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Dan Loeb Q4 2020 Letter: Reddit Bubble No Different Than Tulip Mania

Dan Loeb’s letter to Third Point investors for the fourth quarter ended December 2020, discussing that the Reddit bubble is no different than the Tulip mania. Q4 2020 hedge fund letters, conferences and more During the Fourth Quarter, Third Point returned

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Dan Loeb’s letter to Third Point investors for the fourth quarter ended December 2020, discussing that the Reddit bubble is no different than the Tulip mania.

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Q4 2020 hedge fund letters, conferences and more

During the Fourth Quarter, Third Point returned +16.1% in the flagship Offshore Fund and +21.4% in the Ultra Fund. For 2020, the funds returned +20.5% and +24.9% for Offshore and Ultra, respectively. Assets under management at December 31, 2020 were approximately $15.5 billion, including $750 million in the Third Point Structured Credit Opportunities Fund.1

Looking back at 2020, we employed all of Third Point’s strategies and styles – event-driven, activist, and growth equity investing; private securities; and high yield, investment grade, and structured credit – to recover from a challenging first quarter. Our biggest winner in the Fourth Quarter was Upstart Holdings, Inc., which had a successful IPO in December. Constructive investments in The Walt Disney Company and Prudential plc were top performers, along with Pacific Gas & Electric Company, which we originally purchased as credit during its bankruptcy and now hold as equity. Another top winner in Q4 was Foley Trasimene Acquisition Corp. II’s purchase of Paysafe, which we participated in via a PIPE transaction. Detractors included Alibaba Group Holding, three equity shorts, and a private credit position negatively impacted by COVID-19.

The recent short squeeze in certain securities is nothing new. Indeed, as Jesse Livermore said in Reminiscences of a Stock Operator, (quoting Ecclesiastes), in investing, “there is nothing new under the sun.” As targeted securities have started to come back to earth, wiping out fortunes on the way down as they did on the way up, we can see that this was a bubble no different than other manias over time, going back to the Dutch Tulip Bulb Mania in the 17th century. What is different today, however, is the rapidity of the rise and collapse of bubbles, fueled by retail trading platforms and social media. Large short interests were also an accelerant in this conflagration. We managed to sidestep substantial losses for two reasons. The first is that we have always felt more comfortable with higher net and lower gross exposure. It is tempting to think that lower nets imply lower risk, but recent events are a stark reminder that leverage, in all its forms, is a double-edged sword. In addition, after a few previous painful experiences of our own taking positions against companies with large short interests, we had a preview of what can happen and cut our losses. Since then, we have mostly avoided taking short stakes in companies with modest liquidity and large short interests.

Q4 2020 hedge fund letters, conferences and more

On the economic front, the surprising resilience of the US consumer has informed our optimism since Q3 2020 about a rapid economic recovery following widespread vaccine rollouts. Employment is still down 7% from pre-pandemic levels but jobs in sectors disproportionately impacted by COVID-19 such as retail, restaurants, and entertainment should return quickly as vaccinations ramp and consumers eagerly return to normal life. Both monetary and fiscal policy are also supportive tailwinds. We expect substantial additional stimulus in Q1 or early Q2 and the Fed remains firmly on hold, keeping nominal rates fairly low by historical standards.

Against this favorable backdrop, inflation remains a chief concern. Consensus is strong that it will remain subdued given the high slack in the labor market but, if this is incorrect, the Fed will hike rates more quickly, shocking markets and challenging the recovery. We are focused on interest rates, which will help define how and what type of assets “work” at the margin going forward. The interaction between US nominal yield, the US real rate, and the effective difference between the two (e.g. inflation expectations) is our focus. Rising rates are not bad for equities but can drive sector and factor rotation. We are looking to identify a rapid rise in rates or a de-coupling of real rates and inflation (where the former rises and the latter falls). This scenario would be bad for risk assets broadly and impact long duration assets more harshly as the discount rate inflects higher.

We are finding opportunities to merge an understanding of the broader secular trends driving the market with our ability to identify or spark catalysts. Compelling opportunities include:

  • Capitalizing on our twenty years of experience investing throughout the lifecycle of a company from venture-backed inception to IPOs to listed equities. We have long relied on a similar ability to do this in credit – investing from bankruptcy to post-reorg to listed equities – and are applying this same framework to the VC to IPO pipeline, as discussed in our review of Upstart below. We see many opportunities to invest in attractive private businesses and public markets are receptive to young, high-growth companies. We hope that Upstart will be the first of many to make a significant contribution to our returns.

Q4 2020 hedge fund letters, conferences and more

  • As the SPAC market boomed last year, disintermediating the traditional IPO channel, we used our balance sheet, structuring capabilities, and domain expertise to partner with certain companies seeking to go public via a SPAC. We try to involve ourselves early in the process, become engaged, and partner with great operators with track records of outsized returns. We have anchored and led several PIPEs in the last two quarters and have several other active deals in our pipeline.
  • Our ability to structure and syndicate ABS based on trusted counterparty relationships, domain expertise, and balance sheet strength provides us with another uncorrelated source of alpha. Positive trends should drive further gains in ABS markets and we see structured credit as a compelling post-pandemic opportunity set.
  • Going into COVID, America’s cash flow output (corporates and consumers) stood at a 70-year high and COVID catalyzed a further surge to an outsized 17% of GDP (~$3.5 trillion). A substantial portion of the accumulated $2 trillion of excess savings among consumers should be unleashed as the economy reopens, favoring services sectors such as restaurants, travel, and leisure. Likewise, we think the M&A market in 2021 will be robust, driven by high corporate cash levels, readily available financing at attractive rates, nearly a trillion dollars of dry powder in private equity funds, and boardroom confidence bolstered by a strong equity market.

As we look ahead in 2021, we believe we are well-positioned to use Third Point’s strategies to generate strong risk-adjusted returns.

Q4 2020 hedge fund letters, conferences and more

Equities Updates

Intel Corporation (“Intel”)

After building a significant stake in Intel in Q4, we sent a letter on December 29th to Intel’s Board Chairman, Omar Ishrak. We shared our views regarding Intel’s dramatic underperformance and suggested certain steps the company could take to remedy a rapidly deteriorating outlook. We highlighted an urgent need for Intel to address its “brain drain” of engineering talent, the chief cause of the manufacturing and design deficiencies that have led to its declining market share.

Shortly after our note and engagement with the company, Intel announced it was bringing back Pat Gelsinger as its new CEO. Gelsinger is a respected engineer and manager who previously spent 30 years of his career working closely with Intel’s legendary founders during the company’s best days. With a background in electrical engineering and prior roles such as head of Intel’s digital enterprise group, desktop products group, and Intel Labs, and as the company’s first CTO, Gelsinger has the deep technical expertise needed to address Intel’s current execution issues. He also has a history of success in reinvigorating major organizations. During his eight-year tenure as CEO of VMWare, he put the on-premise company on a path to the hybrid cloud and positioned it for several years of growth ahead.

Equally important, while Gelsinger is a respected engineer, he is also widely lauded as a manager of engineers. It is hard to think of a better person to motivate and inspire the best of Intel’s thousands of brilliant employees who will help build the company’s future.

Once Gelsinger has successfully regained Intel’s position as the premier microprocessor vendor in the world, we believe the opportunity for additional shareholder value creation is enormous. The semiconductor compute TAM is over $100 billion, including CPUs, GPUs, FPGAs, ASICs, and other architectures, and growth is increasingly driven by unstoppable trends like cloud computing and artificial intelligence. Intel’s human, financial, and intellectual property resources are unmatched in the semiconductor industry. The ability to leverage those resources in order to better capture the full unbounded growth of this market opportunity set makes us excited to be long-term shareholders.

Q4 2020 hedge fund letters, conferences and more

Prudential plc (“Prudential”)

Last month, Prudential announced plans to separate its US-based annuity business, Jackson National, via a demerger in Q2 2021 instead of through a partial IPO and sell-down later this year. Prudential also announced it will no longer be distributing all of the anticipated proceeds from the Jackson National IPO and debt-raise to the Group due to accounting changes regarding regulatory capital levels at Jackson, and is instead considering raising $2.5-3 billion of new equity capital to support the high-growth opportunities in standalone Asia. Such an equity raise will be modestly dilutive to existing shareholders.

While the market reacted with disappointment to the news, we believe this is a net positive and important step forward in realizing an independent, high-growth and high-return Asia business for two reasons: 1) The proposed demerger significantly accelerates the Jackson National separation versus the original intention of minority IPO and future sell-downs; and 2) an equity capital raise out of Hong Kong and a potential listing on the Southbound Stock Connect exchange will be an important catalyst to build liquidity among Asian shareholders.

We believe that Prudential’s unique Asian franchise is substantially undervalued (especially relative to its closest comparable, AIA) and this decision, while challenging on an immediate basis, pulls forward the realization of independence and local ownership participation that is essential to achieve full value for long-term shareholders. We have also been pleased to see Prudential make substantial progress in improving its governance, especially around board talent and diversity. Shriti Vadera, who formally assumed her role as Chairwoman last month, brings a wealth of expertise in Asia strategy, capital allocation, technical innovation, and ESG. She recently recruited two new Asia-based board members who bring important skills to help guide the new Pru Asia. Chairwoman Vadera and CEO Mike Wells’ commitment to long-term value creation gives us great confidence in the future of this business.

Q4 2020 hedge fund letters, conferences and more

Upstart Holdings, Inc. (“Upstart”)

During the Fourth Quarter, the Upstart IPO transaction was priced by Goldman Sachs at $20 per share and raised about $180 million for the company. Since the IPO, the stock has traded to $80, with a market cap of over $5.8 billion. We initially invested in the Series C round in 2015 at a pre-money valuation of $145 million and added to our investment on the IPO with the purchase of an additional 1.2 million shares, bringing our total ownership to approximately 13.4 million shares, or roughly an 18% stake.

Founded by Google technologists, Upstart launched in 2012 and originated its first personal loan in 2014. Upstart leverages artificial intelligence operating on non-traditional underwriting variables to more accurately price risk for unsecured consumer loans and, more recently, for auto loans. Through September 2020, 70% of loans through Upstart were automated and approved instantly without human involvement. In the same period, fraud loss was negligible. Compared to traditional bank underwriting models, Upstart’s AI platform has yielded a 75% reduction in loss rates. Upstart’s ongoing model improvements deepen its competitive moat and continually strengthen its business case. This is reflected in increased credit rate requests and increased loan conversion leading to ~87% CAGR in the total number of loans transacted.2

Upstart’s model benefits from flywheel dynamics that should drive compounding growth through a cycle of continuous model feedback and improvement. As the platform grows, more data points (payments, defaults, etc.) are fed into the model, thus improving its accuracy and supporting additional share gain. An understanding of the opportunities presented by AI and machine learning has been an important theme we have expressed in numerous investments at the firm.

Upstart’s core focus is unsecured personal loans, a market that totaled $118 billion in originations between April 2019 and March 2020. This market is rapidly growing by every measure, including new loans, number of unique borrowers, and total debt outstanding. There is a significant opportunity to expand Upstart’s footprint within its core consumer lending market, as well as new markets such as auto, a market worth $625 billion in originations. In September 2020, the first auto loan was processed on the Upstart platform.

Q4 2020 hedge fund letters, conferences and more

Beyond personal and auto, the same AI engine could also be used for mortgage and credit card originations. Upstart is also working to deliver a competitive digital lending platform to small banks, which brings with it an expanded customer base (the typical age of an Upstart borrower is 28 years old, which is a valuable demographic), lower loss rates, and new product offerings.

Upstart exemplifies Third Point’s approach to lifecycle investing. Following a lead from our Structured Credit group, which had looked at funding Upstart’s loan pools, we led Upstart’s Series C in June of 2015 and Rob Schwartz joined their Board. Third Point delivered value on capital markets strategy, staffing, and organizational development, and eventually became a loan buyer on the platform. As Upstart grew, we maintained our ownership through further investments and placed a 10% order of the IPO in December 2020.

TP Ventures and Privates Update

Due to the IPO of Upstart, the public offering of SoFi in early January via a SPAC, and prior IPOs of Wish (ContextLogic) and Palantir, “private” investments now account for only ~6% of assets under management, down from 12% at the beginning of last year. As earlier investments mature, we will continue to make selected private investments in the main fund while decreasing our 10% threshold gradually over the next two and a half years to a guideline range of a cost basis of approximately 5-8%. We are also instituting a side pocket structure of up to 10% of assets to better match the liquidity of the fund with the duration of our private investments. We are pleased to see that the phenomenon of “compounding” that applies to securities we invest in and the accumulation of investment knowledge is also relevant to our network and deal flow in the private area. In connection with this effort and the launch of TP Ventures I later this month, we are currently making significant investments to further the success of this business.

Credit Update

Corporate Credit and Structured Credit contributed +2.0% and +1.5%, respectively, to the firm’s Q4 gross return. It is worth noting that in the month of November alone, our credit book produced gross returns of +11%. Credit markets continue to enjoy the Fed’s largesse. 2020 saw record net issuance in investment grade (over $1 trillion) and high-yield markets ($150 billion) but, despite this deluge, yields ground down to all-time lows. We have not had a real distressed credit cycle since 2009, although there have been a few mini cycles where the market was dislocated for a few weeks. Capturing the returns offered by these brief windows of opportunity is challenging, but we were able to generate roughly +36% gross returns in corporate credit on meaningful amounts of capital again in 2020.

Q4 2020 hedge fund letters, conferences and more

We do not expect to see a significant distressed cycle with the current central bank approach to flooding markets with liquidity during times of stress; however, we do not think business cycles are over or that credit volatility is dead. In fact, we think that volatility will increase. The COVID-19 crisis pushed absolute levels of debt and leverage far above previous records – the massive BBB universe (the lowest rung of investment grade) swelled by another $500 billion last year to $2.6 trillion. This issuance was overwhelmingly concentrated in more cyclical or secularly challenged industries that will continue to face difficulties even as the economy recovers from COVID-19. The increase in duration of the bond market will exacerbate price volatility, and higher levels of AUM per manager will contribute to bottlenecks that can be exploited by investors ready to be “liquidity providers.” We again showed our strength in stepping in decisively and quickly in specific situations and general market meltdowns in 2020 and hope to have chances to work from the same playbook in 2021.

Structured Credit

Structured Credit generated a gross return on assets of +20.3% for the year and added +1.5% to Q4 gross returns. Our investment thesis in 2020 was predicated on the strength and resilience of the US consumer. We believed that the market cycle would shift from a technical selloff in Q1 to a fundamental shift in performance that could persist over multiple years. We capitalized on market dislocation throughout Q2 by purchasing RMBS and consumer ABS from sellers forced to raise cash due to excess leverage and widespread redemptions and launched a dedicated structured credit fund. As monetary and fiscal stimulus stabilized markets in late spring, we began to invest in economic re-opening trades like Hertz and aircraft ABS, which rallied in Q4 with the vaccine news. Structured credit has consistently contributed incremental, uncorrelated monthly returns to our funds.

Q4 2020 hedge fund letters, conferences and more

Government stimulus and an economic shutdown created a unique recession where consumer savings increased for the first time, and financing rates are now better than before the pandemic. As a result, we are moving back to buying loans and creating our own structures. We anticipate opportunities in both mortgage and consumer loan securitizations in 2021. We also see continued deterioration in commercial real estate loans but believe that the large amount of locked-up capital raised will either hide or extend the credit losses in that sector this year.

Business Updates

We recently welcomed two new analysts to the team. Their biographies are below:

SAM CANNON: Sam previously worked at Hound Partners. He started his career as an analyst at Goldman Sachs in its Special Situations Group. Mr. Cannon graduated from the Massachusetts Institute of Technology with a B.S. in Mathematics and a B.S. in Management Science.

EMILIO LAMAR: Emilio was previously a Senior Associate at Centerbridge Partners. He also began his career in the Special Situations Group at Goldman Sachs. Emilio graduated Phi Beta Kappa from the Massachusetts Institute of Technology where he earned B.S. degrees in Mathematics and Economics.

Please contact Investor Relations at ir@thirdpoint.com or at 212.715.6707 with questions.

Sincerely,

Daniel S. Loeb

CEO & CIO

Q4 2020 hedge fund letters, conferences and more

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Chronic stress and inflammation linked to societal and environmental impacts in new study

From anxiety about the state of the world to ongoing waves of Covid-19, the stresses we face can seem relentless and even overwhelming. Worse, these stressors…

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March 12, 2024

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From anxiety about the state of the world to ongoing waves of Covid-19, the stresses we face can seem relentless and even overwhelming. Worse, these stressors can cause chronic inflammation in our bodies. Chronic inflammation is linked to serious conditions such as cardiovascular disease and cancer – and may also affect our thinking and behavior.   

Credit: Image: Vodovotz et al/Frontiers

From anxiety about the state of the world to ongoing waves of Covid-19, the stresses we face can seem relentless and even overwhelming. Worse, these stressors can cause chronic inflammation in our bodies. Chronic inflammation is linked to serious conditions such as cardiovascular disease and cancer – and may also affect our thinking and behavior.   

A new hypothesis published in Frontiers in Science suggests the negative impacts may extend far further.   

“We propose that stress, inflammation, and consequently impaired cognition in individuals can scale up to communities and populations,” explained lead author Prof Yoram Vodovotz of the University of Pittsburgh, USA.

“This could affect the decision-making and behavior of entire societies, impair our cognitive ability to address complex issues like climate change, social unrest, and infectious disease – and ultimately lead to a self-sustaining cycle of societal dysfunction and environmental degradation,” he added.

Bodily inflammation ‘mapped’ in the brain  

One central premise to the hypothesis is an association between chronic inflammation and cognitive dysfunction.  

“The cause of this well-known phenomenon is not currently known,” said Vodovotz. “We propose a mechanism, which we call the ‘central inflammation map’.”    

The authors’ novel idea is that the brain creates its own copy of bodily inflammation. Normally, this inflammation map allows the brain to manage the inflammatory response and promote healing.   

When inflammation is high or chronic, however, the response goes awry and can damage healthy tissues and organs. The authors suggest the inflammation map could similarly harm the brain and impair cognition, emotion, and behavior.   

Accelerated spread of stress and inflammation online   

A second premise is the spread of chronic inflammation from individuals to populations.  

“While inflammation is not contagious per se, it could still spread via the transmission of stress among people,” explained Vodovotz.   

The authors further suggest that stress is being transmitted faster than ever before, through social media and other digital communications.  

“People are constantly bombarded with high levels of distressing information, be it the news, negative online comments, or a feeling of inadequacy when viewing social media feeds,” said Vodovotz. “We hypothesize that this new dimension of human experience, from which it is difficult to escape, is driving stress, chronic inflammation, and cognitive impairment across global societies.”   

Inflammation as a driver of social and planetary disruption  

These ideas shift our view of inflammation as a biological process restricted to an individual. Instead, the authors see it as a multiscale process linking molecular, cellular, and physiological interactions in each of us to altered decision-making and behavior in populations – and ultimately to large-scale societal and environmental impacts.  

“Stress-impaired judgment could explain the chaotic and counter-intuitive responses of large parts of the global population to stressful events such as climate change and the Covid-19 pandemic,” explained Vodovotz.  

“An inability to address these and other stressors may propagate a self-fulfilling sense of pervasive danger, causing further stress, inflammation, and impaired cognition in a runaway, positive feedback loop,” he added.  

The fact that current levels of global stress have not led to widespread societal disorder could indicate an equally strong stabilizing effect from “controllers” such as trust in laws, science, and multinational organizations like the United Nations.   

“However, societal norms and institutions are increasingly being questioned, at times rightly so as relics of a foregone era,” said Prof Paul Verschure of Radboud University, the Netherlands, and a co-author of the article. “The challenge today is how we can ward off a new adversarial era of instability due to global stress caused by a multi-scale combination of geopolitical fragmentation, conflicts, and ecological collapse amplified by existential angst, cognitive overload, and runaway disinformation.”    

Reducing social media exposure as part of the solution  

The authors developed a mathematical model to test their ideas and explore ways to reduce stress and build resilience.  

“Preliminary results highlight the need for interventions at multiple levels and scales,” commented co-author Prof Julia Arciero of Indiana University, USA.  

“While anti-inflammatory drugs are sometimes used to treat medical conditions associated with inflammation, we do not believe these are the whole answer for individuals,” said Dr David Katz, co-author and a specialist in preventive and lifestyle medicine based in the US. “Lifestyle changes such as healthy nutrition, exercise, and reducing exposure to stressful online content could also be important.”  

“The dawning new era of precision and personalized therapeutics could also offer enormous potential,” he added.  

At the societal level, the authors suggest creating calm public spaces and providing education on the norms and institutions that keep our societies stable and functioning.  

“While our ‘inflammation map’ hypothesis and corresponding mathematical model are a start, a coordinated and interdisciplinary research effort is needed to define interventions that would improve the lives of individuals and the resilience of communities to stress. We hope our article stimulates scientists around the world to take up this challenge,” Vodovotz concluded.  

The article is part of the Frontiers in Science multimedia article hub ‘A multiscale map of inflammatory stress’. The hub features a video, an explainer, a version of the article written for kids, and an editorial, viewpoints, and policy outlook from other eminent experts: Prof David Almeida (Penn State University, USA), Prof Pietro Ghezzi (University of Urbino Carlo Bo, Italy), and Dr Ioannis P Androulakis (Rutgers, The State University of New Jersey, USA). 

Journal

Frontiers in Science

DOI

10.3389/1239462

Method of Research

Computational simulation/modeling

Subject of Research

Not applicable

Article Title

A multiscale inflammatory map: linking individual stress to societal dysfunction

Article Publication Date

12-Mar-2024

COI Statement

YV is a cofounder of, and stakeholder in, Immunetrics, Inc. and a consultant to Anuna AI. PFMJV is the founder of, and stakeholder in, Eodyne Systems s.l. and Sapiens5 Holding BV. DLK was employed by Tangelo – Intend, Inc. Neither these companies nor the funders mentioned above were involved in the study design, data collection, analysis, interpretation of data, the writing of this article, or the decision to submit it for publication. The companies mentioned above also did not provide funding for the study. The remaining author declares that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest. The authors YV and PV declared that they are editorial board members of Frontiers, at the time of submission. This had no impact on the peer review process and the final decision.

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Acadia’s Nuplazid fails PhIII study due to higher-than-expected placebo effect

After years of trying to expand the market territory for Nuplazid, Acadia Pharmaceuticals might have hit a dead end, with a Phase III fail in schizophrenia…

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After years of trying to expand the market territory for Nuplazid, Acadia Pharmaceuticals might have hit a dead end, with a Phase III fail in schizophrenia due to the placebo arm performing better than expected.

Steve Davis

“We will continue to analyze these data with our scientific advisors, but we do not intend to conduct any further clinical trials with pimavanserin,” CEO Steve Davis said in a Monday press release. Acadia’s stock $ACAD dropped by 17.41% before the market opened Tuesday.

Pimavanserin, a serotonin inverse agonist and also a 5-HT2A receptor antagonist, is already in the market with the brand name Nuplazid for Parkinson’s disease psychosis. Efforts to expand into other indications such as Alzheimer’s-related psychosis and major depression have been unsuccessful, and previous trials in schizophrenia have yielded mixed data at best. Its February presentation does not list other pimavanserin studies in progress.

The Phase III ADVANCE-2 trial investigated 34 mg pimavanserin versus placebo in 454 patients who have negative symptoms of schizophrenia. The study used the negative symptom assessment-16 (NSA-16) total score as a primary endpoint and followed participants up to week 26. Study participants have control of positive symptoms due to antipsychotic therapies.

The company said that the change from baseline in this measure for the treatment arm was similar between the Phase II ADVANCE-1 study and ADVANCE-2 at -11.6 and -11.8, respectively. However, the placebo was higher in ADVANCE-2 at -11.1, when this was -8.5 in ADVANCE-1. The p-value in ADVANCE-2 was 0.4825.

In July last year, another Phase III schizophrenia trial — by Sumitomo and Otsuka — also reported negative results due to what the company noted as Covid-19 induced placebo effect.

According to Mizuho Securities analysts, ADVANCE-2 data were disappointing considering the company applied what it learned from ADVANCE-1, such as recruiting patients outside the US to alleviate a high placebo effect. The Phase III recruited participants in Argentina and Europe.

Analysts at Cowen added that the placebo effect has been a “notorious headwind” in US-based trials, which appears to “now extend” to ex-US studies. But they also noted ADVANCE-1 reported a “modest effect” from the drug anyway.

Nonetheless, pimavanserin’s safety profile in the late-stage study “was consistent with previous clinical trials,” with the drug having an adverse event rate of 30.4% versus 40.3% with placebo, the company said. Back in 2018, even with the FDA approval for Parkinson’s psychosis, there was an intense spotlight on Nuplazid’s safety profile.

Acadia previously aimed to get Nuplazid approved for Alzheimer’s-related psychosis but had many hurdles. The drug faced an adcomm in June 2022 that voted 9-3 noting that the drug is unlikely to be effective in this setting, culminating in a CRL a few months later.

As for the company’s next R&D milestones, Mizuho analysts said it won’t be anytime soon: There is the Phase III study for ACP-101 in Prader-Willi syndrome with data expected late next year and a Phase II trial for ACP-204 in Alzheimer’s disease psychosis with results anticipated in 2026.

Acadia collected $549.2 million in full-year 2023 revenues for Nuplazid, with $143.9 million in the fourth quarter.

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Four Years Ago This Week, Freedom Was Torched

Four Years Ago This Week, Freedom Was Torched

Authored by Jeffrey Tucker via The Brownstone Institute,

"Beware the Ides of March,” Shakespeare…

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March 12, 2024

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Four Years Ago This Week, Freedom Was Torched

Authored by Jeffrey Tucker via The Brownstone Institute,

"Beware the Ides of March,” Shakespeare quotes the soothsayer’s warning Julius Caesar about what turned out to be an impending assassination on March 15. The death of American liberty happened around the same time four years ago, when the orders went out from all levels of government to close all indoor and outdoor venues where people gather. 

It was not quite a law and it was never voted on by anyone. Seemingly out of nowhere, people who the public had largely ignored, the public health bureaucrats, all united to tell the executives in charge – mayors, governors, and the president – that the only way to deal with a respiratory virus was to scrap freedom and the Bill of Rights. 

And they did, not only in the US but all over the world. 

The forced closures in the US began on March 6 when the mayor of Austin, Texas, announced the shutdown of the technology and arts festival South by Southwest. Hundreds of thousands of contracts, of attendees and vendors, were instantly scrapped. The mayor said he was acting on the advice of his health experts and they in turn pointed to the CDC, which in turn pointed to the World Health Organization, which in turn pointed to member states and so on. 

There was no record of Covid in Austin, Texas, that day but they were sure they were doing their part to stop the spread. It was the first deployment of the “Zero Covid” strategy that became, for a time, official US policy, just as in China. 

It was never clear precisely who to blame or who would take responsibility, legal or otherwise. 

This Friday evening press conference in Austin was just the beginning. By the next Thursday evening, the lockdown mania reached a full crescendo. Donald Trump went on nationwide television to announce that everything was under control but that he was stopping all travel in and out of US borders, from Europe, the UK, Australia, and New Zealand. American citizens would need to return by Monday or be stuck. 

Americans abroad panicked while spending on tickets home and crowded into international airports with waits up to 8 hours standing shoulder to shoulder. It was the first clear sign: there would be no consistency in the deployment of these edicts. 

There is no historical record of any American president ever issuing global travel restrictions like this without a declaration of war. Until then, and since the age of travel began, every American had taken it for granted that he could buy a ticket and board a plane. That was no longer possible. Very quickly it became even difficult to travel state to state, as most states eventually implemented a two-week quarantine rule. 

The next day, Friday March 13, Broadway closed and New York City began to empty out as any residents who could went to summer homes or out of state. 

On that day, the Trump administration declared the national emergency by invoking the Stafford Act which triggers new powers and resources to the Federal Emergency Management Administration. 

In addition, the Department of Health and Human Services issued a classified document, only to be released to the public months later. The document initiated the lockdowns. It still does not exist on any government website.

The White House Coronavirus Response Task Force, led by the Vice President, will coordinate a whole-of-government approach, including governors, state and local officials, and members of Congress, to develop the best options for the safety, well-being, and health of the American people. HHS is the LFA [Lead Federal Agency] for coordinating the federal response to COVID-19.

Closures were guaranteed:

Recommend significantly limiting public gatherings and cancellation of almost all sporting events, performances, and public and private meetings that cannot be convened by phone. Consider school closures. Issue widespread ‘stay at home’ directives for public and private organizations, with nearly 100% telework for some, although critical public services and infrastructure may need to retain skeleton crews. Law enforcement could shift to focus more on crime prevention, as routine monitoring of storefronts could be important.

In this vision of turnkey totalitarian control of society, the vaccine was pre-approved: “Partner with pharmaceutical industry to produce anti-virals and vaccine.”

The National Security Council was put in charge of policy making. The CDC was just the marketing operation. That’s why it felt like martial law. Without using those words, that’s what was being declared. It even urged information management, with censorship strongly implied.

The timing here is fascinating. This document came out on a Friday. But according to every autobiographical account – from Mike Pence and Scott Gottlieb to Deborah Birx and Jared Kushner – the gathered team did not meet with Trump himself until the weekend of the 14th and 15th, Saturday and Sunday. 

According to their account, this was his first real encounter with the urge that he lock down the whole country. He reluctantly agreed to 15 days to flatten the curve. He announced this on Monday the 16th with the famous line: “All public and private venues where people gather should be closed.”

This makes no sense. The decision had already been made and all enabling documents were already in circulation. 

There are only two possibilities. 

One: the Department of Homeland Security issued this March 13 HHS document without Trump’s knowledge or authority. That seems unlikely. 

Two: Kushner, Birx, Pence, and Gottlieb are lying. They decided on a story and they are sticking to it. 

Trump himself has never explained the timeline or precisely when he decided to greenlight the lockdowns. To this day, he avoids the issue beyond his constant claim that he doesn’t get enough credit for his handling of the pandemic.

With Nixon, the famous question was always what did he know and when did he know it? When it comes to Trump and insofar as concerns Covid lockdowns – unlike the fake allegations of collusion with Russia – we have no investigations. To this day, no one in the corporate media seems even slightly interested in why, how, or when human rights got abolished by bureaucratic edict. 

As part of the lockdowns, the Cybersecurity and Infrastructure Security Agency, which was and is part of the Department of Homeland Security, as set up in 2018, broke the entire American labor force into essential and nonessential.

They also set up and enforced censorship protocols, which is why it seemed like so few objected. In addition, CISA was tasked with overseeing mail-in ballots. 

Only 8 days into the 15, Trump announced that he wanted to open the country by Easter, which was on April 12. His announcement on March 24 was treated as outrageous and irresponsible by the national press but keep in mind: Easter would already take us beyond the initial two-week lockdown. What seemed to be an opening was an extension of closing. 

This announcement by Trump encouraged Birx and Fauci to ask for an additional 30 days of lockdown, which Trump granted. Even on April 23, Trump told Georgia and Florida, which had made noises about reopening, that “It’s too soon.” He publicly fought with the governor of Georgia, who was first to open his state. 

Before the 15 days was over, Congress passed and the president signed the 880-page CARES Act, which authorized the distribution of $2 trillion to states, businesses, and individuals, thus guaranteeing that lockdowns would continue for the duration. 

There was never a stated exit plan beyond Birx’s public statements that she wanted zero cases of Covid in the country. That was never going to happen. It is very likely that the virus had already been circulating in the US and Canada from October 2019. A famous seroprevalence study by Jay Bhattacharya came out in May 2020 discerning that infections and immunity were already widespread in the California county they examined. 

What that implied was two crucial points: there was zero hope for the Zero Covid mission and this pandemic would end as they all did, through endemicity via exposure, not from a vaccine as such. That was certainly not the message that was being broadcast from Washington. The growing sense at the time was that we all had to sit tight and just wait for the inoculation on which pharmaceutical companies were working. 

By summer 2020, you recall what happened. A restless generation of kids fed up with this stay-at-home nonsense seized on the opportunity to protest racial injustice in the killing of George Floyd. Public health officials approved of these gatherings – unlike protests against lockdowns – on grounds that racism was a virus even more serious than Covid. Some of these protests got out of hand and became violent and destructive. 

Meanwhile, substance abuse rage – the liquor and weed stores never closed – and immune systems were being degraded by lack of normal exposure, exactly as the Bakersfield doctors had predicted. Millions of small businesses had closed. The learning losses from school closures were mounting, as it turned out that Zoom school was near worthless. 

It was about this time that Trump seemed to figure out – thanks to the wise council of Dr. Scott Atlas – that he had been played and started urging states to reopen. But it was strange: he seemed to be less in the position of being a president in charge and more of a public pundit, Tweeting out his wishes until his account was banned. He was unable to put the worms back in the can that he had approved opening. 

By that time, and by all accounts, Trump was convinced that the whole effort was a mistake, that he had been trolled into wrecking the country he promised to make great. It was too late. Mail-in ballots had been widely approved, the country was in shambles, the media and public health bureaucrats were ruling the airwaves, and his final months of the campaign failed even to come to grips with the reality on the ground. 

At the time, many people had predicted that once Biden took office and the vaccine was released, Covid would be declared to have been beaten. But that didn’t happen and mainly for one reason: resistance to the vaccine was more intense than anyone had predicted. The Biden administration attempted to impose mandates on the entire US workforce. Thanks to a Supreme Court ruling, that effort was thwarted but not before HR departments around the country had already implemented them. 

As the months rolled on – and four major cities closed all public accommodations to the unvaccinated, who were being demonized for prolonging the pandemic – it became clear that the vaccine could not and would not stop infection or transmission, which means that this shot could not be classified as a public health benefit. Even as a private benefit, the evidence was mixed. Any protection it provided was short-lived and reports of vaccine injury began to mount. Even now, we cannot gain full clarity on the scale of the problem because essential data and documentation remains classified. 

After four years, we find ourselves in a strange position. We still do not know precisely what unfolded in mid-March 2020: who made what decisions, when, and why. There has been no serious attempt at any high level to provide a clear accounting much less assign blame. 

Not even Tucker Carlson, who reportedly played a crucial role in getting Trump to panic over the virus, will tell us the source of his own information or what his source told him. There have been a series of valuable hearings in the House and Senate but they have received little to no press attention, and none have focus on the lockdown orders themselves. 

The prevailing attitude in public life is just to forget the whole thing. And yet we live now in a country very different from the one we inhabited five years ago. Our media is captured. Social media is widely censored in violation of the First Amendment, a problem being taken up by the Supreme Court this month with no certainty of the outcome. The administrative state that seized control has not given up power. Crime has been normalized. Art and music institutions are on the rocks. Public trust in all official institutions is at rock bottom. We don’t even know if we can trust the elections anymore. 

In the early days of lockdown, Henry Kissinger warned that if the mitigation plan does not go well, the world will find itself set “on fire.” He died in 2023. Meanwhile, the world is indeed on fire. The essential struggle in every country on earth today concerns the battle between the authority and power of permanent administration apparatus of the state – the very one that took total control in lockdowns – and the enlightenment ideal of a government that is responsible to the will of the people and the moral demand for freedom and rights. 

How this struggle turns out is the essential story of our times. 

CODA: I’m embedding a copy of PanCAP Adapted, as annotated by Debbie Lerman. You might need to download the whole thing to see the annotations. If you can help with research, please do.

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Jeffrey Tucker is the author of the excellent new book 'Life After Lock-Down'

Tyler Durden Mon, 03/11/2024 - 23:40

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