that this could indicate the bursting of a bubble in an unsustainable market with a limited number of active customers and rampant hoaxes and scams.
However, even as the hype subsides, use cases will emerge that address industry pain points and consumer desires with applications that support community building, product traceability and authenticity.

The long-term business opportunity for fashion brands to engage with NFTs will likely serve more pragmatic purposes by using NFTs as “loyalty tokens.” Gucci, Adidas and The Hundreds, among others, have used NFTs to offer benefits like early access to new NFT drops and physical products, essentially serving as a membership programme. In a sense, these NFTs are digital collectibles, since users cannot yet wear them in virtual worlds, though they could use them for social media profiles. Brands are starting to add more “utility” to collectible NFTs, which could make buying one more worthwhile to consumers and translate into a long-term opportunity for brands.

We see the most compelling use case for NFTs as digital twins that host information about a physical or digital product’s history, authenticity and ownership — something that is especially beneficial to the luxury segment in its battle against counterfeiting. Twins enable products to be paired with a theoretically tamper-proof record and unlock the ability for brands to collect royalties from resale. A host of start-ups and industry initiatives such as Aura Blockchain Consortium, Lablaco and Arianee are aiming to make blockchain-based digital twins commonplace. Lablaco is working to link its digital IDs to virtual versions of garments, so that customers can engage in augmented reality experiences such as try-ons.
Partner, Build, Acquire
While a few disruptors, such as marketplaces for digital fashion, will solely focus on virtual goods, most tech-savvy, innovative brands will tap the opportunity to diversify revenue streams and target Gen-Z and Millennial consumers. Players that want to experiment in the metaverse but lack the requisite in-house capabilities can:
  • Partner with gaming or tech companies, as Gucci did in its tie-up with Zepeto, a social network and avatar simulation app, to produce paid-for digital skins, or as Burberry did when it partnered with Tencent to launch a limited-edition scarf with the Chinese virtual influencer Ayayi.
  • Build their own capabilities by recruiting talent with tech-related skills alongside a deep-rooted understanding of the metaverse and its communities, as Balenciaga is doing by creating a “metaverse business unit” dedicated to metaverse marketing and commerce.
  • Make acquisitions, along the lines of Nike’s deal to buy virtual fashion studio RTFKT in 2021.
Like the early days of e-commerce, some metaverse-related ventures are likely to fail outright or need rapid iteration. However, fashion is well placed to capitalise on the engagement with virtual worlds and the metaverse, owing to its connection to self-expression, status and creativity. Executives should consider metaverse strategies based on their companies’ digital ambitions and customer targets.

WWD : Chanel Backed Biotech Firm Evolved by Nature Gains Major Investment

Chanel Backed Biotech Firm Evolved by Nature Gains Major Investment
Evolved by Nature has raised $120 million in Series C financing.

A Chanel-backed green chemistry company has scored its biggest investment to date.

Evolved by Nature has raised $120 million in Series C financing in a round led by Teachers’ Venture Growth, part of the Ontario Teachers’ Pension Plan Board, and Senator Investment Group, with participation from existing investors including Mousse Partners, Jeff Vinik, The Kraft Group, Roy Disney, Emerald Development Managers and Chanel.

In 2019, Chanel acquired a minority stake in the company as part of its strategy of developing sustainable materials.

Evolved by Nature develops biomaterial-based products for industries ranging from personal care to textiles and medical devices. Its so-called activated silk technology, consisting of natural silk in liquid form, provides a nontoxic alternative to petrochemicals.

“By harvesting nature’s most powerful chemistry, we are advancing health and a healthier relationship between industries and ecosystems,” said Dr. Greg Altman, cofounder and chief executive officer of Evolved by Nature. “Natural silk protein has evolved over millions of years, and we can finally make it available to sustainably enhance the performance potential of essentially anything with a surface. And TVG’s support allows us to focus our commercialization efforts on the treatment of skin while making activated silk molecules accessible for limitless applications.”

Olivia Steedman, executive managing director of TVG, added: “Evolved By Nature has a compelling vision to break through new scientific boundaries to reduce our reliance on problematic chemicals and build better, more sustainable supply chains in the process. We’re delighted to partner with them in executing this vision and growing their operations globally.”

According to the Evolved By Nature, this financing will aid both research and the launch of activated silk bioactive molecules — skin barrier enhancing ingredients and treatments — in both brand-owned and third-party personal care products, which may serve as natural replacements to retinoids and fossil fuel derivatives like petrolatum.

Its own brand petrochemical free skin care products are set to launch later this year and will include a serum, face cream and body products for ultra sensitive skin.

The funding also advances Evolved by Nature’s biodegradable activated silk technology for sustainable leather and textile finishes, which in the last year have been adopted by fashion brands including Anya Hindmarch, nylon mills such as Alpine Creations and Apex Holdings, and leather tanneries including Richard Hoffmans GmbH & Co. KG, Cyclica Srl and Curtidos Bengala.

“We started with the thought that if we could clean up the supply chains in personal care that utilize products that treat the skin and hair, we could start to have a massive impact,” Altman said. “In developing some of these novel molecules and ingredients, we also realized we can treat the surface of leather and our really large ambitious goal that is now 100 percent realizable is that we can now make natural leather return to its origins.

“We now have the technology that can make leather waterproof and we eliminate the use and need or polyurethane,” he continued. “There’s mushroom leather and new innovations in growing leather in petri dishes and all of this stuff, but most people don’t understand is that you can make whatever you want in terms of the substrate but it’s all getting coated in plastic and then as a result it’s not going to biodegrade. That’s where we have our sights set in fashion.”

Much of this will be done at Evolved by Nature’s full-scale production facility in Walpole, Mass., which opened in May 2022 and produces 150 metric tons of activated silk per year — a 500 percent increase in capacity from 2021. At full operation by 2024, the facility will be able to generate 900 metric tons of activated silk per year.

As for its work with investor Chanel, Altman declined to comment.

WWD : H&M Is About to Go Big With AI

H&M Is About to Go Big With AI
H&M will soon reveal its secret weapon to fight supply chain woes and unite the business, from front to back, with data: Google Cloud.

H&M and Google Cloud are on the verge of disclosing a strategic partnership that will inject more intelligence into the very core of the Swedish fast-fashion retailer.

Notably, their connection isn’t brand new, as the companies have been working together for some time. But this will mark a new threshold in the partnership. In essence, it means they’re taking the relationship up a notch.

Alan Boehme, H&M Group’s chief technology officer, spelled it out in the upcoming announcement: “We are now further accelerating digitalization as we believe in sustainable growth powered by advanced analytics and tech.”

The work includes a so-called “data mesh,” a system designed to offer more access to all types of data and events from multiple parts of the business spanning stores and e-commerce, as well as its brands’ ecosystem and suppliers.

The latter is significant. One of the stated goals for this deal is to address H&M’s supply chain — a key area that came up on a recent conference call.

Although the retailer reported a sizzling first half of the year, with sales jumping 20 percent, chief executive officer Helena Helmersson warned about inflation worries dragging sales, a concern that has H&M weighing price increases. Meanwhile, head of investor relations Nils Vinge noted that supply chain challenges may be easing on the textile and materials sourcing side, but not when it comes to other logistics, like transportation. That will necessitate adjustments to purchasing.

“Throughout the autumn we will start to adjust them to better tailor to the new situation and continue to have the high precision that we offer,” Vinge said. Knowing how and where to make changes will be crucial, and the Google Cloud deal appears to be at least part of the equation.

While that operates in the back of the house, the AI and data backbone may have implications out in front as well. According to Eva Fors, managing director of Google Cloud Nordic Region, the partners look forward to creating “new and exciting customer experiences, whether that’s in-store or online.” No other details were offered, but across fashion, home, beauty and other categories, algorithms are all the rage for everything from product recommendations to refinements in augmented reality.

Google’s cloud business clocked an excellent first quarter, with $5.8 billion in revenue soaring 44 percent. While it still follows Amazon Web Services and Microsoft’s Azure, which showed increases of 36 percent to $18.44 billion and 32 percent to $23.4 billion in the first quarter, respectively, Google Cloud outpaced its rivals for percentage growth.

Some of that momentum may stem from its retail outreach, especially in fashion. The tech giant has been steadily growing its base in that sector, especially in recent years.

H&M may be an ideal match as a partner, as the fashion retailer is no stranger to data intelligence. The company employs its own data engineers and analysts (more than 200 of them, in fact), and according to its current job listings, it’s still hiring. Their work goes into everything from demand prediction and trend-spotting to optimizing for a more sustainable supply chain — an issue that Google Cloud also advocates.

This week, the tech giant unveiled an “Earth Engine” service at its Google Cloud Sustainability Summit, to offer access to more than 70 petabytes of “analysis-ready geospatial data,” the company said.