Dear New World Investor:
Last Friday’s April jobs report was very weak. The economy added 175,000 jobs, far below the 240,000 estimate. Unemployment ticked up to 3.9%, hiring slowed, the length of the average workweek ticked down, and wages rose less than forecast.
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Also last Friday, we learned that the Institute for Supply Management (ISM) non-manufacturing services sector index fell to 49.4 last month from 51.4 in March, the lowest reading since December 2022. Economists had forecast the index edging up to 52.0. A reading below 50 indicates contraction in the services industry, which accounts for more than two-thirds of the economy. The economy is beginning to lose some steam after expanding at a solid pace.
At the same time, a measure of prices paid by businesses for inputs jumped, a worrisome sign for the outlook on inflation. There are many ways to gauge aggregate consumer price changes in the US economy. How do inflation measures like CPI and PCE and their variations of headline, core, and supercore differ in the prices they cover and weighting of price categories? Answer: Once you zoom out from the volatile monthly data, not that much:
Click for larger graphic h/t St. Louis Fed
Eleven of the 14 Fed hiking cycles since 1950 (except the current one, so far) led to recessions. The last few recessions began an average of 26 months following the first rate hike, in a range from 11 months to 42 months. This cycle’s first rate hike was in March 2022, 25 months ago – which suggests we are almost there.
Click for larger graphic h/t David Rosenberg
It’s hard to believe such an aggressive tightening campaign could end in anything but recession.
Click for larger graphic h/t David Rosenberg
Unfortunately, recession is likely to hit when we already are running a huge budget deficit. That makes it harder to deploy counter-cyclical fiscal policy when it is actually needed. The first thirty years in the graphic below is where our “normal” was tuned. But over the last three years, payments have been rising at 15x. It will happen fast.
Click for larger graphic h/t @balajis
43% of small businesses were unable to pay their rent in April, the highest delinquency rate since March 2021.
Click for larger graphic h/t @WinfieldSmart
I am going to cling to my mild recession forecast starting this year.
Market Outlook
The S&P 500 added 3.0% since last Thursday and regained the 5,200 level. The Index is up 9.3% year-to-date. Looking at the S&P’s annual return from 1966 to 2001 without the 5 best and worst days tells you the truth about timing: You don’t have to miss the worst days, you just need to know that they’ll happen.
Click for larger graphic h/t @NewLowObserver
Investment professionals have always been able to give Market on Close orders. The broker guarantees you the closing price for a block of stock. MOC orders are so widely used by index funds that 33% of all S&P 500 stock trades are now executed in the last 10 minutes of the trading session.
Click for larger graphic h/t @WinfieldSmart
The Nasdaq Composite gained 3.2% and is up 8.9% for the year. The SPDR S&P Biotech Exchange-Traded Fund (XBI) eked out a 0.7% gain. It still is down year-to-date, -0.3%. The small-cap Russell 2000 participated, adding 3.0%, and is back in the black at +2.3% in 2024.
On the plus side, companies have announced stock buybacks of more than $383 billion in the last 13 weeks, up 30% from the year-earlier period and the largest sum since June 2018, per research from Deutsche Bank. The total includes Apple’s $110 billion plan, the largest buyback in history, but the boom in buybacks extends beyond the big names like Apple and Alphabet (which just announced a $70 billion buyback). Of the $262 billion in buybacks reported in first quarter earnings season, $82 billion has come from companies outside the Big Tech dominators.
The fractal dimension is out of energy to push the S&P much higher. It really needs time or lower prices to consolidate the big move up from October.
Top 5
Changes this week: None
Near-Term – chronological order
SCYX – ScyNexis – Data releases and resolution of the manufacturing problem
TGTX TG Therapeutics – Rapid recovery from overdone pullback
AAPL Apple – AI announcements at June WWDC and September iPhone 16 introduction
EQT EQT –natural gas price rebound
USL United States 12 Month Oil Fund, LP – crude should rise quickly
FCX Freeport McMoRan – copper shortage
Long-Term – alphabetical order
ABCL AbCelllera – Will become a huge pharma royalty company
EQT EQT – largest US natural gas company
IBIT iShares Bitcoin Trust – Bitcoin is headed for $100,000
META Meta – a (the?) leader in the metaverse
RKLB Rocket Lab – #2 to SpaceX in space
SCYX ScyNexis –First new antifungal in 20 years
VLD Velo3D – Return manufacturing to the US
Economy
The Atlanta Fed’s GDPNow model estimate for June quarter real GDP growth jumped from +3.3% to +4.2% due to strength in personal consumption expenditures growth and especially private domestic investment growth.
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Yet the six-month Institute of Supply Management outlook index just collapsed to an all-time low in April.
Click for larger graphic h/t @EconguyRosie
I sill think a mild recession is in the cards, but it sure isn’t in all the numbers yet.
Coming Events
All times below are ET, and most presentations and slides are archived on the companies’ websites so you can listen to them. Tuesday!!!
Monday, May 13
SFTBY – SoftBank – 3:30am – Earnings conference call
INO – Inovio – 4:30pm – Earnings conference call
QUIK – QuickLogic – 5:30m – Earnings conference call
Tuesday, May 14
RKLB – Rocket Lab – Unspec. – BofA Industrials Conference
EDIT – Editas Medicine – Unspec. – BofA Health Care Conference
FCX- Freeport McMoRan – 9:30am – BofA Global Metals, Mining and Steel Conference
CDE – Coeur Mining – 10:30am – Annual meeting
INO – Inovio – 11:30am – Citizens JMP Life Sciences Conference
GILD – Gilead Sciences – 2:20pm – BofA Health Care Conference
APTO – Aptose Biosciences – 5:00pm – Earnings conference call
Wednesday, May 15
Consumer Price Index – 8:30am
INO – Inovio – 10:00am – RBC Capital Markets Global Healthcare Conference
GILD – Gilead Sciences – 10:30am – RBC Capital Markets Global Healthcare Conference
EDIT – Editas Medicine – 2:05pm – RBC Capital Markets Global Healthcare Conference
VLD – Velo3D – 5:00pm – Earnings conference call
Big Tech: The Biotech & Digital Dominators MegaShift
There are at least four ways to make money in the stocks of these large, growing, dominant companies. You can:
* * Buy a stock and hold it
* * Buy a stock and write a call option against it
* * With a Level IV options account, write an out-of-the-money put option
* * With a Level IV options account, write an out-of-the-money put option and use part of the premium to buy an out-of-the-money call option
Apple (AAPL – $184.57) introduced a new iPad Pro. It’s the thinnest iPad ever, with the most advanced display ever produced, with the new, very powerful M4 CPU. Apple also hinted at its AI ambitions, saying that the M4’s new 16-core neural engine is more powerful than any neural processing unit in any PC today. The VP:Platform Architecture specifically noted that the chip is capable of 34 trillion operations per second, a measurement commonly used when describing a chip’s AI performance. Apple held the price at $999 for the 10.9” display and $1,299 for the 13” display. AAPL is a Buy under $175 for new iPhone rollouts and augmented/virtual reality products.
Gilead Sciences (GILD – $64.58) and Kite Oncology, their subsidiary, will present an impressive 18 abstracts during the 2024 American Society of Clinical Oncology (ASCO) Annual Meeting the first week of June. At some point, Wall Street will realize this is an oncology powerhouse in the making. And we get paid 4.74% while we wait! GILD is a Long-Term Buy under $80 for a first target of $120.
Meta Platforms (META – $475.42) showed How Companies Are Using Meta Llama, their open-source large language AI model that has had more than 170 million downloads. They said it is being used across industries including education, video communications, research, and medicine for applications like making education content more localized to students, summarizing video calls, and providing medical information in low-resource settings. META is a Buy under $345 for a $400 target in 2024.
PayPal Holdings (PYPL – $64.45) named a new Chief Investor Relations Officer. Normally I wouldn’t even mention something like this, but it’s important for them to communicate the turnaround as it happens. He’s a heavyweight – came from GE, where he most recently served as Chief Investor Relations Officer and Group Vice President for GE Aerospace. He and his team at GE were consistently recognized by investors and analysts as having the top IR program and best professionals in the industrials sector and across all large-cap companies. Before GE he was a senior analyst at UBS, so he knows how to talk to Wall Street. PYPL is a Buy under $68 for a double in three years.
SoftBank (SFTBY – $25.38) reports early Monday morning. There are no Street estimates. What I want to see is continued moves to reduce leverage and buy back stock. SFTBY is a Buy under $25 for a first target of $50 in the next two years.
Small Tech
Enovix (ENVX – $9.14) laid off 170 mostly hourly workers at the Fremont plant as they transition production to Fab2 in Malaysia. They expect to save $35 million a year.
CEO Raj Talluri did his Ask Me Anything, and it went pretty well:
ENVX is a Buy up to $20 for a 4-year hold to $100+ as their BrakeFlow lithium-ion battery takes market share.
Primary Risk: A new competitor invents a better battery.
Fastly (FSLY – $8.55) kicked off the RSA Conference, the cybersecurity industry’s annual event, with a guarantee to notify and begin mitigation of critical security incidents within 30 minutes. Their recently released Bot Management solution combats automated attacks at the edge and significantly reduces the risk of fraud, distributed denial of service (DDoS) attacks, account takeover, and other abuse. Their new industry-leading time-to-notify guarantee means Fastly security experts will proactively notify and begin mitigating critical security incidents within 30 minutes of discovery, often before an incident is even discovered by a customer. FSLY is a Buy up to $14 for a 3- to 5-year hold to $80+ as Compute@Edge drives customer acquisition and revenue growth.
Primary Risk:Content and applications delivery networks are a competitive area.
QuickLogic (QUIK – $12.63) reports next Monday. The two publishing analysts expect revenues to increase 50% from last year to $6.2 million with earning of 5¢ or 6¢. QUIK is a Buy up to $10 for my $40 target as their earnings repeatedly surprise Wall Street.
Primary Risk: Customers’ product introductions and associated royalties are unpredictable.
Rocket Lab USA (RKLB – $4.26) reported March quarter revenues up 69.0% from last year to a record $92.77 million, just short of the $95.0 million consensus estimate. They lost nine cents a share, a penny better than the 10¢ loss estimate.
On the conference call (AUDIO HERE and SLIDES HERE and TRANSCRIPT HERE), CEO Peter Beck said: “…we’re on track for a record year for Electron. And from where we sit today, 2025 is shaping up to be another record year also.”
They sold 22 launch slots for 2024 but customer readiness, payload delays, and other factors can cause them to slip into 2025. Rocket Lab often can find other customers who want to launch earlier. Launch flexibility is a feature of the Electron service and a major selling point over large rideshare launches like SpaceX.
The Archimedes engine development for Neutron is ahead of schedule, with the first one already on the test stand. It uses 3D-printed parts – turbo pump, pre-burner and main combustion chamber components, valve housings, and engine structural components – and is optimized for a target maximum reusability of 20 flights per engine instead of maximum performance, which will allow Rocket Lab to operate this engine at a much lower stress level as compared to others. First launch has been slid from yearend to is mid-2025.
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They guided the June quarter to revenue between $105 million and $110 million, which includes four Electron launches for $28 million to $29 million and Space Systems between $77 million and $81 million. The gross profit margin will be 24% to 26% with operating expenses of $74 million to $76 million.
They ended the quarter with a $1.02 billion backlog, 42% or $428 million of which will be recognized as revenue in the next 12 months. RKLB is a Buy up to $13 for my $30+ target as low earth orbit satellites and space exploration grow.
Primary Risk: A new competitor emerges.
Velo3D (VLD – $0.23) reports March quarter results after the close next Wednesday. The one publishing analyst expects $19.5 million in revenues but does not have an earnings estimate. This will be the first “normal” quarter in a while and give us a chance to analyze their ongoing financial position. VLD is a Buy up to $1 for my $10 target as Velo3D’s high-tolerance metal parts printing business grows.
Primary Risk:A new 3D metal printing competitor emerges.
Biotech MegaShift
If you can afford it – and it would not be too big a position in your portfolio – putting $2,000 into each of these speculative biotechs might be a good way to start. Buying these out-of-favor, fallen, or forgotten companies that can get important products through the FDA at very low market capitalizations seems like a good strategy to me.
Risks
Development-stage biotechs are subject to investor sentiment swings from wildly optimistic to excessively pessimistic – mostly the latter recently. After the Primary Risk for each company, I’ve added the clinical stage of their lead product, the probable time of their first FDA approval, and the probable time of their next financing.
As always, you need to think about an appropriate position size. You could buy a full position upfront and then just hold on, or buy some upfront and leave room to add more on the inevitable financings, transient clinical trial setbacks, and the like.
AbCellera Biologics (ABCL- $3.95) reported March quarter revenue down 17.1% from last year to $9.95 million due to the erratic recognition of partners’ development payments. It was below the $10.85 million estimate. They lost 14¢ a share, a penny less than the 15¢ loss expected.
On the conference call (SLIDES HERE and TRANSCRIPT HERE), they announced a new collaboration with Biogen to discover antibodies for a single neurology target that can be delivered across the blood-brain barrier.
CEO Carl Habsen said: “So the Biogen deal is exciting for two reasons. One, we have an opportunity to work with a new partner that’s one of the heavyweights in the space. So we’re excited about that as the start of a relationship that we hope will be able to grow over time.
“And secondly, the program is focused on being able to solve what is one of the really huge problems in biologics, which is being able to efficiently transport antibodies and other types of biologics across the blood/brain barrier. So we’re going at that based on a lot of groundwork by Biogen. And we think it’s an exciting program. It’s at the very early stages. But if successful, we think that that could make a big difference, not just for Biogen, but for the field.”
Another collaboration with two top-tier investment groups, Viking Global Investors and ArrowMark Partners, will create multiple asset-based companies based on multiple programs, similar to AbCellera’s collaboration with Versant Ventures in the formation of Abdera Therapeutics.
AbCellera presented new data on its T-cell engager (TCE) programs at the American Association for Cancer Research (AACR) annual meeting that demonstrate how AbCellera’s TCE platform is able to generate TCEs that achieve potent cell killing with low toxicity associated with cytokine release.
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Data showed AbCellera-generated TCE equivalent tumor cell killing with potency that is comparable or superior to three clinical benchmarks with low cytokine release. This rare property – potent cell killing with low cytokine release – is seen with only three small families of CD3 engagers from AbCellera’s panel of hundreds. Next they will test these properties in vivo in animals to advance a subset.
They reported three new partner-initiated program starts with downstreams in the quarter, for a cumulative total of 90. 13 molecules already have reached the clinic.
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They finished the quarter with $725 million in cash plus the ~$200 million coming from Canadian government entities. Buy ABCL up to $6 for a long-term hold to $30 or more.
Primary Risk: Partnered and owned drugs fail in the clinic.
Clinical stage of lead product: Partnered: Various Owned: Preclinical
Probable time of next FDA approval: 2027-2028
Probable time of next financing: 2026-2027 or never
Akebia Therapeutics (AKBA- $1.33) announced March quarter results this morning. Total revenues were down 18.8% to $32.6 million, badly missing the $46.09 million estimate. Auryxia revenues fell 10.6% to $31.0 million. License, collaboration, and other revenues were $1.6 million compared to $5.3 million for the March 2023 quarter. They lost 9¢ per share, a penny worse than Wall Street’s expectations for an 8¢ loss.
On the conference call (AUDIO HERE and TRANSCRIPT HERE), management said in spite of the decline in Auryxia sales in the quarter, they still expect 2024 to be up from 2023. Vafseo will launch next January after Transitional Drug Add-on Payment Adjustment (TDAPA) approval. CEO John Butler said: “Upon FDA approval of Vafseo, we initiated work to drive demand from potential prescribers and to contract with dialysis providers. We are progressing plans for generating clinical data to identify additional areas of potential benefit to patients as we remain committed to the kidney community. We also expect to engage with the FDA on label expansion opportunities for Vafseo by the end of this year.”
Although they did not get FDA approval for non-dialysis patients, they are not giving up on that patient population. One potential subgroup they are exploring is CKD patients with anemia not on dialysis with a glomerular filtration rate (GFR) under 15. Over 70% of these patients are not treated today and they routinely have a higher mortality rate than patients who had their anemia controlled before dialysis, and they continue to have a higher mortality rate 12 months after starting dialysis. Akebia will discuss a path forward for these patients with the FDA this year.
They finished the quarter with $42.0 million in cash and $10 million left on their $55 million debt facility with BlackRock. That’s enough to carry them for over two years to cash flow positive. Buy AKBA up to $2 for the vadadustat launches in the EU, UK, and (after TDAPA approval in ) the US.
Primary Risk: Vadadustat doesn’t sell in the US.
Clinical stage of lead product: Approved
Probable time of next approval: TDAPA January
Probable time of next financing: Never
Aptose Biosciences (APTO – $1.23) reports after the close next Tuesday. They are expected to lose 75¢ a share. As always, the important data will be enrollment and clinical responses. They are going to do a through update on the triplet path to an approved product. APTO is a Buy under $2.50 for a $300 target in a buyout.
Primary Risk: Either drug fails in clinical trials.
Clinical stage of lead product: Phase 2
Probable time of first FDA approval: 2027
Probable time of next financing: Mid-2024
Arch Therapeutics (ARTH – $1.04) will present AC5 again at the spring Symposium on Advanced Wound Care on May 14-18. CEO Terry Norchi said: “Prior presentations at SAWC included a case of limb salvage in a 32 year-old patient with a necrotic spider-bite; management of post-Mohs surgery wounds; and treatment of recalcitrant wounds that previously failed to respond to other modalities. Clinicians manage a broad array of acute and chronic challenging wounds, often in patients with concurrent medical problems that interfere with healing.”
I still don’t understand why the VA doesn’t insist on trying AC5 before every expensive amputation and rehabilitation, not to mention why the patients don’t demand it. ARTH is a Hold for a buyout.
Primary Risk: AC5 fails to sell or the internal trial fails.
Clinical stage of lead product: External approved. Internal trial 2024
Probable time of first FDA approval: External done. Internal 2025
Probable time of next financing: December 2023 quarter
Compass Pathways (CMPS – $8.54) reported a March quarter loss of 55¢, worse then the 48¢ expected loss. On the conference call (AUDIO HERE and MAY CORPORATE PRESENTATION HERE), management said the COMP360 Phase 3 pivotal programs in treatment-resistant depression are on track for top-line COMP005 trial data in the December quarter and COMP006 trial top-line data in mid-2025. Long-term follow-up in each trial will generate data on the duration of response and potential effect of retreatment.
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They also announced positive Phase 2 COMP360 data in post-traumatic stress disorder (PTSD). This was a 22 patient, multi-center open label trial of a single administration of COMP360 with psychological support. There was an early and durable change from baseline observed at week 4 and week 12. There was an improvement over time in the Sheehan Disability Scale measure of functional impairment over 12 weeks from a mean total score of 22.7 at baseline to an 11.7 point reduction at week 4 and a 14.4 point reduction at week 12.In short: High and sustained rates of response and remission relative to baseline, with early onset of symptom improvement, accompanied by increasing functional improvement at 4 and 12 weeks. That’s a big win.
CEO Kabir Nath said: “We were pleased to see the positive results from the phase 2 PTSD study, a condition with significant unmet need and limited therapeutic options for the people who live with it. PTSD is a logical extension for COMP360 psilocybin treatment as there is significant overlap in patients living with treatment-resistant depression and PTSD. These strong data enable us to explore the optimal path forward to advance clinical development in PTSD alongside our phase 3 pivotal program in TRD, which is on track for initial data this year.”
June quarter net cash used in operating activities is expected to be in the range of $32 million to $38 million. The full-year 2024 net cash used in operating activities is expected to be in the range of $110 million to $130 million. They finished the quarter with $262.9 million in cash, enough to fund operating expenses and capital expenditure requirements into 2026. CMPS is a Buy under $20 for a very long-term hold to a 10x.
Primary Risk: Their drugs fail in the clinic.
Clinical stage of lead product: Phase 3
Probable time of first FDA approval: 2026
Probable time of next financing: Late 2025
Editas Medicines (EDIT – $5.56) March quarter results whiffed on the top and bottom lines. Revenue fell 88.4% from last year to $1.14 million, badly missing the $7.30 million estimate. I don’t know why Wall Street was expecting $7.3 million. The decrease relates to the January 2023 one-time sale of the company’s wholly owned oncology assets and related licenses. The GAAP loss per share of 76¢ missed the 58¢ loss estimate. The stock dropped 11.4% on Wednesday.
On the conference call (AUDIO HERE and TRANSCRIPT HERE), CEO Gilmore O’Neill said they have completed enrollment in the adult cohort of the RUBY clinical trial for severe sickle cell disease. We’ll get a clinical update in midyear on at least 18 sickle cell patients with 2 to 21 months of clinical follow-up. Four of them will have 12 to 21 months of exposure, 7 will have 5 months to 12 months exposure, and another 7 with 2 to 5 months exposure. There will be a second clinical data release by yearend.
The FDA has agreed that Ruby is a Phase 1, 2, and 3 trial that can support a Biologics Licensing Application (BLA). The drug has Regenerative Medicine Advanced Therapy (RMAT) designation from the FDA. RMAT is given to drug candidates intended to treat serious or life-threatening conditions under the 21st Century Cures Act. The designation allows for accelerated approval based on surrogate or intermediate endpoints.
Also, they have enrolled multiple patients and have more in screening in the adolescent cohort of a RUBY study, which was launched at the beginning of this year.
They have enrolled over 40 patients in the EdiTHAL trial for transfusion-dependent beta thalassemia, with clinical updates also scheduled for midyear for 7 patients with 4 to 12 months of follow-up ,and a second update by yearend.
On Tuesday, oral arguments were held before the US Court of Appeals for the Federal Circuit regarding another appeal of the Patent, Trial and Appeal Board’s previous decision favoring Broad Institute on specific patents for CRISPR-Cas9 Editing in human cells over the University of California, University of Siena, and Emmanuelle Charpentier (collectively, the CDC).
The Broad Institute has previously prevailed three times against the CDC, twice with the PTAB, and once at the Federal Circuit. The Federal Circuit’s review will determine whether the PTAB correctly applied the law. The Court will not hear new evidence and will issue a decision in the second half of the year.
I expect a decision in the Broad’s favor to reaffirm Editas’ position as the exclusive licensor of the patents covering Cas9 use in human medicines in the US, but this is a risk. Only a small fraction of the IP Editas licensed from the Broad is involved.
There are more than 100 Cas9 and Cas12a programs in development worldwide, with the majority of the programs being developed by 10 companies. These all are potential deals for Editas to provide a large source of non-dilutive capital. Vertex Pharmaceuticals expects to pay Editas for the following projected patient/revenue growth :
2024 100/$88 million
2025- 450/$396 million
2026- 750/$660 million
2027- 1100/$966 million
2028- 950/$838 million
2029- 600/$528 million
2030- 300/$264 million
Editas finished the quarter with $376.8 million in cash. Together with the near-term annual license fees and the contingent upfront payment payable under its license agreement with Vertex, that will fund operating expenses and capital expenditures into 2026. EDIT is a Buy under $6 for a double in 12 months and a long-term hold to much higher prices.
Primary Risk: Other companies’ gene-sequencing drugs fail in the clinic.
Clinical stage of lead product: Partnered; Approved; Owned: Preclinical.
Probable time of next FDA approval: 2025
Probable time of next financing: 2026 or never
Inovio (INO – $11.18) reports on Monday. Revenues will be trivial and the consensus expects them to lose $1.00 a share, in a pretty wide range from -86¢ to -$1.17. Everyone is looking for more color on INO-3107. INO is a Buy under $14 for a very long-term hold.
Primary Risk: Their drugs fail in the clinic.
Clinical stage of lead product: Phase 3
Probable time of first FDA approval: 2025
Probable time of next financing: 2026
Invitae‘s (NVTAQ – $0.00) assets will be sold to Labcorp for $239 million in a court-approved deal. Labcorp is taking on some other expenses, but the $239 million all will go to the debt holders. You don’t have to sell the stock to realize the loss. I am dropping coverage.
Medicenna (MDNAF – $2.00) got an excellent writeup on Seeking Alpha: New Buy, Medicenna: Superkine Platform In Oncology. Buy MDNAF under $3 for a first target of $20, then maybe $40.
Primary Risk: Their drugs fail in the clinic.
Clinical stage of lead product: Entering Phase 3
Probable time of first FDA approval: 2024
Probable time of next financing: March 2024
ScyNexis (SCYX – $1.88) reported March quarter earnings of one cent a share due entirely to a $9.6 million gain on the fair value adjustment for warrant liabilities. Wall Street expected a 21¢ loss. They said again that the final study reports from the completed FURI, CARES, NATURE, SCYNERGIA, and VANQUISH studies will be delivered to GSK in mid-2024, triggering a $10 million development milestone payment.
In the 8-K they said: “In response to the hold on clinical studies of ibrexafungerp by the FDA due to possible beta-lactam cross contamination, we have entered into certain new manufacturing agreements with third-party contract manufacturers to begin producing new batches of ibrexafungerp which we believe will allow us to lift the clinical hold and restart our impacted clinical studies, the Phase 3 MARIO study and a Phase 1 lactation study.”
The annual meeting is on June 19, which would be an excellent place to announce the new manufacturers of ibrexafungerp. They ended March with $94.2 million in cash, enough to carry them for more than two years. Buy SCYX under $2.50 for a first target price of $20 after ibrexafungerp is approved for hospital use and a buyout at $50.
Primary Risk: Ibrexafungerp fails to sell.
Clinical stage of lead product: Approved
Probable time of next FDA approval: 2024
Probable time of next financing: Never
Inflation MegaShift
Gold ($2,353.50) has clear support at $2,300. Global Central Banks purchased an all-time high 289 tonnes of Gold during the first quarter, with China, Turkey and India leading the way.
Click for larger graphic h/t World Gold Council
The fractal dimension reversed its consolidation for the moment, but hasn’t signaled a resumed uptrend yet. It will take a bigger move in either direction to make it clear what is going on. Even if the uptrend resumes without a further consolidation, there isn’t enough energy to push gold dramatically higher.
Miners & Related
Coeur Mining (CDE – $5.49) presented at the Canaccord Global Metals & Mining Conference today (SLIDES HERE). It was the standard presentation.
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Coeur is more leveraged to precious metals prices than its competitors.
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CDE is a Buy under $5 for a $20 target as gold goes higher.
Primary Risk: Prices of precious metals fall due to US dollar strength.
First Majestic (AG – $7.48) reported March quarter revenues down 32.5% from last year to $106 million, primarily due to the temporary suspension of mining activities at the Jerritt Canyon Gold Mine in March 2023. They had a pro forma loss of 6¢ a share.
Production of 5.2 million silver equivalent (AgEq) ounces consisted of 2.0 million silver ounces and 35,936 gold ounces, in line with their 2024 production guidance plan. They expect improvements in the second half due to planned higher ore grades and throughput rates.
Their average selling price of $23.72 per AgEq ounce was an 8% increase compared to the March 2023 quarter but a 2% decrease compared to the December quarter. They had consolidated cash costs of $15.00 per AgEq ounce and all-in sustaining costs (AISC) of $21.53 per AgEq ounce.
At the end of the quarter they had $102.1 million in cash, $127.2 million of restricted cash, and held 729,771 silver ounces of coins and bullion in finished goods inventory with a fair value of $17.9 million. AG is a Buy under $11 for a $23 next target price as production increases and the price of silver rises.
Primary Risk: Prices of precious metals fall due to US dollar strength.
Sandstorm Gold (SAND – $5.72) reported March quarter revenue dipped 2.7% from last year to $42.80 million, beating the $41.41 million estimate. They lost a penny a share; the Street expected them to make a penny a share.
On the conference call (AUDIO HERE and SLIDES HERE and TRANSCRIPT HERE), CEO Nolan Watson said at $2,300 gold, $27 silver, and $5.00 copper, Sandstorm’s $165 million of cash flow in 2024 will grow to $250 million in 2029. Meanwhile, thanks to high gold prices and their non-core asset sales program, their debt is evaporating. From the peak of $637 million after the 2022 acquisitions it will be down to $375 million projected at the end of June.
Major new royalties are coming on line as mines are completed:
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Sandstorm owns over 230 royalties, of which only 40 are flowing cash today. Over 30 are in active development – that’s a lot of built-in growth. When they bought these streams, they did their own geology due diligence to pick projects that can drill and discover more gold in the future that will increase their royalty stream. Production from current plans grows through 2030, but by the time we get there I expect the projections for 2031 through 2040 to be much higher.
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Nolan said: “In the past, we have grown Sandstorm sometimes in jarring ways for shareholders and we believe that those days are behind us and that our shareholders can expect smoother sailing going forward and growth that is more methodical and measured and that does not require equity. I have to say as a large Sandstorm shareholder myself, I’m excited for this next leg of growth, and I believe it will be done in a way that’s rewarding to shareholders.” Bravo!
The company said they signed a definitive asset purchase agreement to sell a collection of non-core, non-precious metals royalties for cash proceeds of $21 million plus the retention of the next $10 million in proceeds from the Copper Mountain Royalty. Since the September 2023 quarter, Sandstorm will have sold over $50 million of non-core royalty and equity investments, including approximately $40 million in cash consideration. Sandstorm will receive the cash purchase price in the second quarter of 2024.
The transaction is not expected to materially impact Sandstorm’s near or long-term production guidance. They maintained their 2024 production guidance of between 75,000 and 90,000 gold equivalent ounces, expected to increase to approximately 125,000 ounces within the next five years.
They also renewed their stock buyback program for up to 20 million shares, or about 7% of the issued and outstanding stock. SAND is a Buy under $10 for a $25 target.
Primary Risk: Prices of precious metals fall due to US dollar strength.
Cryptocurrencies
Cryptocurrencies are a diversifying asset that offer a unique opportunity to make (or lose!) a lot of money quickly. You can easily buy bitcoin and other cryptocurrencies at Coinbase, Block, or Robinhood.
Bitcoin (BTC-USD on Yahoo – $62,562.48) is consolidating between $60,000 and $65,000. It is building energy for the next big run to new all-time highs.
Click for larger graphic
BTC-USD, ETH-USD, IBIT, and ETHE are Strong Buys.
Primary Risk: Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.
iShares Bitcoin Trust (IBIT- $35.58) is the cheapest and easiest way to Buy bitcoin for the 2028 and 2032 halvings.
Primary Risk:Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.
Commodities
Oil – $79.60
Oil was flat this week as Hamas and Israel traded what looked to me like pretend ceasefire proposals. I expect a continuation of the Saudi/OPEC+ voluntary cuts of 2.2 million barrels a day into the second half of 2024. They meet on June 1. Assuming that happens, we will see global oil inventories fall to record low levels by the end of the year, supporting oil over $85 a barrel even with a zero political risk premium.
The July 2026 Crude Oil Futures (CLN26.NYM – $69.29) are a Buy under $70 for a $200+ target. Only buy futures for all cash; do not use margin.
The United States 12 Month Oil Fund, LP (USL – $39.31) is a Buy under $40 for a $100+ target.
Vermilion Energy (VET – $12.19) reported March quarter revenues down 8.1% from last year to $508.04 million but above the upper end of their production guidance. Fund flows from operations were $431 million or $2.68 per basic share, a 16% increase from the December quarter. Exploration and development capital expenditures were $190 million, resulting in free cash flow of $241 million or $1.49 per basic share, a 5% increase from the December period. Earnings of 2¢ a share beat the breakeven estimate.
On the conference call, which began with the annual meeting boilerplate (AUDIO HERE and SLIDES HERE and TRANSCRIPT HERE), management said they reduced net debt by $134 million to $944 million, the lowest in more than 10 years, while returning $56 million to shareholders in dividends and buying back 2.4 million shares. They bought another million shares in April.
International operations are strong:
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2024 is going to be a good year even if oil stays in the $85 area.
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VET is a buy under $11 for a target price of $24 or more.
Primary Risk:Oil prices fall.
Energy Fuels (UUUU – $6.15) reported March quarter revenues up 29.7% from last year to $25.43 million, just under the $24.49 million estimate. GAAP earnings of 2¢ a share were in line with expectations.
On the conference call (AUDIO HERE and CORPORATE PRESENTATION SLIDES HERE ), management pointed to their high value product line:
Click for larger graphic
Their three existing US mines can produce two million pounds of uranium at low cost. Their three US development mines have nearly 70 million pounds of uranium and can produce about six million pounds a year.
Click for larger graphic
Their updated guidance:
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They finished the quarter with $195.58 million in cash. UUUU is a buy under $8 for a $30 target.
Primary Risk: Uranium prices fall.
Other Recommendations
Acreage Holdings (ACRDF – $0.46) will be acquired by Canopy Growth USA later this year. Canopy Growth (CGC) just did a $50 million financing. They issued a new C$96.4 million senior unsecured convertible bond with five-year maturity in exchange for C$27.5 million of existing debt maturing in September 2025 plus cash. The bonds have a 7.5% interest rate and are convertible at C$14.38 per share. The investor also got 3.4 million 5-year warrants exercisable at C$16.18. ACRDF is a buy under $2 for a hold for the Canopy Growth merger and beyond.
Primary Risk: Canopy Growth does not acquire the company.
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Your reading an open letter to Western politicians on Russia Editor,
Michael Murphy CFA
Founding Editor
New World Investor
All Recommendations
Priced 5/9/24. Check out the complete Portfolio page HERE.
Portfolio Protection
June 21 SPY $505 put (SPY240621P00505000 – $3.04)
June 21 SPY $410 put (SPY240621P00410000 – $0.17)
Buys
These are the stocks everyone needs to own because transformative events are happening over the next year or two, and I expect to hold them long-term.
Tech Dominators
Apple Computer (AAPL – $184.57) – Buy under $175 for new iPhones
Corning (GLW – $34.20) – Buy under $33, target price $60
Gilead Sciences (GILD – $64.58) – Buy under $80, target price $120
Meta (META – $475.42) – Buy under $345, target price $400
PayPal (PYPL – $64.45) – Buy under $68, target price $136
SoftBank (SFTBY – $25.38) – Buy under $25, target price $50
Small Tech
Enovix (ENVX – $9.14) – Buy under $20; 4-year hold to $100+
First Trust NASDAQ Cybersecurity ETF (CIBR – $54.48) – Buy under $40; 3- to 5-year hold
Fastly (FSLY – $8.55) – Buy under $14; 3- to 5-year hold to $80+
PagerDuty (PD – $19.77) – Buy under $30; 2- to 5-year hold
QuickLogic (QUIK – $12.63) – Buy under $10, target price $40
Rocket Lab (RKLB – $4.26) – Buy under $13, target price $30+
Velo3D (VLD – $0.23) – Buy under $1, target price $10
$20-for-$1 Biotech
AbCellera Biologics (ABCL – $3.95) – Buy under $6, target $30+
Akebia Biotherapeutics (AKBA – $1.33) – Buy under $2, target $20
Aptose Biosciences (APTO – $1.23) – Buy under $10, ultimate target $300
Compass Pathways (CMPS – $8.54) – Buy under $20, hold a long time for a 10x return
Editas Medicines (EDIT – $5.56) – Buy under $6 for a double in 12 months and a long-term hold to much higher prices
Inovio (INO – $11.18) – Buy under $14, hold a long time
Medicenna (MDNAF – $2.00) – Buy under $3, first target $20, then maybe $40
ScyNexis (SCYX – $1.88) – Buy under $3, target price $20, then $50
TG Therapeutics (TGTX – $16.92) – Buy under $12 for buyout at $30+
Inflation
A Short-Sale or REO House – ($415,400) – Hold
Bag of Junk Silver – ($28.55) – hold through silver bull market
Sprott Gold Miners ETF (SGDM – $27.73) – Buy under $28, target price $50
Sprott Junior Gold Miners ETF (SGDJ – $33.97) – Buy under $39, target price $100
Sprott Physical Gold and Silver Trust (CEF – $21.98) – Buy under $18, target price $30
Global X Silver Miners ETF (SIL – $33.44) – Buy under $30, target price $50
Coeur Mining (CDE – $5.49) – Buy under $5, target price $20
First Majestic Mining (AG – $7.48) – Buy under $11, next target price $23
Paramount Gold Nevada (PZG – $0.46) – Buy under $1, first target price $10
Sandstorm Gold (SAND – $5.72) – Buy under $10, target price $25
Sprott Inc. (SII – $42.00) – Buy under $40, target price $70
Cryptocurrencies
Bitcoin (BTC-USD – $62,562.48) – Buy
iShares Bitcoin Trust (IBIT – $35.58) – Buy
Ethereum (ETH-USD – $3,025.40) – Buy
Grayscale Ethereum Trust (ETHE – $21.57) – Buy
Commodities
Crude Oil Futures – July 2026 (CLN26.NYM – $69.29) – Buy under $70; $200+ target
United States 12 Month Oil Fund, LP (USL – $39.31) – Buy under $40; $100+ target
Vermilion Energy (VET – $12.19) – Buy under $11; $24 target
EQT (EQT – $40.02) – Buy under $35; $70 first target
Energy Fuels (UUUU – $6.15) – Buy under $8; $30 target
Freeport McMoRan (FCX – $51.08) – Buy under $44; $65 target within two years
Other Recommendations
Acreage Holdings (ACRDF – $0.46) – Buy under $2 for the Canopy Growth merger
Hold
These are holds but not sells – yet. They could get moved back to one of the buy categories if their prices drop or outlook improves, or they could become sell recommendations in the future.
Arch Therapeutics (ARTH – $1.04) – Hold for buyout
Mongolia Growth Group (MNGGF – $1.03) – Hold for probable liquidation
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1st
Pertaining to a close on NVTAQ,the rule of investing is to invest long 3 to 5 years,that’s what a lot of us were planning on doing this ,as in March of 2021 they were supposedly doing everything right,as so you sold that to us,don’t miss out on this..trading around 40 on the way to becoming The Amazon of genetic testing , hopefully when you sitting drinking your morning brew maybe nvtaq will come to mind,maybe just once you could say something like man guys I sure apologize for nvtaq,I missed something,amen
And to anyone who feels that was a little snarly I do apologize,have a blessed day
Only spoke the truth
I did miss something, which was the outsized effect the Fed’s rate increases would have on development-stage companies.I apologize for that. I still expect NVTA to become the Amazon of genetic testing.
Nvtaq becoming the Amazon of genetic testing now doesn’t mean squat to most of the investors on this forum who have lost so much from this pick,it’s sad you would say that
Hey please if you time show us 5 other companies that went from 40.00 a share in March of 21 to zero like nvtaq did due to the fed tx have a good day
MM – is the 50% increase in revs QUIK is expected to report above expectations? Will this be a stock price moving earnings and do you recommend buying ahead?
It was an OK quarter. QUIK is going to have a great 3 to 5 year run, but I’d stick to the $10 buy limit.
SCYX
MM which of the formulations will allow ibrexifungerp to be used in hospital settings and when might we expect that to happen. will they need fda approval first?
FURI and CARES are done with data to GSK by June 30. They will need FDA approval, probably in mid-2025, and are targeting very specific uses. MARIO is not done but should be completed by yearend. Also needs FDA approval, probably in early 2026.
MM and anyone else, AKBA had their conf call the other day and the SP has gone done ever since. It seems their dates for positive movement have been delayed as well. I thought this would have been addressed on this week’s Report, but it might have missed the deadline. Can you please take a look and and provide thought?
Most likely after that earnings report and being as bad as it was,good possibility we could retrace the 52 low of 79 cents nothing positive coming until 2025 but who knows
They aren’t going to launch until they have TDAPA approval. Everyone including me thought that would come in September, but they can’t apply until June so approval comes in January. They will pre-launch until then and I expect a very fast take-up, especially in the big clinics. So the traders and anyone who thinks a four-month delay means anything bailed. It’s a strong buy.
Michael, I was looking for the “basic write-up” on Palantir in today’s letter that u said you were going to do in yesterday’s Flash Alert, or was the Bloomberg write-up yesterday all u intended to do?
Coming. I was swamped by earnings reports.
Invite, great stock, leader in its field, no debt . No word, bankrupt. WTH?? !!!
No debt?
APTO – “They are going to do a through update on the triplet path to an approved product.”
FDA approval for the triplet is years off and whatever timeframe APTO provides will almost certainly stretch out over time given their history to date.
What’s far more important at this point is how they plan on funding continuing operations over the next several years given the huge amount of funding that it’ll take to move the triplet trials along.
Hanmi was able to acquire 19.99% of APTO in the last half year for a measly $7 million investment. So how does APTO raise far larger sums without massive dilution or giving the vast majority of the revenue stream away?
Already down 93% since recommendation, it’s hard to see how this bio-wreck ends well for any current investors.
I agree. They have to partner.
SCYX
MM please explain why Scynexis is now garnering so much attention when it is facing competition from a small biotech (MTNB) which is about to start a Phase III trial with reformulated Amphotericin B delivered through its proprietary LNC system which has delivered compassionate use cure success to this date. Granted, they have 250+ million shares outstanding,against the wall with funds, and a market cap based on 17 cents per share and importantly no major pharma support. However, that is about to change and active discussions are ensuing. The big question—-SHOULD WE BE WORRIED? Please, not another NVTA.
My main concern with MTNB is that phase 3 has been in planning for over a year. Probably the main problem is financing. Do you have any info that they now have funding and are about to start phase 3? With Chris’ recommendation of ACXP, the science is excellent, but funding for phase 3 is in question, so the stock has had big declines while we are waiting. MTNB may be analogous to ACXP with great science, and SCYX has association with GSK for funding, even if Brexa is a mediocre drug and SCY 247 only has speculative promise. I’ve heard the same promises of ACXP CEO Luci about discussions, but no results on funding so far. MTNB may have a similar problem.
I am sufficiently wary of SCYX so I decided not to add at $1.50 because I already have too much money in it. It is almost $2 and may go up to $2.50 when the FDA lifts the clinical hold on Brexa. After that, the stock is a mere speculation.
I just read the transcript of the MTNB CC on 5/10/24. CEO Jerome Jabbour is a lot more convincing than CEO lying lawyer Luci of ACXP. Luci has used glib phrases on a low level marketing organization, New to the Street. Luci didn’t reveal any details, and merely said “I have spoken to the buyer.” What BS. But Jabbour reveals the complexities of the negotiation process with partners to assess the benefits of any deal to his company. Phase 3 for MAT 2203 is projected to start in Nov 2024. Amphotericin is a wide spectrum anti fungal. It would be great if the LNC oral formulation greatly lower its risks while preserving efficacy of the IV form. I also like the concept of compassionate use for ill patients. The actual material costs of most drugs are minimal, and compassionate use generates wonderful goodwill from good outcomes that would support good partnerships. And MTNB is doing work with their LNC formulations of cancer chemotherapy drugs to mitigate their side effects while preserving efficacy. If MAT 2203 doesn’t work out, their LNC platform for other important drugs will be important.
All this is in contrast to SCYX’s CEO, an Italian MD who speaks broken English, and a medical team that I don’t have much respect for. SCYX is presently a one trick pony with a mediocre Brexa drug for recurrent VVC. We’ll see how Brexa works for serious candida infections when the results of FURI, CARES, etc. are known soon. SCY 247 is a far off speculation.
It remains for MM to do a financial evaluation of MTNB, a worthy company from the medical prospects.
MM? Thanks.
Have not spoken with their pr people but it is reasonable to assume that funding may come soon when they state that active discussions are taking place presumably with big pharma and in light of there success with compassionate care usage. There may be room for more than one drug. I have hedged my bet with SCYX by picking up shares ofMTNB.My money remains with SCYX for two reasons, money/GSK and FDA politics, as you are aware voting members often move on too cushy positions with big pharma with big pay and plenty of stock options
Zman, what is the next share price catalyst for SCYX and how much of a move do you expect from it, thx for the insight
Not sure which formulation will be the best for widespread hospital use. Not sure if formulation under current study can target hospitals ( if that is the case then expanded label use should influence share price rather nicely) or whether MM is referring to the development of SCY-247. In any case,the price has crossed $2 and I agree with JGMD that $2.50 is a reasonable target for current usage. However, I expect that the release of the studies and the lift of the hold by the FDA may carry the share price higher. I wish MM would weigh in on this, it would be helpful. I will lighten a little at $2.50. Prior trading carried the share price to $3.87 on hype alone. Hope this helps.
I’m not talking about -247, which is a ways away. The MARIO trial will be for widespread hospital use, but both FURI and CARES are big enough markets to interest GSK.
Thanks for this clarification. What is your evaluation of the Mario study and will they need to file something with the FDA if successful?
Next catalyst is delivery of trial results to GSK.
Sounds hopeful for MTNB. (However, Luci of ACXP has been saying the same thing–discussions are going on, but no results after over a year. Same political problem–ACXP’s drug is better than the standard of care, vancomycin, and BP wants to suppress it.). The real results with compassionate use should help. If they get funding for phase 3, MTNB is in a much better scientific position than SCYX. Even if SCY247 is better than MAT 2203, it will be a few years behind MAT 2203.
In the meantime, GSK sees potential here, particularilyl withsomething like the MARIO study the essence of which follows (from their website):MARIO is an innovative study to investigate oral ibrexafungerp as a potential step-down antifungal therapy following IV echinocandin for these life-threatening infections.
If successful, the MARIO study will give healthcare providers the opportunity to step-down their patients to a non-azole oral therapy that retains the MOA (glucan synthase inhibition) of the IV-only echinocandins, which are the gold standard for treatment of Candida infections, potentially allowing for faster discharge from the hospital. This won’t take as long.MM has his target at $20, that is reasonable. GSK will easily pay up if this is successful.
I think that the backing of big pharma is in most cases the horse to bet on, even if it’s not the best drug out there. Do I think Jabbour is lying ? Companies seem to be full of wishful thinking. MTNB has collaberated with Bio enTech and their proprietary LNC delivery system has the latter very excited about its potential. So maybe they will back PhaseIII. will hold MTNB for the same potential.
Perhaps oral Brexa will yield better results in the trials for serious infections we are awaiting, compared to for recurrent VVC. I am scornful of the protocol of using 1 day treatment of VVC with either Brexa or fluconazole. Serious MD’s use long courses of azoles as needed. (The most common anti fungal treatment program is for toenail fungus. Lamisil is used daily for at least 3 months, because the penetration into the nail bed is low. Most people of both sexes have toenail fungus, and many try the oral Lamisil.) The problem is that MD’s dumb down their patients and lower their therapeutic standards when they acquiesce to the lazy patients’ desires for 1 day convenience. If Brexa were used in longer courses for recurrent VVC, we might see superbly low rates of recurrence. After all, the reservoir of candida is the GI tract, so longer treatment is better. The cost of pills is negligible, so a 10 day course would be minimally greater than the 1 day course. I don’t know the duration of Brexa for the FURI and other trials we are awaiting. Perhaps they did these trials properly.
Absolutely right. Fungicdal or fungistatic with a short duration of treatment does not tell us anything if fungus remains. Hopefully better use will reveal a better product. I really don’t understand why duration of treatment is not factored into these studies. One day is definitely too short for a treatment regimen.
Unfortunately, for many years the trend is to give high doses in 1 day rather than smaller continuous doses over many days. Several decades ago, the macrolide antibiotic Biaxin came out to treat common respiratory bacterial infections. It was given for 10 days. Around the same time, a competitor macrolide Zithromax came out. Zithromax has a long half life, so a 3 day treatment was supposedly equivalent to a 10 day treatment with Biaxin. The common Z pak of Zithromax is much more popular than Biaxin. For certain sexually transmitted diseases, other antibiotics are used in massive doses for 1 day when originally they were approved at smaller doses over a week or so. The impetus for this short duration treatments is the fact that many patients are lazy and often can’t be trusted to complete a longer course. This has gotten worse with the advent of ubiquitous cell phones. It is hard to find people that are interested in deep conversations because of the prevailing short attention span of the phone addicts. Pop music hits are about 3 min. Even many classical music stations play only a 5-10 min movement at a time, instead of the entire 30-45 min piece which is best appreciated in its whole totality.
I hope that the Brexa trials, FURI, CARES, NATURE, SCYNERGIA, VANQUISH used proper longer duration protocols of treatment of serious candida infections than for VVC.
Today, I studied more about the FURI and CARES trials. I’ve upgraded my opinion about Brexa, based on reading more detailed info about the FURI and CARES phase 3 trials already completed. Results to be released by end of June. FURI had 233 patients with several serious fungal infections (not just candida) enrolled. Importantly, the protocol involved 180 day treatment with Brexa alone, and optional treatment beyond 180 days with a combination of Brexa and other approved anti-fungals. CARES had 30 patients with serious candida auris infections enrolled. The protocol was 90 days treatment with Brexa. Of much less interest to me are the other completed trials–NATURE, SCYNERGIA, VANQUISH. These are for VVC. Sales of Brexa for VVC have been mediocre.
More extended treatment with Brexa will likely produce better results in serious infections than very short treatment for VVC. It’s not clear to me why SCY 247 is assumed to be better than SCY 078 (Brexa). They both have the same MOA. Maybe the main benefit of SCY 247 is that SCYX hasn’t yet given away most of the revenue to GSK as it did for Brexa.
Unfortunately, I should have studied more about the FURI and CARES trials a while ago, and would have bought more shares a month ago if I had done so. For now, I am just holding, but won’t buy more at current prices of $2.61.
Had wondered the same & copied the info below from a SCYX presentation or filing.
Theoretical SCY-247 advantages over ibrexafungerp are:
(1) a lower molecular weight, allowing better central nervous system penetration (ibrexafungerp shows a minimal distribution to central nervous system tissues),
(2) theoretically better oral bioavailability due to smaller molecular weight, and
(3) suitability for effective and simple IV formulation (a major advantage for use in the inpatient setting)
Thanks. Sounds hopeful for SCY 247. Another factor is lipid solubility. The brain is mostly fat. Does Brexa or 247 have better lipid solubility? Serious fungal infections involve the whole body, so we don’t know which one would be more effective in any particular organ. Size matters, but sometimes it is better to be small, and other times it is better to be larger. For LDL cholesterol, smaller LDL particles damage the blood vessel endothelium more than large LDL particles. The small LDL particles penetrate and accumulate in the vessel, but much less so for large LDL particles. So many factors, and we’ll have to wait several years before we find out about 247’s advantages over Brexa. Meanwhile, there is hope for Brexa in serious fungal infections, and we’ll know soon.
I searched pubmed.org using “echinocandins vs amphotericin” . More articles to read, but so far it seems that they both have comparable efficacy, although echinocandins have less toxicity. Liposomal forms of amphotericin do have less risk of toxicity than nonlipo forms, with odds ratios about 0.4. At this point, MAT 2203 and SCY 247 might be competitive. For Brexa, I am lukewarm, unless the trials for serious candida infections were done better than the crummy trials in VVC. It is reasonable to hold positions in both stocks.
Thanks JG. Remember…. it’s not about the science, it’s the politcs
You’re right. I upgraded my opinion about Brexa just above at 12:40 PM today. Do you know why SCY 247 is predicted to be better than SCY 078 (Brexa)?
Amphotericin mostly is fungistatic, not fungicidal like ibrexafungerp. I’m not likely to recommend any more development-stage biotechs here. For whatever reason, I’m not as good as I thought I was at predicting FDA approval, and I don’t think most subscribers have the required venture capital mindset to buy more on financing dips.
Brexa has only a small advantage over fluconazole for recurrent VVC. So much for Brexa being fungicidal. The fact is that amphotericin in the IV form is the standard of care for serious fungal infections. SCY 247 is a wild card, totally speculative. MAT 2203 is an improved version of amphotericin, assuming that liposomal delivery brings the benefits without the risks of IV amphotericin. I don’t expect that IV Brexa will touch IV amphotericin or even the LNC form of amphotericin which is MAT 2203. Oral Brexa, no way it approaches IV amphotericin.
The main bearish case for MTNB is that it is a tiny company without Big Pharma connections. BP wants to bury better competing products and technologies. So MTNB will have more difficulty getting funding than SCYX, which is connected to GSK. CEO Jabbour claims that phase 3 is targeted to start Nov 2024. Is he lying?
I have bought a few shares of MTNB. My money remains on SCYX because of GSK support and the politics of the FDA voting members. I don’t think they hide their aspirations for board seats and stock options with big pharma.
saw plenty of examples of this during covid pandemic and the race for an approved vaccine. Burned and burned badly.
SCYX is up over 11% so far today. I can find no reason for the big jump.
VLD: BRIEF-Velo3D Files Prospectus For Offer And Sale By Selling Stockholders Of Up To 21.95 Mln Shares.This should be interesting – earnings will be out after the close on Wednesday.
I don’t understand that S-3 from last PM. AH it dropped to 21.25 cents as someone thought it meant dilution. But it wasn’t.
https://investorplace.com/2024/05/palantir-stock-sell-alert-why-pltr-has-further-to-fall/
What did anyone think about the earnings for vld,anyone
I liked what I heard and read. Guidance for 30% sequential growth is great news. Hopefully, this means continual growth over many quarters. Hopefully MM does a thorough financial analysis of profit margins, opex, etc in tonight’s RR.
Tx,thought the same
New World Investor for 5.16.24 is posted.