Month: July 2023

Release – Tonix Pharmaceuticals Announces Enrollment Initiated in the MGH Phase 2 ‘STROBE’ Study of TNX-1900 (Intranasal Potentiated Oxytocin) for the Treatment of Binge-Eating Disorder

Posted on by aweinsoff@channelchek.com

Research News and Market Data on TNXP

July 31, 2023 7:00am EDT

Preliminary Data Show that Oxytocin Decreases Impulsivity and Reduces Food Intake

TNX-1900 (Intranasal Potentiated Oxytocin) May Serve as a Novel Neuroendocrine Treatment for Binge-Eating Disorder

CHATHAM, N.J., July 31, 2023 (GLOBE NEWSWIRE) — Tonix Pharmaceuticals Holding Corp. (Nasdaq: TNXP) (Tonix or the Company), a clinical-stage biopharmaceutical company, today announced that the first participant was enrolled in the investigator-initiated Phase 2 Study of The Results of Oxytocin in Binge Eating ‘STROBE’ study of TNX-1900 (intranasal potentiated oxytocin) for the treatment of binge-eating disorder at the Massachusetts General Hospital (MGH). The aim of the study is to investigate the efficacy and safety of TNX-1900 as a novel therapeutic agent to reduce binge eating frequency in adults with binge-eating disorder. Tonix is supporting the STROBE study through a clinical trial agreement with MGH. MGH is the sponsor of the trial, which is being conducted under an investigator-initiated investigational new drug (IND) application.

The 8-week double-blind, placebo-controlled trial has a target enrollment of at least 60 participants 18-45 years old with binge-eating disorder.

“Binge-eating disorder is identified as a reduced ability to control behavioral impulses and formed habits, disrupting the regulation of food intake and energy balance,”1-4 said Seth Lederman, M.D., Chief Executive Officer of Tonix Pharmaceuticals. “While existing treatment options may produce remission from binge eating in some cases, up to 50% of patients continue to engage in binge eating.”5-7

Elizabeth A. Lawson, M.D., M.M.Sc., Director, Interdisciplinary Oxytocin Research Program in the Neuroendocrine Unit, Department of Medicine, Massachusetts General Hospital and principal investigator of the study added, “Individuals with binge-eating disorder experience loss of control over eating that is thought to be driven by increased hedonic drive to eat as well as impulsivity.8-10 The oxytocin system has been linked to likelihood of lifetime binge eating in women11, and our preliminary studies of intranasal oxytocin at the dose used in this trial show that oxytocin modulates areas of the brain responsible for hedonic eating and impulse control12, improves impulsivity13, and reduces caloric intake.14 The goal of the STROBE study is to assess whether 8 weeks intranasal administration of oxytocin will decrease binge eating frequency by lowering the drive to eat and improving impulse control.”

About the Phase 2 STROBE Study

The Phase 2 STROBE study is a randomized, double blind, placebo-controlled study to evaluate the efficacy and safety of TNX-1900 for the treatment of binge-eating disorder in adults. The 8-week trial has a target enrollment of at least 60 participants 18-45 years old with binge-eating disorder. Subjects will be randomized to receive TNX-1900 or placebo and will be studied at Massachusetts General Hospital. Subjects will self-administer TNX-1900 or placebo as two sprays total (one spray in each nostril) up to four times per day for 8 weeks. The primary endpoint is 8-week change from baseline in binge frequency.

For more information, see ClinicalTrials.gov Identifier: NCT05664516

About Binge Eating Disorder

Binge-eating disorder (BED) is a psychiatric illness characterized by frequent episodes of uncontrollable consumption of large amounts of food. It is the most common eating disorder and often leads to obesity-associated complications and later psychopathology15. BED is characterized by increased homeostatic appetite and sensitivity to reward (including food reward)16, which may lead to initiation of binge episodes, and a reduced ability to control behavioral impulses and formed habits, creating an imbalance in the sensitive interplay between these bottom-up and top-down processes governing the adaptive regulation of food intake and energy balance1-4.

About TNX-1900

TNX-1900 (intranasal potentiated oxytocin) is a proprietary formulation of oxytocin in development as a candidate for prevention of chronic migraine and other conditions. In 2020, TNX-1900 was acquired from Trigemina, Inc. who had licensed the technology underlying the composition and method from Stanford University. TNX-1900 is a drug-device combination product, based on an intranasal actuator device that delivers oxytocin into the nasal cavity. Oxytocin is a naturally occurring human peptide hormone that also acts as a neurotransmitter in the brain. Oxytocin has no recognized addiction potential. It has been observed that low oxytocin levels in the body are associated with increases in migraine headache frequency, and that increased oxytocin levels are associated with fewer migraine headaches. Certain other chronic pain conditions are also associated with decreased oxytocin levels. Migraine attacks are caused, in part, by the activity of pain-sensing trigeminal neurons which, when activated, release of calcitonin gene-related peptide (CGRP) which binds to receptors on other nerve cells and starts a cascade of events that is believed to result in headache. Oxytocin when delivered via the nasal route, concentrates in the trigeminal system17 resulting in binding of oxytocin to receptors on neurons in the trigeminal system, inhibiting the release of CGRP and transmission of pain signals returning from the site of CGRP release.18 Blocking CGRP release is a distinct mechanism compared with CGRP antagonist and anti-CGRP antibody drugs, which block the binding of CGRP to its receptor. With TNX-1900, the addition of magnesium to the oxytocin formulation enhances oxytocin receptor binding19 as well as its inhibitory effects on trigeminal neurons and resultant craniofacial analgesic effects, as demonstrated in animal models20. Intranasal oxytocin has been shown to be well tolerated in several clinical trials in both adults and children21. Targeted nasal delivery results in low systemic exposure and lower risk of non-nervous system, off-target effects, which could potentially occur with systemic CGRP antagonists such as anti-CGRP antibodies22. For example, CGRP has roles in dilating blood vessels in response to ischemia, including in the heart. The Company believes nasally targeted delivery of oxytocin could translate into selective blockade of CGRP release from neurons in the trigeminal ganglion and not throughout the body, which could be a potential safety advantage over systemic CGRP inhibition. In addition, daily dosing is more rapidly reversible, in contrast to monthly or quarterly dosing, as is the case with anti-CGRP antibodies, giving physicians and their patients greater control. In addition to chronic migraine, TNX-1900 will be developed for treatment of episodic migraine, binge eating disorder, craniofacial pain conditions, and insulin resistance. Tonix also has a license with the University of Geneva to use TNX-1900 for the treatment of insulin resistance and related conditions.

About TNX-2900

TNX-2900 is another intranasal potentiated oxytocin-based therapeutic candidate, being developed for the treatment of Prader-Willi syndrome, or PWS. The technology for TNX-2900 was licensed from the French National Institute of Health and Medical Research. PWS, an orphan condition, is a rare genetic disorder of failure to thrive in infancy, associated with uncontrolled appetite later in childhood.

1Dawe S and Loxton NJ. Neurosci Biobehav Rev. 2004; 28(3):343-351
2Giel KE, et al. Nutrients. 2017; 9(11)
3Hernandez D, et al. Obesity (Silver Spring). 2019; 27(4):629-635
4Schag K, et al. Obes Rev. 2013; 14(6):477-495
5Hilbert A, et al. Int J Eat Disord. 2020; 53(9):1353-1376
6Reas DL and Grilo CM. Expert Opin Emerg Drugs. 2014; 19(1):99-142
7Wilson GT. Psychiatr Clin North Am. 2011; 34(4):773-783
8Giel KE, et al. Nutrients. 2017. 9(11)
9Hernandez D, et al. Obesity (Silver Spring). 2019. 27(4):629-635
10Schag K, et al. Obes Rev. 2013. 14(6):477-95
11Micali N, et al. Eur Eat Disord Rev. 2017; 25(1):19-25
12Plessow F, et al. Neuropsychopharmacology. 2018. 43(3):638-645
13Plessow F, et al. Obesity (Silver Spring), 2021. 29(1):56-61
14Lawson EA, et al. Obesity (Silver Spring). 2015; 23(5):950-956
15Field A, et al. Pediatrics. 2012; 130 (2):e289–e295
16Bulik CM, et al. Nature Neuroscience. 2022. 25(5):543-554
17Yeomans DC, et al. Transl Psychiatry. 2021. 11(1):388
18Tzabazis A, et al. Cephalalgia. 2016. 36(10):943-50
19Antoni FA and Chadio SE. Biochem J. 1989. 257(2):611-4
20Cai Q, et al. Psychiatry Clin Neurosci. 2018. 72(3):140-151
21Yeomans, DC et al. 2017. US patent US2017368095
22MaassenVanDenBrink A, et al. Trends Pharmacol Sci. 2016. 37(9):779-788

Tonix Pharmaceuticals Holding Corp.*

Tonix is a biopharmaceutical company focused on commercializing, developing, discovering and licensing therapeutics to treat and prevent human disease and alleviate suffering. Tonix markets Zembrace® SymTouch® (sumatriptan injection) 3 mg and Tosymra® (sumatriptan nasal spray) 10 mg. Zembrace SymTouch and Tosymra are each indicated for the treatment of acute migraine with or without aura in adults. Tonix’s development portfolio is composed of central nervous system (CNS), rare disease, immunology and infectious disease product candidates. Tonix’s CNS development portfolio includes both small molecules and biologics to treat pain, neurologic, psychiatric and addiction conditions. Tonix’s lead CNS candidate, TNX-102 SL (cyclobenzaprine HCl sublingual tablet), is in mid-Phase 3 development for the management of fibromyalgia, nearing complete enrollment in a potentially registration-enabling study, with topline data expected in the fourth quarter of 2023. TNX-102 SL is also being developed to treat Long COVID, a chronic post-acute COVID-19 condition. Enrollment in a Phase 2 study has been completed, and topline results are expected in the third quarter of 2023. TNX-601 ER (tianeptine hemioxalate extended-release tablets), a once-daily formulation being developed as a treatment for major depressive disorder (MDD), is nearing complete enrollment with topline results expected in the fourth quarter of 2023. TNX-4300 (estianeptine) is a small molecule oral therapeutic in preclinical development to treat MDD, Alzheimer’s disease and Parkinson’s disease. TNX-1900 (intranasal potentiated oxytocin), in development for chronic migraine, is currently enrolling with topline data expected in the fourth quarter of 2023. TNX-1300 (cocaine esterase) is a biologic designed to treat cocaine intoxication and has been granted Breakthrough Therapy designation by the FDA. A Phase 2 study of TNX-1300 is expected to be initiated in the third quarter of 2023. Tonix’s rare disease development portfolio includes TNX-2900 (intranasal potentiated oxytocin) for the treatment of Prader-Willi syndrome. TNX-2900 has been granted Orphan Drug designation by the FDA. Tonix’s immunology development portfolio includes biologics to address organ transplant rejection, autoimmunity and cancer, including TNX-1500, which is a humanized monoclonal antibody targeting CD40-ligand (CD40L or CD154) being developed for the prevention of allograft rejection and for the treatment of autoimmune diseases. A Phase 1 study of TNX-1500 is expected to be initiated in the third quarter of 2023. Tonix’s infectious disease pipeline includes TNX-801, a vaccine in development to prevent smallpox and mpox. TNX-801 also serves as the live virus vaccine platform or recombinant pox vaccine platform for other infectious diseases. The infectious disease development portfolio also includes TNX-3900 and TNX-4000, classes of broad-spectrum small molecule oral antivirals.

*Tonix’s product development candidates are investigational new drugs or biologics and have not been approved for any indication.

Tonix Medicines has contracted to acquire the Zembrace SymTouch and Tosymra registered trademarks. Intravail is a registered trademark of Aegis Therapeutics, LLC, a wholly owned subsidiary of Neurelis, Inc.

This press release and further information about Tonix can be found at www.tonixpharma.com.

Forward Looking Statements

Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “forecast,” “estimate,” “expect,” and “intend,” among others. These forward-looking statements are based on Tonix’s current expectations and actual results could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks related to the failure to obtain FDA clearances or approvals and noncompliance with FDA regulations; risks related to the failure to successfully market any of our products; risks related to the timing and progress of clinical development of our product candidates; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government or third party payor reimbursement; limited research and development efforts and dependence upon third parties; and substantial competition. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. Tonix does not undertake an obligation to update or revise any forward-looking statement. Investors should read the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission (the “SEC”) on March 13, 2023, and periodic reports filed with the SEC on or after the date thereof. All of Tonix’s forward-looking statements are expressly qualified by all such risk factors and other cautionary statements. The information set forth herein speaks only as of the date thereof.

Investor Contact

Jessica Morris
Tonix Pharmaceuticals
investor.relations@tonixpharma.com
(862) 904-8182

Peter Vozzo
ICR Westwicke
peter.vozzo@westwicke.com
(443) 213-0505

Media Contact

Ben Shannon
ICR Westwicke
ben.shannon@westwicke.com
(919) 360-3039

Zembrace® SymTouch® (sumatriptan Injection):   IMPORTANT SAFETY INFORMATION

Zembrace SymTouch (Zembrace) can cause serious side effects, including heart attack and other heart problems, which may lead to death. Stop use and get emergency help if you have any signs of a heart attack:

  • discomfort in the center of your chest that lasts for more than a few minutes or goes away and comes back
  • severe tightness, pain, pressure, or heaviness in your chest, throat, neck, or jaw
  • pain or discomfort in your arms, back, neck, jaw or stomach
  • shortness of breath with or without chest discomfort
  • breaking out in a cold sweat
  • nausea or vomiting
  • feeling lightheaded

Zembrace is not for people with risk factors for heart disease (high blood pressure or cholesterol, smoking, overweight, diabetes, family history of heart disease) unless a heart exam shows no problem.

Do not use Zembrace if you have:

  • history of heart problems
  • narrowing of blood vessels to your legs, arms, stomach, or kidney (peripheral vascular disease)
  • uncontrolled high blood pressure
  • hemiplegic or basilar migraines. If you are not sure if you have these, ask your provider.
  • had a stroke, transient ischemic attacks (TIAs), or problems with blood circulation
  • severe liver problems
  • taken any of the following medicines in the last 24 hours: almotriptan, eletriptan, frovatriptan, naratriptan, rizatriptan, ergotamines, dihydroergotamine.
  • are taking certain antidepressants, known as monoamine oxidase (MAO)-A inhibitors or it has been 2 weeks or less since you stopped taking a MAO-A inhibitor. Ask your provider for a list of these medicines if you are not sure.
  • an allergy to sumatriptan or any of the components of Zembrace

Tell your provider about all of your medical conditions and medicines you take, including vitamins and supplements.

Zembrace can cause dizziness, weakness, or drowsiness. If so, do not drive a car, use machinery, or do anything where you need to be alert.

Zembrace may cause serious side effects including:

  • changes in color or sensation in your fingers and toes
  • sudden or severe stomach pain, stomach pain after meals, weight loss, nausea or vomiting, constipation or diarrhea, bloody diarrhea, fever
  • cramping and pain in your legs or hips; feeling of heaviness or tightness in your leg muscles; burning or aching pain in your feet or toes while resting; numbness, tingling, or weakness in your legs; cold feeling or color changes in one or both legs or feet
  • increased blood pressure including a sudden severe increase even if you have no history of high blood pressure
  • medication overuse headaches from using migraine medicine for 10 or more days each month. If your headaches get worse, call your provider.
  • serotonin syndrome, a rare but serious problem that can happen in people using Zembrace, especially when used with anti-depressant medicines called SSRIs or SNRIs. Call your provider right away if you have: mental changes such as seeing things that are not there (hallucinations), agitation, or coma; fast heartbeat; changes in blood pressure; high body temperature; tight muscles; or trouble walking.
  • hives (itchy bumps); swelling of your tongue, mouth, or throat
  • seizures even in people who have never had seizures before

The most common side effects of Zembrace include: pain and redness at injection site; tingling or numbness in your fingers or toes; dizziness; warm, hot, burning feeling to your face (flushing); discomfort or stiffness in your neck; feeling weak, drowsy, or tired.

Tell your provider if you have any side effect that bothers you or does not go away. These are not all the possible side effects of Zembrace. For more information, ask your provider.

This is the most important information to know about Zembrace but is not comprehensive. For more information, talk to your provider and read the Patient Information and Instructions for Use. You can also visit www.upsher-smith.com or call 1-888-650-3789.

You are encouraged to report adverse effects of prescription drugs to the FDA. Visit www.fda.gov/medwatch, or call 1-800-FDA-1088.

INDICATION AND USAGE

Zembrace is a prescription medicine used to treat acute migraine headaches with or without aura in adults who have been diagnosed with migraine.

Zembrace is not used to prevent migraines. It is not known if it is safe and effective in children under 18 years of age.

Tosymra® (sumatriptan nasal spray): IMPORTANT SAFETY INFORMATION

Tosymra can cause serious side effects, including heart attack and other heart problems, which may lead to death. Stop Tosymra and get emergency medical help if you have any signs of heart attack:

  • discomfort in the center of your chest that lasts for more than a few minutes or goes away and comes back
  • severe tightness, pain, pressure, or heaviness in your chest, throat, neck, or jaw
  • pain or discomfort in your arms, back, neck, jaw, or stomach
  • shortness of breath with or without chest discomfort
  • breaking out in a cold sweat
  • nausea or vomiting
  • feeling lightheaded

Tosymra is not for people with risk factors for heart disease (high blood pressure or cholesterol, smoking, overweight, diabetes, family history of heart disease) unless a heart exam is done and shows no problem.

Do not use Tosymra if you have:

  • history of heart problems
  • narrowing of blood vessels to your legs, arms, stomach, or kidney (peripheral vascular disease)
  • uncontrolled high blood pressure
  • severe liver problems
  • hemiplegic or basilar migraines. If you are not sure if you have these, ask your healthcare provider.
  • had a stroke, transient ischemic attacks (TIAs), or problems with blood circulation
  • taken any of the following medicines in the last 24 hours: almotriptan, eletriptan, frovatriptan, naratriptan, rizatriptan, ergotamines, or dihydroergotamine. Ask your provider if you are not sure if your medicine is listed above.
  • are taking certain antidepressants, known as monoamine oxidase (MAO)-A inhibitors or it has been 2 weeks or less since you stopped taking a MAO-A inhibitor. Ask your provider for a list of these medicines if you are not sure.
  • an allergy to sumatriptan or any ingredient in Tosymra

Tell your provider about all of your medical conditions and medicines you take, including vitamins and supplements.

Tosymra can cause dizziness, weakness, or drowsiness. If so, do not drive a car, use machinery, or do anything where you need to be alert.

Tosymra may cause serious side effects including:

  • changes in color or sensation in your fingers and toes
  • sudden or severe stomach pain, stomach pain after meals, weight loss, nausea or vomiting, constipation or diarrhea, bloody diarrhea, fever
  • cramping and pain in your legs or hips, feeling of heaviness or tightness in your leg muscles, burning or aching pain in your feet or toes while resting, numbness, tingling, or weakness in your legs, cold feeling or color changes in one or both legs or feet
  • increased blood pressure including a sudden severe increase even if you have no history of high blood pressure
  • medication overuse headaches from using migraine medicine for 10 or more days each month. If your headaches get worse, call your provider.
  • serotonin syndrome, a rare but serious problem that can happen in people using Tosymra, especially when used with anti-depressant medicines called SSRIs or SNRIs. Call your provider right away if you have: mental changes such as seeing things that are not there (hallucinations), agitation, or coma; fast heartbeat; changes in blood pressure; high body temperature; tight muscles; or trouble walking.
  • hives (itchy bumps); swelling of your tongue, mouth, or throat
  • seizures even in people who have never had seizures before

The most common side effects of Tosymra include: tingling, dizziness, feeling warm or hot, burning feeling, feeling of heaviness, feeling of pressure, flushing, feeling of tightness, numbness, application site (nasal) reactions, abnormal taste, and throat irritation.

Tell your provider if you have any side effect that bothers you or does not go away. These are not all the possible side effects of Tosymra. For more information, ask your provider.

This is the most important information to know about Tosymra but is not comprehensive. For more information, talk to your provider and read the Patient Information and Instructions for Use. You can also visit www.upsher-smith.com or call 1-888-650-3789.

You are encouraged to report negative side effects of prescription drugs to the FDA. Visit www.fda.gov/medwatch, or call 1-800-FDA-1088.

INDICATION AND USAGE
Tosymra is a prescription medicine used to treat acute migraine headaches with or without aura in adults.

Tosymra is not used to treat other types of headaches such as hemiplegic or basilar migraines or cluster headaches.

Tosymra is not used to prevent migraines. It is not known if Tosymra is safe and effective in children under 18 years of age.

Source: Tonix Pharmaceuticals Holding Corp.

Released July 31, 2023

Release – Alliance Resource Partners, L.P. Reports Increased Financial and Operating Results; Declares Quarterly Cash Distribution of $0.70 Per Unit; and Updates 2023 Guidance

Posted on by aweinsoff@channelchek.com

Research News and Market Data on ARLP

Company Release – 7/31/2023 7:00 AM ET

2023 Quarter Highlights

  • Revenue of $641.8 million, up 3.5% year-over-year
  • Net income of $169.8 million, or $1.30 per unit, a 3.8% increase compared to $163.5 million, or $1.23 per unit for the 2022 Quarter
  • EBITDA of $249.2 million, up 1.0% year-over-year
  • Repurchased $34.2 million of outstanding senior notes during the 2023 Quarter and redeemed an additional $50.0 million of senior notes in July 2023
  • Declared a quarterly cash distribution in July 2023 of $0.70 per unit, or $2.80 per unit annualized, up 75.0% year-over-year

TULSA, Okla.–(BUSINESS WIRE)– Alliance Resource Partners, L.P. (NASDAQ: ARLP) (“ARLP” or the “Partnership”) today reported increased financial and operating results for the quarter ended June 30, 2023 (the “2023 Quarter”) compared to the quarter ended June 30, 2022 (the “2022 Quarter”). Total revenues in the 2023 Quarter increased 3.5% to $641.8 million compared to $619.9 million for the 2022 Quarter driven primarily by higher coal sales price per ton, which rose by 5.7%, partially offset by lower oil & gas royalty prices. Increased revenues, partially offset by higher total operating expenses, led to net income for the 2023 Quarter of $169.8 million, or $1.30 per basic and diluted limited partner unit, compared to $163.5 million, or $1.23 per basic and diluted limited partner unit, for the 2022 Quarter. (Unless otherwise noted, all references in the text of this release to “net income” refer to “net income attributable to ARLP.”)

Compared to the quarter ended March 31, 2023 (the “Sequential Quarter”), total revenues in the 2023 Quarter decreased by 3.2% primarily as a result of lower average coal sales prices of $62.93 per ton sold compared to $68.34 per ton sold in the Sequential Quarter, partially offset by higher coal sales volumes, which rose 5.1% to 8.9 million tons sold in the 2023 Quarter. Lower revenues contributed to a reduction in net income and EBITDA of 11.2% and 8.0%, respectively, compared to the Sequential Quarter. (For a definition of EBITDA and related reconciliation to its comparable GAAP financial measure, please see the end of this release.)

Financial and operating results for the six months ended June 30, 2023 (the “2023 Period”) increased compared to the six months ended June 30, 2022 (the “2022 Period”). Coal sales prices and coal sales revenues during the 2023 Period were higher by 21.8% and 23.8%, respectively, compared to the 2022 Period. Increased revenues and lower income tax expense, partially offset by higher total operating expenses, in the 2023 Period drove net income higher by 79.0% and EBITDA increased 29.6%, both as compared to the 2022 Period.

CEO Commentary

“ARLP delivered solid results during the second quarter of 2023, keeping us on track to deliver record financial results this year,” commented Joseph W. Craft III, Chairman, President and Chief Executive Officer. “Continued strength in our contract book positioned our coal operations to achieve higher realized pricing per ton sold and Segment Adjusted EBITDA relative to the 2022 Quarter and the 2022 Period. Our year-to-date results have been impressive despite coal demand, both domestically and globally, being lower than we expected entering this year, due to slower economic growth, mild weather in our targeted markets, and lower natural gas prices.”

Mr. Craft added, “Recent reports of sustained, record heat in many parts of the U.S. should once again emphasize our nation’s critical need for a reliable, affordable, and diverse energy mix. Markets can turn quickly in response to moderate swings in demand, particularly when supply remains constrained and policy decisions impact reliability. Our operations continue to provide a low-cost, secure source of supply for our customers, and with our recent actions to further strengthen our balance sheet, we expect to do so well into the future.”

Coal Operations

ARLP’s coal sales prices per ton increased compared to the 2022 Quarter as improved domestic price realizations drove coal sales prices higher by 9.8% and 3.5% in the Illinois Basin and Appalachia, respectively. Compared to the Sequential Quarter, lower domestic and export prices led to a decrease of 24.1% in coal sales prices in Appalachia. Tons sold increased by 4.0% in the Illinois Basin compared to the 2022 Quarter due primarily to increased volumes from the Hamilton and Warrior mines. Appalachia coal sales volumes decreased by 8.5% compared to the 2022 Quarter as a result of reduced export sales across the region and lower production from our MC Mining operation. Compared to the Sequential Quarter, Illinois Basin coal sales volumes decreased 2.0% due to lower volumes from River View while coal sales volumes increased by 24.5% in Appalachia due to higher volumes from Tunnel Ridge as a result of longwall moves at the mine in the Sequential Quarter. ARLP ended the 2023 Quarter with total coal inventory of 1.8 million tons, representing an increase of 0.2 million tons and 0.5 million tons compared to the end of the 2022 and Sequential Quarters, respectively.

Segment Adjusted EBITDA Expense per ton increased by 6.0% in the Illinois Basin compared to the 2022 Quarter, resulting from higher labor-related expenses and maintenance costs as well as increased sales-related expenses due to higher price realizations. Segment Adjusted EBITDA Expense per ton in Appalachia increased by 11.1% compared to the 2022 Quarter, due primarily to increased labor-related expenses, purchased coal and higher inventory charges, partially offset by increased recoveries and lower selling expenses due to a greater mix of coal sales from operations in states with lower severance taxes per ton during the 2023 Quarter. Compared to the Sequential Quarter, Segment Adjusted EBITDA Expense per ton increased 5.8% in the Illinois Basin primarily due to reduced coal sales volumes from our lower cost Gibson South and River View mines during the 2023 Quarter. In Appalachia, Segment Adjusted EBITDA Expense per ton decreased 23.8% compared to the Sequential Quarter as a result of higher sales volumes from our lower cost Tunnel Ridge mine during the 2023 Quarter, increased recoveries across the region and longwall moves at Tunnel Ridge during the Sequential Quarter.

Royalties

Segment Adjusted EBITDA for the Oil & Gas Royalties segment decreased to $29.1 million in the 2023 Quarter compared to $37.6 million and $30.0 million in the 2022 and Sequential Quarters, respectively, primarily due to lower average sales prices per BOE, partially offset by higher BOE volumes sold. Higher BOE volumes during the 2023 Quarter compared to the 2022 Quarter resulted from increased drilling and completion activities on our interests and the acquisition of additional oil & gas mineral interests.

Segment Adjusted EBITDA for the Coal Royalties segment increased to $11.0 million for the 2023 Quarter compared to $9.1 million and $10.1 million for the 2022 and Sequential Quarters, respectively, as a result of higher average royalty rates per ton received from the Partnership’s mining subsidiaries.

Balance Sheet and Liquidity

During the 2023 Quarter, ARLP repurchased $34.2 million of its senior notes due May 1, 2025 and began principal payments on its term loan. In July 2023, ARLP redeemed an additional $50.0 million of its senior notes.

As of June 30, 2023, total debt and finance leases outstanding were $417.8 million, including $339.2 million in ARLP’s 2025 senior notes. The Partnership’s total and net leverage ratio was 0.40 times and 0.14 times, respectively, as of June 30, 2023. ARLP ended the 2023 Quarter with total liquidity of $717.2 million, which included $284.9 million of cash and cash equivalents and $432.3 million of borrowings available under its revolving credit and accounts receivable securitization facilities.

Distributions

As previously announced, on July 28, 2023, the Board of Directors of ARLP’s general partner (the “Board”) approved a cash distribution to unitholders for the 2023 Quarter of $0.70 per unit (an annualized rate of $2.80 per unit), payable on August 14, 2023, to all unitholders of record as of the close of trading on August 7, 2023. The announced distribution represents a 75.0% increase over the cash distribution of $0.40 per unit for the 2022 Quarter and is consistent with the Sequential Quarter cash distribution.

Outlook

“The recent heat wave has supported additional coal burn this summer for both the domestic and export markets. However, until Henry Hub natural gas prices rise above $3.00 per million Btu, we do not expect any meaningful gas-to-coal switching domestically. Therefore, we have chosen to reduce our coal production and sales volume guidance for 2023. Production targets have been reduced at our River View and Gibson operations in the Illinois Basin and at our Mettiki operation in Appalachia,” commented Mr. Craft. “Committed and priced sales tons currently represent 96% to 97% of our updated guidance range, and we plan to sell any remaining uncontracted tonnage primarily into international markets from these three mines. We have also adjusted the top end of our coal sales price per ton sold range downward based upon recent market analysis. On the positive side, we are lowering our cost estimates for the year as our team continues to find ways to reduce expenses in a stubbornly volatile inflationary environment.”

Mr. Craft added, “During the 2023 Quarter, we agreed to sell an additional 8.6 million tons with multiple customers for coal to be delivered over the 2024 to 2026 time period. We expect there will be more opportunities this year to fill out our future contract book.”

Mr. Craft closed, “These modest guidance revisions have not changed our view that we remain on track to achieve record financial results this year. As we look beyond 2023, we are encouraged by growth opportunities being pursued by our New Ventures group, the recent increase in the forward oil and gas price curves and acquisition prospects for our Oil & Gas Royalties segment. We are also seeing stability for coal demand over the next several years. Many of our coal customers are projecting significant growth in electricity demand as record numbers of new manufacturing facilities are being announced to come online over the next several years. All of these announced projects require exceptionally large electrical loads, adding to the reliability concerns of the stakeholders responsible for meeting the rising energy needs of their customers. The increased electricity demand should lead to slowing the pre-mature closing of coal-fired power plants in the eastern United States. We also expect the growth in LNG terminals coming online over the next five years will support higher domestic natural gas prices further supporting stable demand expectations for our coal operations over the next five to ten years.”

ARLP is providing the following updated guidance for the 2023 full year:

Conference Call

A conference call regarding ARLP’s 2023 Quarter financial results is scheduled for today at 10:00 a.m. Eastern. To participate in the conference call, dial (877) 407-0784 and request to be connected to the Alliance Resource Partners, L.P. earnings conference call. International callers should dial (201) 689-8560 and request to be connected to the same call. Investors may also listen to the call via the “investor relations” section of ARLP’s website at www.arlp.com.

An audio replay of the conference call will be available for approximately one week. To access the audio replay, dial U.S. Toll Free (844) 512-2921; International Toll (412) 317-6671 and request to be connected to replay using access code 13739987.

About Alliance Resource Partners, L.P.

ARLP is a diversified energy company that is currently the largest coal producer in the eastern United States, supplying reliable, affordable energy domestically and internationally to major utilities, metallurgical and industrial users. ARLP also generates operating and royalty income from mineral interests it owns in strategic coal and oil & gas producing regions in the United States. In addition, ARLP is evolving and positioning itself as a reliable energy partner for the future by pursuing opportunities that support the advancement of energy and related infrastructure.

News, unit prices and additional information about ARLP, including filings with the Securities and Exchange Commission (“SEC”), are available at www.arlp.com. For more information, contact the investor relations department of ARLP at (918) 295-7673 or via e-mail at investorrelations@arlp.com.

The statements and projections used throughout this release are based on current expectations. These statements and projections are forward-looking, and actual results may differ materially. These projections do not include the potential impact of any mergers, acquisitions or other business combinations that may occur after the date of this release. We have included more information below regarding business risks that could affect our results.

FORWARD-LOOKING STATEMENTS: With the exception of historical matters, any matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from projected results. Those forward-looking statements include expectations with respect to our future financial performance, coal and oil & gas consumption and expected future prices, our ability to increase unitholder distributions in future quarters, business plans and potential growth with respect to our energy and infrastructure transition investments, optimizing cash flows, reducing operating and capital expenditures, preserving liquidity and maintaining financial flexibility, and our future repurchases of units and senior notes, among others. These risks to our ability to achieve these outcomes include, but are not limited to, the following: decline in the coal industry’s share of electricity generation, including as a result of environmental concerns related to coal mining and combustion and the cost and perceived benefits of other sources of electricity and fuels, such as oil & gas, nuclear energy, and renewable fuels; changes in macroeconomic and market conditions and market volatility, and the impact of such changes and volatility on our financial position; changes in global economic and geo-political conditions or changes in industries in which our customers operate; changes in commodity prices, demand and availability which could affect our operating results and cash flows; the outcome or escalation of current hostilities in Ukraine; the severity, magnitude, and duration of any future pandemics and impacts of the pandemic and of businesses’ and governments’ responses to the pandemic on our operations and personnel, and on demand for coal, oil, and natural gas, the financial condition of our customers and suppliers, available liquidity and capital sources and broader economic disruptions; actions of the major oil-producing countries with respect to oil production volumes and prices could have direct and indirect impacts over the near and long term on oil & gas exploration and production operations at the properties in which we hold mineral interests; changes in competition in domestic and international coal markets and our ability to respond to such changes; potential shut-ins of production by operators of the properties in which we hold oil & gas mineral interests due to low commodity prices or the lack of downstream demand or storage capacity; risks associated with the expansion of our operations and properties; our ability to identify and complete acquisitions and to successfully integrate such acquisitions into our business and achieve the anticipated benefits therefrom; our ability to identify and invest in new energy and infrastructure transition ventures; the success of our development plans for our wholly owned subsidiary, Matrix Design Group, LLC, and our investments in emerging infrastructure and technology companies; dependence on significant customer contracts, including renewing existing contracts upon expiration; adjustments made in price, volume, or terms to existing coal supply agreements; the effects of and changes in trade, monetary and fiscal policies and laws; central bank policy actions, bank failures and associated liquidity risks; the effects of and changes in taxes or tariffs and other trade measures adopted by the United States and foreign governments; legislation, regulations, and court decisions and interpretations thereof, both domestic and foreign, including those relating to the environment and the release of greenhouse gases, mining, miner health and safety, hydraulic fracturing, and health care; deregulation of the electric utility industry or the effects of any adverse change in the coal industry, electric utility industry, or general economic conditions; investors’ and other stakeholders’ increasing attention to environmental, social, and governance matters; liquidity constraints, including those resulting from any future unavailability of financing; customer bankruptcies, cancellations or breaches to existing contracts, or other failures to perform; customer delays, failure to take coal under contracts or defaults in making payments; our productivity levels and margins earned on our coal sales; disruptions to oil & gas exploration and production operations at the properties in which we hold mineral interests; changes in equipment, raw material, service or labor costs or availability, including due to inflationary pressures; changes in our ability to recruit, hire and maintain labor; our ability to maintain satisfactory relations with our employees; increases in labor costs including costs of health insurance and taxes resulting from the Affordable Care Act, adverse changes in work rules, or cash payments or projections associated with workers’ compensation claims; increases in transportation costs and risk of transportation delays or interruptions; operational interruptions due to geologic, permitting, labor, weather, supply chain shortage of equipment or mine supplies, or other factors; risks associated with major mine-related accidents, mine fires, mine floods or other interruptions; results of litigation, including claims not yet asserted; foreign currency fluctuations that could adversely affect the competitiveness of our coal abroad; difficulty maintaining our surety bonds for mine reclamation as well as workers’ compensation and black lung benefits; difficulty in making accurate assumptions and projections regarding post-mine reclamation as well as pension, black lung benefits, and other post-retirement benefit liabilities; uncertainties in estimating and replacing our coal mineral reserves and resources; uncertainties in estimating and replacing our oil & gas reserves; uncertainties in the amount of oil & gas production due to the level of drilling and completion activity by the operators of our oil & gas properties; uncertainties in the future of the electric vehicle industry and the market for EV charging stations; the impact of current and potential changes to federal or state tax rules and regulations, including a loss or reduction of benefits from certain tax deductions and credits; difficulty obtaining commercial property insurance, and risks associated with our participation in the commercial insurance property program; evolving cybersecurity risks, such as those involving unauthorized access, denial-of-service attacks, malicious software, data privacy breaches by employees, insiders or others with authorized access, cyber or phishing-attacks, ransomware, malware, social engineering, physical breaches, or other actions; and difficulty in making accurate assumptions and projections regarding future revenues and costs associated with equity investments in companies we do not control.

Additional information concerning these, and other factors can be found in ARLP’s public periodic filings with the SEC, including ARLP’s Annual Report on Form 10-K for the year ended December 31, 2022, filed on February 24, 2023, and ARLP’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, filed on May 9, 2023. Except as required by applicable securities laws, ARLP does not intend to update its forward-looking statements.

Reconciliation of Non-GAAP Financial Measures

Reconciliation of GAAP “net income attributable to ARLP” to non-GAAP “EBITDA” and “Distributable Cash Flow” (in thousands).

EBITDA is defined as net income attributable to ARLP before net interest expense, income taxes and depreciation, depletion and amortization. Distributable cash flow (“DCF”) is defined as EBITDA excluding equity method investment earnings, interest expense (before capitalized interest), interest income, income taxes and estimated maintenance capital expenditures and adding distributions from equity method investments. Distribution coverage ratio (“DCR”) is defined as DCF divided by distributions paid to partners.

Management believes that the presentation of such additional financial measures provides useful information to investors regarding our performance and results of operations because these measures, when used in conjunction with related GAAP financial measures, (i) provide additional information about our core operating performance and ability to generate and distribute cash flow, (ii) provide investors with the financial analytical framework upon which management bases financial, operational, compensation and planning decisions and (iii) present measurements that investors, rating agencies and debt holders have indicated are useful in assessing us and our results of operations.

EBITDA, DCF and DCR should not be considered as alternatives to net income attributable to ARLP, net income, income from operations, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. EBITDA and DCF are not intended to represent cash flow and do not represent the measure of cash available for distribution. Our method of computing EBITDA, DCF and DCR may not be the same method used to compute similar measures reported by other companies, or EBITDA, DCF and DCR may be computed differently by us in different contexts (i.e., public reporting versus computation under financing agreements).

Reconciliation of GAAP “Cash flows from operating activities” to non-GAAP “Free cash flow” (in thousands).

Free cash flow is defined as cash flows from operating activities less capital expenditures and the change in accounts payable and accrued liabilities from purchases of property plant and equipment. Free cash flow should not be considered as an alternative to cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. Our method of computing free cash flow may not be the same method used by other companies. Free cash flow is a supplemental liquidity measure used by our management to assess our ability to generate excess cash flow from our operations.

Reconciliation of GAAP “Operating Expenses” to non-GAAP “Segment Adjusted EBITDA Expense” and Reconciliation of non-GAAP ” EBITDA” to “Segment Adjusted EBITDA” (in thousands).

Segment Adjusted EBITDA Expense includes operating expenses, coal purchases, if applicable, and other income or expense. Transportation expenses are excluded as these expenses are passed on to our customers and, consequently, we do not realize any margin on transportation revenues. Segment Adjusted EBITDA Expense is used as a supplemental financial measure by our management to assess the operating performance of our segments. Segment Adjusted EBITDA Expense is a key component of EBITDA in addition to coal sales, royalty revenues and other revenues. The exclusion of corporate general and administrative expenses from Segment Adjusted EBITDA Expense allows management to focus solely on the evaluation of segment operating performance as it primarily relates to our operating expenses. Segment Adjusted EBITDA Expense – Coal Operations represents Segment Adjusted EBITDA Expense from our wholly-owned subsidiary, Alliance Coal, which holds our coal mining operations and related support activities.

Cary P. Marshall
Senior Vice President and Chief Financial Officer
918-295-7673
investorrelations@arlp.com

Source: Alliance Resource Partners, L.P.

Great Lakes Dredge & Dock (GLDD) – Two New Awards

Posted on by cpereira@noblefcm.com


Monday, July 31, 2023

Great Lakes Dredge & Dock Corporation is the largest provider of dredging services in the United States. In addition, Great Lakes is fully engaged in expanding its core business into the rapidly developing offshore wind energy industry. The Company has a long history of performing significant international projects. The Company employs experienced civil, ocean and mechanical engineering staff in its estimating, production and project management functions. In its over 131-year history, the Company has never failed to complete a marine project. Great Lakes owns and operates the largest and most diverse fleet in the U.S. dredging industry, comprised of approximately 200 specialized vessels. Great Lakes has a disciplined training program for engineers that ensures experienced-based performance as they advance through Company operations. The Company’s Incident-and Injury-Free® (IIF®) safety management program is integrated into all aspects of the Company’s culture. The Company’s commitment to the IIF® culture promotes a work environment where employee safety is paramount.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Two New Awards. Great Lakes was announced as the recipient of two awards by the Department of Defense last week, hopefully an indication of a return to a more normal award pace by the Army Corps of Engineers. In total, the two awards represent $36.7 million of new business for Great Lakes.

Award 1. Great Lakes was awarded a $20.7 million firm-fixed-price contract for Atchafalaya River basin maintenance dredging. Work will be performed in Morgan City, Louisiana, with an estimated completion date of February 15, 2024. Fiscal 2023 civil construction funds in the amount of $20.7 million were obligated at the time of the award.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Cumulus Media (CMLS) – Some Hopeful Signs Total Revenues Are Stabilizing

Posted on by cpereira@noblefcm.com


Monday, July 31, 2023

Cumulus Media (NASDAQ: CMLS) is an audio-first media company delivering premium content to over a quarter billion people every month — wherever and whenever they want it. Cumulus Media engages listeners with high-quality local programming through 406 owned-and-operated radio stations across 86 markets; delivers nationally-syndicated sports, news, talk, and entertainment programming from iconic brands including the NFL, the NCAA, the Masters, CNN, the AP, the Academy of Country Music Awards, and many other world-class partners across more than 9,500 affiliated stations through Westwood One, the largest audio network in America; and inspires listeners through the Cumulus Podcast Network, its rapidly growing network of original podcasts that are smart, entertaining and thought-provoking. Cumulus Media provides advertisers with personal connections, local impact and national reach through broadcast and on-demand digital, mobile, social, and voice-activated platforms, as well as integrated digital marketing services, powerful influencers, full-service audio solutions, industry-leading research and insights, and live event experiences. Cumulus Media is the only audio media company to provide marketers with local and national advertising performance guarantees. For more information visit www.cumulusmedia.com.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Q2 operating results. The company reported quarterly revenue of $210.1 million, in line with our estimate of $208.3 million.  While National/Network advertising remains weak, Local advertising has some greenshoots particularly with Digital Marketing Services revenue. Adj. EBITDA in the quarter was $28.7 million, beating our estimate of $21.8 million by an impressive 32%, excluding a $2 million nonrecurring benefit. The adj. EBITDA surprise was attributed to aggressive cost cutting efforts. 

Positive DMS outlook. Digital Marketing Services performed strongly, with revenue up 21% in the latest quarter. Management believes there is significant untapped growth potential in local DMSand is tripling its salesforce. Management anticipates an increase of 3x to 4x its current revenue run rate of $40 million in the next few years. 


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

How You Can Future-Proof Your Career in the Era of AI

Posted on by phoffman@channelchek.com

Critical Thinking and Analytical Skills Will Not Easily Be Replaced

Ever since the industrial revolution, people have feared that technology would take away their jobs. While some jobs and tasks have indeed been replaced by machines, others have emerged. The success of ChatGPT and other generative artificial intelligence (AI) now has many people wondering about the future of work – and whether their jobs are safe.

A recent poll found that more than half of people aged 18-24 are worried about AI and their careers. The fear that jobs might disappear or be replaced through automation is understandable. Recent research found that a quarter of tasks that humans currently do in the US and Europe could be automated in the coming years.

The increased use of AI in white-collar workplaces means the changes will be different to previous workplace transformations. That’s because, the thinking goes, middle-class jobs are now under threat.

The future of work is a popular topic of discussion, with countless books published each year on the topic. These books speak to the human need to understand how the future might be shaped.

This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It represents the research-based findings and thoughts of, Elisabeth Kelan, Professor of Leadership and Organization, University of Essex.

I analyzed 10 books published between 2017 and 2020 that focused on the future of work and technology. From this research, I found that thinking about AI in the workplace generally falls into two camps. One is expressed as concern about the future of work and security of current roles – I call this sentiment “automation anxiety”. The other is the hope that humans and machines collaborate and thereby increase productivity – I call this “augmentation aspiration”.

Anxiety and Aspiration

I found a strong theme of concern in these books about technology enabling certain tasks to be automated, depriving many people of jobs. Specifically, the concern is that knowledge-based jobs – like those in accounting or law – that have long been regarded as the purview of well-educated professionals are now under threat of replacement by machines.

Automation undermines the idea that a good education will secure a good middle-class job. As economist Richard Baldwin points out in his 2019 book, The Globotics Upheaval, if you’ve invested a significant amount of money and time on a law degree – thinking it is a skill set that will keep you permanently employable – seeing AI complete tasks that a junior lawyer would normally be doing, at less cost, is going to be worrisome.

But there is another, more aspirational way to think about this. Some books stress the potential of humans collaborating with AI, to augment each other’s skills. This could mean working with robots in factories, but it could also mean using an AI chatbot when practicing law. Rather than being replaced, lawyers would then be augmented by technology.

In reality, automation and augmentation co-exist. For your future career, both will be relevant.

Future-Proofing Yourself

As you think about your own career, the first step is to realize that some automation of tasks is most likely going to be something you’ll have to contend with in the future.

In light of this, learning is one of the most important ways you can future-proof your career. But should you spend money on further education if the return on investment is uncertain?

It is true that specific skills risk becoming outdated as technology develops. However, more than learning specific abilities, education is about learning how to learn – that is, how to update your skills throughout your career. Research shows that having the ability to do so is highly valuable at work.

This learning can take place in educational settings, by going back to university or participating in an executive education course, but it can also happen on the job. In any discussion about your career, such as with your manager, you might want to raise which additional training you could do.

Critical thinking and analytical skills are going to be particularly central for how humans and machines can augment one another. When working with a machine, you need to be able to question the output that is produced. Humans are probably always going to be central to this – you might have a chatbot that automates parts of legal work, but a human will still be needed to make sense of it all.

Finally, remember that when people previously feared jobs would disappear and tasks would be replaced by machines, this was not necessarily the case. For instance, the introduction of automated teller machines (ATMs) did not eliminate bank tellers, but it did change their tasks.

Above all, choose a job that you enjoy and keep learning – so that if you do need to change course in the future, you know how to.

Will Uranium Prices Continue Rising?

Posted on by phoffman@channelchek.com
Image Credit: IAEA Imagebank

The Back Story on Why Uranium Investors Saw a Spike Up in Values

Nuclear energy now provides 10% of the world’s electricity. If a major supplier of uranium becomes unavailable, it could be very disruptive. For countries such as France that derives 68% of their electricity from nuclear power plants, it can become more than disruptive. This is why the coup in Niger, which provides 15% of of the uranium used in French power plants is generating so much concern.

Background

Over the past few days, a successful military coup in Niger has sparked concerns in the EU and especially in France regarding the potential ramifications on uranium imports crucial for powering the country’s nuclear plants. As a major supplier, Niger currently fulfills 15% of France’s uranium needs and holds a significant 20% share of the EU’s total uranium imports. French authorities, along with energy officials have been quick to address public concerns. While the short-term implications are minimal, long-term uranium requirements could become a challenge for France and other countries within the EU. The block of nations has already been engaged with efforts to reduce dependency on Russia, another prominent uranium supplier for European nuclear facilities.

France, is unusually reliant on nuclear power. Orano, the French state-controlled nuclear fuel producer, has maintained its operations in Niger despite the coup, with the company asserting its primary focus is on ensuring the safety of its employees in the region.

Existing uranium stocks are expected to sustain France’s uranium requirements for approximately two years. Therefore, the French government is confident that the current tensions in Niger will not immediately impact their uranium needs.

Long-Term Concerns for Europe’s Uranium Needs

While immediate disruptions seem improbable, Europe could face challenges in its uranium supply chain in the long run, particularly as the continent strives to diminish its reliance on Russian uranium. Niger, as the top uranium supplier to the EU in 2021, alongside Kazakhstan and Russia, play a critical role in sustaining Europe’s nuclear power sector.

Source: Koyfin

Uranium Investment Reactions

While it may seem cold to think of one’s investment portfolio when trouble befalls others, it is the flow of money in the capital markets that often helps allow for corrective actions that lessen the problem. The plot lines on the chart above represent Cameco (CCJ) a Canadian company that is one of the largest providers of uranium fuel. Energy Fuels (UUUU) which is the leading U.S. producer of uranium,  Sprott Uranium Miners (URNM) invests in an index designed to track the performance of companies that devote at least 50% of their assets to the uranium mining industry. The fourth plotline is the S&P 500.

The gap up after the news is unmistakable and suggests investors immediately expect reduced supply from the coup to cause current production to become more valuable as it meets unchanged demand.  

Take Away

The military coup in Niger has raised concerns that the supply of uranium to France and the EU may be disrupted. Officials have assured that short-term there is little need for concern, however there are still uncertainties in Europe’s as it was already reducing dependency on Russian uranium production. The evolving situation in Niger may influence the EU’s stance on sanctions against Russian uranium, and its long-term effects on the nuclear energy sector are still uncertain.

Investors may wish to look closer at energy stocks, including uranium producers as they determine whether or not the blip in stock price is the beginning of a trend or a reaction that may, in part, or fully unwind.

Paul Hoffman

Managing Editor, Channelchek

Sources

https://world-nuclear.org/information-library/current-and-future-generation/nuclear-power-in-the-world-today.aspx#:~:text=Nuclear%20energy%20now%20provides%20about,of%20the%20total%20in%202020).

https://www.eia.gov/todayinenergy/detail.php?id=55259#:~:text=France%20has%20one%20of%20the,generation%20share%20in%20the%20world.

https://www.politico.eu/article/niger-coup-spark-concerns-france-uranium-dependency/

https://www.reuters.com/world/africa/pro-coup-protests-niger-west-african-leaders-meet-2023-07-30/

The Week Ahead – Earnings, Interest Rates, and US Dollar

Posted on by phoffman@channelchek.com

This Trading Week – Earnings Reports are Likely to Set the Tone

Just over half of the companies in the S&P 500 have now reported second-quarter earnings. Of these companies, 80% have surprised on the high side with actual EPS above the average estimate – 4% have reported earnings equal to the average expectations. The reporting sectors beating estimates by the most are Information Technology at 93%, and Communication Services, which beat average estimates 92% of the time. Of sectors that beat the least often, Utilities and Financials were at the bottom of the list at 67% and 70%, respectively, surpassing average estimates. These are also above 50%, supporting strong stock markets.

The weaker US dollar has helped companies with more international exposure as these have had improved year-over-year earnings above those companies with a higher percentage of domestic revenue.

The markets are likely to focus on the earnings reports this week as economic releases will be slow. Stocks may also take its cue from interest rates that have been rising for longer duration US Treasuries.

Monday 7/31

•             9:45 AM ET, The Chicago Purchasing Managers Report is expected to improve 2 points in July to a still very weak 43.5 versus 41.5 in June, which was the tenth straight month of sub-50 contraction. Readings above 50 indicate an expanding business sector.

•             10:30 AM ET, The Dallas Fed Manufacturing Survey is expected to post a 15th straight negative score, at a consensus minus 22.5 in July versus minus 23.2 in June. The Dallas Survey gives a detailed look at Texas’ manufacturing sector, how busy it is, and where it is headed. Since manufacturing is a major sector of the economy, this report can greatly influence the markets.

Tuesday 8/1

•             9:45 AM ET, the final Purchasing Managers Index (PMI) for manufacturing for July is expected to come in at 49.0, unchanged from the mid-month flash to indicate marginal contraction (above 50 indicates expansion).

•             10:00 AM ET, Construction Spending for June is expected to rise a further 0.6 percent following May’s 0.9 percent increase that benefited from a sharp jump in residential spending.

•             10:00 AM ET, JOLTS (Job Openings and Labor Turnover Survey) still strong but slowing is the consensus for June as it is expected to ease 9.650 million from 9.824 million.

Wednesday 8/2

•             10:00 AM ET, New Home Sales are expected to slow after a much higher-than-expected 763,000 annualized rate in May. Junes are expected to have slowed to 727,000.

•             10:30 AM ET,  The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the US, whether produced here or abroad. The inventory level impacts prices for petroleum products.

Thursday 8/3

•             8:30 AM ET, Jobless Claims for the week ended July 30, 2023, are expected to come in at 225,000 versus 221,000 in the prior week. Claims have been moving lower in recent weeks. This is a classic case of where what might otherwise be considered worsening news (increased jobless claims) may be taken well by the market as tight labor markets are considered additive to inflation pressures.

•             8:30 AM ET, Productivity and Costs (nonfarm) is expected to rise at a 1.3 percent annualized rate in the second quarter versus 2.1 percent contraction in the first quarter. Unit labor costs, which rose 4.2 percent in the first quarter, are expected to rise to a 2.6 percent rate in the second quarter.

•             9:45 AM ET, PMI Services. Following Tuesday’s PMI Composite Final for manufacturing, which has been contracting, the Services Purchasing Managers Index is expected to indicate no change at 52.4 as the July final.

•             10:00 AM ET, Factory Orders are expected to rise 1.7 percent in June versus May’s 0.3 percent gain. Factory Orders is a leading indicator that economists and investors watch as it has been a fairly reliable indicator of future economic activity.

•             10:00 AM ET, The Institute for Supply Management (ISM) gauge is expected to have slowed to 53 from June’s 53.9 level. An ISM reading above 50 percent indicates that the services economy is generally expanding; below 50 percent indicates that it is generally declining.

•             4:30 AM ET, The Fed’s Balance Sheet is expected to have decreased by $31.208 billion to $8.243 trillion. Market participants and Fed watchers look to this weekly set of numbers to determine, among other things if the Fed is on track with its stated quantitative tightening (QT) plan.

Friday 8/4

•             8:30 AM ET, Employment Situation is expected to show that the unemployment rate unchanged at 3.6%, with a consensus for payrolls at 200,000 versus the 209,000 reported in June.

What Else

On Thursday quarterly results will be reported on Apple (AAPL) and Amazon (AMZN). The week will be the busiest one of the earnings season. About 30% of the S&P 500 will give their financial updates during the week, including Alphabet (GOOGL), Microsoft (MSFT), Meta (META), and Robinhood (HOOD). Several big pharma companies are getting ready to report, and it’s a big week for industrial companies and big oil as well.

We’re near the halfway point for Summer 2023. Have you signed up to receive Channelchek market-related news and analysis in your inbox?  Now is a good time to make sure you don’t miss anything!

Paul Hoffman

Managing Editor, Channelchek

Learn more about NobleCon19 here

Sources

https://tradingeconomics.com/calendar

https://us.econoday.com/byweek.asp?cust=us

https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_072823.pdf

Release – Tonix Pharmaceuticals Announces Pricing of $7 Million Public Offering

Posted on by aweinsoff@channelchek.com

Research News and Market Data on TNXP

July 27, 2023 9:31pm EDT

CHATHAM, N.J., July 27, 2023 (GLOBE NEWSWIRE) — Tonix Pharmaceuticals Holding Corp. (Nasdaq: TNXP) (“Tonix” or the “Company”), a biopharmaceutical company, today announced it has entered into a securities purchase agreement for the purchase and sale of 7,000,000 shares of its common stock (or common stock equivalents in lieu thereof) and warrants to purchase up to an aggregate of 7,000,000 shares of common stock in a public offering at a combined offering price of $1.00 per share (or common stock equivalents in lieu thereof) and accompanying warrant. The warrants have an exercise price of $1.00 per share, will become exercisable commencing the date of issuance, and will expire five years following the issuance date. The closing of the public offering is expected to take place on or about August 1, 2023, subject to the satisfaction of customary closing conditions.

The gross proceeds of the offering will be approximately $7 million before deducting placement agent fees and other estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes, the build out of the Company’s manufacturing and research and development facilities, and the acquisition or licensing of approved products and products in development.

A.G.P./Alliance Global Partners is acting as lead placement agent for the offering.

Brookline Capital Markets, a division of Arcadia Securities, LLC is acting as co-placement agent for the offering.

This offering is being made pursuant to an effective shelf registration statement on Form S-3 (File No. 333-254975) previously filed with the U.S. Securities and Exchange Commission (the “SEC”). The offering will be made only by means of a prospectus supplement and accompanying base prospectus, as may be further supplemented by any free writing prospectus and/or pricing supplement that Tonix may file with the SEC. A preliminary prospectus supplement and accompanying prospectus describing the terms of the proposed offering have been filed with the SEC and are available on the SEC’s website located at http://www.sec.gov. Electronic copies of the final prospectus supplement may be obtained, when available, from A.G.P./Alliance Global Partners, 590 Madison Avenue, 28th Floor, New York, NY 10022, or by telephone at (212) 624-2060, or by email at prospectus@allianceg.com. Before investing in this offering, interested parties should read in their entirety the prospectus supplement and the accompanying prospectus and the other documents that Tonix has filed with the SEC that are incorporated by reference in such prospectus supplement and the accompanying prospectus, which provide more information about Tonix and such offering.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Tonix Pharmaceuticals Holding Corp.*

Tonix is a biopharmaceutical company focused on commercializing, developing, discovering and licensing therapeutics to treat and prevent human disease and alleviate suffering. Tonix markets Zembrace® SymTouch® (sumatriptan injection) 3 mg and Tosymra® (sumatriptan nasal spray) 10 mg. Zembrace SymTouch and Tosymra are each indicated for the treatment of acute migraine with or without aura in adults. Tonix’s development portfolio is composed of central nervous system (CNS), rare disease, immunology and infectious disease product candidates. Tonix’s CNS development portfolio includes both small molecules and biologics to treat pain, neurologic, psychiatric and addiction conditions. Tonix’s lead CNS candidate, TNX-102 SL (cyclobenzaprine HCl sublingual tablet), is in mid-Phase 3 development for the management of fibromyalgia, nearing complete enrollment in a potentially registration-enabling study, with topline data expected in the fourth quarter of 2023. TNX-102 SL is also being developed to treat Long COVID, a chronic post-acute COVID-19 condition. Enrollment in a Phase 2 study has been completed, and topline results are expected in the third quarter of 2023. TNX-601 ER (tianeptine hemioxalate extended-release tablets), a once-daily formulation being developed as a treatment for major depressive disorder (MDD), is nearing complete enrollment with topline results expected in the fourth quarter of 2023. TNX-4300 (estianeptine) is a small molecule oral therapeutic in preclinical development to treat MDD, Alzheimer’s disease and Parkinson’s disease. TNX-1900 (intranasal potentiated oxytocin), in development for chronic migraine, is currently enrolling with topline data expected in the fourth quarter of 2023. TNX-1300 (cocaine esterase) is a biologic designed to treat cocaine intoxication and has been granted Breakthrough Therapy designation by the FDA. A Phase 2 study of TNX-1300 is expected to be initiated in the third quarter of 2023. Tonix’s rare disease development portfolio includes TNX-2900 (intranasal potentiated oxytocin) for the treatment of Prader-Willi syndrome. TNX-2900 has been granted Orphan Drug designation by the FDA. Tonix’s immunology development portfolio includes biologics to address organ transplant rejection, autoimmunity and cancer, including TNX-1500, which is a humanized monoclonal antibody targeting CD40-ligand (CD40L or CD154) being developed for the prevention of allograft rejection and for the treatment of autoimmune diseases. A Phase 1 study of TNX-1500 is expected to be initiated in the third quarter of 2023. Tonix’s infectious disease pipeline includes TNX-801, a vaccine in development to prevent smallpox and mpox. TNX-801 also serves as the live virus vaccine platform or recombinant pox vaccine platform for other infectious diseases. The infectious disease development portfolio also includes TNX-3900 and TNX-4000, classes of broad-spectrum small molecule oral antivirals.

* Tonix’s product development candidates are investigational new drugs or biologics and have not been approved for any indication.

Tonix Medicines has contracted to acquire the Zembrace SymTouch and Tosymra registered trademarks. Intravail is a registered trademark of Aegis Therapeutics, LLC, a wholly owned subsidiary of Neurelis, Inc.

Forward Looking Statements

Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 including those relating to the completion of the public offering, the satisfaction of customary closing conditions, the intended use of proceeds from the public offering and other statement that are predictive in nature.  These statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “forecast,” “estimate,” “expect,” and “intend,” among others. These forward-looking statements are based on Tonix’s current expectations and actual results could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks related to the failure to obtain FDA clearances or approvals and noncompliance with FDA regulations; risks related to the failure to successfully market any of our products; risks related to the timing and progress of clinical development of our product candidates; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government or third party payor reimbursement; limited research and development efforts and dependence upon third parties; and substantial competition. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. Tonix does not undertake an obligation to update or revise any forward-looking statement. Investors should read the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission (the “SEC”) on March 13, 2023, and periodic reports filed with the SEC on or after the date thereof. All of Tonix’s forward-looking statements are expressly qualified by all such risk factors and other cautionary statements. The information set forth herein speaks only as of the date thereof.

Investor Contact
Jessica Morris
Tonix Pharmaceuticals
investor.relations@tonixpharma.com
(862) 904-8182

Peter Vozzo
ICR Westwicke
peter.vozzo@westwicke.com
(443) 213-0505

Media Contact
Ben Shannon
ICR Westwicke
ben.shannon@westwicke.com
(919) 360-3039

Source: Tonix Pharmaceuticals Holding Corp.

Released July 27, 2023

Travelzoo (TZOO) – Liftoff in Europe?

Posted on by cpereira@noblefcm.com


Friday, July 28, 2023

Travelzoo® provides its 30 million members with exclusive offers and one-of-a-kind experiences personally reviewed by our deal experts around the globe. We have our finger on the pulse of outstanding travel, entertainment, and lifestyle experiences. We work in partnership with more than 5,000 top travel suppliers—our long-standing relationships give Travelzoo members access to irresistible deals.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Solid Q2 results. The company reported better than expected revenue and adj. EBITDA in Q2. Revenue was $21.1 million and adj. EBITDA was $4.2 million, compared with our estimates of $20.5 million and $3.4 million, respectively. Revenue growth accelerated to 19% in Q2, compared with 17% growth in Q1.

Strong margins. Adj. EBITDA margins were up to nearly 20%, due in large part to 27% operating profit margins in the North America business segment. Operating profit in Europe, though, still negative, improved to nearly flat (-3%).


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Orion Group Holdings (ORN) – Post Call Commentary and Updated Models

Posted on by cpereira@noblefcm.com


Friday, July 28, 2023

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Marine Segment. Marine segment revenue was up 22.1% y-o-y driven by the Hawaii contract. Segment operating profit rose to $3.5 million, or a 3.5% margin, from $2.5 million, or a 3.1% margin last year. Orion is winning new awards in the segment, but the Army Corps continues to award business at a slower than historical rate.

Concrete Segment. Revenue of $82 million declined from $112.3 million last year, partly due to the exit of the Central Texas market and partly due to stricter bidding by Orion as the Company seeks to improve overall segment margins. Second quarter operating loss was $1.4 million versus a loss of $5.4 million last year. The segment was profitable on an Adjusted EBITDA basis.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Eskay Mining Corp. (ESKYF) – New Targets Increase the Potential for New Discoveries

Posted on by cpereira@noblefcm.com


Friday, July 28, 2023

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Drilling has commenced. Eskay Mining has commenced this year’s diamond drill program at its 100% controlled Consolidated Eskay Gold Project in the Golden Triangle of British Columbia. The company’s exploration program is focused on precious metal-rich volcanogenic massive sulfide (VMS) deposits. Eskay Mining intends to complete up to 6,500 meters of core drilling. Closing the sale of five mining claims to Skeena Resources provided additional funding for the program.

Targets to be tested. Targets to be tested include: 1) Maroon Cliffs, 2) Hexagon-Mercury, 3) Tarn Lake, 4) Scarlet Knob, 5) Bruce Glacier, 6) Storie Creek, 7) Cumberland, and 8) TV South. Eskay recently started diamond drilling at the Tarn Lake target. A second drill is currently being mobilized to the site. These targets have been discussed by the company previously except for perhaps Bruce Glacier and Storie Creek.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Gensler’s Appeal for Much More Oversight Over Cryptocurrencies

Posted on by phoffman@channelchek.com
Image: Gary Gensler on Bloomberg TV, July 27, 2023

SEC Chairman Pushes for More Crypto Cops on the Beat

Gary Gensler, the SEC chair, was asked on Bloomberg TV whether the efforts to protect the consumer related to cryptocurrency are complicated by non-compliance and lack of growth in the agency’s staff. Gensler discussed the need for more enforcement of current laws and lively debate with Congress to create new rules, “the capital markets really wouldn’t work without cops on the beat and rules of the road,” replied the SEC chair.

During his discussion on July 27, the head of the SEC demonstrated the Commission is still taking aim at the crypto markets despite what is seen as legal setbacks related to its authority. Gensler said that the cryptocurrency sector remains underhanded and unregulated. “The securities laws are there to protect you, and this is a field rife with fraud, rife with hucksters. There are good-faith actors as well, but there are far too many that aren’t.”

The overall theme of the conversation is that the crypto asset class lacks adequate protections for investors.

Gensler calmly appealed to investors not to assume that they are getting full protection despite the securities laws applied to many tokens in the crypto space. “A lot of investors should be aware that it’s not only a highly speculative asset class, it’s also one that they currently should not assume they are getting the protections of the securities law,” he said. He alleged that some crypto platforms were “co-mingling and trading against” investors.

As it relates to crypto exchanges and how they operate, the SEC chair said crypto violates laws that other exchanges abide by. “You as investors are not getting the full, fair, and truthful disclosure, and the platforms and intermediaries are doing things that we would never in a day allow or think the New York Stock Exchange or NASDAQ would do,” declared Gensler.

Earlier this month, a U.S. judge ruled that Ripple did not break securities law by selling its XRP token on public exchanges. The decision sent positive ripples through the entire crypto market and sent the value of XRP soaring. If tokens can not be deemed securities, transactions within the asset class may not fall under the SEC at all. This leaves open the question of who will regulate and oversee crypto and its exchanges.

Take Away

SEC chair Gary Gensler warned investors in late July about the lack of regulation for cryptocurrencies. He told Bloomberg TV the sector was rife with “fraud” and “hucksters,” leaving investors at risk. Gensler made listeners aware that some crypto platforms were “co-mingling and trading against” investors.

It is likely that there will ultimately be regulation handed down from Congress and enforced by an agency, which may include self-regulation, but after the Ripple decision, the oversight will not automatically be from the SEC. It appears Gary Gensler has taken to the interview circuit in order to sway opinion in favor of the SEC.

Paul Hoffman

Managing Editor, Channelchek

Sources

https://www.bloomberg.com/news/videos/2023-07-27/sec-chair-says-crypto-rife-with-fraud-hucksters-video

https://www.bloomberg.com/news/videos/2023-07-27/sec-s-gensler-on-ai-stock-market-plans-and-crypto-video

ASO Success Treating Fragile X Syndrome

Posted on by phoffman@channelchek.com
Image Credit: Thom Leach, The Conversation

Fragile X Syndrome Often Results from Improperly Processed Genetic Material – Correctly Cutting RNA Offers a Potential Treatment

Fragile X syndrome is a genetic disorder caused by a mutation in a gene that lies at the tip of the X chromosome. It is linked to autism spectrum disorders. People with fragile X experience a range of symptoms that include cognitive impairment, developmental and speech delays and hyperactivity. They may also have some physical features such as large ears and foreheads, flabby muscles and poor coordination.

This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It represents the research-based findings and thoughts of, Joel Richter, Professor of Neuroscience, UMass Chan Medical School and Sneha Shah, Assistant Professor of Molecular Medicine. UMass Chan Medical School

Along with our colleagues Jonathan Watts and Elizabeth Berry-Kravis, we are a team of scientists with expertise in molecular biology, nucleic acid chemistry and pediatric neurology. We recently discovered that the mutated gene responsible for fragile X syndrome is active in most people with the disorder, not silenced as previously thought. But the affected gene on the X chromosome is still unable to produce the protein it codes for because the genetic material isn’t properly processed. Correcting this processing error suggests that a potential treatment for symptoms of fragile X may one day be available.

Repairing Faulty RNA Splicing

The FMR1 gene encodes a protein that regulates protein synthesis. A lack of this protein leads to overall excessive protein synthesis in the brain that results in many of the symptoms of fragile X.

The mutation that causes fragile X results in extra copies of a DNA sequence called a CGG repeat. Everyone has CGG repeats in their FMR1 gene, but typically fewer than 55 copies. Having 200 or more CGG repeats silences the FMR1 gene and results in fragile X syndrome. However, we found that around 70% of people with fragile X still have an active FMR1 gene their cellular machinery can read. But it is mutated enough that it is unable to direct the cell to produce the protein it encodes.

Genes are transcribed into another form of genetic material called RNA that cells use to make proteins. Normally, genes are processed before transcription in order to make a readable strand of RNA. This involves removing the noncoding sequences that interrupt genes and splicing the genetic material back together. For people with fragile X, the cellular machinery that does this cutting incorrectly splices the genetic material, such that the protein the FMR1 gene codes for is not produced.

Fragile X syndrome is the most common inherited form of intellectual disability.

Using cell cultures in the lab, we found that correcting this missplice can restore proper RNA function and produce the FMR1 gene’s protein. We did this by using short bits of DNA called antisense oligonucleotides, or ASOs. When these bits of genetic material bind to RNA molecules, they change the way the cell can read it. That can have effects on which proteins the cell can successfully produce.

ASOs have been used with spectacular success to treat other childhood disorders, such as spinal muscular atrophy, and are now being used to treat a variety of neurological diseases.

Beyond Mice Models

Notably, fragile X syndrome is most often studied using mouse models. However, because these mice have been genetically engineered to lack a functional FMR1 gene, they are quite different from people with fragile X. In people, it is not a missing gene that causes fragile X but mutations that lead the existing gene to lose function.

Because the mouse model of fragile X lacks the FMR1 gene, the RNA is not made and so cannot be misspliced. Our discovery would not have been possible if we used mice.

With further research, future studies in people may one day include injecting ASOs into the cerebrospinal fluid of fragile X patients, where it will travel to the brain and hopefully restore proper function of the FMR1 gene and improve their cognitive function.