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Blain: Distracting Times

Blain: Distracting Times

Authored by Bill Blain via MorningPorridge.com,

"Some men are born mediocre, some men achieve mediocrity, and some men have mediocrity thrust upon them. " 

Who would really want to invest time and effort in a basket

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Blain: Distracting Times

Authored by Bill Blain via MorningPorridge.com,

"Some men are born mediocre, some men achieve mediocrity, and some men have mediocrity thrust upon them. " 

Who would really want to invest time and effort in a basket case spiralling downwards, riven by internal dissent, where pushback against the agreed rules and the disagreement is commonplace? But enough about She-Who-Is-Mrs-Blain and I trying to agree on new bathrooms… let’s talk about markets instead. 

The fun and games in the USA is a massive but fascinating distraction from everything else going on in the world. 

A chum and I were wondering about markets and how difficult this whole “democracy” thing is becoming. Bearing in mind the history and shoot-first mindset of the US, is it right to punish Trump for the crime of being Trump or would it be better to gloss over it? Is it right big tech companies – which clearly state on their terms of service that they will not host or promote sites or apps that allow hate, racism or incitements to violence – have effectively spiked the Alt-right forum “Parler”? Is it a denial of free speech or a logical business decision? What is the right to free speech? I’ve been slung out of posh clubs for being free with my speech….  (I don’t think Parler should worry… I’m sure the Kremlin will be happy to fund a server farm deal for them…)

As we debated the potential outcomes for the US – our consensus being the US faces a long-term crisis to address and solve the equation for both disaffected Trump Supporters and the crushing poverty now seen in Democrat Cities… we wondered if there are better places to invest. 

You might have noticed in your rear-view mirror China getting away with whatever it pleases in Hong Kong, and ask the question: Where is Jack Ma? 

That’s an interesting one – what President Xi decides to do with Alibaba will define what kind of investible market China is likely to become. As its likely to become the largest economy very soon, it’s can’t be ignored and is worth considering. We have a very simple litmus test to watch:

  • If Alibaba is “punished” with a simple but significant corporate fine on the basis Ma’s disrespect for regulation needed “correction” then China investment is not insurmountable. China has the right to set its regulatory rules and expect them to be respected. 

  • However, if Xi decides to “unperson” Ma, and absorb Alibaba and Ant into the state, then that creates a very different outlook where garnering returns from a “pivot to China” becomes a lottery. 

I’m watching carefully – Alibaba is my worst performing investment position at the moment.

Europe has been getting even less attention. It strikes me it should be top of list of places to be watching – and not just because Italian politics are looking wobbly… again… But Yoorp is just too dull to get excited about. I suppose things could be worse. According to The Times of London a few weeks ago, ace EU negotiator Michael Barnier is in with a chance of standing for French President. Aw.. bless.. 

Yesterday, the former Italian prime-minister Matteo Renzi pulled his Italia Viva party out the coalition over spending demands and how much they can get from Europe and the EU’s recovery fund. It didn't get mentioned on the BBC news. It might force an election.. All while Italy is struggling with the second worse Coronavirus load in Europe. (The UK numbers are cosmetically worse.) 

On the other hand, yesterday Spain received an extraordinary initial €130 bln of orders (a record demand number for a European peripheral govt bond sale, apparently) on its new 10-year bond – priced at 55 basis points over Bunds to yield 0.08%. There is a lot of scepticism about the order books for new deals – plenty of buyers aren’t holders, but are stagging the deals to sell on to the ECB. Who wouldn’t – buy bonds in the morning a 0.08% and spiv them to the ECB at 0.07% in the afternoon…

Because I very occasionally express opinions that Europe is not quite the capitalist workers’ paradise it claims to be… but is possibly the least free, most protectionist, bureaucratically trip-wired, mismatched and mismanaged wannabe state on the planet, some readers think I’m some kind of Brexiteering Eurosceptic foaming at the mouth to declare war on Europe. 

Nonsense. I adore Europe – seriously I do. But, as the botched EU coordination of the vaccination programme yet again highlights…. running a loose confederated union of 26 conflicted tribes with varying degrees of distrust for each other is a pretty thankless task – which is why the President of The European Commission is a lackluster former German defence minister appointed to the role. Successful big-nation politicians would be unlikely to take the job…

That’s the problem for Europe. Great idea… but not everyone is fully bought into the programme yet. The more I observe and think about it, I suspect the likely outcome for Europe is not a sudden collapse of the Euro, or a spectacular national default brought about by the mechanisms of the Euro and debt… but more likely nations just losing the will to bother anymore.. and that rather than move forward it slowly stagnates. Rather than the EU and Euro exploding in a catastrophic supernova, I suspect its more likely to bore us to death in a welter of regulations, bailout programmes and superstate controls…  

That’s a sign of a fundamental disconnect at the heart of Europe. The Brussels Eurocracy’s ambition is for the EU superstate to have primacy over the member states – as has been achieved in terms of the currency and monetary issues. However, the Nation states remain sovereign for fiscal policy – which is a fundamental block: if you don’t have monetary sovereignty, how can you have fiscal sovereignty. The delicate balance/fudge between state and union is below the surface in member countries, but it’s what underlay the Brexit vote in the UK. The next two years in European politics could well see these tensions re-emerge – which will further hamper the efforts of individual nationse to reflate economies and drive recovery. Its a fundamental conflict.

As the end of the Angela Merkel era approaches, there isn’t much to hope Germany is going to lead Europe by example. Reading about, (because who wants to watch) German politics is close to a SLMOT (slit my own throat) moment as the perhaps the dullest, least inspiring politicians in the western world chunter on about blah blah blah blahbitty blah blah.. The potential successors to Frau Merkel are a mildly uninspiring lot. Merkel dominated the European agenda as the practical pragmatic senior European statesman. Yet her centrist personality and policies will her leave the party stalled in the Middle of The Road in every respect. German politics is so dull and boring it’s difficult to see anyone with much of a personality to set agendas to lead Europe emerge from it. 

The winner of the party election won’t be the politician with the best outreach to young people, or the one with firmest grasp on European control – it will be the establishment man that appeals best to the 1000 senior CDU politicrats who will make the choice. They will choose a leader unlikely to rock the boat. None of them care much for “galvanising” young people or challenging the finances and structures of the EU - as long a Germany is ok.  

In France, but Macron’s recent TV performances have been less than stunning. Looking haunted, he knows the game is likely up unless he is gifted Marine Le-Pen as his rival in May 2022 – and the whole electorate gathers behind him in order to keep the Eurosceptic far right out. Macron failed to solve the domestic issue which spawned the gillet-jaunes or exploit the space left by Merkel to lead Europe. 

Earlier this week Italian bonds got hosed on the back of fears the current government may throw in the towel over its inability to support the economy. While the UK and US can turn on the government cash spiggots and furlough, support and bail out whomever they chose with as much money as they can possibly need.. Italy, and every other EU member, has to go cap in hand to Brussels for permission to breach debt/GDP levels, for additional money and the vaccinations. 

Seasoned European watchers say the latest crisis in Italy isn’t worth getting bothered about. It happens – get over it. Italy needs money it doesn’t have. It doesn’t have financial sovereignty, so all it can do is bleat to Europe, harumph in front of Italian voters, and then ask Europe nicely for more – even though its already getting the biggest slice of the €750 bln recovery/generational funding....  See.. the system works.. 

As I was asking earlier – am I inclined to invest in Europe where growth remains limited and politics has become a null entrophy game? 

All of which leaves… the UK? Oh dear… is that the best I can come up with… !

Finally.. My big upset at the moment is the likelihood I won’t to La Thuile, the Little Siberia of The Italian Alps – my favourite place to ski. Why? Because its quiet, it’s not very fashionable, it’s got great runs including a world championship downhill, and it’s got marvellous quiet little bars you need to ski to get to where I can just sit, relax and take in the views (and brandies..) Next year… next year… 

Tyler Durden Thu, 01/14/2021 - 08:30

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Four burning questions about the future of the $16.5B Novo-Catalent deal

To build or to buy? That’s a classic question for pharma boardrooms, and Novo Nordisk is going with both.
Beyond spending billions of dollars to expand…

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To build or to buy? That’s a classic question for pharma boardrooms, and Novo Nordisk is going with both.

Beyond spending billions of dollars to expand its own production capacity for its weight loss drugs, the Danish drugmaker said Monday it will pay $11 billion to acquire three manufacturing plants from Catalent. It’s part of a broader $16.5 billion deal with Novo Holdings, the investment arm of the pharma’s parent group, which agreed to acquire the contract manufacturer and take it private.

It’s a big deal for all parties, with potential ripple effects across the biotech ecosystem. Here’s a look at some of the most pressing questions to watch after Monday’s announcement.

Why did Novo do this?

Novo Holdings isn’t the most obvious buyer for Catalent, particularly after last year’s on-and-off M&A interest from the serial acquirer Danaher. But the deal could benefit both Novo Holdings and Novo Nordisk.

Novo Nordisk’s biggest challenge has been simply making enough of the weight loss drug Wegovy and diabetes therapy Ozempic. On last week’s earnings call, Novo Nordisk CEO Lars Fruergaard Jørgensen said the company isn’t constrained by capital in its efforts to boost manufacturing. Rather, the main challenge is the limited amount of capabilities out there, he said.

“Most pharmaceutical companies in the world would be shopping among the same manufacturers,” he said. “There’s not an unlimited amount of machinery and people to build it.”

While Novo was already one of Catalent’s major customers, the manufacturer has been hamstrung by its own balance sheet. With roughly $5 billion in debt on its books, it’s had to juggle paying down debt with sufficiently investing in its facilities. That’s been particularly challenging in keeping pace with soaring demand for GLP-1 drugs.

Novo, on the other hand, has the balance sheet to funnel as much money as needed into the plants in Italy, Belgium, and Indiana. It’s also struggled to make enough of its popular GLP-1 drugs to meet their soaring demand, with documented shortages of both Ozempic and Wegovy.

The impact won’t be immediate. The parties expect the deal to close near the end of 2024. Novo Nordisk said it expects the three new sites to “gradually increase Novo Nordisk’s filling capacity from 2026 and onwards.”

As for the rest of Catalent — nearly 50 other sites employing thousands of workers — Novo Holdings will take control. The group previously acquired Altasciences in 2021 and Ritedose in 2022, so the Catalent deal builds on a core investing interest in biopharma services, Novo Holdings CEO Kasim Kutay told Endpoints News.

Kasim Kutay

When asked about possible site closures or layoffs, Kutay said the team hasn’t thought about that.

“That’s not our track record. Our track record is to invest in quality businesses and help them grow,” he said. “There’s always stuff to do with any asset you own, but we haven’t bought this company to do some of the stuff you’re talking about.”

What does it mean for Catalent’s customers? 

Until the deal closes, Catalent will operate as a standalone business. After it closes, Novo Nordisk said it will honor its customer obligations at the three sites, a spokesperson said. But they didn’t answer a question about what happens when those contracts expire.

The wrinkle is the long-term future of the three plants that Novo Nordisk is paying for. Those sites don’t exclusively pump out Wegovy, but that could be the logical long-term aim for the Danish drugmaker.

The ideal scenario is that pricing and timelines remain the same for customers, said Nicole Paulk, CEO of the gene therapy startup Siren Biotechnology.

Nicole Paulk

“The name of the group that you’re going to send your check to is now going to be Novo Holdings instead of Catalent, but otherwise everything remains the same,” Paulk told Endpoints. “That’s the best-case scenario.”

In a worst case, Paulk said she feared the new owners could wind up closing sites or laying off Catalent groups. That could create some uncertainty for customers looking for a long-term manufacturing partner.

Are shareholders and regulators happy? 

The pandemic was a wild ride for Catalent’s stock, with shares surging from about $40 to $140 and then crashing back to earth. The $63.50 share price for the takeover is a happy ending depending on the investor.

On that point, the investing giant Elliott Investment Management is satisfied. Marc Steinberg, a partner at Elliott, called the agreement “an outstanding outcome” that “clearly maximizes value for Catalent stockholders” in a statement.

Elliott helped kick off a strategic review last August that culminated in the sale agreement. Compared to Catalent’s stock price before that review started, the deal pays a nearly 40% premium.

Alessandro Maselli

But this is hardly a victory lap for CEO Alessandro Maselli, who took over in July 2022 when Catalent’s stock price was north of $100. Novo’s takeover is a tacit acknowledgment that Maselli could never fully right the ship, as operational problems plagued the company throughout 2023 while it was limited by its debt.

Additional regulatory filings in the next few weeks could give insight into just how competitive the sale process was. William Blair analysts said they don’t expect a competing bidder “given the organic investments already being pursued at other leading CDMOs and the breadth and scale of Catalent’s operations.”

The Blair analysts also noted the companies likely “expect to spend some time educating relevant government agencies” about the deal, given the lengthy closing timeline. Given Novo Nordisk’s ascent — it’s now one of Europe’s most valuable companies — paired with the limited number of large contract manufacturers, antitrust regulators could be interested in taking a close look.

Are Catalent’s problems finally a thing of the past?

Catalent ran into a mix of financial and operational problems over the past year that played no small part in attracting the interest of an activist like Elliott.

Now with a deal in place, how quickly can Novo rectify those problems? Some of the challenges were driven by the demands of being a publicly traded company, like failing to meet investors’ revenue expectations or even filing earnings reports on time.

But Catalent also struggled with its business at times, with a range of manufacturing delays, inspection reports and occasionally writing down acquisitions that didn’t pan out. Novo’s deep pockets will go a long way to a turnaround, but only the future will tell if all these issues are fixed.

Kutay said his team is excited by the opportunity and was satisfied with the due diligence it did on the company.

“We believe we’re buying a strong company with a good management team and good prospects,” Kutay said. “If that wasn’t the case, I don’t think we’d be here.”

Amber Tong and Reynald Castañeda contributed reporting.

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Petrina Kamya, Ph.D., Head of AI Platforms at Insilico Medicine, presents at BIO CEO & Investor Conference

Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb….

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Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb. 26-27 at the New York Marriott Marquis in New York City. Dr. Kamya will speak as part of the panel “AI within Biopharma: Separating Value from Hype,” on Feb. 27, 1pm ET along with Michael Nally, CEO of Generate: Biomedicines and Liz Schwarzbach, PhD, CBO of BigHat Biosciences.

Credit: Insilico Medicine

Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb. 26-27 at the New York Marriott Marquis in New York City. Dr. Kamya will speak as part of the panel “AI within Biopharma: Separating Value from Hype,” on Feb. 27, 1pm ET along with Michael Nally, CEO of Generate: Biomedicines and Liz Schwarzbach, PhD, CBO of BigHat Biosciences.

The session will look at how the latest artificial intelligence (AI) tools – including generative AI and large language models – are currently being used to advance the discovery and design of new drugs, and which technologies are still in development. 

The BIO CEO & Investor Conference brings together over 1,000 attendees and more than 700 companies across industry and institutional investment to discuss the future investment landscape of biotechnology. Sessions focus on topics such as therapeutic advancements, market outlook, and policy priorities.

Insilico Medicine is a leading, clinical stage AI-driven drug discovery company that has raised over $400m in investments since it was founded in 2014. Dr. Kamya leads the development of the Company’s end-to-end generative AI platform, Pharma.AI from Insilico’s AI R&D Center in Montreal. Using modern machine learning techniques in the context of chemistry and biology, the platform has driven the discovery and design of 30+ new therapies, with five in clinical stages – for cancer, fibrosis, inflammatory bowel disease (IBD), and COVID-19. The Company’s lead drug, for the chronic, rare lung condition idiopathic pulmonary fibrosis, is the first AI-designed drug for an AI-discovered target to reach Phase II clinical trials with patients. Nine of the top 20 pharmaceutical companies have used Insilico’s AI platform to advance their programs, and the Company has a number of major strategic licensing deals around its AI-designed therapeutic assets, including with Sanofi, Exelixis and Menarini. 

 

About Insilico Medicine

Insilico Medicine, a global clinical stage biotechnology company powered by generative AI, is connecting biology, chemistry, and clinical trials analysis using next-generation AI systems. The company has developed AI platforms that utilize deep generative models, reinforcement learning, transformers, and other modern machine learning techniques for novel target discovery and the generation of novel molecular structures with desired properties. Insilico Medicine is developing breakthrough solutions to discover and develop innovative drugs for cancer, fibrosis, immunity, central nervous system diseases, infectious diseases, autoimmune diseases, and aging-related diseases. www.insilico.com 


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Another country is getting ready to launch a visa for digital nomads

Early reports are saying Japan will soon have a digital nomad visa for high-earning foreigners.

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Over the last decade, the explosion of remote work that came as a result of improved technology and the pandemic has allowed an increasing number of people to become digital nomads. 

When looked at more broadly as anyone not required to come into a fixed office but instead moves between different locations such as the home and the coffee shop, the latest estimate shows that there were more than 35 million such workers in the world by the end of 2023 while over half of those come from the United States.

Related: There is a new list of cities that are best for digital nomads

While remote work has also allowed many to move to cheaper places and travel around the world while still bringing in income, working outside of one's home country requires either dual citizenship or work authorization — the global shift toward remote work has pushed many countries to launch specific digital nomad visas to boost their economies and bring in new residents.

Japan is a very popular destination for U.S. tourists. 

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This popular vacation destination will soon have a nomad visa

Spain, Portugal, Indonesia, Malaysia, Costa Rica, Brazil, Latvia and Malta are some of the countries currently offering specific visas for foreigners who want to live there while bringing in income from abroad.

More Travel:

With the exception of a few, Asian countries generally have stricter immigration laws and were much slower to launch these types of visas that some of the countries with weaker economies had as far back as 2015. As first reported by the Japan Times, the country's Immigration Services Agency ended up making the leap toward a visa for those who can earn more than ¥10 million ($68,300 USD) with income from another country.

The Japanese government has not yet worked out the specifics of how long the visa will be valid for or how much it will cost — public comment on the proposal is being accepted throughout next week. 

That said, early reports say the visa will be shorter than the typical digital nomad option that allows foreigners to live in a country for several years. The visa will reportedly be valid for six months or slightly longer but still no more than a year — along with the ability to work, this allows some to stay beyond the 90-day tourist period typically afforded to those from countries with visa-free agreements.

'Not be given a residence card of residence certificate'

While one will be able to reapply for the visa after the time runs out, this can only be done by exiting the country and being away for six months before coming back again — becoming a permanent resident on the pathway to citizenship is an entirely different process with much more strict requirements.

"Those living in Japan with the digital nomad visa will not be given a residence card or a residence certificate, which provide access to certain government benefits," reports the news outlet. "The visa cannot be renewed and must be reapplied for, with this only possible six months after leaving the countr

The visa will reportedly start in March and also allow holders to bring their spouses and families with them. To start using the visa, holders will also need to purchase private health insurance from their home country while taxes on any money one earns will also need to be paid through one's home country.

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