CULVER CITY, Calif., July 11, 2023 (GLOBE NEWSWIRE) — Snail, Inc. (Nasdaq: SNAL) (“Snail”), a leading, global independent developer and publisher of interactive digital entertainment, today announced that ARK: Survival Evolved will be featured in the online competitive game event, DEDsafío, scheduled for July 12, 2023.
DEDsafío is a series featuring Latin American and Spanish streamers and is organized by renowned Mexican video game influencer, ElDed. Initiated in 2021 with DEDsafío Minecraft, the series has featured various games including Minecraft, League of Legends, Rocket League, PUBG, Valorant, COD: Warzone, Fortnite, and Fall Guys.
Each DEDsafío event involves content creators participating in a progression of challenges that increase in complexity. The upcoming DEDsafío event will spotlight ARK: Survival Evolved, with about 50 new and existing streamers expected to participate under the aegis of ElDed. The competition unfolds on a custom server, featuring specific mods for the series, with the aim of enduring and ultimately conquering all the presented challenges.
ElDed, a Mexican streamer based in the United States, has established himself as a major influencer in the global gaming community, boasting 5.5 million followers on Twitch and an impressive total of 11 million subscribers across his two YouTube channels.
Jim Tsai, Chief Executive Officer of Snail, expressed his enthusiasm, “We are thrilled that ARK: Survival Evolved will be featured in the upcoming DEDsafío event. Our commitment is to ensure our games remain accessible and engaging to different regions and communities globally. We look forward to future opportunities to participate in similar vibrant events featuring our long-standing ARK franchise and other games in our portfolio.”
About Snail, Inc.
Snail is a leading, global independent developer and publisher of interactive digital entertainment for consumers around the world, with a premier portfolio of premium games designed for use on a variety of platforms, including consoles, PCs and mobile devices.
Forward-Looking Statements
This press release contains statements that constitute forward-looking statements. Many of the forward-looking statements contained in this press release can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “may,” “predict,” “continue,” “estimate” and “potential,” or the negative of these terms or other similar expressions. Forward-looking statements appear in a number of places in this press release and include, but are not limited to, statements regarding Snail’s intent, belief or current expectations. These forward-looking statements include information about possible or assumed future results of Snail’s business, financial condition, results of operations, liquidity, plans and objectives. The statements Snail makes regarding the following matters are forward-looking by their nature: growth prospects and strategies; launching new games and additional functionality to games that are commercially successful, including the launch of ARK: Survival Ascended, ARK: The Animated Series and ARK 2; expectations regarding significant drivers of future growth; its ability to retain and increase its player base and develop new video games and enhance existing games; competition from companies in a number of industries, including other game developers and publishers and both large and small, public and private Internet companies; its relationships with third-party platforms such as Xbox Live and Game Pass, PlayStation Network, Steam, Epic Games Store, the Apple App Store, the Google Play Store, My Nintendo Store and the Amazon Appstore; expectations for future growth and performance; and assumptions underlying any of the foregoing.
MAIA is a targeted therapy, immuno-oncology company focused on the development and commercialization of potential first-in-class drugs with novel mechanisms of action that are intended to meaningfully improve and extend the lives of people with cancer. Our lead program is THIO, a potential first-in-class cancer telomere targeting agent in clinical development for the treatment of NSCLC patients with telomerase-positive cancer cells. For more information, please visit www.maiabiotech.com.
Robert LeBoyer, Senior Vice President, Equity Research Analyst, Biotechnology, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Survival Data From The First Two Patients Announced. MAIA Biotechnology announced updated survival data from the first two patients treated in its Phase 2 THIO-101 trial. The patients remain alive without disease progression for 12.2 and 11.5 months from treatment initiation and 10.2 months and 8.5 months after completing THIO treatment. These results compare with expected survival of about 3 months to 4 months after disease progression or about 6 months if a third line of therapy is given. We see these positive results as consistent with the preclinical data.
Patients Were From The Safety Lead-In Stage. The THIO-101 trial enrolls patients with recurrent or metastatic Stage 4 non-small cell lung cancer that have failed 2 lines of therapy. These prior therapies include an immune checkpoint inhibitor and a platinum-based (standard) chemotherapy regimen. The two patients were from the Part A safety verification stage. The patients were treated with 360 mg of THIO followed by a standard regimen of Libtayo (cemiplimab, an immune checkpoint inhibitor from Regeneron). The patients have not received any new cancer therapies.
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.
GeoVax Labs, Inc., a clinical-stage biotechnology company, develops human vaccines for infectious diseases and cancer in the United States and internationally. The company through its patented Modified Vaccinia Ankara-Virus Like Particle vaccine platform develops various vaccines. It is developing various vaccines that are in human clinical trials, and preclinical research and development phases, including vaccines against human immunodeficiency virus (HIV); Zika virus; malaria; and hemorrhagic fever viruses, such as Ebola, Sudan, Marburg, and Lassa, as well as therapeutic vaccines for chronic Hepatitis B infections and cancers. The company has collaboration and partnership agreements with the National Institute of Allergy and Infectious Diseases of the National Institutes of Health; the HIV Vaccines Trial Network; Centers for Disease Control and Prevention; United States Army Research Institute of Infectious Disease; U.S. Naval Research Laboratory; Emory University; University of Pittsburgh; Georgia State University Research Foundation; Peking University; University of Texas Medical Branch; the Institute of Human Virology at the University of Maryland; the Scripps Research Institute; the Burnet Institute; American Gene Technologies, Inc.; Viamune, Inc.; Vaxeal Holding SA; CaroGen Corporation; Virometix AG; and Leidos, Inc. GeoVax Labs, Inc. was founded in 2001 and is based in Smyrna, Georgia.
Robert LeBoyer, Senior Vice President, Equity Research Analyst, Biotechnology, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
GeoVax Presents Preliminary Phase 1/2 HNSCC data GeoVax presented first data from its Gedeptin Phase 1/2 trial at the AACR (American Association for Cancer Research) and AHNS (American Head and Neck Society) joint cancer conference. The results show that the Gedeptin regimen was able to achieve Stable Disease according to RECIST 1.1 criteria in 5 out of 7 evaluable patients.
Study Design and First Data. Gedeptin delivers the PNP gene from E. coli to convert a prodrug, fludarabine, into an active cytotoxic drug, fluoroadenine, inside the tumor cells. The trial enrolled patients with refractory head and neck squamous cell carcinoma (HNSCC) to receive up to 5 cycles of the combination, consisting of 3 intratumoral injections of Gedeptin over two days followed by daily infusions of fludarabine for three days. The presentation reported on the first 8 patients out of a planned enrollment of 10 patients.
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.
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.
Sale of mining claims enhances financial flexibility. Eskay Mining recently sold five mining claims to Skeena Resources Limited (TSX: SKE, NYSE: SKE) for C$4 million in cash. Initial consideration of C$2 million was paid to Eskay upon closing with an additional C$1 million payable on October 31, 2023, and a final C$1 million payment due on December 31, 2023. Four of the claims are north and west of the Skeena Eskay Creek Project, and one of the claims is adjacent to the west side of the project.
Maintaining exposure to the properties’ long-term potential. Eskay Mining retained a 2% net smelter returns royalty (NSR) interest in the claims. Skeena may purchase 50% of the royalty at any time for C$2 million. Moreover, Eskay will not be required to pay any road use fees to Skeena for its use of the Eskay Creek Road for the five-year period ending December 31, 2027.
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.
Statistically, 2023 Should Finally Be the Year for Small Caps
It has been six months since I shared the hard data and a graphic from Royce Investment Partners. In the firms most recent letter to investors, the firm reiterated the reality that after any consecutive five-year period where small-cap stocks had returned less than five percent, the following year, returns averaged 14.9%. Senior management of Royce again stated in its July newsletter, that a five-year low-performing period occurred 81 times in history, 81 times small caps had a sixth year with very good returns.
Are Small Cap Stocks on Track to Make it 82 Times in a Row?
The five-year period 12/31/83 through 6/30/23, was below 5% for each year. January kicked off the sixth year return was up over 5%. Since the strong January, we have had a strong June, and so far July. Year-to-date, the Russell 2000 index is up 9.4%, which is a strong six months – with six months to go. If it stays on course, small caps will keep the “100% of the time history.”
What is even more exciting is that in the month of June alone, the small cap index was up 6.9% and so far in July is up on the month and outperforming large cap indexes, which are all down on the month.
While a 100% of the time track record is comforting, the idea that so far only months that start with the letter “J” have been up, and after this month, we run out of “J” months, is concerning. The Royce newsletter dated July 7th has pointed out another positive statistic for where we are now.
Co-CIO Francis Gannon recognized, “It’s true that January and June were the only months so far in 2023 when the Russel 2000 had positive returns. There were four straight down months in between.” Gannon explained that this is also a rare occurrence that has occurred only nine times since the start of the Russell 2000 on the last day of 1978. The Co-CIO said, “For the eight periods for which we have data, subsequent one-year returns averaged 24.7%; subsequent three-year returns averaged 21.0%; and subsequent five-year returns averaged 16.8%.”
These numbers work on a simple, buy-the-dip phenomenom, but quantify it in a way that gives investors confidence that at a minimum there is a rationale behind expanding holdings in small cap stocks.
Take Away
Investing, at it’s core, is putting statistics on your side, expecting that it is not different this time, then letting historical probabilities play out. Large cap stocks are expensive compared to small caps. This may not be the only reason the two scenarios discussed in newsletters from Royce Capital Partners have played out. But other factors, including a rebalancing of the Nasdaq 100 Index this summer, strongly favor a more competitive performance of small cap stocks in 2023 than we have experienced in five years.
Nasdaq Special Rebalance Will Create Winners and Losers
The Nasdaq press release didn’t provide much information, but index investors have been talking about the need to reweight large-cap funds for years. Later this month, the Nasdaq 100 will be rebalanced. Unlike the Russell Indexes, which have an annual rebalance process, this will be only the third time in history. The last Nasdaq 100 reweighting was in 2011. This will affect stock prices, potentially, by quite a bit.
The seven big tech stocks like Apple (AAPL), Microsoft (MSFT), and Meta (META) have market caps that rival entire stock exchanges outside of the US. The popular stock indexes, including the Nasdaq 100, weights stocks with a larger market cap more heavily than those with lower market caps. The result is the movement of these indexes don’t necessarily reflect the movement of the stocks within the index. In the case of the Nasdaq 100, ninety-three other stocks taken together are weighted by only 44.5%.
The rebalancing is expected to trim the weighting of at least six of the seven largest stocks in the index and increase the weighting somewhat of many others. Similar to what occurs each June during the Russell Index Reconstitution, index fund managers will have to sell those stocks that experience reduced weight and buy those stocks that have increased weighting in the benchmark index.
The Big Seven that Are Likely to be Trimmed
Microsoft (MSFT)………..12.9%
Apple (AAPL)………..12.5%
NVIDIA (NVDA)……….7.0%
AMAZON (AMZN)……….6.9%
Alphabet (GOOG)……….3.7%
Alphabet (GOOGL)……….3.7%
Tesla (TSLA)……….5.5%
Meta Platforms (META)……….4.3%
The seven-largest companies in the Nasdaq 100 impact 55.5% of the index’s movement. This combined weighting will be lowered. Investors can also expect relative weighting shifts within these upper echelons.
Current Weighting and Methodology
The Nasdaq 100 index is a modified market-cap-weighted index. Overall Market valuation is the largest factor, but with oversight and review of concentration to help benefit users of the index.
Currently, MSFT has the largest weight. AAPL, which has a larger market cap than MSFT has a lower weight. Alphabet has the next highest weighting with the GOOGL and GOOG share classes combined. NVDA recently jumped to a 7% Nasdaq 100 weight, just ahead of AMZN. Tech/car company TSLA, and META are the final two represented in the top seven that are expected to end the month with some of their current weighting being added to stocks with smaller market values.
Key Dates and New Methodology
The Nasdaq 100 includes the 100 largest non-financial Nasdaq components.
The weighting changes will be announced on Friday, July 14, after the market close. The current 100 tickers will all still be intact.
The Nasdaq 100 special rebalance will take place before the Nasdaq open on Monday, July 24, to “address overconcentration in the index by redistributing the weights.” This has only happened twice before, in December 1998 and May 2011.
The combined weight of the five companies with the largest market caps, will be set to 38.5. The top four alone, have a combined weight of 46.7%. So these company’s can expect meaningful reductions. Nasdaq has also adjusted its methodology to state that no company outside the top five can have a market cap exceeding 4.4%. This implies that Tesla will also experience a little trim in its weighting.
Why it’s Important
With 17% additional weighting to be shared down the line in the Nasdaq 100 index, there may be a huge shift in individual stocks. The official new weightings are to be released Friday July 14, based on July 3 market data. This will include companies that see an increase in weighing.
According to Nasdaq, more than $300 billion in exchange-traded funds tracked the index as of the end of 2021, that number has since risen considerably. Currently, QQQ, the Invesco Nasdaq 100 ETF (QQQ), by itself, has over $200 billion in assets. Index fund managers using the benchmark will need to sell some of their holdings in the largest constituents of the index, and add to their positions in other stocks, based on the Nasdaq readjustments that we will learn about after the close on Friday July 14.
Atlanta, GA, July 10, 2023 – GeoVax Labs, Inc. (Nasdaq: GOVX), a biotechnology company developing immunotherapies and vaccines against cancers and infectious diseases, announced today the presentation of Phase 1/2 clinical trial data for GeoVax’s gene therapy candidate, Gedeptin® at the American Association for Cancer Research (AACR) and the American Head and Neck Society (AHNS) joint Head and Neck Cancer Conference in Montréal, QC, Canada. The presentation, titled “Phase 1/ 2 study of Ad/PNP with fludarabine for the treatment of head neck squamous cell carcinoma (HNSCC)”, describes the evaluation of Gedeptin as an experimental therapy for refractory solid tumors.
Gedeptin is a novel patented product/technology for the treatment of solid tumors through a gene therapy strategy known as Gene-Directed Enzyme Prodrug Therapy (GDEPT). In GDEPT, a vector is used to selectively transduce tumor cells with a nonhuman gene, which expresses an enzyme that can convert a nontoxic prodrug into a highly toxic antitumor compound in situ.
The ongoing Phase 1/2 trial (ClinicalTrials.gov Identifier: NCT03754933) is evaluating the safety and efficacy of repeat cycles of Gedeptin therapy in patients with recurrent head and neck squamous cell carcinoma (HNSCC), with tumor(s) accessible for injection and no curable treatment options. The protocol entails up to five treatment cycles, each consisting of three intra-tumoral injections of Gedeptin over two days followed by infusion of a prodrug, fludarabine phosphate, once daily for three days. A completed Phase 1 dose-ranging study demonstrated that treating a tumor with a single cycle of Gedeptin, followed by fludarabine infusions, was well tolerated, with evidence of a reduction in tumor size in patients with solid tumors.
The poster presentation (viewed here), highlighted the following data:
8 patients have been enrolled in the study to date.
No dose limiting toxicities or serious adverse events (SAEs) are definitively attributable to treatment. Additionally, no adverse events above grade 3 severity have been reported.
Up to 5 cycles of Gedeptin treatment have been administered without limiting sequelae. Intratumoral expression of the PNP transgene by RT-PCR has been established in treated tumors studied to date.
Impairment of tumor growth (i.e., “stable disease” using RECIST 1.1 evaluation criteria) in targeted lesions was seen in 5 of 7 patients; tumor response assessment in one patient remains under study.
Kelly T. McKee, M.D., GeoVax’s Chief Medical Officer and presenting author, commented, “This clinical trial is ongoing, but from our interim analysis, we can conclude that administration of Gedeptin is safe and feasible. The strategy is also being considered for earlier-stage HNSCC with less tumor burden, including a role similar to neoadjuvant or cytoreductive radiotherapy in combination with checkpoint blockade inhibition. A multi-center trial is planned to define the maximum tolerable dose and feasibility in smaller tumors.”
The current study is being funded in part by the U.S. Food and Drug Administration (FDA) pursuant to its Orphan Products Clinical Trials Grants Program. The FDA has also granted Gedeptin orphan drug status for the intra-tumoral treatment of anatomically accessible oral and pharyngeal cancers, including cancers of the lip, tongue, gum, floor of the mouth, salivary gland, and other oral cavities. GeoVax anticipates completion of the current trial by year-end 2023, after which expanded development of Gedeptin is anticipated, both as monotherapy and combination therapy in conjunction with other therapies to potentially include immune checkpoint inhibitors, angiogenesis inhibitors, radiation, chemotherapy, etc.)
About GeoVax
GeoVax Labs, Inc. is a clinical-stage biotechnology company developing novel therapies and vaccines for solid tumor cancers and many of the world’s most threatening infectious diseases. The company’s lead program in oncology is a novel oncolytic solid tumor gene-directed therapy, Gedeptin®, presently in a multicenter Phase 1/2 clinical trial for advanced head and neck cancers. GeoVax’s lead infectious disease candidate is GEO-CM04S1, a next-generation COVID-19 vaccine targeting high-risk immunocompromised patient populations. Currently in two Phase 2 clinical trials, GEO-CM04S1 is being evaluated as a COVID-19 vaccine for immunocompromised patients such as those suffering from hematologic cancers and other patient populations for whom the current authorized COVID-19 vaccines are insufficient. In addition, GEO-CM04S1 is in a Phase 2 clinical trial evaluating the vaccine as a more robust, durable COVID-19 booster among healthy patients who previously received the mRNA vaccines. GeoVax has a leadership team who have driven significant value creation across multiple life science companies over the past several decades. For more information, visit our website: www.geovax.com.
Forward-Looking Statements
This release contains forward-looking statements regarding GeoVax’s business plans. The words “believe,” “look forward to,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Actual results may differ materially from those included in these statements due to a variety of factors, including whether: GeoVax is able to obtain acceptable results from ongoing or future clinical trials of its investigational products, GeoVax’s immuno-oncology products and preventative vaccines can provoke the desired responses, and those products or vaccines can be used effectively, GeoVax’s viral vector technology adequately amplifies immune responses to cancer antigens, GeoVax can develop and manufacture its immuno-oncology products and preventative vaccines with the desired characteristics in a timely manner, GeoVax’s immuno-oncology products and preventative vaccines will be safe for human use, GeoVax’s vaccines will effectively prevent targeted infections in humans, GeoVax’s immuno-oncology products and preventative vaccines will receive regulatory approvals necessary to be licensed and marketed, GeoVax raises required capital to complete development, there is development of competitive products that may be more effective or easier to use than GeoVax’s products, GeoVax will be able to enter into favorable manufacturing and distribution agreements, and other factors, over which GeoVax has no control.
Further information on our risk factors is contained in our periodic reports on Form 10-Q and Form 10-K that we have filed and will file with the SEC. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
TORONTO, ON / ACCESSWIRE / July 10, 2023 /Eskay Mining Corp. (“Eskay” or the “Company”) (TSXV:ESK) (OTCQX:ESKYF) (Frankfurt:KN7)(WKN:A0YDPM) wishes to announce that it has sold 5 mining claims (the “Claims”) in the Golden Triangle area of BC to Skeena Resources Limited (“Skeena”) in consideration for aggregate cash payments of $4 million. The initial consideration of $2 million was paid to Eskay on closing, a further $1 million is payable on October 31, 2023 and the final $1 million payment is payable on December 31, 2023. Eskay retains a 2% net smelter returns royalty (the “Royalty”) in the Claims. Skeena can purchase 50% of the Royalty at any time for $2 million. In addition, Eskay will not be required to pay any road use fees to Skeena for its use of the Eskay Creek Road for the five year period ending December 31, 2027, provided that its road use those years is consistent with its road use in 2022. Four of the Claims are north and west of the Skeena Eskay Creek Project and one of the Claims is adjacent to the west side of the Skeena Eskay Creek Project.
The Company also wishes to announce that, further to its press release of May 18, 2023, the Eskay exploration team has been mobilized to the camp and is preparing for the 2023 exploration and drilling season at the Company’s Consolidated Eskay Project, Golden Triangle, BC.
About Eskay Mining Corp:
Eskay Mining Corp (TSXV:ESK) is a TSX Venture Exchange listed company, headquartered in Toronto, Ontario. Eskay is an exploration company focused on the exploration and development of precious and base metals along the Eskay rift in a highly prolific region of northwest British Columbia known as the “Golden Triangle,” 70km northwest of Stewart, BC. The Company currently holds mineral tenures in this area comprised of 177 claims (52,600 hectares).
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements: This Press Release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to risks and uncertainties. Many factors could cause our actual results to differ materially from the statements made, including those factors discussed in filings made by us with the Canadian securities regulatory authorities. Should one or more of these risks and uncertainties, such as actual results of current exploration programs, the general risks associated with the mining industry, the price of gold and other metals, currency and interest rate fluctuations, increased competition and general economic and market factors, occur or should assumptions underlying the forward looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, or expected. We do not intend and do not assume any obligation to update these forward-looking statements, except as required by law. Shareholders are cautioned not to put undue reliance on such forward-looking statements.
Mechanical stress on the heart, such as high blood pressure, initiates NLRP3-induced inflammation through heart-brain interactions, causing heart enlargement (hypertrophic heart disease)
Mechanical stress on the heart triggers neural signals that contribute to NLRP3 inflammasome activation and subsequent release of IL-1β to initiate inflammation in the stressed heart
ZyVersa is developing Inflammasome ASC Inhibitor IC 100, which can inhibit up to 12 different inflammasomes (including NLRP3 inflammasomes) and their associated ASC specks which perpetuate damaging inflammation
WESTON, Fla., July 10, 2023 (GLOBE NEWSWIRE) — ZyVersa Therapeutics, Inc. (Nasdaq: ZVSA, or “ZyVersa”), a clinical stage specialty biopharmaceutical company developing first-in-class drugs for treatment of inflammatory and renal diseases, announces publication of an article in the peer-reviewed journal Circulation demonstrating the role of inflammasome NLRP3 activation in hypertrophic heart disease induced by mechanical stress.
In the paper titled, “NLRP3 Inflammasome Activation Through Heart-Brain Interaction Initiates Cardiac Inflammation and Hypertrophy During Pressure Overload,” data are reported from in vivo studies in various animal models, and in vitro experiments using primary rat neonate cardiomyocytes and fibroblasts, and a human microvascular endothelial cell line. The objective was to determine the regulatory mechanism of inflammation and its role in the stressed heart. Key findings are as follows:
Neural signals contribute to NLRP3 inflammasome activation in cardiac nonimmune cells that initiate inflammation in the stressed heart through IL-1β production
Pressure overload to the heart’s left ventricle activates sympathetic efferent nerves (SENs) to secrete extracellular ATP, which activates NLRP3 inflammasomes in cardiomyocytes, fibroblasts, and vascular endothelial cells, leading to L-1β production and initiation of the inflammatory cascade that causes cardiac adaptive hypertrophy in response to mechanical stress
Cardiac afferent nerve signals also contribute to ATP secretion from SEN terminals and inflammasome activation
The above findings reveal that cardiac inflammation and hypertrophy are controlled through NLRP3 activation through heart-brain interactions
“The research published in Circulation demonstrating that mechanical stress on the heart, such as high blood pressure, initiates NLRP3-induced inflammation through heart-brain interactions causing hypertrophic heart disease, provides support for Inflammasome ASC Inhibitor IC 100 as a potential therapeutic candidate for a condition that affects approximately 1 in 500 people. Hypertrophic heart disease puts people at greater risk of heart failure, stroke, and cardiac arrhythmias, including sudden cardiac death. Our preclinical data demonstrate that IC 100 has broad penetration, including the heart and central nervous system, where it can inhibit formation of NLRP3 and other types of inflammasomes to block initiation of the inflammatory cascade. Likewise, IC 100 uniquely inhibits ASC specks to block perpetuation of damaging inflammation,” commented Stephen C. Glover, ZyVersa’s Co-founder, Chairman, CEO and President. To review a white paper summarizing the mechanism of action and preclinical data for IC 100, Click Here.
About Inflammasome ASC Inhibitor IC 100
IC 100 is a novel humanized IgG4 monoclonal antibody that inhibits the inflammasome adaptor protein ASC. IC 100 was designed to attenuate both initiation and perpetuation of the inflammatory response. It does so by binding to a specific region of the ASC component of multiple types of inflammasomes, including NLRP1, NLRP2, NLRP3, NLRC4, AIM2, Pyrin. Intracellularly, IC 100 binds to ASC monomers, inhibiting inflammasome formation, thereby blocking activation of IL-1β early in the inflammatory cascade. IC 100 also binds to ASC in ASC Specks, both intracellularly and extracellularly, further blocking activation of IL-1β and the perpetuation of the inflammatory response that is pathogenic in inflammatory diseases. Because active cytokines amplify adaptive immunity through various mechanisms, IC 100, by attenuating cytokine activation, also attenuates the adaptive immune response.
About ZyVersa Therapeutics, Inc.
ZyVersa (Nasdaq: ZVSA) is a clinical stage specialty biopharmaceutical company leveraging advanced, proprietary technologies to develop first-in-class drugs for patients with renal and inflammatory diseases who have significant unmet medical needs. The Company is currently advancing a therapeutic development pipeline with multiple programs built around its two proprietary technologies – Cholesterol Efflux Mediator™ VAR 200 for treatment of kidney diseases, and Inflammasome ASC Inhibitor IC 100, targeting damaging inflammation associated with numerous CNS and other inflammatory diseases. For more information, please visit www.zyversa.com.
Certain statements contained in this press release regarding matters that are not historical facts, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These include statements regarding management’s intentions, plans, beliefs, expectations, or forecasts for the future, and, therefore, you are cautioned not to place undue reliance on them. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. ZyVersa Therapeutics, Inc (“ZyVersa”) uses words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and similar expressions to identify these forward-looking statements that are intended to be covered by the safe-harbor provisions. Such forward-looking statements are based on ZyVersa’s expectations and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements due to a number of factors, including ZyVersa’s plans to develop and commercialize its product candidates, the timing of initiation of ZyVersa’s planned preclinical and clinical trials; the timing of the availability of data from ZyVersa’s preclinical and clinical trials; the timing of any planned investigational new drug application or new drug application; ZyVersa’s plans to research, develop, and commercialize its current and future product candidates; the clinical utility, potential benefits and market acceptance of ZyVersa’s product candidates; ZyVersa’s commercialization, marketing and manufacturing capabilities and strategy; ZyVersa’s ability to protect its intellectual property position; and ZyVersa’s estimates regarding future revenue, expenses, capital requirements and need for additional financing.
New factors emerge from time-to-time, and it is not possible for ZyVersa to predict all such factors, nor can ZyVersa assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements included in this press release are based on information available to ZyVersa as of the date of this press release. ZyVersa disclaims any obligation to update such forward-looking statements to reflect events or circumstances after the date of this press release, except as required by applicable law.
This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities.
Corporate and IR Contact: Karen Cashmere Chief Commercial Officer kcashmere@zyversa.com 786-251-9641
Preliminary Data Suggest that Oxytocin May Simultaneously Reduce Energy Intake and Increase Energy Expenditure
TNX-1900 (Intranasal Potentiated Oxytocin) May Serve as a Novel Neuroendocrine Weight-Loss Therapeutic for this Patient Population
CHATHAM, N.J., July 10, 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 Phase 2 ‘POWER’ study of TNX-1900 (intranasal potentiated oxytocin) for the treatment of pediatric obesity 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 induce weight loss and improve indicators of cardiometabolic risk in adolescent patients with obesity. Tonix is providing active drug and placebo for the POWER study as part of a drug donation agreement with MGH. MGH is the sponsor of the National Institutes of Health-funded trial, being conducted under an investigator-initiated IND.
The 12-week double-blind, placebo-controlled trial has a target enrollment of 75 participants 12-18 years old with obesity.
“More than two-thirds of the U.S. population suffers from obesity or is overweight1,” said Seth Lederman, M.D., Chief Executive Officer of Tonix Pharmaceuticals. “Available pharmacologic treatment options for weight loss in children are limited by safety/tolerability problems and failure to achieve sustained weight loss. It is essential to develop safe and effective therapeutic strategies for weight loss, particularly in adolescents, who are understudied while being at greatest risk for long-term comorbidities.”
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 (along with Madhusmita Misra, MD, and Miriam Bredella, MD) of the study added, “Studies in animals have shown that oxytocin, a hypothalamic peptide hormone, simultaneously reduces food intake and increases energy expenditure, leading to weight loss. Intranasal oxytocin is well-tolerated and in our studies of adults, results in reduced caloric intake, increased fat burning, and improved insulin sensitivity. The goal of the double-blind POWER study is to assess whether intranasal administration of oxytocin will decrease weight as a consequence of decreased caloric intake and increased energy expenditure, and improve metabolic risk markers in adolescents with obesity.”
About the Phase 2 POWER Study
The Phase 2 POWER investigator-initiated study is a randomized, double blind, placebo-controlled study to evaluate the efficacy and safety of TNX-1900 for the treatment of pediatric obesity. The 12-week trial has a target enrollment of 75 participants 12-18 years old with obesity (BMI ≥95th percentile for age and gender). Subjects will be randomized to receive TNX-1900 or placebo and will be studied at the Translational and Clinical Research Center at Massachusetts General Hospital. Subjects will self-administer TNX-1900 or placebo as two sprays total (one spray in each nostril) before meals and at bedtime for 12 weeks. The primary endpoint is 12-week change in body mass index standard deviation score (BMI-SDS) versus placebo.
For more information, see ClinicalTrials.gov Identifier: NCT04551482
About Pediatric Obesity2
Childhood obesity is a serious health problem in the United States, with approximately one in five children and adolescents affected. Many factors can contribute to excess weight gain including behavior, genetics and taking certain medications. Obesity-related conditions include high blood pressure, high cholesterol, type 2 diabetes, breathing disorders such as asthma and sleep apnea, polycystic ovary syndrome (in females), and joint pathology.
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 within the central nervous system (CNS). 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 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 system3 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.4 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 binding5 as well as oxytocin’s inhibitory effects on trigeminal neurons and resultant craniofacial analgesic effects, as demonstrated in animal models7. Intranasal oxytocin has been shown to be well tolerated in several clinical trials in both adults and children6. Targeted nasal delivery results in low systemic exposure and lower risk of non-CNS, off-target effects, which could potentially occur with systemic CGRP antagonists such as anti-CGRP antibodies8. 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 patients greater control. In addition to chronic migraine, TNX-1900 will be developed for treatment of episodic migraine, binge eating disorder, and craniofacial pain conditions. Tonix also has a license with the University of Geneva for the use of TNX-1900 in 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.
1Ogden CL, Carroll MD,FlegalKM. Prevalence of obesity in the United States. JAMA2014;312:189-90. 2Centers for Disease Control https://www.cdc.gov/obesity/childhood/index.html. 3Yeomans DC, et al. Transl Psychiatry. 2021. 11(1):388. 4Tzabazis A, et al. Cephalalgia. 2016. 36(10):943-50. 5Antoni FA and Chadio SE. Biochem J. 1989. 257(2):611-4. 6Yeomans, DC et al. 2017. US patent US2017368095 7Cai Q, et al., Psychiatry Clin Neurosci. 2018. 72(3):140-151. 8MaassenVanDenBrink 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 with topline data expected in the first quarter of 2024. 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 also currently enrolling with topline results expected in the first quarter of 2024. 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.
Zembrace SymTouch and Tosymra are registered trademarks of Tonix Medicines. Intravail is a registered trademark of Aegis Therapeutics, LLC, a wholly owned subsidiary of Neurelis, Inc. All other marks are the property of their respective owners.
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.
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 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.
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) develops and fields transformative, affordable technology, platforms, and systems for United States National Security related customers, allies, and commercial enterprises. Kratos is changing the way breakthrough technologies for these industries are rapidly brought to market through proven commercial and venture capital backed approaches, including proactive research, and streamlined development processes. At Kratos, affordability is a technology, and we specialize in unmanned systems, satellite communications, cyber security/warfare, microwave electronics, missile defense, hypersonic systems, training and combat systems and next generation turbo jet and turbo fan engine development. For more information go to www.kratosdefense.com.
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.
Another Award. On Friday, the Department of Defense announced Kratos has been awarded a $95 million firm-fixed-price contract for fixed-wing, subscale, jet-propelled aerial, unmanned target systems. The U.S. Army was the contracting unit. Work locations and funding will be determined with each order, with an estimated completion date of July 6, 2028.
Further Proof. As Kratos CEO Eric DeMarco noted in the 1Q23 conference call, “Kratos’ target drone business is performing well, driven by Kratos’ producing and delivering what we consider to be the highest performance threat representative jet drone systems in the world, with our primary customers including the United States Navy, Air Force and Army. The global recapitalization of strategic weapon systems and the requirement to test and train on these weapon systems is providing a strong macro level catalyst for Kratos’ target drone business.” We view Friday’s award as further confirmation of the positive momentum in the target drone business.
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.
Why Diversify Your Portfolio Into Smaller Government Contractors
Will there be a recession, or will the Fed orchestrate a rare soft landing? Coming off a down year last year, with the stock market now up mid-year by 7%, which is the average expected return for a full year of the broader indexes, many investors find themselves straddling a fence. On one side of the fence is the fear of missing out (FOMO), and on the other is a money market rate that is higher than it has been in decades. In a weakening economy, investors don’t have to exit the stock market completely to find stocks that are not expected to be negatively impacted. Until there is more clarity, perhaps it is worth taking a portion of your holdings on a side trip, to look at government contractors.
When company earnings are dependent on the consumer, its stock price may be tied to the pace of the economy – it’s likely to at least be correlated to activity within its industry. While many investment options are available, one often overlooked but potentially rewarding segment is companies that generate revenue through government contracts, not consumer sales or business-to-business. Let’s explore the benefits of investing in such companies, particularly smaller ones where a new contract is most impactful to the bottom line. These company’s still have above average growth potential but can be quite resilient during economic downturns.
Stable Revenue Streams
Companies that secure government contracts often enjoy stable and predictable revenue streams, they also are billing an entity that can tax and is not reliant on stable earnings itself. Government contracts typically involve long-term agreements that provide a consistent flow of income for the duration of the contract. This stability can be particularly beneficial for investors seeking reliable returns on their investments. Aerospace companies, for instance, often receive substantial contracts for the production and maintenance of military aircraft, providing a steady stream of income.
Reduced Vulnerability to Recessions
One of the key advantages of investing in companies with government contracts is their potential indifference to economic downturns. During recessions or periods of economic uncertainty, government spending has even been known to increase as a means to stimulate a weak economy. This increased spending often benefits companies with government contracts, as governments prioritize projects related to defense, infrastructure development, and public services. This makes aerospace and dredging companies, which are heavily involved in such projects, relatively impervious to recessions.
Long-Term Growth Opportunities
Government contracts often involve large-scale projects that span several years or even decades. This long-term nature provides companies with ample opportunities for growth and expansion. For example, aerospace companies may secure contracts to develop advanced military aircraft, including drones, or provide satellite-based communication systems. Similarly, dredging companies might be contracted for extensive port development projects. These opportunities allow companies to invest in research, development, and innovation, positioning them for sustained growth and profitability.
Competitive Advantage of Being Established
Government contracts typically involve rigorous bidding processes and stringent eligibility criteria. Companies that successfully secure these contracts gain a competitive advantage over their peers. Once established, they often become preferred suppliers for subsequent projects, further solidifying their market position. This advantage can translate into increased market share, higher profitability, and enhanced investor confidence, making these companies attractive for long-term investments.
Great Lakes Dredge & Dock Corporation (GLDD) would seem to fit the above criteria. It is the largest provider of dredging services in the United States, and is engaged in expanding its core business into the rapidly developing offshore wind energy industry. Great Lakes also has a history of securing significant international projects. GLDD has a 132-year history, has a market-cap of $542 million, and is up 37% year-to-date.
The most recent research note from Noble Capital Markets on GLDD is available here.
Kratos Defense & Security Solutions, Inc. (KTOS), a military contractor that has admirable specialties compared to the large names that typically come to mind. Kratos is changing the way transformative breakthrough technology for the industry is rapidly brought to market through proven approaches, including proactive research and streamlined development processes. KTOS treats affordability as a technology that needs to be considered. It specializes in unmanned systems, satellite communications, cyber security/warfare, microwave electronics, missile defense, hypersonic systems, training, combat systems and next generation turbo jet and turbo fan engine development. KTOS has a $1.72 billion market-cap and is up 31% year-to-date.
The most recent research note from Noble Capital Markets on KTOS is available here.
Technological Advancements and Spin-Off Opportunities
Working on government contracts often requires companies to push the boundaries of technology and innovation. Aerospace companies, for example, are at the forefront of developing advanced defense systems, satellite technologies, and commercial aircraft. Similarly, dredging companies and those involved in wind energy may invest in state-of-the-art equipment and techniques to execute complex infrastructure projects. These advancements can lead to spin-off opportunities in commercial markets, expanding the company’s revenue streams beyond government contracts.
Take Away
Investing in companies that recieve revenue primarily through government contracts, particularly those that are small cap companies, may provide a recession-fearful investor with some comfort that the stock(s) they are investing in are less likely to suffer from consumers tightening their wallets, yet they have potential to grow.
As with all investing and forecasting the future, if it was easy, everyone would already be doing it. But, the two examples listed above may be a good start to help inspire discovering stocks that are situated differently than traditional consumer or business-to-business companies.
The Positive Sentiment Toward Gold Has a Large Tailwind
The number of countries bringing more of their gold reserves back within their own borders and in many cases buying additional gold has been on a strong uptrend. Why is this something investors should pay attention to, why is the trend accelerating, and who may benefit from the increased gold repatriation and hoarding? We explore these questions below and look for insights that investors may consider for their own portfolios.
During the first three months of 2023, central banks bought a combined 228 tonnes, the most ever seen in the first quarter of any year, according to the World Gold Council. This followed what is a record year in 2022, during which 1,136 tonnes of gold worth near $70 billion were added to the central banks’ reserves. Compared to the 450 tonnes bought during 2021, this 152% year-on-year increase might be worth paying attention to.
But the central banks aren’t just buying gold; they are also bringing what they currently own home. The number of countries that are repatriating gold reserves is high and rising. The methodical central banks’ accumulation of gold, “as far as we can tell, is unprecedented, given they’ve mostly been sellers throughout history,” wrote Mining.com in a recent analysis of the trend. “But the recent transactional trend, in particular over the past 30 years, illustrates a dramatic shift in the official attitude towards gold.”
In a global economy fraught with more uncertainty than in most periods, it makes sense that central banks looking to combat yield volatility and inflation risk see gold as a safe-haven asset. There is substantial verification of this in a thorough survey of central banks released last week. According to Invesco Global Sovereign Asset Management, more than 85% of the 85 sovereign wealth funds and 57 central banks that took part in the Invesco survey now believe that inflation will be higher in the current decade than in the last.
Countries that are also repatriating gold reserves are on the increase as central bankers look to reduce risk and moderate yield volatility and inflations erosion, they see gold as a safe-haven asset, according to the survey. There is also a fear of the unsettled war in Ukraine and the steps nations are willing to take. Last year’s freezing of almost half of Russia’s $640 billion of gold and forex reserves by the West in response to the invasion of Ukraine also appears to have created a move toward less trust. The survey showed a “substantial share” of central banks were concerned by the precedent that had been set. Almost 60% of respondents said it had made gold more attractive, while 68% were keeping reserves at home compared to 50% in 2020.
The Invesco survey also revealed 7% believe rising US debt is also a negative for the $US dollar, although most still see it as the most solid choice as the world’s reserve currency. Those that see China’s yuan as a potential contender fell to 18%, from 29% last year. Nearly 80% of the 142 institutions surveyed see geopolitical tensions as the biggest risk over the next decade, while 83% cited inflation as a concern over the next 12 months, Reuters reported.
Why Increase Exposure to Gold?
Central banks hold gold because it is expected to hold its value through turbulent times and, unlike currency, it does not rely on any issuer or government. It also enables central banks to diversify away from assets like US Treasury bonds and other dollar-exposed assets.
Source S&P Global
Central banks have been hoarding gold for well over a decade, even during periods when the global economy was considered stable and healthy.
When it comes to shifting values of assets, the power of the US Federal Reserve, or the combined power of central banks in countries like China, Germany, Switzerland, the Netherlands, etc. it is important to understand their unique ability to move the needle. They try not to disrupt markets in their moves, but it still stands to reason that investing alongside, or mirroring, what the world’s central banks are doing has limited downside, and a huge tailwind toward the upside.
Central banks throughout the world are buying additional stores of gold and bringing some of what they already own outside of their borders home for safer keeping. Mirroring central banks, with at least a modest allocation, in a year that already has an above-average stock market, yet is still full of the uncertainty, is something for investors to consider.
Exposure to gold need not mean buying gold buillion or gold coins; investors also get exposure by owning stock in gold mining companies, gold exchange-traded funds (ETF) and mutual funds, gold royalty companies, or gold futures and options.
Publicly traded equities of gold producers may offer the simplest and most attractive way to invest given the disproportionate percentage impact higher commodity prices may have on a company’s bottom line and valuation for a given percentage increase in the commodity itself.
