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Release – ACCO Brands Reports Fourth Quarter and Full Year 2023 Results and Provides Outlook for 2024

Posted on by aweinsoff@channelchek.com

Research News and Market Data on ACCO

02/22/2024

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Company Exceeds Full Year 2023 Outlook

Full Year

  • Reported net sales of $1.833 billion, with gross margin expanding 420 basis points
  • Operating income of $45 million; adjusted operating income grew 17% to $205 million
  • Loss per share of $(0.23); adjusted EPS of $1.09, above the Company’s outlook
  • Net operating cash flow improved $51 million, generated adjusted free cash flow of $118 million
  • Reduced total debt by $88 million with a consolidated net leverage ratio of 3.4x at year-end

LAKE ZURICH, Ill.–(BUSINESS WIRE)– ACCO Brands Corporation (NYSE: ACCO) today reported financial results for the fourth quarter and fiscal year ended December 31, 2023.

“I am pleased to report that our fourth quarter financial performance, including our reported net sales and adjusted EPS and free cash flow, was better than expected. During the year, we successfully executed against our 2023 priorities and implemented our previously announced restructuring plans, which enabled us to significantly expand our gross margin, deliver strong free cash flow, and reduce our consolidated net leverage ratio to 3.4x at the end of 2023. We believe our achievement of these results against a challenging demand environment is a testament to the solid execution of our team and our geographically diverse portfolio of leading brands. The restoration of our gross margins and improved cash flows enables us to make investments that position the Company for long-term growth,” stated ACCO Brands’ President and Chief Executive Officer, Tom Tedford.

Fourth Quarter Results

Net sales declined 2.2 percent to $488.6 million from $499.4 million in 2022. Comparable sales fell 4.6 percent, as favorable foreign exchange increased sales by $12.2 million, or 2.4 percent. Both reported and comparable sales declines reflect softer demand due to a weaker macroeconomic environment, which has also led to lower global demand for our technology accessories. These factors more than offset growth in our International segment, driven by the recovery of back-to-school sales in Latin America.

Operating loss was $52.8 million versus operating income of $35.6 million in 2022, primarily due to a non-cash goodwill impairment charge of $89.5 million related to the North America segment. In 2023, we recognized restructuring charges of $20.9 million, compared to $7.3 million in the prior-year period, with the increase related to our continuing footprint rationalization and cost reduction programs. Adjusted operating income increased 30.6 percent to $68.3 million from $52.3 million in the prior-year period. This increase reflects recovery of gross margin from the effect of cumulative global price increases and cost reduction actions, as well as moderating input costs. This was partially offset by higher SG&A expense, primarily due to an increase in incentive compensation compared to the prior year.

The Company reported a net loss of $59.4 million, or $(0.62) per share, compared with prior-year net income of $18.8 million, or $0.20 per share. The net loss is primarily due to the non-cash goodwill impairment charge of $89.5 million, with no associated tax benefit, as well as the higher restructuring charges noted above. In addition, there was a favorable change in discrete tax items of $21.8 million, largely related to recent tax legislation in both Brazil and the United States. Adjusted net income was $37.5 million, or $0.39 per share, compared with $30.5 million, or $0.32 per share in 2022. The increase in adjusted net income was due to the items noted above in adjusted operating income, partially offset by higher interest and non-operating pension expenses.

Full Year Results

Net sales decreased 5.9 percent to $1.83 billion from $1.95 billion in 2022. Favorable foreign exchange increased sales by $11.3 million, or 0.6 percent. Comparable sales decreased 6.5 percent. Both reported and comparable sales declines reflect the challenging macroeconomic environment, especially in North America and EMEA, and lower than anticipated return to office trends, as well as tight inventory management by our customers in North America. Sales of technology accessories were most negatively impacted. This more than offset the benefit of cumulative price increases across all segments, and volume growth in Latin America.

Operating income was $44.7 million compared to $34.8 million in 2022. The increase in operating income is primarily due to a lower non-cash goodwill impairment charge of $89.5 million versus the $98.7 million recorded in 2022. In 2023, we recorded restructuring charges of $27.2 million compared to $9.6 million in 2022, with the increase related to our continuing footprint rationalization and cost reduction programs. 2022 includes a benefit related to the change in value of the PowerA contingent earnout of $9.0 million, which did not repeat in 2023. Adjusted operating income increased to $204.8 million from $175.8 million in 2022. Both reported and adjusted operating income increases reflect the benefit of cumulative global price increases and cost reduction initiatives, partially offset by negative fixed cost leverage and higher SG&A expense, primarily due to increased incentive compensation.

Net loss was $21.8 million, or $(0.23) per share, compared with a net loss of $13.2 million, or $(0.14) per share, in 2022. The net losses were primarily related to the items noted above in operating income. In 2023, there was a significant increase in discrete tax benefits largely related to recent tax legislation in both Brazil and the United States, partially offset by reduced operating tax gains. Adjusted net income was $105.6 million compared with $101.0 million in 2022, and adjusted earnings per share were $1.09 per share compared with $1.04 per share in 2022. The increase in adjusted net income was due to the items noted above in adjusted operating income, partially offset by higher interest and non-operating pension expenses.

Capital Allocation and Dividend

For the full year, the Company significantly improved its operating cash flow to $128.7 million versus $77.6 million in the prior year, driven primarily by improved profits and working capital. Adjusted free cash flow in 2023 improved by $40.0 million to $117.5 million versus $77.5 million in 2022. Adjusted free cash flow in 2022 excludes the contingent earnout payment. The Company’s consolidated leverage ratio as of December 31, 2023 was 3.4x.

On February 16, 2024, ACCO Brands announced that its board of directors declared a regular quarterly cash dividend of $0.075 per share. The dividend will be paid on March 27, 2024 to stockholders of record at the close of business on March 15, 2024.

Restructuring and Cost Savings Program

On January 30, 2024, the Company announced a multi-year restructuring and cost savings program, with anticipated annualized pre-tax cost savings of at least $60 million. The program incorporates initiatives to simplify and delayer the Company’s operating structure and reduce costs through headcount reductions, supply chain optimization, global footprint rationalization, and better leveraging the Company’s sourcing capabilities. As a result of these actions, the Company will improve its speed of execution and bring key leaders closer to customers.

In connection with the program, the Company recognized pre-tax restructuring charges of $20.9 million in the fourth quarter of 2023, related to costs associated with the headcount reductions, as well as the closing of its Sidney, NY manufacturing facility. This was the fourth facility closure announced in 2023.

New Operating Segments

As previously announced, the Company will be implementing a new operating model, consolidating its three reportable segments into two reportable segments. The Americas reporting segment will include the U.S., Canada, Brazil, Mexico and Chile and the International reporting segment will include EMEA, Australia, New Zealand, and Asia. The Company will report on this basis for the fiscal year commencing January 1, 2024.

Business Segment Results

ACCO Brands North America – For the full year, North America net sales of $887.2 million decreased 11.1 percent from $998.0 million in 2022, and comparable sales declined 10.7 percent. Fourth quarter segment net sales of $199.0 million and comparable sales of $199.1 million both decreased 11.8 percent versus the prior year. Both full-year and fourth quarter reported and comparable sales decreases reflect softer demand due to a weaker macroeconomic environment, lower than anticipated return to office trends and retailers maintaining lower inventory levels, which resulted in lower demand for technology accessories and office products. This more than offset the benefit of cumulative pricing actions.

In North America, full year operating loss was $5.9 million versus an operating loss of $4.9 million in 2022. In 2023, we recorded a $89.5 million non-cash goodwill impairment charge compared to the $98.7 million recorded in the prior year. In 2023, restructuring charges were $16.7 million, an increase from the $5.3 million in 2022, largely related to our cost reduction and productivity programs. Adjusted operating income was $122.4 million, up from $121.5 million in the prior year, as benefits of the cumulative effect of pricing and cost actions, were largely offset by lower volume and negative fixed cost leverage.

ACCO Brands EMEA – Full year net sales in the EMEA segment of $547.2 million decreased 5.7 percent from $580.3 million in 2022. Favorable foreign exchange increased sales by 1.0 percent. Comparable sales declined 6.7 percent. Fourth quarter segment net sales of $159.1 million increased 2.0 percent versus the prior year’s net sales of $156.0 million. Favorable foreign exchange increased sales by 4.6 percent for the quarter. Comparable sales of $152.0 million decreased 2.6 percent versus the prior-year period as volume declines moderated sequentially in the quarter. Both full year and fourth quarter comparable sales declines reflect reduced demand, especially for technology accessories, due to a weaker macroeconomic environment. This more than offset the benefit of cumulative pricing actions.

The EMEA segment posted full-year operating income of $38.7 million compared with operating income of $21.7 million in 2022. In 2023, we recorded restructuring charges of $8.9 million versus $3.4 million in 2022, with the increase related to our ongoing footprint rationalization and cost reduction programs. Adjusted operating income was $62.5 million, up from $37.0 million in 2022. The increases in both reported operating income and adjusted operating income reflect recovery of gross margins from price increases and cost savings actions, more than offsetting negative fixed cost leverage and higher incentive compensation.

ACCO Brands International – International segment net sales of $398.4 million for the full year increased 7.9 percent from $369.3 million in 2022. Favorable foreign exchange increased sales by 2.6 percent. Comparable sales were $388.7 million, up 5.3 percent versus the prior year. Fourth quarter segment net sales of $130.5 million increased 10.9 percent versus the prior year’s net sales of $117.7 million. Favorable foreign exchange increased sales by 4.4 percent for the quarter. Comparable sales were $125.3 million an increase of 6.5 percent versus the year-ago period. Both full year and fourth quarter reported and comparable sales increases reflect stronger pricing and volume growth in Latin America, more than offsetting the impact of weaker economic conditions in Australia and Asia and overall lower demand for technology accessories.

Operating income for the full year was $60.7 million, an increase from $50.5 million in 2022. Adjusted operating income of $68.1 million increased from $58.3 million in the prior year. The increase in both operating and adjusted operating income were primarily due to the cumulative benefit of pricing and cost actions, somewhat offset by higher go-to-market spending, people costs and incentive compensation.

2024 Outlook

“We are taking actions to reposition the company for long-term, sustainable, profitable growth. In January, we announced a multi-year restructuring and cost savings program, to reset our cost structure. The program is expected to deliver at least $60 million in annual cost savings once fully implemented and will better leverage our global platform and leading brands. We continue to focus on our margin profile by exiting low margin business and better leveraging our sourcing and supply chain infrastructure. These actions will enable us to accelerate investments in new product development, innovation, and other growth initiatives, while increasing our profitability and cash flow, leading to improved shareholder value,” concluded Mr. Tedford.

For the full year, we expect reported sales to be down in the range of 2.0% to 5.0%. The Company’s sales outlook reflects the uncertain demand environment for its categories. Full year adjusted EPS is expected to be within a range of $1.07 to $1.11. The Company expects 2024 free cash flow to grow to at least $120 million and to end the year with a consolidated leverage ratio of approximately 3.0x to 3.2x.

In the first quarter, we expect reported sales to be down in the range of 6.5% to 8.0% and adjusted EPS within a range of $0.01 to $0.04. Seasonally, sales can shift between first and second quarter due to the timing of back-to-school shipments in North America.

Webcast

At 8:30 a.m. ET on February 23, 2024, ACCO Brands Corporation will host a conference call to discuss the Company’s fourth quarter and full year 2023 results. The call will be broadcast live via webcast. The webcast can be accessed through the Investor Relations section of www.accobrands.com . The webcast will be in listen-only mode and will be available for replay following the event.

About ACCO Brands Corporation

ACCO Brands, the Home of Great Brands Built by Great People, designs, manufactures and markets consumer and end-user products that help people work, learn, and play. Our widely recognized brands include AT-A-GLANCE®, Five Star®, Kensington®, Leitz®, Mead®, PowerA®, Swingline®, Tilibra® and many others. More information about ACCO Brands Corporation (NYSE: ACCO) can be found at www.accobrands.com .

Non-GAAP Financial Measures

In addition to financial results reported in accordance with generally accepted accounting principles (GAAP), we have provided certain non-GAAP financial information in this earnings release to aid investors in understanding the Company’s performance. Each non-GAAP financial measure is defined and reconciled to its most directly comparable GAAP financial measure in the “About Non-GAAP Financial Measures” section of this earnings release.

Forward-Looking Statements

Statements contained herein, other than statements of historical fact, particularly those anticipating future financial performance, business prospects, growth, strategies, business operations and similar matters, results of operations, liquidity and financial condition, and those relating to cost reductions and anticipated pre-tax savings and restructuring costs are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management based on information available to us at the time such statements are made. These statements, which are generally identifiable by the use of the words “will,” “believe,” “expect,” “intend,” “anticipate,” “estimate,” “forecast,” “project,” “plan,” and similar expressions, are subject to certain risks and uncertainties, are made as of the date hereof, and we undertake no duty or obligation to update them. Forward-looking statements are subject to the occurrence of events outside the Company’s control and actual results and the timing of events may differ materially from those suggested or implied by such forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties. Investors and others are cautioned not to place undue reliance on forward-looking statements when deciding whether to buy, sell or hold the Company’s securities.

Our outlook is based on certain assumptions, which we believe to be reasonable under the circumstances. These include, without limitation, assumptions regarding the impact of inflation and global geopolitical and economic uncertainties and fluctuations in foreign currency exchange rates; and the other factors described below.

Among the factors that could cause our actual results to differ materially from our forward-looking statements are: our ability to successfully execute our restructuring and cost savings plans and realize the anticipated benefits of these plans and our other ongoing productivity initiatives; our ability to obtain additional price increases and realize longer-term cost reductions; the ongoing impact of the COVID-19 pandemic; a relatively limited number of large customers account for a significant percentage of our sales; issues that influence customer and consumer discretionary spending during periods of economic uncertainty or weakness; risks associated with foreign currency exchange rate fluctuations; challenges related to the highly competitive business environment in which we operate; our ability to develop and market innovative products that meet consumer demands and to expand into new and adjacent product categories that are experiencing higher growth rates; our ability to successfully expand our business in emerging markets and the exposure to greater financial, operational, regulatory, compliance and other risks in such markets; the continued decline in the use of certain of our products; risks associated with seasonality; the sufficiency of investment returns on pension assets, risks related to actuarial assumptions, changes in government regulations and changes in the unfunded liabilities of a multi-employer pension plan; any impairment of our intangible assets; our ability to secure, protect and maintain our intellectual property rights, and our ability to license rights from major gaming console makers and video game publishers to support our gaming accessories business; continued disruptions in the global supply chain; risks associated with inflation and other changes in the cost or availability of raw materials, transportation, labor, and other necessary supplies and services and the cost of finished goods; risks associated with outsourcing production of certain of our products, information technology systems and other administrative functions; the failure, inadequacy or interruption of our information technology systems or its supporting infrastructure; risks associated with a cybersecurity incident or information security breach, including that related to a disclosure of personally identifiable information; our ability to grow profitably through acquisitions; our ability to successfully integrate acquisitions and achieve the financial and other results anticipated at the time of acquisition, including planned synergies; risks associated with our indebtedness, including limitations imposed by restrictive covenants, our debt service obligations, and our ability to comply with financial ratios and tests; a change in or discontinuance of our stock repurchase program or the payment of dividends; product liability claims, recalls or regulatory actions; the impact of litigation or other legal proceedings; our failure to comply with applicable laws, rules and regulations and self-regulatory requirements, the costs of compliance and the impact of changes in such laws; our ability to attract and retain qualified personnel; the volatility of our stock price; risks associated with circumstances outside our control, including those caused by public health crises, such as the occurrence of contagious diseases, severe weather events, war, terrorism and other geopolitical incidents; and other risks and uncertainties described in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, and in other reports we file with the Securities and Exchange Commission.

Click to read the the full release: ACCO Brands Reports Fourth Quarter and Full Year 2023 Results and Provides Outlook for 2024

Christopher McGinnis

Investor Relations

(847) 796-4320

Kori Reed

Media Relations

(224) 501-0406

Source: ACCO Brands Corporation

AstraZeneca Completes $1.1 Billion Buyout of Seattle Biotech Icosavax

Posted on by slightbourne@noblecapitalmarkets.com

UK pharmaceutical giant AstraZeneca has finalized its $1.1 billion acquisition of Icosavax, a Seattle-based biotechnology company specializing in virus-like particle (VLP) vaccines. This buyout provides key insights into AstraZeneca’s pipeline strategy and the ongoing consolidation in the biopharma sector.

Icosavax was founded in 2017 as a spinout from the University of Washington’s Institute for Protein Design. The company leverages computationally designed VLPs to induce robust and durable immune responses against respiratory viruses, including COVID-19, respiratory syncytial virus (RSV), and human metapneumovirus (hMPV).

Since its founding, Icosavax has raised over $150 million in private funding and completed a successful IPO in 2021. However, the company caught the eye of pharma giant AstraZeneca, who sees Icosavax’s VLP platform and talented research team as a strategic fit.

For AstraZeneca, this acquisition provides access to a versatile new vaccine modality with broad applicability beyond Icosavax’s current clinical programs. It also bolsters AstraZeneca’s pipeline with a Phase 1/2 COVID-19 vaccine candidate, IVX-411, which produced robust neutralizing antibody titers in early clinical testing.

Broader Implications for Investors and the Biopharma Industry

The buyout has several key implications for biotech investors and industry dynamics. Firstly, it highlights that platform technologies with versatile applications across disease areas remain highly valued, even in the ongoing biotech market downturn. Vaccines also continue to see strong corporate interest after the pandemic spotlight.

Secondly, it reflects Big Pharma’s pursuit of emerging biotech innovation to replenish pipelines and access cutting-edge modalities like VLPs. With the Icosavax deal, AstraZeneca gains talented scientists and potential new products without costly in-house R&D.

Thirdly, from a structure standpoint, the deal provides an upfront cash payout to Icosavax investors but leaves upside through future contingent payments on pipeline advancement. This highlights a flexible model to balance the high valuations sought by biotechs with the risk management needs of acquirers.

Finally, the buyout continues the wave of consolidation between large and small biopharma players. With the market downturn squeezing biotech funding, more mergers and acquisitions are likely on the horizon. Investors should watch for other innovative biotechs with promising science that become acquisition targets.

What Drove AstraZeneca’s Interest in Icosavax

AstraZeneca has been one of the more active Big Pharmas on the M&A front, and the Icosavax deal provides strategic rationale. The VLP technology adds a promising new platform to AstraZeneca’s vaccine capabilities, already bolstered by its previous acquisitions of drug delivery player MedImmune and biotech Sobi.

Icosavax’s potential COVID-19 and RSV vaccine candidates can be added to AstraZeneca’s pipeline as it looks to expand beyond its core oncology portfolio. Additionally, Icosavax’s team and VLP engineering expertise will be valuable assets for the company.

By acquiring Icosavax while still early-stage compared to more established biopharmas, AstraZeneca secures access to the technology at a reasonable price. The $1.1 billion price tag is well below the multi-billion deals that some commercial-stage biotechs have commanded.

Overall, Icosavax represented an opportunity for AstraZeneca to obtain cutting-edge vaccine technology and talent to boost its R&D capabilities in new directions. It highlights that Big Pharmas are willing to buy innovation at early stages rather than develop it internally.

Take a moment to take a look at emerging growth healthcare and biotech companies by taking a look at Noble Capital Markets’ Senior Research Analyst Robert LeBoyers’s coverage universe

The Future for Icosavax’s Programs

While the buyout places Icosavax’s pipeline under AstraZeneca’s control, active development of the VLP programs is expected to continue. Lead COVID-19 vaccine candidate IVX-411 recently began Phase 1/2 trials, and its RSV and hMPV programs are progressing towards clinical stages as well.

AstraZeneca has expressed interest in advancing Icosavax’s full portfolio of vaccines leveraging the versatility of the VLP platform. Its resources and late-stage development expertise can help progress these experimental vaccines through clinical trials and regulatory approval pathways.

Meanwhile, Icosavax will continue operations as an AstraZeneca subsidiary based in Seattle. Keeping its operations separate allows Icosavax to retain its innovative biotech culture while benefiting from AstraZeneca’s financial backing and synergies.

In summary, AstraZeneca’s acquisition of Icosavax underscores its strategy of looking to smaller biotechs to supplement its pipeline with cutting-edge science. The deal rewards Icosavax investors for their early backing while retaining upside potential through milestone payments. For the biopharma industry, it exemplifies the ongoing consolidation between pharmas and biotechs amidst market pressures. Investors should watch for other emerging biotechs that may become tomorrow’s M&A targets.

Haynes International (HAYN) – Haynes International Shares Rise on Acquisition Announcement; Rating Lowered to Market Perform

Posted on by cpereira@noblefcm.com


Tuesday, February 06, 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.

Haynes to be acquired by Acerinox, S.A. Haynes International entered into a definitive agreement to be acquired in an all-cash transaction by Acerinox’s wholly owned U.S. subsidiary, North American Stainless, Inc. Acerinox is a leader in the manufacturing and distribution of stainless steel and high-performance alloys and will acquire all the outstanding shares of Haynes for $61.00 per share valuing Haynes at an enterprise value of approximately $970 million and a fully diluted equity value of $798 million. The shares are trading close to the proposed transaction price per share.

Closing is expected in the third calendar quarter. The transaction has been unanimously approved by the board of directors of both companies and is expected to close in the third calendar quarter of 2024, subject to the satisfaction of closing conditions, including receipt of regulatory approvals and approval by Haynes stockholders. Because the Haynes shareholder meeting is tentatively planned for April 2024, we think the transaction could close sooner than later.


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NAYA Biosciences Strengthens Pipeline Through Acquisition of Gene Therapy Asset

Posted on by slightbourne@noblecapitalmarkets.com

NAYA Biosciences is expanding its clinical portfolio through the acquisition of an innovative gene therapy program from Florida Biotechnologies focused on treating rare mitochondrial diseases. This binding deal demonstrates NAYA’s strategy to rapidly build pipeline assets in high-potential areas like gene therapy.

NAYA has entered into a binding letter of intent to acquire Florida Biotechnologies for $20 million in NAYA shares, with potential milestone payments up to $5 million more. The deal specifically targets Florida Biotech’s clinical-stage gene therapy for Leber’s Hereditary Optic Neuropathy (LHON).

LHON is a rare mitochondrial genetic disease leading to progressive vision loss and blindness. There are currently no approved treatments. Florida Biotech’s AAV gene therapy aims to deliver functional copies of the mutated gene to restore cellular function.

Encouraging Safety Data

This therapeutic has already demonstrated encouraging safety data in a 28-patient Phase 1 trial conducted by Florida Biotech and the University of Miami’s Bascom Palmer Eye Institute. Building on this initial study, NAYA aims to accelerate Phase 2 development and provide early access to patients.

The therapy delivers the gene of interest inside an adeno-associated virus (AAV) vector containing a mitochondrial targeting sequence. This sequence enables delivery specifically to mitochondria, the key site of pathology in LHON and many other mitochondrial diseases.

Broad Applicability

While the lead indication is LHON, NAYA highlights this approach has potential for various mitochondrial orphan diseases. The platform’s strong intellectual property covers use of different AAV capsids and routes of administration.

This flexibility and the high unmet need enables a streamlined regulatory path, including Regenerative Medicine Advanced Therapy and priority review voucher opportunities. The technology has already received over $6 million in grant funding to date.

The asset aligns with NAYA’s focus on innovative regenerative medicine approaches with near-term clinical potential. Gene therapy represents a key component of NAYA’s strategy to build a pipeline addressing major unmet needs.

Expertise in Developing Gene Therapies

NAYA has extensive in-house expertise to advance the acquired AAV gene therapy through late-stage trials toward commercialization. For example, NAYA Chief Medical Officer Dr. Fred Grossman previously led development of the first approved gene therapy, Glybera, during his time at uniQure.

Florida Biotech co-founder Dr. Peter Kash also joins NAYA’s board, bringing over 36 years of biotech leadership experience, including developing and financing gene therapy pioneer Kite Pharma. This expertise will prove valuable for unlocking the platform’s full potential.

Execution of Broader Growth Strategy

NAYA Biosciences was formed earlier in 2023 through the merger of Clinigence Holdings and 4Front Biotech. This deal created a holding company structure to facilitate pipeline expansion through additional strategic acquisitions.

The Florida Biotechnologies program represents the next step in this growth strategy. NAYA plans to continue acquiring high-potential clinical assets to build a robust portfolio spanning gene therapy, oncology, fertility and other areas.

These efforts support NAYA’s overall mission of providing patients earlier access to transformative therapies. The company aims to take an entrepreneurial approach to aggressively advance new technologies through development.

Pending Merger to Unlock Public Markets

NAYA’s deal to acquire Florida Biotechnologies is contingent upon the completion of NAYA’s previously announced merger with fertility company INVO Bioscience, expected in Q1 2024.

The merger will create a publicly traded life sciences company under the INVO name, providing access to capital to support NAYA’s development programs and commercialization. The combined company is valued at over $100 million.

Conclusion

In summary, NAYA Bioscience’s move to acquire Florida Biotechnologies’ AAV gene therapy strengthens its pipeline and aligns with its strategy to focus on high-potential clinical assets. Leveraging its development expertise, NAYA is positioned to accelerate this innovative therapy toward commercialization and fill an important unmet need for patients with mitochondrial diseases.

Johnson & Johnson Spends $2 Billion to Buy Ambrx and Expand in Oncology

Posted on by slightbourne@noblecapitalmarkets.com

Johnson & Johnson announced Monday that it will acquire clinical-stage biotech Ambrx Biopharma for $2 billion, making a big bet on Ambrx’s proprietary platform for developing next-generation antibody drug conjugates (ADCs) to treat cancer.

The acquisition provides Johnson & Johnson access to Ambrx’s promising pipeline of ADC candidates, while also allowing the healthcare giant to leverage Ambrx’s novel conjugate technology that improves the efficacy and safety of ADCs. Ambrx’s proprietary platform incorporates synthetic amino acids to allow site-specific conjugation of antibodies to toxic payloads, creating more stable ADCs with less off-target effects.

Johnson & Johnson is particularly interested in Ambrx’s lead asset ARX517, an anti-PSMA ADC currently in Phase 1/2 development for metastatic castration-resistant prostate cancer (mCRPC). Prostate cancer has long been a focus for J&J and its Janssen pharmaceuticals unit, with blockbuster prostate cancer drug Zytiga bringing in over $2 billion in annual sales prior to losing patent protection in 2019.

The pressing need for improved mCRPC treatments provided additional impetus for the deal. Over 185,000 men in the U.S. currently have mCRPC, with a poor median overall survival of less than two years. The early data for ARX517 demonstrates promising anti-tumor activity, and Johnson & Johnson believes the drug could become a first-in-class targeted ADC therapy for mCRPC if approved.

“We see a unique opportunity to harness the potential of this innovative ADC platform, and with our deep understanding of prostate cancer, deliver a targeted PSMA therapeutic for addressing the growing needs of the more than 185,000 patients living with metastatic castration-resistant disease today,” said Dr. Yusri Elsayed, Global Therapeutic Area Head for Oncology at Johnson & Johnson.

Beyond ARX517, Ambrx has several other ADC candidates in its pipeline targeting cancer antigens like HER2 and CD70, providing Johnson & Johnson with a robust suite of new ADC therapies that can be optimized using Ambrx’s conjugate technology.

The acquisition reflects Johnson & Johnson’s strategy of using deals to access innovation, especially in high-potential areas like oncology. With in-house R&D productivity under scrutiny, major players like J&J and its pharma peers have turned to M&A to supplement pipeline development. Cancer has been the top therapy area target for M&A over the past 5 years, according to EY data, demonstrating the demand for innovative oncology drugs.

Ambrx was founded in 2003 as a spin-out from The Scripps Research Institute. The company raised over $200 million in venture capital and held its IPO in 2021, listing on the NASDAQ exchange. The $2 billion buyout price represents a nice return for Ambrx’s backers and shareholders.

The deal is expected to close in the first half of 2024, pending approval from Ambrx stockholders as well as regulatory clearance. Upon completion of the acquisition, Ambrx’s stock will be delisted and it will no longer be an independent public company.

Johnson & Johnson’s acquisition of Ambrx highlights the pharma industry’s race to find new modalities like ADCs that can precisely target cancer cells while minimizing side effects. With cancer poised to become the leading cause of death globally, the need for better tolerated treatments has never been more pressing. J&J is making a big bet that Ambrx’s next-gen ADC platform can yield breakthroughs in achieving that goal.

Take a moment to take a look at Noble Capital Markets’ Senior Research Analyst Robert LeBoyer’s coverage universe.

Google Settles Lawsuit Over Alleged Secret Tracking – What It Means for Tech

Posted on by slightbourne@noblecapitalmarkets.com

Alphabet’s Google has reached a preliminary settlement in a major class action lawsuit accusing the tech giant of secretly tracking users’ browsing activity, even in “private” mode. The lawsuit alleges Google violated privacy laws by monitoring internet usage through analytics, cookies, and other means without user consent.

While settlement terms are undisclosed, the case spotlighted concerns over data privacy and transparency in the tech industry. As regulators increasingly scrutinize how companies collect and use personal data, lawsuits like this could spur meaningful change across Silicon Valley.

The Potential $5 Billion Settlement Underscores Privacy Risks

Filed by consumers in 2020, the lawsuit sought at least $5 billion in damages for millions of Google users. The plaintiffs alleged Google violated wiretapping and privacy laws by tracking their web activity after they enabled private modes in browsers like Chrome. By collecting data on browsing habits, interests, and sensitive topics searched, Google allegedly created an “unaccountable trove of information” without user permission.

Though Google disputed the claims, the judge rejected the company’s motion to dismiss last August. This allowed the case to move forward, leading to mediation and a preliminary settlement just before the scheduled 2024 trial. The multibillion dollar price tag highlights financial liability over privacy concerns. As data rules tighten worldwide, lawsuits and settlements like this could pressure tech firms to improve data practices.

How Private is Private Browsing? The Murky Line Between Tracking and Targeting

At issue is whether Google made legally binding commitments not to collect user data during private browsing sessions. The plaintiffs argued that policies, privacy settings, and public statements implied limits on tracking activity – which Google then violated behind the scenes. Google may contend that it needed analytics and user data to improve services and target ads.

This speaks to an ongoing debate over data use in the tech industry. Companies like Google and Facebook rely on customer data for ad targeting, which generates immense revenue. However, consumers often don’t realize how much of their activity is monitored and monetized. Laws like Europe’s GDPR require transparency in data collection, aiming to close this gap. As regulators in the U.S. also update privacy rules, pressure for change is growing.

Potential Fallout – Changes to Data Practices or Business Models?

While details remain unannounced, the Google settlement will likely require reforms and possibly oversight to the company’s data practices. Some analysts think damages could reach into the billions given the massive class size. Whether Google also modifies its ad tracking and targeting is less clear but plausible given the liability over those practices.

More broadly, the lawsuit may accelerate shifts in how tech companies handle user data. Increasingly, consumers demand greater transparency and control over their personal information. New laws also dictate stricter consent requirements for tracking users across sites and devices. All this affects the fundamentals of ad-based business models dominant across internet platforms.

Of course, the prime value tech giants derive from users is in data collection and analysis abilities. Reform enforced by lawsuits, regulation, or settlements will cut into this advantage. As data gathering, retention, and usage get reined in over privacy concerns, tech firms lose a key asset. In response, some companies are developing alternative revenue streams based less on collecting personal data and more on subscription services. How far this trend goes depends on how seriously privacy risks are addressed industry-wide.

Looking Ahead – Tech Faces a Reckoning Over Data Ethics

Though appeasing users worried over privacy, the Google settlement also shows how engrained user data is in delivering online products and experiences. Reforming these practices while preserving free, quality services will require balancing competing interests. As U.S. regulators catch up with privacy laws proliferating worldwide, expect thorny debates over this balance.

Lawsuits casting light on data abuses will continue playing a pivotal role in driving change. With landmark suits against tech giants like Google and Facebook working through courts, no company is immune. Protecting user privacy is paramount going forward in the digital economy. How Silicon Valley adapts its business models and justifies its data dependence will shape trust in these powerful platforms. If companies fail to convince consumers their privacy matters, backlash and regulation could fundamentally disrupt the tech sector for years to come.

Meta Stock Skyrockets in Monumental Rebound From Brutal 2022

Posted on by slightbourne@noblecapitalmarkets.com

After a nightmarish 2022 saw Meta’s stock plunge over 60%, the company orchestrated a jaw-dropping turnaround in 2023 – with shares skyrocketing 178% year-to-date. This staggering rally cements 2023 as the best year ever for Meta’s stock, capping a remarkable validation of CEO Mark Zuckerberg’s intense push around “efficiency” and coast cuts.

The share price resurgence was fueled by Meta leanly rebuilding itself as an advertising titan laser-focused on what drives revenue today. Zuckerberg notably changed his tone in early 2023 – listening to shareholders, communicating more transparently, and realigning his priorities around the core ad business over capital intensive metaverse bets.

It represented a dramatic pivot from the seeming indifference to shareholder concerns that defined much of 2022 as Meta’s stock spiraled. After three straight quarters of declining sales, Zuckerberg admitted economic troubles and stiff competition had severely impacted projections.

2023 became Meta’s “year of efficiency” with sweeping layoffs and disciplined spending helping right the ship. Growth returned as digital advertising rebounded and Meta seized market share back from rivals Snap and Alphabet.

Crucially, Meta rapidly adapted its ad targeting to Apple’s 2021 privacy policy changes which had previously hammered revenue. Investments in artificial intelligence and machine learning helped Meta overcome the loss of certain user data – finding new ways to optimize ads despite disruptive forces.

The company also benefited enormously from booming advertising spend out of China looking to target Meta’s billions of users globally. This diversified another previous over-reliance on western advertisers.

Wall Street firmly rewarded Zuckerberg’s renewed focus and urgency regarding costs and care for the core business. But work remains heading into 2024 amidst lingering industry skepticism.

Meta still predicts an uncertain advertising landscape tied to geopolitical instability and the possibility of global recession. Its family of social apps also face intensifying governmental scrutiny and lawsuits related to mental health and data privacy concerns.

Plus the multi-billion dollar metaverse division continues bleeding substantial losses quarter after quarter – leading some analysts to demand bolder restructuring of that arm. Zuckerberg has trodden delicately here so far though, reluctant to fully abandon his vision.

And peril lies ahead in 2024 as digital behemoth Google plans to join Apple in phasing out certain ad tracking cookies from its dominant mobile ecosystems. This threatens a repeat of the mammoth revenue hit Meta only just recovered from and adapted to regarding Apple’s changes.

The regulatory ground also keeps shifting under the entire social media sector with legislative action repeatedly proposed on issues ranging from antitrust regulation to outright platform bans tied to national security concerns.

Upstart rival TikTok particularly remains an imposing threat having pioneered the culture-dominating short video format now ubiquitous across all social apps. Its popularity with younger demographics continues outpacing Meta’s offerings, forcing more ad dollars out of Meta’s reach as marketing follows shifting generational engagement.

Despite still monumental scale, Meta therefore heads towards 2024 with nervous investors recalling how quickly its business model faltered against the collision of multiple storm fronts in 2022. Its salvation came by sweating assets through job cuts and engineering revenue growth however possible in a battered online ad market.

But Meta likely needs more innovative long-term vision to guarantee sustained dominance as new technological and economic realities reshape its competitive landscape in dynamic ways year after year.

For now, as 2023 wraps historically, Mark Zuckerberg has earned a victory lap after boldly steering his tech empire back from the brink. Though clouds remain on the horizon, Meta proved it still has sharp reflexes and can reinvent itself when forced. The coming decade may demand that agility over and over as digital ways of life advance apace.

Release – MustGrow Biologics and Bayer Sign Commercial License Agreement for Biocontrol Technologies in Europe, Middle East and Africa

Posted on by cpatches
Research News and Market Data on MGROF
  • Bayer’s commercial license covers soil applications of MustGrow’s mustard-based biocontrol technologies in Europe, Middle East and Africa.
  • MustGrow to receive upfront license fees and milestone payments, royalties, and manufacturing sales linked to development and commercial achievements.

SASKATOON, Canada, December 11, 2023 – MustGrow Biologics Corp. (TSXV:MGRO) (OTC:MGROF) (FRA:0C0) (“MustGrow”) is pleased to announce the signing of a collaboration agreement (the “Agreement”) with Bayer AG (BAYN) (“Bayer”) covering soil applications of MustGrow’s mustard-based biocontrol technologies in Europe, Middle East and Africa, excluding home and garden, turf and ornamental applications.

Under the terms of the Agreement, MustGrow will receive an initial upfront payment as well as additional payments linked to the achievement of certain business milestones. Upon the commencement of commercial sales, MustGrow will also be entitled to fees from royalties and manufacturing sales. Additionally, Bayer will be responsible for regulatory and market development work (the “Development Work“) in the respective field of use necessary to commercialize MustGrow’s mustard-based biocontrol technologies, including the development of the formulated product, conducting relevant regulatory data studies for regulatory submissions, filing regulatory submissions, registration with relevant regulatory authorities, and support, marketing, and commercial sales activities. MustGrow anticipates that the value of the upfront, milestone payments and Development Work could approximate USD $35 to $40 million over the next several years (not including additional fees from royalties and manufacturing sales).

“Biologicals are part of an exciting frontier that offers new solutions for the challenges that growers face across the world,” said Benoit Hartmann, Head of Biologics for Bayer. “We’re committed to working with leading innovators like MustGrow to accelerate the development of innovative biological solutions that provide safe, sustainable options for farmers and are looking forward to continuing our work together.”

Pursuant to the Agreement, Bayer has also been granted a right-of-first-negotiation for a license to use MustGrow’s mustard-based biocontrol technologies for use in bananas in particular applications, excluding postharvest applications. MustGrow expects to continue collaborating with Bayer to consider other potential applications of MustGrow’s mustard-based biocontrol technologies, including potentially testing in regions not currently covered by the Agreement.

Sustainable innovations and green technologies are necessary to ensure agricultural production continues to address food safety and security as well as soil health. MustGrow’s rapidly developing technologies are focused on sustainable, safe, and effective, organic plant-based crop protection technologies that harness the mustard seed’s natural defense mechanism to treat diseases, pests and weeds. MustGrow’s technology has shown consistent efficacy in multiple global regions, in multiple crops, in multiple applications, over multiple years. The Agreement between Bayer and MustGrow demonstrates the importance of innovation in sustainable technologies in agricultural regions around the world.

“MustGrow is thrilled to commercialize our technologies with Bayer in three important food producing regions. Through Bayer’s research, development and commercial teams we have seen a rapid  advancement in our product and market knowledge in the last two years,” remarked Corey Giasson, CEO of MustGrow. “Working with the leader in global crop science and sustainable agriculture is a tremendous opportunity for our organization to see our mustard plant-based technologies commercialized globally.”

About MustGrow

MustGrow is an agriculture biotech company developing organic biocontrol and biofertility products by harnessing the natural defense mechanism and organic materials of the mustard plant to sustainably protect the global food supply and help farmers feed the world. MustGrow and its leading global partners — Bayer, Janssen PMP (pharmaceutical division of Johnson & Johnson), Sumitomo Corporation, and Univar Solutions’ NexusBioAg — are developing mustard-based organic solutions for applications in biocontrol to potentially replace harmful synthetic chemicals in preplant soil treatment and weed control, to postharvest disease control and food preservation. Bayer has an commercial agreement to develop and commercialize MustGrow’s biocontrol soil applications in Europe, Africa, and the Middle East. Concurrently, with new formulations derived from food-grade mustard, the Company is pursuing the adoption and use of its first registered and OMRI Listed® product, TerraSanteTM, in key U.S. states. Over 150 independent tests have been completed, validating MustGrow’s safe and effective approach to crop and food protection and yield enhancements. Pending regulatory approval, MustGrow’s patented liquid technologies could be applied through injection, standard drip or spray equipment, improving functionality and performance features. MustGrow has approximately 50.1 million basic common shares issued and outstanding and 55.0 million shares fully diluted. For further details, please visit www.mustgrow.ca.

Contact Information

Corey Giasson
Director & CEO
Phone: +1-306-668-2652
info@mustgrow.ca

MustGrow Forward-Looking Statements

Certain statements included in this news release constitute “forward-looking statements” which involve known and unknown risks, uncertainties and other factors that may affect the results, performance or achievements of MustGrow.

Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “budget”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”, “occur” or “be achieved”. Examples of forward-looking statements in this news release include, among others, statements MustGrow makes regarding: MustGrow receiving upfront license fees and milestone payments, royalties, and manufacturing sales linked to development and commercial achievements; whether and if certain development and commercial achievements, that are a pre-condition to MustGrow receiving certain fees from royalties and manufacturing sales, will occur; the anticipated value of potential aggregate payments and development capital being USD $35 to $40 million; whether and how Bayer completes any regulatory and market development work; and MustGrow’s expectation to continue collaborating with Bayer to consider other potential applications of MustGrow’s mustard-based biocontrol technologies, including testing in regions not currently covered by the Agreement.

Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of MustGrow to differ materially from those discussed in such forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, MustGrow. Important factors that could cause MustGrow’s actual results and financial condition to differ materially from those indicated in the forward-looking statements include market receptivity to investor relations activities as well as those risks described in more detail in MustGrow’s Annual Information Form for the year ended December 31, 2022 and other continuous disclosure documents filed by MustGrow with the applicable securities regulatory authorities which are available at www.sedar.com. Readers are referred to such documents for more detailed information about MustGrow, which is subject to the qualifications, assumptions and notes set forth therein.

This release does not constitute an offer for sale of, nor a solicitation for offers to buy, any securities in the United States.

Neither the TSXV, nor their Regulation Services Provider (as that term is defined in the policies of the TSXV), nor the OTC Markets has approved the contents of this release or accepts responsibility for the adequacy or accuracy of this release.

© 2023 MustGrow Biologics Corp. All rights reserved.

Release – Cocrystal Pharma Announces First-Patient-In for Phase 2a Human Challenge Study Evaluating Oral CC-42344 in Pandemic and Seasonal Influenza A

Posted on by aweinsoff@channelchek.com

Research News and Market Data on COCP

DECEMBER 06, 2023

 DOWNLOAD AS PDF

BOTHELL, Wash., Dec. 06, 2023 (GLOBE NEWSWIRE) — Cocrystal Pharma, Inc. (Nasdaq: COCP) (“Cocrystal” or the “Company”) announces the achievement of first-patient-in for the Phase 2a human challenge clinical trial with CC-42344, an investigational new oral antiviral inhibitor for the treatment of pandemic and seasonal influenza A. This randomized, double-blind, placebo-controlled study will evaluate the safety, tolerability, viral and clinical measurements of influenza A infection in subjects dosed with oral CC-42344 treatment.

“There is an urgent need for new oral antivirals targeting pandemic and seasonal influenza that address drug resistance. CC-42344 was discovered using our proprietary structure-based drug discovery platform technology to inhibit the viral replication process. The data from this proof-of-concept clinical study will further validate CC-42344’s novel mechanism of action,” said Sam Lee, Ph.D., Cocrystal’s President and co-CEO. “We expect to report topline data from this clinical trial in 2024.”

“We are excited about the potential CC-42344 holds to create a paradigm shift in the treatment of one the world’s most common viral infections,” added James Martin, Cocrystal’s CFO and co-CEO. “Currently approved antiviral treatments for influenza are prone to viral resistance, increasing the need for improved influenza treatments for patients that also provide significant cost savings to the global healthcare system.”

About CC-42344
In late 2022 Cocrystal reported favorable safety and tolerability results in the single-ascending and multiple-ascending dose portions of the healthy volunteer Phase 1 trial conducted in Australia. Preclinical data showed that CC-42344 is highly active against seasonal and pandemic influenza A strains. In October 2023 Cocrystal received authorization from the United Kingdom Medicines and Healthcare Products Regulatory Agency to initiate a Phase 2a human challenge trial with CC-42344 as a potential treatment for pandemic and seasonal influenza A.

About Seasonal Influenza
Each year there are approximately 1 billion cases of seasonal influenza worldwide, with 3-5 million severe illnesses and up to 650,000 deaths, according to the World Health Organization. On average about 8% of the U.S. population contracts influenza each season. In addition to the health risk, influenza is responsible for approximately $10.4 billion in direct costs for hospitalizations and outpatient visits for adults in the U.S. annually.

About Cocrystal Pharma, Inc.
Cocrystal Pharma, Inc. is a clinical-stage biotechnology company discovering and developing novel antiviral therapeutics that target the replication process of influenza viruses, coronaviruses (including SARS-CoV-2) noroviruses and hepatitis C viruses. Cocrystal employs unique structure-based technologies and Nobel Prize-winning expertise to create first- and best-in-class antiviral drugs. For further information about Cocrystal, please visit www.cocrystalpharma.com.

Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the initiation and characteristics of a Phase 2a study for CC-42344 as a product candidate for oral antiviral inhibitor for the treatment of pandemic and seasonal influenza A, the potential efficacy and clinical benefits of, and market for, such product candidate, and the expected results and topline data from this clinical trial in 2024. The words “believe,” “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. Some or all of the events anticipated by these forward-looking statements may not occur. Important factors that could cause actual results to differ from those in the forward-looking statements include, but are not limited to, risks relating to our ability to proceed with the Phase 2a study including recruiting volunteers and procuring materials for such study by our clinical research organizations and vendors, and the results of such study. Further information on our risk factors is contained in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2022. 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.

Investor Contact:
LHA Investor Relations
Jody Cain
310-691-7100
jcain@lhai.com

Media Contact:
JQA Partners
Jules Abraham
917-885-7378
Jabraham@jqapartners.com

# # #

Source: Cocrystal Pharma, Inc.

Released December 6, 2023

Pfizer Weight Loss Pill Hits Snag in Mid-Stage Trial

Posted on by slightbourne@noblecapitalmarkets.com

Pharmaceutical giant Pfizer suffered a setback this week in the high-stakes race to tap into the burgeoning multi-billion dollar weight loss drug market. The company announced it is halting development of the twice-daily formulation of its experimental obesity pill danuglipron after underwhelming mid-stage trial results.

While the drug induced significant weight loss in obese patients, it came at the cost of poor tolerability. Over half of participants dropped out of the phase 2 study due to adverse gastrointestinal side effects like nausea and diarrhea.

Nonetheless, Pfizer still intends to stay in the game with a once-daily version of danuglipron. The company aims to release fresh phase 2 data on the more competitive formulation in early 2024 before determining next steps.

For a drugmaker grappling with fading Covid-19 revenues, the news deals a tough blow to its strategy to offset declines through potential new blockbusters for obesity. Just last year, CEO Albert Bourla tagged the total addressable weight loss market at a whopping $90 billion.

But competition is cutthroat, with Novo Nordisk and Eli Lilly vying to convert millions from their injectable diabetes meds to an oral option. Their rival pills have already posted mid-teens percentage weight loss results that position them to potentially leapfrog Pfizer’s attempt.

Danuglipron Quick Facts

  • Twice-daily formulation now discontinued after 6.9% to 11.7% weight loss at 32 weeks
  • Well below 14-15% loss seen as competitive threshold
  • High rates of nausea, vomiting, diarrhea
  • Over 50% dropout rate

Key Takeaways for Investors
The disappointing data for danuglipron’s twice-daily pill underscores several investor concerns around Pfizer’s efforts to expand into weight loss medicines.

Uphill Battle Against Rivals
Novo Nordisk and Eli Lilly already dominate the obesity drug landscape with their injectable products Saxenda and Ozempic. Lilly’s oral candidate tirzepatide is showing roughly 15% weight loss over 72 weeks, clearing the competitive bar Pfizer failed to hit.

While the field is large enough for multiple winners, Pfizer faces substantial share challenges from these deeply entrenched rivals. Its best-case outcome may be carving off a small slice rather than market leadership.

Tolerability Issues Limiting
Danuglipron has now faltered twice in mid-stage studies due to side effects leading over half of volunteers to quit treatment. The once-daily route shows some promise, but gastrointestinal problems may hamper uptake if they persist. By comparison, tirzepatide posted a 21% dropout rate.

Uncertainty Remains High
With phase 3 trials still a distant prospect, the program faces a long road ahead fraught with risk. While danuglipron evinced significant weight-loss efficacy, real-world commercial success depends greatly on improving its poor tolerability profile.

Until then, uncertainty around Pfizer’s weight loss aspirations stays high. Expect sales projections to remain muted absent positive late-stage outcomes down the line. But rivals like Lilly and Novo aren’t standing still either, making danuglipron’s path ahead even trickier.

Release -Entravision Announces Participation in NobleCon19 – Noble Capital Markets’ 19th Annual Emerging Growth Equity Conference

Posted on by aweinsoff@channelchek.com

Research News and Market Data on EVC

November 28, 2023

SANTA MONICA, Calif.–(BUSINESS WIRE)– Entravision (NYSE: EVC), a leading global advertising solutions, media and technology company, today announced its participation in NobleCon19, Noble Capital Markets’ 19th Annual Emerging Growth Equity Conference, to be held December 3-5, 2023, in Boca Raton, FL. Chris Young, Chief Financial Officer and Treasurer, is scheduled to present on Monday, December 4th, 2023 at 11:30 a.m. ET and will participate in meetings with investors throughout the day.

The presentation will be webcast live over the Internet, and links to the live webcast and replay will be available on Entravision’s Investor Relations website at investor.entravision.com.

About Entravision Communications Corporation

Entravision is a global advertising solutions, media and technology company. Over the past three decades, we have strategically evolved into a digital powerhouse, expertly connecting brands to consumers in the U.S., Latin America, Europe, Asia and Africa. Our digital segment, the company’s largest by revenue, offers a full suite of end-to-end advertising services in 40 countries. We have commercial partnerships with Meta, X Corp. (formerly known as Twitter), TikTok, and Spotify, and marketers can use our Smadex and other platforms to deliver targeted advertising to audiences around the globe. In the U.S., we maintain a diversified portfolio of television and radio stations that target Hispanic audiences and complement our global digital services. Entravision remains the largest affiliate group of the Univision and UniMás television networks. Shares of Entravision Class A Common Stock trade on the NYSE under ticker: EVC. Learn more about our offerings at entravision.com or connect with us on LinkedIn and Facebook.

Christopher T. Young
Chief Financial Officer
Entravision
310-447-3870

Kimberly Orlando
Addo Investor Relations
310-829-5400
evc@addo.com

Source: Entravision

Mortgage Rates See Biggest Weekly Drop in Over a Year, Sparking Demand

Posted on by slightbourne@noblecapitalmarkets.com

Mortgage rates took a steep dive last week in the biggest one-week drop since September 2021. The average 30-year fixed mortgage rate decreased to 7.61% from 7.86% the week prior, according to the Mortgage Bankers Association (MBA).

This plunge in rates over the course of just one week sparked a 2.5% increase in total mortgage loan application volume. It was the first uptick in demand after four straight weeks of declines.

The drop in mortgage rates was driven by positive economic news. The Federal Reserve struck a dovish tone signaling slower future rate hikes. This was followed by monthly jobs data that came in under expectations pointing to cooling inflation.

What does the rate plunge mean for mortgage borrowers? Here are the key takeaways:

Refinancing Demand Rises But Still Lags 2021

The dip in rates led to a 2% bump in refinance application volume last week. This marks a turnaround after refinancing demand fell to a 22-year low in October when rates topped 7%.

But refinancing is still 7% lower than the same week last year. In 2021, rates hovered near 3%, fueling a refinancing boom. Today, most homeowners already refinanced at those historically low rates.

For context, 63% of mortgage borrowers are paying rates under 4%, according to Black Knight data. There is little incentive for these borrowers to refinance at today’s higher rates.

The bottom line is that lower rates are inviting more refinancing but volumes are still a fraction of the 2021 frenzy. Only borrowers with rates well above 7% stand to meaningfully benefit from a refi now.

Homebuying Demand Rebounds But Remains Suppressed

The positive rate movement also drove a 3% weekly gain in purchase mortgage applications. This suggests some home buyers are jumping at the chance to lock lower rates.

But purchase demand remains sharply lower than last year, down 20% from the same week in 2021. Sky high home prices are outweighing the lure of lower rates for many prospective buyers.

The median home sales price in September was $384,800, up 8.4% from 2021 according to the National Association of Realtors. Price gains are outpacing the rate relief.

Moreover, today’s rates are still dramatically higher than the sub-3% levels seen last year. So while lower rates offer savings, overall affordability remains constrained for buyers.

What Drove the Rate Plunge?

Rates started retreating after the Fed announced its latest 0.75% rate hike on November 2. Investors took an optimistic signal from the Fed indicating it may slow the pace of future hikes due to easing inflation.

The optimism was cemented on November 4 when the October jobs report showed the labor market is starting to cool. Employers added 261,000 jobs last month, below estimates of 300,000.

Slower job growth reduces inflation pressures, reinforcing the case for the Fed to temper rate hikes. This positive news for the economy caused mortgage rates to unravel.

What’s Ahead for Mortgage Rates?

Mortgage rates started this week slightly higher but remain volatile. The MBA noted there are fewer major economic events on the calendar this week that could substantially sway rates.

But Fed speakers may still influence rate expectations. Any renewed hawkish signals could nudge rates higher again. Rates are also very sensitive to inflation data hints.

For now, the overall trend for mortgage rates is bouncing within a range but remains comparatively high historically. Barring an unforeseen shock, major swings in either direction appear unlikely in the near term.

What Are Small-Cap Stocks and Are They a Good Investment?

Posted on by slightbourne@noblecapitalmarkets.com

For many individuals, investing in the stock market is a pathway to financial growth and security. And while familiar large-cap names like Amazon, Apple and Microsoft may first come to mind when building a portfolio, small-cap stocks represent another promising segment of the market.

Today, we’ll take an in-depth look at the world of small-cap stocks and examine whether they can make a wise addition to your investment strategy. Whether you’re a seasoned investor looking to broaden your portfolio or someone new to stock market investing, this article will answer all your questions about what a small-cap stock is and much more.

Defining Small-Cap Stocks

First, let’s start with a quick definition – what exactly are small-cap stocks?

Small-cap stocks refer to companies that have a relatively small market capitalization, generally between $300 million and $2 billion. Market capitalization (or market cap) is calculated by multiplying the total number of company shares outstanding by the current market price per share.

So a company with 10 million shares trading at $20 per share would have a market cap of $200 million, landing it in the small-cap category.

In contrast, large-cap stocks like Apple, Microsoft, and Amazon are valued in the hundreds of billions. Small-cap stocks represent companies in earlier developmental stages with significant room for expansion ahead of them before reaching the scale of the market leaders. Some well-known examples of small-cap companies across different sectors are The ODP Corporation, Bassett Furniture, The Geo Group and Maple Gold Mines.

Small-cap stocks sit in the middle between micro-cap stocks (under $300 million market cap) and mid-cap stocks ($2 billion to $10 billion market cap). At the higher end are large-cap stocks (over $10 billion) and mega-cap stocks like Apple that exceed $200 billion in market value.

For many growth-oriented investors, small-cap stocks represent an opportunity to invest early in a company with potential for rapid expansion before they become household names. The early-stage status means small-cap companies have ample runway to grow their market share and establish themselves as industry leaders over time. With the right investments, small-cap stocks can deliver exponential returns compared to slow and steady large-cap stocks that have less growth potential ahead.

However, the smaller size and scale of these companies also leads to higher volatility and risk compared to large-caps with firmly entrenched market positions. We’ll explore these trade-offs more in the sections ahead.

Key Characteristics of Small-Cap Stocks

Now that we’ve defined what a small-cap stock is, let’s dive deeper into some of the typical characteristics of these types of companies:

Greater Growth Potential

With small-cap companies still in relatively early phases of their lifecycle, their products and services often have significant room for wider adoption and expansion. Small-cap stocks are laser focused on growing their market share rapidly during the critical early innings before competitors emerge. They pour capital into product development, sales and marketing, and geographic expansion while large-caps aim to protect and defend their existing turf.

Higher Volatility

With smaller financial resources and operational scale, small-cap stocks tend to be more vulnerable to market swings and changing economic conditions. As a result, their share prices can fluctuate wildly in short periods of time as sentiment shifts. On the other hand, large-cap stocks boast stability and steady, predictable growth.

Less Analyst Coverage

Wall Street banks and financial media outlets tend to devote the bulk of their research and coverage to large, established companies that dominate their industries. Meanwhile, small-cap stocks fly under the radar in comparison. This lack of attention results in opportunities for diligent individual investors to uncover small companies poised for growth before they gain widespread analyst and investor attention. This is where Channelchek comes in. Our market research is specific to small cap stocks and completely free as long as you join our community

Potential for Undervaluation

The limited analyst coverage and lack of institutional investor interest in small-cap stocks can at times lead to mispricing opportunities where the stocks trade at valuations that do not fully reflect their growth prospects and upside potential. Savvy investors can find hidden gems trading at deep discounts relative to their future earnings power. Of course, finding these diamonds in the rough requires rolling up your sleeves and digging into financial statements.

Liquidity Challenges

The total number of outstanding shares is far lower for small-cap companies versus large-caps, which leads to lighter trading volumes and thinner liquidity. This results in wider bid-ask spreads, premiums and heightened volatility when entering and exiting positions. Large-cap stocks benefit from abundant liquidity and tight spreads, allowing large trades to be executed seamlessly.

In summary, while small-cap stocks carry additional risk factors, their lower valuations, lack of analyst coverage and undiscovered status provide significant upside potential for enterprising investors willing to conduct their own due diligence.

The Pros and Cons of Small-Cap Stocks

Now that we understand the typical traits of small-caps relative to large-caps, let’s examine the key potential benefits and drawbacks of adding these types of companies to your investment portfolio:

Potential Benefits of Small-Cap Stocks

– Outsized Growth Potential – With the right stock picks, small-cap companies can deliver exponential returns over a relatively short timeframe that mature large-cap stocks simply cannot match. Just look at Amazon’s meteoric rise over the past decade when it was still a small-cap. 

– Undervaluation Opportunities – Due to the lack of widespread analyst coverage, small-cap stocks can become underpriced or neglected relative to their growth prospects. Dedicated investors can find hidden gems trading at compelling valuations before market awareness builds.

– Portfolio Diversification – Because small-cap stocks behave differently than large-caps with lower correlation, adding small-cap exposure can improve the overall risk-adjusted return profile of a portfolio heavy in stable large-cap names.

– Inflation Hedge – During periods of rising inflation, small-cap stocks have historically outperformed as they are more nimble in passing on price increases to customers. Large-cap names are slower to react.

Potential Drawbacks of Small-Cap Stocks

– Higher Volatility – The amplified swings in small-cap share prices require mental fortitude during periods of market stress. Their risk profile means small-caps are better suited for those with higher risk tolerance.

– Liquidity Risk – The lower trading volumes inherent with small-caps necessitates close monitoring of bid-ask spreads and liquidity when entering or exiting a position. Sudden moves can lead to dislocation.

– Fewer Resources – Compared to the robust balance sheets of large-caps, small-cap companies have less financial flexibility and capital reserves which can leave them vulnerable during recessions.

– Lack of Institutional Coverage – Minimal Wall Street research coverage means individual investors must conduct their own due diligence. Those relying purely on analyst reports will be late to the party.

All in all, while small-cap stocks carry some additional risks and challenges, their return potential merits inclusion for at least a portion of growth-oriented investors’ portfolios.

Researching and Investing in Small-Caps

Here are some key factors for investors to weigh before adding small-cap exposure:

– Assess your personal risk tolerance – The inherent volatility of small-cap stocks means they are better suited for those investors with higher risk appetites and ability to withstand routine price swings. Make sure your temperament aligns.

– Consider investment timeframe – The long-term growth trajectories of small-caps make them ideal picks for investors with longer time horizons of at least 5-10 years rather than short-term trading mentality. Have patience.

– Conduct extensive due diligence – There’s far less third-party Wall Street research available on small-caps compared to large-caps. You’ll need to thoroughly comb through financial filings, growth prospects, competitive dynamics and management track records.

– Diversify across multiple small-caps – Build a basket of small-cap stocks across different sectors to smooth volatility and avoid concentration risk. Layer in large-cap and mid-cap holdings.

– Monitor liquidity trends – Keep an eye on trading volumes and bid-ask spreads of small-caps you own to ensure ample liquidity exists when entering and exiting positions. Liquidity shrinks rapidly during downturns.

Taking these elements into account allows you to make informed decisions before venturing into small-caps.

Investing Strategies for Small-Cap Stocks

If small-cap stocks fit your risk tolerance, goals and research diligence, here are some effective approaches:

– Seek out promising sectors – Target high-growth sectors like technology, healthcare and consumer discretionary where disruption potential is highest rather than diversified small-cap funds.

– Identify company-specific catalysts – Look for upcoming product launches, partnerships, FDA approvals or expansion plans that could serve as catalysts for a sharp rise in sales, earnings and sentiment.

– Take a long-term perspective – Tune out the noise and stick to your original investment thesis during temporary price swings. Have conviction in your small-cap picks.

– Utilize stop-loss orders – Use stop-loss orders to automatically sell positions if prices breach certain thresholds as a risk management tactic. Re-enter when volatility subsides.

– Reinvest dividends for compounding – Many small-caps pay dividends despite early-stage status. Reinvesting dividends turbocharges long-term total returns. 

– Consider small-cap index funds – For diversification, consider cost-effective small-cap index funds from leading providers like Vanguard, Schwab and iShares.

– Limit overall allocation – Given the amplified risk, small-caps should likely account for no more than 10% of your total portfolio assets. Size positions accordingly.

With rigorous research and prudent strategy, small-cap stocks can boost returns for enterprising investors willing to accept the higher volatility profile.

The Bottom Line on Small-Cap Stocks

In the high-growth small-cap arena, there will inevitably be huge winners and unfortunate flameouts. But for risk-tolerant investors, the profit potential justifies the bumpy ride. By taking a selective approach, diversifying across multiple small-caps, and holding for long time horizons, much of the volatility smoothes outs while allowing winners time to fully capture market share.

While individual small-cap stocks require diligence, broad exposure can be gained cost-effectively through small-cap index funds and ETFs. Overall, small-cap stocks fill an important niche in balanced portfolios, providing a return boost that slow-changing large-caps cannot match. For investors willing to accept fluctuations in the pursuit of superior long-term returns, small-cap stocks warrant consideration.

Join the Channelchek community to keep up with the latest small-cap insights and start making informed investment decisions!