Month: August 2024

Release – Information Services Group Announces Second-Quarter 2024 Results

Posted on by dburczyk@noblecapitalmarkets.com

Research News and Market Data on III

  • Reports second-quarter GAAP revenues of $64 million
  • Reports second-quarter net income of $2.0 million, GAAP EPS of $0.04 and adjusted EPS of $0.08
  • Reports second-quarter adjusted EBITDA of $7 million
  • Generates $2.2 million of cash from operations
  • Declares third-quarter dividend of $0.045 per share, payable October 4, 2024, to shareholders of record as of September 6, 2024
  • Sets third-quarter guidance: revenues between $64 million and $66 million and adjusted EBITDA between $7.0 and $8.0 million

STAMFORD, Conn.–(BUSINESS WIRE)– Information Services Group ( ISG ) (Nasdaq: III ), a leading global technology research and advisory firm, today announced its financial results for the second quarter ended June 30, 2024.

“ISG delivered sequentially stronger results in the second quarter,” said Michael P. Connors, chairman and CEO. “Adjusted EBITDA was up more than 60 percent, utilization was up more than 800 basis points, and adjusted EBITDA margin was up 400 basis points, driven by an improved product and services mix, all as our revenue base stabilized versus the first quarter.

“Though clients continue to delay the start of new initiatives and extend their spending over longer periods, our pipeline is strong, and with inflation easing and the prospect of interest rate cuts on the horizon, we anticipate demand picking up again late this year.”

Connors said an increase in contract value flowing through the ISG Tango™ sourcing platform is a sign of accelerating client activity. “Contract value on our AI-powered ISG Tango platform now exceeds $4 billion,” said Connors. “This innovative platform solution accelerates speed to value for our clients and generates expanded margins for ISG.”

Second-Quarter 2024 Results

Reported revenues for the second quarter were $64.3 million, down 14 percent from $74.6 million in the prior year’s second quarter. Reported revenues were $40.0 million in the Americas, down 5 percent; $18.8 million in Europe, down 23 percent; and $5.5 million in Asia Pacific, down 31 percent, all versus the prior year.

ISG reported second-quarter operating income of $3.7 million, compared with operating income of $4.9 million in the prior year. The firm’s reported second-quarter net income was $2.0 million, compared with net income of $2.3 million in the prior year. Income per fully diluted share was $0.04, compared with income per fully diluted share of $0.05 in the prior year.

Adjusted net income (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) for the second quarter was $3.8 million, or $0.08 per share on a fully diluted basis, compared with adjusted net income of $5.3 million, or $0.11 per share on a fully diluted basis, in the prior year’s second quarter.

Second-quarter adjusted EBITDA (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) was $7.1 million, down 30 percent from the prior-year second quarter. Adjusted EBITDA margin (a non-GAAP measure calculated by dividing adjusted EBITDA by reported revenues) was 11.1 percent, compared with 13.6 percent in the prior year.

Other Financial and Operating Highlights

ISG generated $2.2 million of cash from operations in the second quarter, compared with generating $2.8 million of cash in the second quarter last year. The firm’s cash balance totaled $11.8 million at June 30, 2024, down from $14.0 million at March 31, 2024.

During the second quarter, ISG repurchased $2.0 million of shares and paid $1.7 million of contingent consideration for prior acquisitions. As of June 30, 2024, ISG had $74.2 million in debt outstanding, down from $79.2 million at the end of last year.

2024 Third-Quarter Revenue and Adjusted EBITDA Guidance

“For the third quarter, ISG is targeting revenues of between $64 million and $66 million and adjusted EBITDA of between $7.0 million and $8.0 million. We will continue to monitor the macroeconomic environment, including the impact of FX, inflation and other factors, and adjust our business plans accordingly,” said Connors.

Quarterly Dividend

The ISG Board of Directors declared a third-quarter dividend of $0.045 per share, payable on October 4, 2024, to shareholders of record as of September 6, 2024.

“ISG remains committed to a disciplined capital allocation strategy that includes reinvesting in our business, managing our debt, returning capital to shareholders in the form of dividends and share repurchases, and supplementing our organic growth with strategic acquisitions to drive long-term shareholder value,” Connors said.

Conference Call

ISG has scheduled a call for 9 a.m., U.S. Eastern Time, Tuesday, August 6, 2024, to discuss the firm’s second-quarter results. The call can be accessed by dialing +1 (800) 715-9871 , or, for international callers, by dialing +1 (646) 307-1963 . The access code is 6237254 . A recording of the conference call will be accessible on ISG’s investor relations page for approximately four weeks following the call.

Forward-Looking Statements

This communication contains “forward-looking statements” which represent the current expectations and beliefs of management of ISG concerning future events and their potential effects. Statements contained herein including words such as “anticipate,” “believe,” “contemplate,” “plan,” “estimate,” “target,” “expect,” “intend,” “will,” “continue,” “should,” “may,” and other similar expressions are “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future results and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. Those risks relate to inherent business, economic and competitive uncertainties and contingencies relating to the businesses of ISG and its subsidiaries, including without limitation: (1) failure to secure new engagements or loss of important clients; (2) ability to hire and retain enough qualified employees to support operations; (3) ability to maintain or increase billing and utilization rates; (4) management of growth; (5) success of expansion internationally; (6) competition; (7) ability to move the product mix into higher margin businesses; (8) general political and social conditions such as war, political unrest and terrorism; (9) healthcare and benefit cost management; (10) ability to protect ISG and its subsidiaries’ intellectual property or data and the intellectual property or data of others; (11) currency fluctuations and exchange rate adjustments; (12) ability to successfully consummate or integrate strategic acquisitions; (13) outbreaks of diseases, including coronavirus, or similar public health threats or fear of such an event; and (14) potential terminations of engagements, delays or reductions in scope by clients. Certain of these and other applicable risks, cautionary statements and factors that could cause actual results to differ from ISG’s forward-looking statements are included in ISG’s filings with the U.S. Securities and Exchange Commission. ISG undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.

Non-GAAP Financial Measures

ISG reports all financial information required in accordance with U.S. generally accepted accounting principles (GAAP). In this release, ISG has presented both GAAP financial results as well as non-GAAP information for the three and six months ended June 30, 2024, and June 30, 2023. ISG believes that evaluating its ongoing operating results will be enhanced if it discloses certain non-GAAP information. These non-GAAP financial measures exclude non-cash and certain other special charges that many investors believe may obscure the user’s overall understanding of ISG’s current financial performance and the Company’s prospects for the future. ISG believes that these non-GAAP measures provide useful information to investors because they improve the comparability of the financial results between periods and provide for greater transparency of key measures used to evaluate the Company’s performance.

ISG provides adjusted EBITDA (defined as net income, plus interest, taxes, depreciation and amortization, foreign currency transaction gains/losses, non-cash stock compensation, interest accretion associated with contingent consideration, acquisition-related costs, and severance, integration and other expense), adjusted net income (defined as net income, plus amortization of intangible assets, non-cash stock compensation, foreign currency transaction gains/losses, interest accretion associated with contingent consideration, acquisition-related costs, write-off of deferred financing cost and severance, integration and other expense on a tax-adjusted basis), adjusted net income per diluted share, adjusted EBITDA margin, and selected financial data on a constant currency basis which are non-GAAP measures that the Company believes provide useful information to both management and investors by excluding certain expenses and financial implications of foreign currency translations, which management believes are not indicative of ISG’s core operations. These non-GAAP measures are used by ISG to evaluate the Company’s business strategies and management’s performance.

We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP financial measure, excludes the impact of year-over-year fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations, thereby facilitating period-to-period comparisons of our business performance, and is consistent with how management evaluates the Company’s performance. We calculate constant currency percentages by converting our current and prior periods’ local currency financial results using the same point in time exchange rates and then comparing the adjusted current and prior period results. This calculation may differ from similarly titled measures used by others and, accordingly, the constant currency presentation is not meant to be a substitution for recorded amounts presented in conformity with GAAP, nor should such amounts be considered in isolation.

Management believes this information facilitates comparison of underlying results over time. Non-GAAP financial measures, when presented, are reconciled to the most closely applicable GAAP measure. Non-GAAP measures are provided as additional information and should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the forward-looking non-GAAP estimates contained herein to the corresponding GAAP measures is not being provided, due to the unreasonable efforts required to prepare it.

About ISG

ISG (Information Services Group) (Nasdaq: III ) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com .

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Information Services Group (III) – A Look at the Second Quarter

Posted on by cpereira@noblefcm.com


Tuesday, August 06, 2024

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For additional information, visit www.ISG-One.com

Joe Gomes, CFA, 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.

2Q Results. Reported revenues totaled $64.3 million, slightly below our estimate of $65 million. Clients are continuing to delay projects, as these are being pushed further. Net income was better than expected at $2.0 million, or $0.04 per diluted share, compared to $2.3 million or $0.05 last year. We estimated a net loss of $0.2 million or breakeven EPS.

Silver Lining. The continued headwind of client decision making has offered a light at the end of the tunnel for management. An increase in contract value through ISG Tango, now exceeding $4 billion from $2.6 billion in the previous quarter, offers a sign that clients are allocating more towards projects in our view. The increase in overall contract value showcases management’s belief in increasing business spending as the year progresses.


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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. 

Commercial Vehicle Group (CVGI) – First Look at 2Q24

Posted on by cpereira@noblefcm.com


Tuesday, August 06, 2024

Joe Gomes, CFA, 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.

Still Challenging. 2Q24 revenue declined 12.3% y-o-y to $229.9 million due to softening global customer demand. We had projected $237.5 million. Operating income was $0.8 million and adjusted operating income totaled $5.7 million, down 65.9% y-o-y. CVGI reported a net loss of $1.6 million, or $0.05/sh, and adjusted net income of $2.1 million, or EPS of $0.06. We had forecast adjusted EPS of $0.21. Adjusted EBITDA of $10 million was down 51.9% y-o-y and short of our $16 million estimate.

Drivers. Second quarter results were challenged due to multiple factors. In particular, continued softening in the construction and agricultural end markets and reduced volumes in new business win launches, impacting the key growth segment in Electrical Systems. CVG also experienced operational inefficiencies in the Vehicle Solutions segment resulting from a new product launch with a major customer across multiple sites, as well as activities to prepare the Cab Structures business for sale.


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. 

Release – Bitcoin Depot Expands BDCheckout Program to Six New States

Posted on by dburczyk@noblecapitalmarkets.com

Research News and Market Data on BTM

Extending Service to 31 States, Providing Customers with More Access Points for Loading Cash into Their Bitcoin Depot Digital Wallets

ATLANTA, Aug. 05, 2024 (GLOBE NEWSWIRE) — Bitcoin Depot Inc. (“Bitcoin Depot” or the “Company”) (NASDAQ: BTM), a U.S.-based Bitcoin ATM (“BTM”) operator and leading fintech company, announced today the expansion of its BDCheckout program into six new states: Alaska, Arkansas, Illinois, North Carolina, Oregon, and Texas. This expansion increases the total footprint of BDCheckout to 31 states, allowing even more customers to conveniently load cash into their Bitcoin Depot digital wallets at major retail partners.

The BDCheckout program provides an in-app experience that allows customers to conveniently load cash into their Bitcoin Depot digital wallets directly at the cash register. Since its initial launch in 2022, BDCheckout has continuously expanded, now covering over 1,500 new locations in Alaska (27), Arkansas (112), Illinois (360), North Carolina (496), Oregon (145), and Texas (396). These additions increase Bitcoin Depot’s total number of BDCheckout locations to 7,723, significantly enhancing accessibility and convenience for its users and reinforcing Bitcoin Depot’s position as a market leader in cryptocurrency accessibility.

“Expanding BDCheckout to these six new states marks a significant milestone in our mission to make cryptocurrency accessible to everyone,” said Bitcoin Depot CEO Brandon Mintz. “As we continue this remarkable year of growth, our focus remains on delivering unparalleled convenience and superior service to our customers by providing —a simpler way to buy Bitcoin quickly, conveniently, and securely.”

BDCheckout allows users to load cash into their Bitcoin Depot digital wallets through the Bitcoin Depot mobile app, which enables them to generate a barcode in the app and present it at participating retail locations to complete the transaction.

As the largest BTM operator in North America, Bitcoin Depot continues to lead the industry with innovative solutions that bridge the gap between cash and digital currencies. This announcement follows a series of notable achievements and recent momentum for Bitcoin Depot. Earlier this month, The Company exceeded its goal of deploying over 8,000 Bitcoin ATMs five months ahead of schedule, reaching a total of 8,180 kiosks. This rapid expansion is part of Bitcoin Depot’s broader growth strategy, which has also seen the addition of nearly 225 Bitcoin ATMs in Australia and Puerto Rico, and significant retail partnerships serving to broaden its market reach. The company has also expanded its BTM fleet by over 900 kiosks this year and advanced its profit-sharing program.

About Bitcoin Depot 
Bitcoin Depot Inc. (Nasdaq: BTM) was founded in 2016 with the mission to connect those who prefer to use cash to the broader, digital financial system. Bitcoin Depot provides its users with simple, efficient and intuitive means of converting cash into Bitcoin, which users can deploy in the payments, spending and investing space. Users can convert cash to bitcoin at Bitcoin Depot kiosks in 48 states and at thousands of name-brand retail locations in 31 states through its BDCheckout product. The Company has the largest market share in North America with approximately 7,400 kiosk locations as of April 1, 2024. Learn more at www.bitcoindepot.com.

Cautionary Note Regarding Forward-Looking Statements

This press release and any oral statements made in connection herewith include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. Forward-looking statements are any statements other than statements of historical fact, and include, but are not limited to, statements regarding the expectations of plans, business strategies, objectives and growth and anticipated financial and operational performance, including our growth strategy and ability to increase deployment of our products and services, the anticipated effects of the Amendment, and the closing of the Preferred Sale. These forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events. Forward-looking statements are often identified by words such as “anticipate,” “appears,” “approximately,” “believe,” “continue,” “could,” “designed,” “effect,” “estimate,” “evaluate,” “expect,” “forecast,” “goal,” “initiative,” “intend,” “may,” “objective,” “outlook,” “plan,” “potential,” “priorities,” “project,” “pursue,” “seek,” “should,” “target,” “when,” “will,” “would,” or the negative of any of those words or similar expressions that predict or indicate future events or trends or that are not statements of historical matters, although not all forward-looking statements contain such identifying words. In making these statements, we rely upon assumptions and analysis based on our experience and perception of historical trends, current conditions, and expected future developments, as well as other factors we consider appropriate under the circumstances. We believe these judgments are reasonable, but these statements are not guarantees of any future events or financial results. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond our control.

These forward-looking statements are subject to a number of risks and uncertainties, including changes in domestic and foreign business, market, financial, political and legal conditions; failure to realize the anticipated benefits of the business combination; future global, regional or local economic and market conditions; the development, effects and enforcement of laws and regulations; our ability to manage future growth; our ability to develop new products and services, bring them to market in a timely manner and make enhancements to our platform; the effects of competition on our future business; our ability to issue equity or equity-linked securities; the outcome of any potential litigation, government and regulatory proceedings, investigations and inquiries; and those factors described or referenced in filings with the Securities and Exchange Commission. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that we do not presently know or that we currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect our expectations, plans or forecasts of future events and views as of the date of this press release. We anticipate that subsequent events and developments will cause our assessments to change.

We caution readers not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events, or other factors that affect the subject of these statements, except where we are expressly required to do so by law. All written and oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement.

Contacts: 

Investors  
Cody Slach
Gateway Group, Inc.  
949-574-3860  
BTM@gateway-grp.com 

Media  
Christina Lockwood, Brenlyn Motlagh, Ryan Deloney  
Gateway Group, Inc. 
949-574-3860  
BTM@gateway-grp.com

Source: Bitcoin Depot Inc.

Released August 5, 2024

Release – Bowlero Declares Common Stock Dividend

Posted on by dburczyk@noblecapitalmarkets.com

Research News and Market Data on BOWL

RICHMOND, Va.–(BUSINESS WIRE)– The Board of Directors of Bowlero Corp. (NYSE: BOWL), one of the world’s premier operators of location-based entertainment, declared a regular quarterly cash dividend of $0.055 per common share. The dividend is payable on September 6, 2024, to stockholders of record on August 23, 2024.

About Bowlero Corp.

Bowlero Corporation is one of the world’s premier operators of location-based entertainment. With over 350 locations across North America, the Company serves more than 40 million guest visits annually through a family of brands that include Lucky Strike, Bowlero and AMF. In 2019, Bowlero acquired the Professional Bowlers Association, the major league of bowling and a growing media property that boasts millions of fans around the globe. For more information on Bowlero, please visit BowleroCorp.com.

Forward Looking Statements

Some of the statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risk, assumptions and uncertainties, such as statements of our plans, objectives, expectations, intentions and forecasts. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “confident,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. These forward-looking statements reflect our views with respect to future events as of the date of this release and are based on our management’s current expectations, estimates, forecasts, projections, assumptions, beliefs and information. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. All such forward-looking statements are subject to risks and uncertainties, many of which are outside of our control, and could cause future events or results to be materially different from those stated or implied in this document. It is not possible to predict or identify all such risks. These risks include, but are not limited to: our ability to design and execute our business strategy; changes in consumer preferences and buying patterns; our ability to compete in our markets; the occurrence of unfavorable publicity; risks associated with long-term non-cancellable leases for our centers; our ability to retain key managers; risks associated with our substantial indebtedness and limitations on future sources of liquidity; our ability to carry out our expansion plans; our ability to successfully defend litigation brought against us; our ability to adequately obtain, maintain, protect and enforce our intellectual property and proprietary rights and claims of intellectual property and proprietary right infringement, misappropriation or other violation by competitors and third parties; failure to hire and retain qualified employees and personnel; the cost and availability of commodities and other products we need to operate our business; cybersecurity breaches, cyber-attacks and other interruptions to our and our third-party service providers’ technological and physical infrastructures; catastrophic events, including war, terrorism and other conflicts; public health emergencies and pandemics, such as the COVID-19 pandemic, or natural catastrophes and accidents; changes in the regulatory atmosphere and related private sector initiatives; fluctuations in our operating results; economic conditions, including the impact of increasing interest rates, inflation and recession; and other factors described under the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) by the Company on September 11, 2023, as well as other filings that the Company will make, or has made, with the SEC, such as Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in other filings. We expressly disclaim any obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.

Bowlero Corp. Investor Relations
IR@BowleroCorp.comSource: Bowlero Corp

Global Market Turmoil: VIX Spikes to Pandemic-Era Highs as Recession Fears Intensify

Posted on by slightbourne@noblecapitalmarkets.com
Key Points:
– The VIX spiked to its highest level since March 2020, indicating high market volatility.
– Major indices, including the Dow and Nasdaq, suffered significant losses amid recession fears.
– Experts urged the Federal Reserve to consider emergency rate cuts to stabilize the economy.

In a significant development for global financial markets, the Cboe Volatility Index (VIX), commonly known as Wall Street’s “fear gauge,” surged to its highest level since the pandemic-driven market plunge in March 2020. This increase in volatility comes amid a sharp sell-off in equities, driven by mounting concerns about a potential U.S. recession and disappointing economic data.

The VIX briefly soared above 65 on Monday morning, a dramatic rise from about 23 on Friday and roughly 17 just a week ago. It later cooled to about 42 shortly after 10 a.m. ET, reflecting ongoing market turbulence. The last time the VIX reached such heights was in March 2020, when it climbed as high as 85.47 following the Federal Reserve’s emergency actions during the Covid-19 pandemic.

The VIX is calculated based on market pricing for options on the S&P 500 and is designed to measure expected volatility over the next 30 days. It is often used as an indicator of investor fear and market uncertainty. Historically, spikes in the VIX have coincided with significant market sell-offs, although they can also precede swift recoveries.

Monday’s market rout saw the Dow Jones Industrial Average drop 854 points, or 2.1%, while the Nasdaq Composite lost 3.1%, and the S&P 500 slid 2.5%. The decline was part of a broader global sell-off, with Japan’s Nikkei 225 plunging 12%, marking its worst day since the 1987 Black Monday crash.

The sell-off was triggered by a combination of factors, including fears of a U.S. recession, disappointing July jobs data, and concerns that the Federal Reserve is not acting quickly enough to cut interest rates to support the economy. The Fed recently chose to keep rates at their highest levels in two decades, exacerbating investor anxiety about economic growth.

Tech stocks were among the hardest hit, with Nvidia falling more than 5%, Apple dropping nearly 4.6% after Warren Buffett’s Berkshire Hathaway halved its stake in the company, and Tesla down 10%. Other major losers included Broadcom and Super Micro Computer, down 7% and 12%, respectively.

The bond market also reflected heightened fears, with U.S. Treasury yields tumbling as investors sought safe havens. The yield on the benchmark 10-year note fell to 3.7%. Meanwhile, Bitcoin experienced a sharp decline, falling from nearly $62,000 on Friday to around $52,000 on Monday.

In Asia, the Nikkei 225’s 12.4% loss underscored the global nature of the sell-off. The index closed at 31,458.42, its worst day since 1987, with a record point drop of 4,451.28. The decline was exacerbated by the Bank of Japan’s decision to raise interest rates, which ended the yen “carry trade” and increased the yen’s value against the U.S. dollar.

The sharp increase in the VIX and the corresponding market declines have prompted calls for urgent action. Jeremy Siegel, Wharton professor emeritus and chief economist at Wisdom Tree, urged the Federal Reserve to implement an emergency 75 basis point cut in the federal funds rate and to consider another cut at the September meeting. Chicago Fed President Austan Goolsbee also acknowledged that current interest rates might be too restrictive and suggested that the central bank would take necessary actions if economic conditions deteriorate further.

As markets continue to digest these developments, investors are closely monitoring economic data and Federal Reserve communications for signs of stability. The interplay between economic indicators, Fed policy, and market reactions will be crucial in determining the trajectory of the financial markets in the coming weeks. With three more Fed meetings scheduled for this year, there remains ample opportunity for the central bank to adjust its policy stance in response to evolving economic conditions.

The dramatic rise in the VIX serves as a stark reminder of the market’s vulnerability to economic uncertainties and the importance of vigilant policy responses to maintain stability and investor confidence.

Release – Graham Corporation Wins Over $65 Million In Defense and Space Industry Contracts for Mission Critical Turbomachinery and Cryogenic Pump Products

Posted on by dburczyk@noblecapitalmarkets.com

Research News and Market Data on GHM

  • Secures new contract to provide the MK19 Air Turbine Pump assembly for the Columbia-class submarine
  • Wins new contract to provide cryogenic recirculation pumps for space launch vehicles
  • Awarded another option year for alternators and regulators to support the MK48 Mod 7 Heavyweight Torpedo program

BATAVIA, N.Y.–(BUSINESS WIRE)– Graham Corporation (NYSE: GHM) (“GHM” or “the Company”), a global leader in the design and manufacture of mission critical fluid, power, heat transfer, and vacuum technologies for the defense, space, energy, and process industries, today announced that it was awarded three contracts with a combined value of over $65 million.

Matthew Malone, Vice President, Graham Corporation and General Manager – Barber-Nichols, commented, “We believe the investments we have made in our engineering and operations to expand our capacity and increase our capabilities to serve the defense and space industries led to our being awarded these contracts. We differentiated our solutions through our strong customer relationships, engineering expertise, precision manufacturing capabilities and rigorous testing and qualification processes. Our solutions are vital components that meet the high-level performance requirements for mission critical applications. We appreciate our customers’ confidence to select us for these high-value projects.”

The second option year award supporting the MK48 Mod 7 Heavyweight Torpedo program was received in the first quarter of fiscal 2025 which ended June 30, 2024. The Company will continue to provide alternators and regulators for this program. The contract award for the Company to provide the MK19 air turbine pump for the torpedo ejection system on the Columbia-class submarine was awarded in the second quarter of fiscal 2025 ending September 30, 2024. This is a new program for the Company and was won through a competitive bid process.

Also awarded in the second quarter was a contract to provide the cryogenic recirculation pump that provides thermal conditioning for upper stage engines on launch vehicles in space. The products for all three of these contracts will be manufactured at the Company’s Arvada, Colorado operations.

The revenue for the contracts to provide the second-stage cryogenic recirculation pump and to support the MK48 Mod 7 Heavyweight Torpedo program will be recognized over varied periods for the next three years while revenue for the MK19 program will be recognized over varied periods for the next eight years. The revenue from these awards had been considered in the Company’s outlook for fiscal 2025.

About Graham Corporation
Graham is a global leader in the design and manufacture of mission critical fluid, power, heat transfer and vacuum technologies for the defense, space, energy, and process industries. Graham Corporation and its family of global brands are built upon world-renowned engineering expertise in vacuum and heat transfer, cryogenic pumps, and turbomachinery technologies, as well as its responsive and flexible service and the unsurpassed quality customers have come to expect from the Company’s products and systems. Graham Corporation routinely posts news and other important information on its website, grahamcorp.com, where additional information on Graham Corporation and its businesses can be found.

Safe Harbor Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as “believe,” “expects,” “potential,” “will,” and other similar words. All statements addressing operating performance, events, or developments that Graham Corporation expects or anticipates will occur in the future, including but not limited to, winning potential future or multi-year orders, potential revenues and timing of such revenues, and delivering timely or otherwise on schedule are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties are more fully described in Graham Corporation’s most recent Annual Report filed with the Securities and Exchange Commission, including under the heading entitled “Risk Factors,” its quarterly reports on Form 10-Q, and other filings it makes with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize or should any of Graham Corporation’s underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on Graham Corporation’s forward-looking statements. Except as required by law, Graham Corporation disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this news release.

Christopher J. Thome
Vice President – Finance and CFO
Phone: (585) 343-2216

Deborah K. Pawlowski
Kei Advisors LLC
Phone: (716) 843-3908
dpawlowski@keiadvisors.com

Source: Graham Corporation

Released August 5, 2024

Release – Ocugen, Inc. Announces FDA Approval of Expanded Access Program for Patients with Retinitis Pigmentosa

Posted on by dburczyk@noblecapitalmarkets.com

Research News and Market Data on OCGN

MALVERN, Pa., Aug. 05, 2024 (GLOBE NEWSWIRE) — Ocugen, Inc. (“Ocugen” or the “Company”) (NASDAQ: OCGN), a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies and vaccines, today announced that it has received notification from FDA to begin its expanded access program (EAP) for the treatment of adult patients, aged 18 and older, with retinitis pigmentosa (RP) with OCU400—a modifier gene therapy product candidate.

“Each clinical milestone achieved by OCU400 brings us closer to providing a potential one-time treatment for life to patients living with RP,” said Dr. Shankar Musunuri, Chairman, CEO, and Co-founder of Ocugen. “With positive Phase 1/2 study data and an ongoing Phase 3 liMeliGhT (pronounced “limelight”) clinical trial, we now plan to work with clinicians, patients, and the RP community to provide access to OCU400 for eligible patients through our EAP. The EAP strengthens our commitment to serving RP patients—300,000 in the U.S. and Europe and 1.6 million globally.”

EAP allows patients who have unmet medical needs with serious or life-threatening conditions to access treatments outside of a clinical trial that are not yet approved by the FDA.

The OCU400 EAP is available for patients with early, intermediate to advanced RP with at least minimal retinal preservation who may benefit from the mechanism of action of OCU400 prior to approval of the Biologics License Application (BLA). Ocugen is actively dosing patients in the Phase 3 liMeliGhT clinical trial.

“RP patients with mutations in multiple genes currently have no therapeutic options. As a retinal surgeon, I am encouraged by the therapeutic potential of OCU400 to provide long-term benefit,” said Lejla Vajzovic, MD, FASRS, Director, Duke Surgical Vitreoretinal Fellowship Program, Associate Professor of Ophthalmology with Tenure, Adult and Pediatric Vitreoretinal Surgery and Disease, Duke University Eye Center, and Retina Scientific Advisory Board Chair of Ocugen. “The OCU400 EAP gives RP patients access to this novel modifier gene therapy outside of the ongoing Phase 3 study.”

“We are pleased to make OCU400 available to patients beyond our Phase 3 liMeliGhT clinical trial through this EAP,” said Dr. Huma Qamar, Ocugen’s Chief Medical Officer. “We are excited to expand our enrollment to include patients representing a diverse array of RP gene mutations. This program reflects our ongoing commitment to develop a safe and effective therapy for RP patients who may not have other treatment options.”

Ocugen previously announced that OCU400 has received orphan drug and Regenerative Medicine Advanced Therapy (RMAT) designations from FDA and that the European Medicines Agency (EMA) accepted the U.S.-based trial for submission of a Marketing Authorization Application (MAA). With the dosing of patients in the Phase 3 clinical trial program underway, OCU400 remains on track for targeted BLA and MAA approval in 2026.

About OCU400 EAP
The OCU400 EAP is a U.S.-only protocol for (1) eligible adult RP patients, 18 years and older, with early, intermediate to advanced disease with at least minimal retinal preservation, (2) patients who participated in the OCU400 Phase 1/2 study and who qualify for dosing in the contralateral eye, (3) patients who failed to meet inclusion criteria in the Phase 1/2 trial and ongoing Phase 3 liMeliGhT clinical trial who could benefit from OCU400, and (4) RP patients who can benefit from the mechanism of action of OCU400 prior to BLA approval.

Additional information on the OCU400 EAP will be available on www.clinicaltrials.gov.

About OCU400 Phase 3 (liMeliGhT) for RP
The Phase 3 liMeliGhT clinical trial, with a duration of one year, will have a sample size of 150 participants. One arm will include 75 participants with RHO gene mutations, and the other arm will include 75 participants who have mutations in other genes. Within each arm, participants will be randomized 2:1 to the treatment group (2.5 x1010 vector genomes/eye of OCU400) and untreated control group, respectively. Patients eight years of age and older with early to late-stage RP are being recruited to participate in the liMeliGhT study.

About OCU400
OCU400 is the Company’s modifier gene therapy product based on a nuclear hormone receptor (NHR) gene called NR2E3. This gene regulates diverse physiological functions within the retina, such as photoreceptor development and maintenance, metabolism, phototransduction, inflammation, and cell survival. Retinal cells in RP patients have a dysfunctional gene network, and OCU400 resets this network to reestablish a healthy cellular homeostasis—which has the potential to improve vision in patients with RP.

About Modifier Gene Therapy
Modifier gene therapy is designed to fulfill unmet medical needs related to retinal diseases, including IRDs, such as RP, Leber congenital amaurosis (LCA) and Stargardt disease, as well as multifactorial diseases like dry age-related macular degeneration (dAMD). Our modifier gene therapy platform is based on the use of NHRs, master gene regulators, which have the potential to restore homeostasis — the basic biological processes in the retina. Unlike single-gene replacement therapies, which only target one genetic mutation, we believe that our modifier gene therapy platform, through its use of NHRs, represents a novel approach that has the potential to address multiple retinal diseases caused by mutations in multiple genes with one product, and to address complex diseases that are potentially caused by imbalances in multiple gene networks. Currently, Ocugen has three modifier gene therapy programs in the clinic: OCU400, OCU410, and OCU410ST. In addition to the OCU400 Phase 3 liMeliGhT clinical trial, the OCU410 Phase 1/2 ArMaDa clinical trial for geographic atrophy (GA) secondary to dAMD and the OCU410ST Phase 1/2 GARDian clinical trial for Stargardt disease are currently underway. GA affects approximately two to three million people in the U.S. and EU combined and Stargardt disease affects nearly 100,000 people in the U.S. and EU combined.

About Ocugen, Inc.
Ocugen, Inc. is a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies and vaccines that improve health and offer hope for patients across the globe. We are making an impact on patients’ lives through courageous innovation—forging new scientific paths that harness our unique intellectual and human capital. Our breakthrough modifier gene therapy platform has the potential to treat multiple retinal diseases with a single product, and we are advancing research in infectious diseases to support public health and orthopedic diseases to address unmet medical needs. Discover more at www.ocugen.com and follow us on X and LinkedIn.

Cautionary Note on Forward-Looking Statements
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding qualitative assessments of available data, potential benefits, expectations for ongoing clinical trials, anticipated regulatory filings and anticipated development timelines, which are subject to risks and uncertainties. We may, in some cases, use terms such as “predicts,” “believes,” “potential,” “proposed,” “continue,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should,” or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Such statements are subject to numerous important factors, risks, and uncertainties that may cause actual events or results to differ materially from our current expectations, including, but not limited to, the risks that preliminary, interim and top-line clinical trial results may not be indicative of, and may differ from, final clinical data; that unfavorable new clinical trial data may emerge in ongoing clinical trials or through further analyses of existing clinical trial data; that earlier non-clinical and clinical data and testing of may not be predictive of the results or success of later clinical trials; and that that clinical trial data are subject to differing interpretations and assessments, including by regulatory authorities. These and other risks and uncertainties are more fully described in our periodic filings with the Securities and Exchange Commission (SEC), including the risk factors described in the section entitled “Risk Factors” in the quarterly and annual reports that we file with the SEC. Any forward-looking statements that we make in this press release speak only as of the date of this press release. Except as required by law, we assume no obligation to update forward-looking statements contained in this press release whether as a result of new information, future events, or otherwise, after the date of this press release.

Contact:
Tiffany Hamilton
Head of Corporate Communications
Tiffany.Hamilton@ocugen.com

Haynes International (HAYN) – Tempering Expectations for the Remainder of FY 2024 and FY 2025

Posted on by cpereira@noblefcm.com


Monday, August 05, 2024

Haynes International, Inc. is a leading developer, manufacturer and marketer of technologically advanced, nickel and cobalt-based high-performance alloys, primarily for use in the aerospace, industrial gas turbine and chemical processing industries.

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.

Third quarter financial results. Haynes reported third-quarter fiscal 2024 net income of $8.1 million or $0.63 per share compared to $8.8 million or $0.68 per share during the prior year period. Adjusted EBITDA was $17.1 million compared to $18.7 million during the prior year period and declined as a percentage of net revenues. Third-quarter results were negatively impacted by raw material headwinds and lower mill production volumes due to fewer orders and company initiatives to reduce inventory.

Updating estimates. We have lowered our 2024 EBITDA and EPS estimates to $68.5 million and $2.52, respectively, from $77.3 million and $3.00. The revisions reflect third quarter financial results and management expectations that fourth quarter revenue and earnings will be like the third quarter due to the unfavorable impact of lower production volumes. Our 2025 EBITDA and EPS estimates were lowered to $90.5 million and $3.82, respectively, from $99.5 million and $4.15 to reflect lower revenue and margin expectations in 2025, particularly during the first half of the year.


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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. 

Cumulus Media (CMLS) – Green Shoots Wither Amidst Economic Uncertainty

Posted on by cpereira@noblefcm.com


Monday, August 05, 2024

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.

Mixed Q2 results. The company reported revenue of $204.8 million, slightly lighter than our expectations of $206.2M. Due to cost cuts, adj. EBITDA was $25.2 million, finishing ahead of our estimates by $2.1M. Digital revenues advanced 5%, but was slower than the 7% in the first quarter. 

Lackluster pacing outlook. Management indicated that third quarter revenue pacing is disappointingly down low single digits, in spite of the anticipated influx of Political advertising. We believe that spot advertising is down mid single digits, with Network likely to be down double digits, similar to the second quarter. 


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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 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. 

ACCO Brands (ACCO) – 2Q 2024: A Closer Look

Posted on by cpereira@noblefcm.com


Monday, August 05, 2024

ACCO Brands Corporation is one of the world’s largest designers, marketers and manufacturers of branded academic, consumer and business products. Our widely recognized brands include AT-A-GLANCE®, Esselte®, Five Star®, GBC®, Kensington®, Leitz®, Mead®, PowerA®, Quartet®, Rapid®, Rexel®, Swingline®, Tilibra®, and many others. Our products are sold in more than 100 countries around the world. More information about ACCO Brands, the Home of Great Brands Built by Great People, can be found at www.accobrands.com.

Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , 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.

Segment results. Americas revenue totaled $292.3 million in Q2, a decrease of 13.1% from the prior year period. Comparable sales were down 12.7%. International revenue was $146.0 million in Q2, a decrease of 7.1% from the prior period. Comparable sales decreased 5.1%. While revenue was modestly below our estimates, largely due to soft demand for business and consumer office products and a shift from lower margin products, we believe the Company’s outlook is favorable.

Cost reduction efforts. The company made significant progress towards its cost reduction target of $60 million in annualized savings, with $10 million in cost reductions realized so far this year, and $20 million of savings expected for full year 2024. Notably, the Company reduced inventory levels by 17% from the prior year with its technology enabled SKU rationalization.


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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. 

Wall Street Panic Forces Powell’s Hand – Will He Cut Rates?

Posted on by slightbourne@noblecapitalmarkets.com

As of August 5, 2024, the Federal Reserve finds itself under increasing pressure to take more aggressive action on interest rates amid growing concerns about the U.S. economy and heightened market volatility. The recent sell-off on Wall Street, coupled with a disappointing July jobs report, has intensified calls for the central bank to accelerate its rate-cutting plans.

The latest employment data released by the Bureau of Labor Statistics showed the U.S. economy added only 114,000 nonfarm payroll jobs in July, falling short of the 175,000 expected by economists. Moreover, the unemployment rate climbed to 4.3%, its highest level since October 2021. These figures have reignited fears of an economic slowdown and potential recession.

In response to these developments, market expectations for Fed action have shifted dramatically. Traders are now pricing in more aggressive rate cuts, anticipating half-percentage-point reductions in both September and November, followed by an additional quarter-point cut in December. This marks a significant change from previous expectations of two quarter-point cuts for the remainder of 2024.

Some prominent voices on Wall Street are even calling for more immediate action. JPMorgan chief economist Michael Feroli suggests there is a “strong case to act before September,” indicating that the Fed may be “materially behind the curve.” Feroli expects a 50-basis-point cut at the September meeting, followed by another 50-basis-point reduction in November.

However, not all experts agree on the need for such aggressive measures. Wilmer Stith, bond portfolio manager for Wilmington Trust, believes an inter-meeting rate cut is unlikely, as it might further spook investors. Wells Fargo’s Brian Rehling echoes this sentiment, stating that while the situation could deteriorate rapidly, the Fed is not at the point of needing an emergency rate cut.

The pressure on the Fed comes just days after its most recent policy meeting, where Chair Jerome Powell and his colleagues decided to keep rates at a 23-year high. This decision has been questioned by some observers who believe the Fed should have acted sooner to get ahead of a slowing economy.

Powell, for his part, appeared dismissive of the idea of a 50-basis-point cut during last week’s press conference. However, he will have another opportunity to address monetary policy in about two weeks at the Fed’s annual symposium in Jackson Hole, Wyoming.

As market participants anxiously await further guidance, the debate over the appropriate pace and timing of rate cuts continues. Some strategists, like Baird’s Ross Mayfield, believe a 50-basis-point rate cut should be on the table for the September meeting.

The coming weeks will be crucial as policymakers digest incoming economic data and assess the need for more aggressive action. With three more Fed meetings scheduled for this year, there remains ample opportunity for the central bank to adjust its stance.

As the situation evolves, all eyes will be on economic indicators, Fed communications, and market reactions. The interplay between these factors will be critical in determining the trajectory of monetary policy and the broader economic outlook for the remainder of 2024 and beyond.

New Hope for Rare Disease Patients: FDA Panel Backs Zevra’s Drug

Posted on by slightbourne@noblecapitalmarkets.com
Key Points:
– FDA advisory panel recommends approval of arimoclomol for Niemann-Pick disease type C (NPC).
– If approved, arimoclomol would be the first FDA-approved treatment for NPC in the US.
– Final FDA decision expected by September 21, 2024.

In a significant development for patients with a rare and devastating brain disease, an FDA advisory panel has recommended approving arimoclomol, a drug developed by Zevra Therapeutics. This decision marks a potential turning point in the treatment of Niemann-Pick disease type C (NPC), a condition that currently lacks FDA-approved therapies in the United States.

NPC is a serious genetic disorder that impairs the body’s ability to process and transport fats, leading to their accumulation in various organs, including the brain. This buildup causes progressive neurological damage, severely impacting patients’ quality of life. The disease is caused by mutations in either the NPC1 or NPC2 genes, which are responsible for producing proteins involved in cellular cholesterol transport.

Arimoclomol’s journey to potential approval has been marked by setbacks and perseverance. In 2021, the FDA initially rejected the drug, requesting additional evidence of its efficacy. However, under the new ownership of Zevra Therapeutics (formerly KemPharma), arimoclomol has found new life. The company submitted a reinforced New Drug Application (NDA) with additional long-term data, which seems to have addressed the FDA’s previous concerns.

The FDA’s Genetic Metabolic Diseases Advisory Committee (GeMDAC) voted 11 to 5 in favor of approving arimoclomol. This recommendation is based on a comprehensive review of clinical data, including results from a pivotal trial and a four-year open-label extension study. These studies demonstrated a decrease in the NPC Clinical Severity Scale (NPCCSS) score compared to placebo, indicating a meaningful clinical benefit for patients.

Arimoclomol works by inducing the heat shock response in cells, which helps to correct the protein misfolding that contributes to NPC. This novel approach has earned the drug several FDA designations, including orphan drug, fast track, breakthrough therapy, and rare pediatric disease status, underscoring its potential significance in treating this devastating condition.

If approved, arimoclomol would become the first FDA-approved treatment for NPC in the United States. Currently, US patients rely on off-label use of miglustat (Zavesca), which is approved for NPC in some European countries. The FDA’s final decision on arimoclomol is expected by September 21, 2024, the Prescription Drug User Fee Act (PDUFA) action date for the NDA.

The market implications of arimoclomol’s potential approval are substantial. GlobalData forecasts that the NPC drug market could reach $220 million by 2031 across the US, Germany, and the UK. This represents a significant opportunity for Zevra Therapeutics and, more importantly, a beacon of hope for NPC patients and their families.

Zevra’s CEO, Neil McFarlane, expressed confidence in arimoclomol’s clinical benefit and optimism about its path to approval. The company’s persistence in addressing the FDA’s initial concerns and providing robust long-term data has seemingly paid off, potentially bringing a much-needed treatment option to a patient population with limited choices.

This story underscores the complex and often challenging path of drug development for rare diseases. It highlights the importance of persistence and comprehensive clinical data in addressing regulatory concerns and ultimately bringing innovative treatments to patients in need. If approved, arimoclomol could significantly improve the lives of people with NPC, offering hope to a community that has long awaited an effective treatment option.