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Futures Slump In Ugly Start To Ugliest Month Of The Year

Futures Slump In Ugly Start To Ugliest Month Of The Year

With September already historically the ugliest month for markets of the entire…

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Futures Slump In Ugly Start To Ugliest Month Of The Year

With September already historically the ugliest month for markets of the entire year...

... an underperformance which this year will likely be on steroids thanks to the Fed's doubling of QT to $95BN starting today...

... especially with stocks having gone from overbought to oversold in two weeks as bullish sentiment imploded...

... it's not like stocks needed an additional impetus to dump, yet they got just that overnight when first China announced that it would put 21 million citizens living in its megacity of Chengdu on lockdown (as part of Beijing's "Zero Covid" policy of blaming China's slowdown on 1 or 2 cases of covid per city and promptly locking down whole swaths of the economy, you know, for the kids), and second in a major escalation, Taiwan shot down an unidentified drone off the Chinese coast; the news sent S&P 500 futures sharply lower on the first of the month, dropping as much as 0.9%, with Nasdaq futures down as much as 1.3% after another sales warning from Nvidia sent chipmakers in retreat on new China export rules.

The US 10-year Treasury yield rose to 3.20% and threatening to break above the previous level, a move which would be seen as especially bearish. The dollar gained and oil tumbled for a 3rd day amid fears about Chinese demand, even as OPEC+ is preparing to announce some sort of price stabilization intervention. Industrial metals fell after China locked down Chengdu’s 21 million residents, while oil and natural gas retreated as Europe considers various measures to intervene in the energy market. Commodity-linked and Group-of-10 currencies weakened, while the yen dropped to a 24-year low.

The market jitters come after August’s losses, reflecting fears of an economic downturn alongside restrictive monetary policy to choke inflation. A global bond rout saw the two-year Treasury yield touch 3.50% for the first time since 2007.

In premarket trading, US chipmakers fell in premarket trading after Nvidia warned that new rules governing the export of artificial-intelligence chips to China may affect hundreds of millions of dollars in revenue. Nvidia fell 6%, AMD -3.5%, Intel -1.2%, Micron -2.3%. Bank stocks were lower as investors await the release of jobs data. Here are other notable premarket movers:

  • Okta shares slumped as much as 15% in premarket trading after results, which analysts said were “muted” and spurred worries over billings growth and demand.
  • MongoDB shares fell 17% in premarket trading, after the database software company gave a “conservative” full-year forecast.
  • C3.ai shares were down 14% in premarket trading after the application software company cut its full-year revenue forecast amid an uncertain macro environment.
  • Bed Bath & Beyond shares slid as much as 6.3% in premarket trading, with other meme stocks also down, as investors continue to assess the home-goods retailer’s turnaround plan.
  • Five Below reported second-quarter results that failed to meet estimates. While disappointed, analysts said they weren’t surprised. The stock rose 3.2% in thin premarket trading.

“The Fed effect is now melding with other global factors such as China’s growth slowdown and Europe’s stagflation to create a more fraught global macro environment with higher rates and lower growth,” said Alvin Tan, strategist at RBC Capital Markets in Singapore. “It is this combination of hawkish central banks led by the Fed, China’s slowdown and Europe’s stagflation that is now driving volatility across global markets.”

European stocks also declined, Euro Stoxx 50 slumps 1.6%. IBEX outperforms, dropping 0.9%, CAC 40 lags, dropping 1.7%. Miners, real estate and consumer products are the worst-performing sectors.  Miners led declines in Europe as commodities dropped amid concerns that aggressive tightening and China’s slowdown will lower demand.  Among individual moves, Reckitt Benckiser Group Plc’s shares fell on news that Chief Executive Officer Laxman Narasimhan will step down at the end of the month to pursue a new opportunity in the US. Here are the other notable European movers today:

  • Jet2 shares rise as much as 4.2% with HSBC saying the tour operator’s AGM statement was reassuring for the short- term
  • EuroAPI gains as much as 6.1%, the most since June, after the company presented its 1H earnings. Oddo BHF says the strong report shows EuroAPI’s strategy is “beginning to bear fruit.”
  • Chrysalis Investments climbs as much as 5.7% as the Telegraph newspaper’s Questor column says now is “the best time to buy” shares in the investment firm
  • Basic Resource stocks fall the most in seven weeks, the sector’s longest losing streak since mid-June, as a slide in metal prices accelerated amid demand concerns over fresh Covid lockdowns in China
  • The European real estate sector is among the day’s worst performers on the regional equity benchmark, weighed down by concerns around hawkish central banks
  • Luxury-goods stocks slide in Europe after a new Covid lockdown in the key market of China and as HSBC downgraded a bunch of the sector’s biggest firms
  • Reckitt Benckiser drops as much as 5.7%, the most since July 2021, after the unexpected news that CEO Laxman Narasimhan will step down
  • Zur Rose slumps as much as 11% after an offering of shares priced at CHF39 apiece, representing a 15% discount to the last close
  • Warsaw’s WIG20 index continues its retreat, widening this year’s drop to 34% as appetite for commodity stocks wanes amid growth fears and a decline in energy prices in Europe

Some of Wall Street’s biggest banks now expect the European Central Bank to hike rates by 75 basis points at next week’s meeting, while the latest economic data underlined a parlous outlook for China. Meanwhile, Russia said it is considering a plan to buy as much as $70 billion in yuan and other “friendly” currencies this year to slow the ruble’s surge, before shifting to a longer-term strategy of selling its holdings of the Chinese currency to fund investment.

Earlier in the session Asian stocks traded mostly lower following the weak handover from global counterparts amid the higher yield environment and following a surprise contraction in Chinese Caixin Manufacturing PMI data. Hang Seng and Shanghai Comp were subdued after weak factory activity data from China and with Meituan among the worst performers in Hong Kong after reports its shareholder Tencent is planning about USD 14.5bln of divestments from its equity portfolio including a partial divestment of its stake in Meituan, while the mainland was cushioned after further policy support pledges by China’s cabinet. 

Japanese stocks closed lower ahead of a raft of US data that may back the case for the Federal Reserve to continue raising interest rates. The Topix index fell 1.4% to 1,935.49 at the 3 p.m. market close in Tokyo, while the Nikkei 225 declined 1.5% to 27,661.47,  closing beneath the 28k alongside the broader risk aversion with further currency weakness and an upgrade to Japanese PMI data doing little to inspire a turnaround. Toyota contributed the most to the Topix’s decline, decreasing 2.3%. Out of 2,169 stocks in the index, 226 rose and 1,879 fell, while 64 were unchanged. Shares also slid as parts of China went back into lockdown.

In Australia, the S&P/ASX 200 index fell 2%, the most since June 14, to close at 6,845.60, dragged by losses in banks and mining shares.  The materials sub-gauge was the worst performer, slumping to the lowest since July 27, as commodity prices tumbled and as BHP, the benchmark’s heaviest-weighted stock, trades ex-dividend. In New Zealand, the S&P/NZX 50 index was little changed at 11,609.83.

In FX, the Bloomberg Dollar Spot Index advanced as the greenback strengthened against all of its Group-of-10 peers apart from the Swiss Franc. The euro slumped but managed to hold above parity against the dollar after Germany July retail sales rose 1.9% m/m vs estimated 0.1% decline. Italian bonds and bunds slid for a fifth day, lifting Italy’s 10-year yield above 4% for the first time since June 15 as money markets continued to raise ECB tightening bets ahead of next week’s policy outcome. The Swiss Franc snapped a four-day loss against the dollar. A report showed that Swiss prices increased by 3.5% in August, above July’s reading of 3.4% -- already the highest in three decades. The pound extended declines, dropping to a 2 1/2-year low against a broadly stronger US dollar. Sterling was set for its fifth- straight day of declines, after August saw its worst month versus the greenback since 2016. The yen dropped to 139.68 per dollar, its lowest since 1998 as surge in Treasury yields heaped more pressure on the currency, prompting a warning from a Japanese government official that did little to stem the tide. Australian and New Zealand dollars fell as a stronger greenback boosted by rising Treasury yields and a drop in iron ore prices weighed.

The offshore yuan fleetingly extended gains against the dollar on reports that Russia is considering buying as much as $70 billion in yuan and other “friendly” currencies. The yen pares some declines to trade at 139.24/USD after falling to weakest level since 1998 as US-Japan yield spread keeps widening. Bloomberg dollar spot index rises 0.2%, while CHF outperforms G-10 peers.

In rates, Treasuries were narrowly mixed as US trading gets under way Thursday with the yield curve steeper after the 2-year failed to sustain its first breach of 3.5% since 2007. 2-year yields are lower by 1.4bp at 3.479% after rising as much as 1.8bp to 3.511%; 30-year higher by 2.2bp near day’s high; inverted 2s10s spread steeper by 1.6bp at -29bp, 5s30s by nearly 4bp at -2.2bp. Wednesday’s month-end close entailed bear-flattening that continued until 5pm New York time, an hour after the Bloomberg Treasury index rebalancing, and was especially pronounced in TIPS. The US 10-year trails steeper yield increases for UK and most euro-zone counterparts. Treasuries’ 2.5% August loss was the market’s biggest since April; paced by UK and euro-zone yields, it was driven by more hawkish expectations for Fed policy that lifted 2- and 5-year yields by more than 60bp. Gilts push lower, with the yield on 10-years up 7 bps to 2.87%, while European bonds extend declines. Italian 10-year yield went briefly above 4% for the first time since June 15. Bunds also slipped, leaving the two-year rate within a whisker of its June peak.

In commodities, WTI crude fell to around $88; gold loses ~$5 to near $1,705. European natural gas declines for a fourth day. Spot gold is meandering just north of USD 1,700/oz after testing the figure to the downside. Base metals are lower across the board following the downbeat Chinese manufacturing PMI overnight alongside news of stricter Chinese lockdowns in some regions. US Treasury Secretary Yellen and UK Chancellor Zahawi discussed efforts regarding a price cap on Russian oil to lower global energy prices and restrict Russia's revenue, according to the US Treasury Department. It was separately reported that US and allies are to set out a plan on Friday to limit the price of Russian oil with a strategy that aims to cut Russian energy revenues without increasing global oil prices, according to WSJ. OPEC+ JTC acknowledges the relevance of the Saudi Energy Minister's comments on volatility and thin liquidity of crude markets, via Reuters citing a document.

Bitcoin remains under pressure and below the USD 20k mark, fairly in-fitting with its Ethereum peer in residing at the bottom-end of very narrow ranges.

To the day ahead now, data releases include the global manufacturing PMIs for August and the ISM manufacturing reading from the US. Otherwise, there’s also the US weekly initial jobless claims, the Euro Area unemployment rate for July, and German retail sales for July. Central bank speakers include the ECB’s Centeno and the Fed’s Bostic. Finally, earnings releases include Broadcom and Lululemon.

Market Snapshot

  • S&P 500 futures down 0.8% to 3,924.25
  • STOXX Europe 600 down 1.6% to 408.48
  • MXAP down 1.9% to 155.53
  • MXAPJ down 1.9% to 510.07
  • Nikkei down 1.5% to 27,661.47
  • Topix down 1.4% to 1,935.49
  • Hang Seng Index down 1.8% to 19,597.31
  • Shanghai Composite down 0.5% to 3,184.98
  • Sensex down 1.6% to 58,581.55
  • Australia S&P/ASX 200 down 2.0% to 6,845.60
  • Kospi down 2.3% to 2,415.61
  • German 10Y yield little changed at 1.63%
  • Euro down 0.2% to $1.0032
  • Brent Futures down 1.8% to $93.88/bbl
  • Brent Futures down 1.9% to $93.87/bbl
  • Gold spot down 0.6% to $1,701.34
  • U.S. Dollar Index up 0.19% to 108.91

Top Overnight News from Bloomberg

  • The hotly anticipated US jobs report has the potential to tip the scales toward a third jumbo-sized hike in interest rates later this month after a wave of data that point to a resilient consumer and high labor demand
  • The Chinese metropolis of Chengdu will lock down its 21 million residents to contain a Covid-19 outbreak, a seismic move in the country’s vast Western region that has largely been untouched by the virus
  • Europe is considering various measures to intervene in the energy market, including price caps, reducing power demand and windfall taxes on energy companies as surging prices threaten the economy and push households toward poverty
  • PMIs for the 19-nation euro zone slipped to 49.6 in August from 49.8 in July, according to S&P Global -- a reflection of dwindling demand as consumers face surging costs for energy and a broadening range of goods and services. Germany and Italy both saw the worst readings in 26 months
  • Russia is considering a plan to buy as much as $70 billion in yuan and other “friendly” currencies this year to slow the ruble’s surge, before shifting to a longer-term strategy of selling its holdings of the Chinese currency to fund investment
  • Japanese workers’ share of company earnings fell for the first time in four years, suggesting Prime Minister Fumio Kishida’s call for companies to pay more to employees is running into resistance

A more detailed summary of global markets courtesy of Newsquawk

Asia-Pac stocks traded mostly lower following the weak handover from global counterparts amid the higher yield environment and following a surprise contraction in Chinese Caixin Manufacturing PMI data. ASX 200 was dragged lower by the mining-related sectors after recent declines in underlying commodity prices. Nikkei 225 retreated beneath the 28k alongside the broader risk aversion with further currency weakness and an upgrade to Japanese PMI data doing little to inspire a turnaround. Hang Seng and Shanghai Comp were subdued after weak factory activity data from China and with Meituan among the worst performers in Hong Kong after reports its shareholder Tencent is planning about USD 14.5bln of divestments from its equity portfolio including a partial divestment of its stake in Meituan, while the mainland was cushioned after further policy support pledges by China’s cabinet.

Top Asian News

  • China's city of Chengdu will conduct mass COVID testing from September 1st-4th and the city government said all residents will stay at home from this evening, according to Reuters.
  • Hong Kong will push ahead with a proposal that will allow more residents to travel to mainland China after completing a quarantine period locally, according to SCMP citing sources.
  • UN Human Rights Office issued its assessment of human rights concerns in Xinjiang in which it stated that China's government has committed serious human rights violations in Xinjiang and recommended China take prompt steps to release all those detained in training centres, prisons or detention facilities, according to Reuters and AFP.
  • Chinese mission in Geneva said it expresses strong dissatisfaction regarding the UN report on Xinjiang and firmly opposes the report, while it added that the so-called assessment was a farce planned by the US, western nations and anti-China forces, according to Reuters.
  • Hong Kong officials are targeting a conclusion to hotel COVID quarantines in November.
  • Macau gov't intends to gradually reopen the city to foreign travellers, via Reuters.

European bourses are underpressure amid continued hawkish pricing, but off lows as yields ease from highs, Euro Stoxx 50 -1.4%. Stateside, a similar picture to fixed with action in-fitting directionally but steadier in terms of magnitudes ahead of data, ES -07%; NQ -1.1% lags given elevated yields.

Top European News

  • Russia is said to be mulling as much as USD 70bln in "friendly" currencies, according to Bloomberg sources; this is in order to slow the RUB surge "before shifting to a longer-term strategy of selling its holdings of the Chinese currency".
  • Lufthansa Pilot Union Calls for One-Day Strike on Friday
  • Zur Rose Slumps Amid Offering at Discount, Convertibles Sale
  • Russia Mulls Buying $70 Billion in Yuan, ‘Friendly’ Currencies
  • Factory Slowdown in Europe and Asia Is Warning for Global Trade

Central Banks

  • Fed's Logan (2023 voter) said the number one priority is to restore price stability, according to Reuters.
  • Japan's Chief Secretary Matsuno provides no comment on every day-to-day FX moves, watching moves with a high sense of urgency; desirable for currencies to move stably, reflecting economic fundamentals.

FX

  • DXY sits around USD 109.00 after seeing fresh lows amid Yuan appreciation.
  • EUR, GBP AUD, NZD, JPY are all softer vs the USD to similar magnitudes.
  • CAD and CHF are the G10 outliers, with the latter supported after Swiss CPI and the former hit by softer oil prices.

Fixed Income

  • Core benchmarks are under pronounced pressure once more with yields across the board at fresh near-term peaks
  • Pressure occurring despite geopolitical tensions as hawkish ECB pricing continues to increase, ~85% chance of a 75bp hike.
  • Though, following the passing of hefty European/UK issuance, the magnitude of this downside has eased.
  • USTs are directionally in-fitting but more contained overall awaiting ISM Manufacturing today and then NFP on Friday.

Commodities

  • WTI and Brent futures have resumed downward action following an APAC session of consolidation.
  • Spot gold is meandering just north of USD 1,700/oz after testing the figure to the downside.
  • Base metals are lower across the board following the downbeat Chinese manufacturing PMI overnight alongside news of stricter Chinese lockdowns in some regions
  • US Treasury Secretary Yellen and UK Chancellor Zahawi discussed efforts regarding a price cap on Russian oil to lower global energy prices and restrict Russia's revenue, according to the US Treasury Department. It was separately reported that US and allies are to set out a plan on Friday to limit the price of Russian oil with a strategy that aims to cut Russian energy revenues without increasing global oil prices, according to WSJ.
  • OPEC+ JTC acknowledges the relevance of the Saudi Energy Minister's comments on volatility and thin liquidity of crude markets, via Reuters citing a document.
  • EU Commission President von der Leyen will outline ideas on an energy price cap in more detail in a speech on September 14th.
  • Four people killed in overnight clashes in Iraq's Basra, according to security officials cited by Reuters.

US Event Calendar

  • Aug. Wards Total Vehicle Sales, est. 13.3m, prior 13.4m
  • 07:30: Aug. Challenger Job Cuts YoY, prior 36.3%
  • 08:30: 2Q Unit Labor Costs, est. 10.5%, prior 10.8%
    • 2Q Nonfarm Productivity, est. -4.3%, prior -4.6%
  • 08:30: Aug. Initial Jobless Claims, est. 248,000, prior 243,000
    • Continuing Claims, est. 1.44m, prior 1.42m
  • 10:00: July Construction Spending MoM, est. -0.2%, prior -1.1%
  • 10:00: Aug. ISM Manufacturing, est. 51.9, prior 52.8
    • ISM Employment, est. 49.5, prior 49.9
    • ISM New Orders, est. 48.0, prior 48.0
    • ISM Prices Paid, est. 55.2, prior 60.0

DB's Henry Allen concludes the overnight wrap

Welcome to September. Given it’s the start of the month, we’ll shortly be publishing our regular monthly review of financial assets across for the month just gone. August was very much a month of two halves when it came to risk assets, with most ending the month in negative territory. There were still plenty of headlines though, and in Europe we saw some of the largest rises in short-term yields in decades. For instance, yields on 2yr German debt haven’t risen this much in a month since 1981, and for their UK counterparts you also have to go back to 1986. The full report will be in your inboxes shortly.

When it comes to the last 24 hours, markets have been playing a familiar theme, with risk assets losing further ground as investors price in more rate hikes over the coming months. The big driver behind that yesterday was another stronger-than-expected inflation print from the Euro Area, where the flash CPI reading rose to a record +9.1%. We haven’t seen inflation that strong since the formation of the single currency, and it was also above the +9.0% reading expected by the consensus. The details didn’t look much better either, with core inflation rising to a record +4.3% too (vs. +4.1% expected). So a disappointment for those hoping we might have seen the worst of inflation by now, and another demonstration of how the energy shock is sending European inflation increasingly above that in the US.

Unsurprisingly, the high inflation bolstered the arguments of the hawks on the ECB’s Governing Council, and Bundesbank President Nagel said yesterday that “We need a strong rise in interest rates in September.” In addition, Austria’s Holzmann further said that he saw “no reason to show any kind of leniency in our positioning and our wish to reduce inflation”. That’s more voices bolstering the speakers we’ve heard from in recent days who’ve put a 75bps hike on the table, and investors themselves moved to price in a more aggressive ECB response too. Indeed, overnight index swaps are now pricing in a 69.0bps hike for the next meeting, which is noticeably closer to 75 than 50 now. And for the September and October meetings as a whole, 130.7bps worth of hikes are priced in, which is equivalent to at least one of them being a 75bps move and the other at 50bps.

In light of these developments, our own European economists at DB have changed their call and now expect that the ECB will hike by 75bps at the next meeting (link here for the full details). Their view is that the upside inflation surprise and the more vocal support from Governing Council members to have 75bps on the table has tipped the balance in favour of a larger hike. Remember that we’re just a week away from the next policy decision now, so not long until we find out, and it was only at the last meeting in July when the ECB went against their own forward guidance in June and hiked by 50bps rather than the 25bps they’d indicated.

For markets, the prospect of additional rate hikes knocked European sovereign bonds once again, meaning that for many country’s government bonds (including Germany and the UK) it’s been their worst monthly performance on a total returns basis for the 21st century so far. Yields rose across the continent, with those on 10yr bunds (+2.8bps), OATs (+1.9bps) and BTPs (+6.7bps) all moving higher. Gilts underperformed in particular with a +9.6bps move, whilst US Treasuries also lost ground as the 10yr yield rose +9.0bps to 3.19%. The move in Treasuries came as Cleveland President Mester said that her view was the “move the fed funds rate up to somewhat above 4% by early next year and hold it there”, saying in addition that she did “not anticipate the Fed cutting the fed funds rate target next year.”

For equities it wasn’t a great day either, with the S&P 500 (-0.78%) in negative territory for a 4th consecutive session, and leaving the index down by -4.08% over the month in total return terms. That came in spite of a decent performance at the open yesterday, when it had been up +0.73% at one point, but it couldn’t sustain those gains by the close. In Europe there was an even worse performance as the inflation data hurt risk appetite, and the STOXX 600 (-1.12%) fell to a six-week low. That said, in a contrast with recent days, megacap tech stocks were an outperformer, and the FANG+ index advanced +0.32%.

One brighter piece of news for the ECB yesterday was the latest decline in energy prices, which have continued to fall back from their recent highs. European natural gas futures shed -5.15%, bringing their declines since the start of the week to more than -29%, and German power prices for next year fell -5.61%, bringing their own declines since the start of the week to more than -40%. Oil lost ground too, with Brent Crude down -2.84% as it capped off its worst monthly performance since last November, with a -12.29% decline over August as a whole.

Those negative moves in the US and European equities are continuing in Asia this morning with many of the major indices seeing sharp losses. The Kospi (-1.89%) is the biggest underperformer followed by the Nikkei (-1.77%) and the Hang Seng (-1.52%) whilst the CSI (+0.09%) and the Shanghai Comp (+0.24%) have made modest gains. An important factor affecting sentiment this morning has been a new lockdown in the Chinese city of Chengdu, making it the largest city to be locked down since Shanghai earlier in the year. 157 cases were reported in the city yesterday.

We also got the latest manufacturing PMIs for August overnight, which painted a mixed picture across the region’s main economies. In China, the Caixin PMI showed the sector falling into contraction for the first time in three months with a 49.5 reading (vs. 50.0 expected), and in South Korea the reading fell to 47.6 (vs. 49.8 previously), which is its lowest level since July 2020. Meanwhile in Japan, the 51.5 reading was the lowest since September 2021, and the Yen has hit a 24-year low of 139.52 against the US Dollar overnight.

Elsewhere on the data side, we had the ADP’s report of private payrolls from the US ahead of tomorrow’s jobs report. That came in at +132k (vs. +300k expected) and marked the first release that uses an updated methodology. They also updated their previous data, and on the same basis the job growth in August was the slowest since January 2021.

Otherwise in the UK, there was a significant piece of news from the Office for National Statistics, as they said that the government’s £400 discount for energy customers this winter would not affect the Consumer Price Index. As our UK economist has written, that decision was an important one because if it had been counted as part of inflation, then the October RPI projections would have been affected by around 2.7 percentage points.

To the day ahead now, and data releases include the global manufacturing PMIs for August and the ISM manufacturing reading from the US. Otherwise, there’s also the US weekly initial jobless claims, the Euro Area unemployment rate for July, and German retail sales for July. Central bank speakers include the ECB’s Centeno and the Fed’s Bostic. Finally, earnings releases include Broadcom and Lululemon.

Tyler Durden Thu, 09/01/2022 - 08:13

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Economic Trends, Risks and the Industrial Market

By a show of hands, I.CON West keynote speaker Christine Cooper, Ph.D., managing director and chief U.S. economist with CoStar Group, polled attendees…

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By a show of hands, I.CON West keynote speaker Christine Cooper, Ph.D., managing director and chief U.S. economist with CoStar Group, polled attendees on their economic outlook – was it bright or bleak? The group responded largely positively, with most indicating they felt the economy was doing better than not.  

Four years ago, the World Health Organization declared COVID-19 a global pandemic, seemingly halting life as we knew it. And although those early days of the pandemic seem like a long time ago, we’re still in recovery from two of its major consequences: 1) the $4 trillion in economic stimulus that the U.S. government showered on consumers; and 2) the aggressive monetary policies that have created ripple effects on the industrial markets. 

Cooper began with an overview of the economic environment, which she called “the good news.” The nation’s GDP is strong, and the economy gained momentum in the second half of 2023 – we saw economic growth of 4.9% and 3.2% in Q3 and Q4 respectively — much higher than expected. “The reason is consumers,” Cooper said. “When things get tough, we go shopping. This generates sales and economic activity. But how long can it last?” 

Consumer sentiment continues to be healthy, and employment is good, although a shortage of workers could impact that moving forward. The U.S. added 275,000 jobs in January, far exceeding expectations. “The Fed raising interest rates hasn’t done what it normally does – slow job growth and the economy,” said Cooper. In addition, the $4 trillion given to keep households afloat during the pandemic has simply padded checking accounts, she said, as consumers couldn’t immediately spend the money because everyone was staying home, and the supply chain was clogged. The money was banked, and there’s still a lot of it to be spent. 

Cooper addressed economic risks and the weak points that industrial real estate professionals should be mindful of right now, including mortgage rates that remain at 20-year highs, stalling the housing market, particularly for new home buyers. Mid-pandemic years of 2020-2021 had strong home sales, driven by people moving out of the city or roommates dividing into two properties for more space and protection against the virus. Homeowners who refinanced in the early stages of the pandemic were fortunate and aren’t willing to list their houses for sale quite yet. 

“The housing market is a big driver of industrial demand – think furniture, appliances and all the durable goods that go into a home. This equates to warehouse space demand,” said Cooper. 

Interest rates on consumer credit are spiking and leading economic indexes are still signaling a recession ahead. Financial markets are indicating the same, with a current probability of 61.5% that we will be in a recession by 2025. However, Cooper said, while all signs point to a recession, economists everywhere say the same thing as the economy seemingly continues to surprise us: “This time is different.” 

Consumers are still holding the economy up with solid job and wage gains, yet higher borrowing costs are weighing on business activity and the housing market. Inflation has eased meaningfully but remains a bit too high for comfort. We’ve so far avoided the recession that everyone predicted, and the Federal Reserve appears ready to cut rates this year.  

For the industrial markets, the good news is that retailer corporate profits are beginning to bounce back after slowing in 2021 and 2022, with retail sales accelerating.  

A slowdown in industrial space absorption was reflected in all the key markets – Atlanta, Chicago, Columbus, Dallas-Fort Worth, Houston, the Inland Empire, Los Angeles, New Jersey and Phoenix – but was worst in the southern California markets, which have since been rebounding.  

“Supply responded to strong demand,” Cooper said. “In 2021, 307 million square feet were delivered, followed by 395 million in 2022. In 2023, we saw 534 million square feet delivered – that’s almost 33% higher than the year before.” 

The top 20 markets for 2023 deliveries measured by square feet are the expected hot spots: Dallas-Fort Worth (71 million square feet) leads the pack by almost double its follower of Chicago (37 million), then Houston (35 million), Phoenix (30 million) and Atlanta (29 million). Measured by share of inventory, emerging markets like Spartanburg, Pennsylvania, topped the list at 15 million square feet, followed by Austin (10 million), Phoenix and Dallas-Fort Worth (7 million), and Columbus (6 million). 

“Developers are more focused on big box distribution projects, and 90% of what’s being delivered is 100,000 square feet or more,” Cooper said. Around 400 million square feet of space currently under construction is unleased, in addition to the around 400,000 square feet that remained unleased in 2023. “Putting supply and demand together, industrial vacancy rate is rising and could peak at 6-7% in 2024,” she said. 

In conclusion, Cooper said that industrial real estate is rebalancing from its boom-and-bust years. Pandemic-related demands and accelerated e-commerce growth created a surge in 2021 and 2022, and the strong supply response that began in 2022 will continue to unfold through 2024. With rising interest rates putting a damper on demand in 2023, vacancies began to move higher and will continue to rise this year.  

“Consumers are spending and will continue to do so, and interest rates are likely to fall this year,” said Cooper. “We can hope for a recovery from the full effects of the pandemic in 2025.” 


This post is brought to you by JLL, the social media and conference blog sponsor of NAIOP’s I.CON West 2024. Learn more about JLL at www.us.jll.com or www.jll.ca.

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Pharma and biotech’s top R&D spenders in 2023: a $153B total with M&A as a focus

At a time when biotech is still counting its losses as a thaw gradually sets in after the long market winter, pharma has been on a tear. M&A took off…

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At a time when biotech is still counting its losses as a thaw gradually sets in after the long market winter, pharma has been on a tear. M&A took off in Q4 as the industry’s biggest R&D spenders either rolled the dice on the back of their blockbuster bonanzas, were forced to address gaping holes in the pipeline in the face of looming patent expirations, or simply had no choice in the face of repeated setbacks.

Bioregnum Opinion Column by John Carroll

For some, it was all of the above.

As a result, Merck flipped into the lead position generally occupied by Roche with an M&A-inflated expense line for research. The companies joined a hunt for new drugs frequently focused on Phase III; premiums are in — heavy preclinical risks are out of favor. The majors followed some well-worn paths into immunology and oncology. And 2024 kicked off with a new round of buyouts and licensing deals.

The sudden end of Covid as a vaccine, drug and diagnostic market left the likes of Pfizer scrambling to convince investors that they had an exciting new plan. (It’s not working so far.) Eli Lilly has become one of the most valuable companies on the planet as obesity drugs go mainstream. Leaders like Takeda kept upping the ante on the R&D budget as the numbers frayed, with all but Pfizer and Bristol Myers Squibb — two of the most deeply off-balance biopharmas — spending more in 2023. Across the board, we saw $153 billion accounted for in R&D budget lines for last year — which would have registered as a record even without the sudden bolus of spending at Merck.

New, promising drugs at biotechs aren’t getting cheaper. And some of the blockbusters pharma has to cover as the patent cliff approaches will demand multiple replacement franchises.

The Big 15 have the money, desire and need to do much, much more in R&D. And all signs indicate that we’ll see more through 2024.

  • Merck
  • Roche
  • J&J
  • Novartis
  • AstraZeneca
  • Pfizer
  • Eli Lilly
  • Bristol Myers Squibb
  • GSK
  • AbbVie
  • Sanofi
  • Gilead
  • Takeda
  • Amgen
  • Novo Nordisk

1. Merck: The BD team is remaking the pipeline, and they are moving fast

  • R&D spending 2023: $30.5 billion
  • R&D spending 2022: $13.5 billion
  • Change: +125%
  • Revenue: $60.1 billion
  • R&D as a % of revenue: 51%
  • R&D chief: Dean Li
  • Ticker: $MRK — up 16% in the past year

The big picture: Merck moved up to the top of the list this year by bundling a mother lode of M&A and drug licensing deals into the R&D expense line. Otherwise, the top slot would have gone to Roche, the traditional top title holder in the R&D 15.

Merck has been parlaying its unchallenged position as number one in the PD-1 game with Keytruda — a drug that earned $25 billion last year but will face a loss of exclusivity as patents start to expire in 2028 — into a host of big deals in 2023. Keytruda, meanwhile, has cruised to 39 approvals, leaving Bristol Myers’ Opdivo in its wake.

Too much commercial success, though, doesn’t translate into unending praise. Analysts had been grumbling for some time that Merck wasn’t doing enough to diversify its pipeline bets. But that’s been changing.

Merck tallied $5.5 billion upfront for its Daiichi Sankyo deal — picking up rights to three ADCs in the move — along with the across-the-slate hikes in costs for clinical programs, bigger payrolls and benefits. There was another charge for the $11.4 billion that went to buying Prometheus and Imago. Prometheus accounted for $10.8 billion of that — one of the biggest deals that followed the $11.5 billion Acceleron buyout in 2021. With $690 million in cash for a group of partners that includes Moderna, Orna and Orion.

Merck kicked off the new year with a $680 million buyout of Harpoon Therapeutics, underscoring its enduring interest in the oncology market. And it’s leaving no popular stone unturned, capturing attention with its expressed interest in GLP-1 combos as the next generation of weight loss drugs takes shape.

Merck CEO Rob Davis also recently made it clear that the pharma giant can afford more $1 billion-to-$15 billion deals, making it a top candidate for more deals in 2024.

Merck’s firepower on the deals side, though, is needed after some deep wrinkles marred the pipeline plan, like the FDA’s back-to-back CRLs for chronic cough drug gefapixant. The data, however, never matched up to Merck’s rhetoric. Failures in Alzheimer’s and depression underscored Merck’s traditional ill fortunes in neuro.

Merck has a few years to plan for its next big thing. They show every sign of remaining focused on the big prize ahead.


2. Roche: 2023 was a tough year. Will 2024 be any better on the R&D side?

  • R&D spending 2023:  $16.1 billion/group — pharma and diagnostics (14.2 billion CHF)
  • R&D spending 2022: $16 billion/group (14.1 billion (CHF)
  • Change:
  • Revenue: $67 billion (58.7 billion CHF, -7% from 63.3 billion CHF in 2022)
  • R&D as a % of revenue: 24%
  • R&D chiefs: Hans Clevers (pRED), Aviv Regev (gRED), CMO Levi Garraway
  • Ticker: $RHHBY — down 4.8% in the past year

The big picture: It’s not easy being Roche. The behemoth has long had a near-omnivorous approach to R&D, buying up and down the pipeline at all stages with a big appetite for oncology ahead of neuro, ophthalmology and immunology. This year, it’s had to contend with the elimination of its Covid revenue, once a big player on the diagnostics side as testing soared during the pandemic. They’ve had to lower investors’ expectations of 2024 sales to an embarrassingly modest level and saw their stock price slide.

It’s surprising they have any growth, given the corresponding knockoff competition building for Lucentis and Esbriet, but you can’t play with market expectations. They’ll kill you every time you’re off.

Roche found some silver linings in the Vabysmo franchise and they’ve been a significant player on the M&A side, scoring the Carmot buyout for $3 billion after bagging Telavant for $7.1 billion back in October, paying a price for something Pfizer all but gave away to Roivant. James Sabry and the BD team, meanwhile, have kept up their globetrotting ways, uncorking a slate of deals for JP Morgan.

Sabry moved to global BD chief at Roche after winning his spurs at Genentech, and he’s been in the game for quite a long time. His résumé includes a stint as a biotech CEO. He’s the doyen of dealmakers and isn’t sitting on the sidelines. Hope grows eternal at Roche, and to keep it growing, Sabry has to stay busy.

“We have in total 12 NMEs that could potentially transition into a Phase III during this year,” CEO Thomas Schinecker told analysts hopefully during their Q4 call.

On this scale, Roche tends to do things on a wholesale basis. So when execs recently unveiled a pipeline review, they mapped 146 programs covering 82 new molecular entities. That can be hard to keep up with. If raw numbers like that were a good indicator of future success, though, Roche wouldn’t have these troubles.

It’s less difficult to follow the culls. That includes a slate of neurology drugs, with several axed from the oncology area. The write-offs include the longtime disappointment crenezumab, which had been partnered with AC Immune in Alzheimer’s. Roche recently handed back crenezumab as well as semorinemab after working with AC Immune for close to an R&D generation. Some analysts gave up long ago.

We’ve also been hearing complaints about a lack of upcoming pivotal clinical data to arouse enthusiasm. But Roche has two big R&D groups at work trying to counter those impressions, with gRED (Genentech) and pRED (the traditional Roche research group) at bat. They now have a straight-up GLP-1/GIP drug in the clinic for obesity, with oral therapies in the works alongside many others. It may be late to the obesity game with the Carmot buyout, but Roche still sees opportunities worth paying for.

Execs are promising to play a better R&D game, prioritizing their best assets and piling on resources. But Roche has always been willing to invest heavily in R&D. Now the company needs to see some clinical cards fall its way. This has not been a patient market.


3. J&J: Under new management, J&J doubles down on the innovative side of R&D. Can they still surprise us?

  • R&D spending 2023: $11.96 billion in meds
  • R&D spending 2022: $11.64 billion in meds
  • Change: Up 3%
  • Revenue: $54.7 billion (pharma side)
  • R&D as a % of spending: 21.8%
  • R&D chief: John Reed
  • Ticker: $JNJ —  up 5.3% in the past year

The big picture: J&J typically has weighed in heavy on R&D, particularly if you add its medtech work to the total. Even after splitting that out, though, it’s still in the top five, hoovering up large numbers of early-stage licensing deals while occasionally nabbing something major in the $1 billion-plus category.

Last year the pharma giant punted its consumer division, following the footsteps of many major industry outfits, and shut down its work in infectious diseases and vaccines. RSV, a highly competitive field now, went out the window with a host of smaller programs and alliances. Its major fields of interest zero in on oncology, immunology, cardio and retinal disorders. And they chipped in close to $2 billion to join the ADC hunt in January with its acquisition of Ambrx.

J&J earned a rep for out-of-the-box thinking in oncology under former oncology R&D chief Peter Lebowitz, striking a deal with China’s Legend that delivered an approved drug — Carvykti — and following up with a $245 million pact to gain worldwide rights to another CAR-T from CBMG, a low-profile Chinese biotech that erupted into mainstream view with its Big Pharma deal.

Now the big questions about J&J focus on its new leadership after Joaquin Duato moved into the CEO’s role in 2022 and John Reed — leaping into his third Big Pharma R&D posting in 10 years, following Roche and Sanofi — takes command of the global R&D side of the company.

They have plenty of motivation to hustle up major new approvals. Stelara — raking in more than $10 billion a year — will see its patent protection erode in the US in 2025, with Europe moving first this year. That will take a few big wins to cover.

But J&J has been making big promises for years. Just a few months ago, it touted 20 drugs in the pipeline that could fuel 5% to 7% growth through 2030. One of the prime candidates is a drug they picked up from Protagonist: JNJ-2113, an IL-23 they believe can bring in blockbuster revenue in immunology. J&J, though, is likely far from done when it comes to new deals. Oncology R&D has been changing rapidly in the wake of the Inflation Reduction Act, with researchers moving up OS as a primary initial focus in Phase III. And it’s going to take a behemoth effort to deliver on these numbers, with likely failures and shortfalls along the way.

Don’t look for J&J to cut R&D anytime soon. They have a big agenda.


4. Novartis: Another streamlining move is wrapping up as Novartis vows to get back to basics in R&D — again

  • R&D spending 2023: $11.37 billion
  • R&D spending 2022: $9.17 billion
  • Change: Up 24%
  • Revenue: $45.44 billion
  • R&D as a % of revenue:  27%
  • Development chief: Shreeram Aradhye, NIBR chief: Fiona Marshall
  • Ticker: $NVS — up 31% in the past year

The big picture: Novartis CEO Vas Narasimhan has been crystal clear about the Big Pharma’s M&A strategy. He’s sticking with the industry sweet spot now in favor: picking up late-stage assets below the $5 billion range. A few weeks ago, that led Novartis to MorphoSys, where they have been partnered for years while distancing themselves from rumors of a pricey Cytokinetics play.

And it springs right off another $3 billion acquisition — for Chinook — that went straight to positive Phase III data for the kidney drug atrasentan, which likely wasn’t much of a surprise inside Novartis.

These days, Narasimhan and Novartis are all about focus. They want to make a deeper impact where they emphasize their priorities — cardio, immunology, neuroscience and oncology. And they also want to be leaders where they are centered, slashing oncology while emphasizing at every opportunity that they jumped out front in radioligands, now a hot commodity in R&D.

Lest anyone forget, Novartis was a pioneer in autologous CAR-T and has held on as it slowly works through all the challenges a cutting-edge technology can inspire.

Narasimhan had been five years before the mast as CEO, after being promoted from development chief, and he’s revising a pipeline strategy away from something he describes now as akin to everything everywhere all at once. Downsizing in 2023 was the big focus, dropping programs, reassigning scientists and promising a swifter pace — a never-ending problem in Big Pharma land. Narasimhan has also been pushing “seamlessness,” projecting a new era of cooperation among scientists and sales.

There’s nothing new about streamlining at Novartis, though. Narasimhan had a billion dollars of cuts in mind back in the spring of 2022. And periodically, the company has been well-known for going in and ironing out budgets. Changes have included an exit for development chief John Tsai, now a biotech CEO, who was replaced by Shreeram Aradhye. Fiona Marshall took the helm at NIBR in the fall of 2022, taking the place of Jay Bradner, who left and later wound up running R&D at Amgen.

The recent cleanup at Novartis included the end of the deal for BeiGene’s PD-1, an area that proved enormously frustrating to Novartis. Their TIGIT pact ended last summer. Phase II for GT005, a gene therapy it picked up in the $800 million Gyroscope buyout, didn’t end well. That program got the axe. And their anti-TGFß antibody, picked up in a small deal with Xoma nine years ago, failed after execs once billed it as a high-risk, high-reward play. Other setbacks include Adakveo, which faced global regulatory challenges following the failure of the Phase III confirmatory study. At the beginning of this year, there was a snafu in Phase III for ligelizumab, once billed as a top asset for peanut allergies.

Warning clouds have also formed around their top-selling drug Entresto, as Novartis fights a battle against the IRA and price negotiations.

The CEO, though, has been able to transition while the stock price was headed up, with a few big drugs driving revenue growth as a struggling Sandoz finally got the heave-ho in a spinout. Their franchise drug Kisqali, for example, is now billed as a $4 billion earner at the peak. As a result, their story has played well on Wall Street. Investors want to see the money and the trajectory. R&D follows sales in priority when it comes to the majors.


5. AstraZeneca: Pascal Soriot never takes defeat lying down. And that stubborn attitude has delivered big dividends as another big R&D test takes shape

  • R&D spending 2023: $10.93 billion
  • R&D spending 2022: $9.76 billion
  • Change: Up 12%
  • Revenue: $45.8 billion
  • R&D as a % of revenue: 24%
  • R&D chiefs: Sharon Barr (biopharmaceuticals); Susan Galbraith (oncology)
  • Ticker: $AZN — up 1.8% in the past year

The big picture: Back in 2018, AstraZeneca reported R&D expenses just under $6 billion. In the past five years, that big line item has grown 85%, and investors have seen the stock price grow 56%.

The R&D leaders at AstraZeneca have changed, but CEO Pascal Soriot has become a longtime fixture at the company. During his stint he took the weakest pipeline in biopharma and turned it into one of the strongest, building a slate of blockbuster oncology franchises while building a research machine based in Cambridge, UK, that consumes about $1 out of every $4 in revenue. He bet the ranch on Enhertu and won, with some analysts bullishly projecting peak sales that will break $10 billion. And he’s kept many of the promises he had to fire out to investors to keep an unwanted Pfizer takeover at bay in the way back when.

So what’s next?

That’s a question that’s vexing quite a few analysts. AstraZeneca is a restless player and the company takes a lot of chances — which means it racks up a lot of setbacks.

A major initiative aimed at protecting its revenue involves its legal fight against the IRA, which AstraZeneca has so far lost. Its next big ADC with Daiichi Sankyo, Dato-DXd, has sparked a running debate on its potential approval and some analysts have doubted if it can live up to the hype following weak PFS results for the TROP2 ADC. Last summer an early-stage GLP-1 went down in flames, unable to take the heat in a kitchen currently controlled by the commercial chefs at Novo Nordisk and Eli Lilly. Lokelma, picked up in a 2015 buyout, got hit when R&D decided to quash two Phase III studies, denting once-big hopes for blockbuster status. And Soriot has recently been forced to finally give up on one old failure when he finally punted roxadustat’s US rights.

Soriot, though, is a weathered player when it comes to setbacks. Every loss is an opportunity to do better the next time, and no one can be more stubborn. You could see that play out over Covid when its vaccine came in for some undue criticism that blighted its impact in the face of the mRNA stars. That spurred some angry responses as execs dug in. But there was an unexpected upside. The giant didn’t have to readjust as the Covid market went pfffffft.

Their next step: A couple of months ago AstraZeneca touted its new vaccine platform, buying Icosavax for $838 million in cash while contributing an RSV vaccine to the pipeline — a field where GSK has made major headway — and a virus-like particle platform that the company intends to build on.

Volrustomig, a PD-1/CTLA-4 bispecific antibody, has been accelerated into Phase III, with Soriot claiming a leadership spot in bispecifics: “Our portfolio of bispecifics has the potential to replace the first-generation checkpoint inhibitors across a range of cancers.”

And that GLP-1 fail? Last November AstraZeneca paid $185 million to gain a Phase I GLP-1 drug out of China’s Eccogene. And now they’re mapping combo studies with some of their other drugs in a play at creating the next wave of obesity therapies with an edge.

Word in biopharma is that Soriot has been devoting a considerable amount of face time to China, where he committed the company years ago. That’s another one of those market promises that has seen plenty of ups and downs. But Soriot tends to win the big gambles more than he loses, and in this industry, seeing it through can be a major long-term advantage.


6. Pfizer: What the hell happened to the Covid king?

  • R&D spending 2023: $10.57 billion
  • R&D spending 2022: $11.4 billion
  • Change: -7.3%
  • Revenue: $58.5 billion (down 42% from $100.3 billion)
  • R&D as a % of revenue: 18%
  • R&D chief: Mikael Dolsten
  • Ticker: $PFE — down 29% in the past year

The big picture: There was one brief, shining moment — or two — when Pfizer could seemingly do no wrong. It had taken a leading role in breaking through scientific barriers to create a new Covid vaccine in record time, harvested a bumper crop of cash and CEO Albert Bourla was the darling of the world’s favored pharma industry.

That was then.

Now, Bourla and his team are having a tough time convincing Wall Street that the company can do even simple things right. They paid $43 billion to bag Seagen and mount a major new campaign on the cancer front, but its stock has been blighted and the focus turned to cost-cutting as revenue plunged. There was fresh humiliation when Roivant flipped a drug it had grabbed from Pfizer for lunch money and sold it to Roche for $7.1 billion a year later. And Pfizer has lost the narrative in convincing investors it can get back to growth.

That somewhat hapless rep was burnished considerably when Pfizer reported that its first try at an oral GLP-1 obesity drug had flopped. It’s still working to move the dial in the hottest new field in pharma, but so is a long list of rivals. Instead of spurring renewed faith in Pfizer, the obesity play turned into another example of getting it wrong, and the focus at Pfizer shifted squarely to downsizing and cost-cutting in acknowledgment of the new reality that set in.

Bourla, though, is committed to pushing the story that a new period of growth lies ahead. And it’s not proving easy.

At the end of February, Pfizer made its best pitch for oncology, underscoring plans to seize the leadership role in genitourinary and breast cancer while making promises for eight-plus possible blockbusters in the next six years. R&D promises, though, are easy to make and hard to keep. Right now, the clarion call in pharma is “show me the money.”

With Covid and the mRNA revolution forgotten like last season’s hit show, there’s an enormous gap now that will be devilishly hard to bridge. But don’t expect anyone at Pfizer to stop trying anytime soon.


7. Eli Lilly: Built for the long term, Lilly’s day has arrived — and they don’t want to let go

  • R&D spending 2023: $9.31 billion
  • R&D spending 2022: $7.2 billion
  • Change: +30%
  • Revenue: $34.1 billion
  • R&D as a % of revenue: 27%
  • R&D chief: Dan Skovronsky
  • Ticker: $LLY — up 126% in the past year

The big picture: Historically, Eli Lilly has been known as a ponderously slow pharma outfit that often slowly cruised its way into Phase III squalls. But that view is so 2017. In 2024, Lilly has rebranded itself as the Big Pharma engine that could, and did, blow out expectations. And if it’s still not quite as nimble as some analysts might like, its ability to deliver in massively expensive late-stage studies for drugs aimed at big populations has made it a darling of quite the investor crowd.

Lilly, for example, was thwarted at getting an accelerated approval for its Alzheimer’s med, but that didn’t really cut expectations, with blockbuster peak sales projections — even as Biogen/Eisai’s Leqembi suffers from dimming prospects as their high hopes are lowered by the reality of limited sales in the face of limited efficacy.

That pales, though, in comparison to the bright rainbow that’s emerged in obesity. Lilly continues to work up manufacturing capacity to meet demand for its new obesity version of tirzepatide, the GLP-1/GIP drug building up the diabetes franchise, where neither of the two leaders has been able to meet a seemingly limitless demand.

Lilly attracted considerable attention for its vow to build out manufacturing capacity ahead of Phase III data for its next-gen oral version, orforglipron, while clearly so unhappy about Novo’s decision to muscle in and snap up Catalent that CEO Dave Ricks is grousing about the antitrust implications of their rival’s move. Lilly, though, has bragging rights to solid pivotal data in a market that is nowhere close to saturation point.

Like a lot of the big spenders on the list, Eli Lilly has been hunting new immunology drugs and plunked down $2.4 billion for Dice last summer. That was part of a full slate of acquisitions, including a pair of small ADC companies. Following yet another hot trend, there was a $1.4 billion deal for Point, which put them into radiopharmaceuticals.

Lilly nabbed two new drug approvals last year as it waited on the 2 big franchises in obesity and Alzheimer’s. That’s a testament to the progress that Dan Skovronsky spurred after the global player made him R&D chief 6 years ago. Eli Lilly execs still may not always be first, in an industry where first can be tremendously important to commercialization. But they’ve been right where it counts big in drug development, and it will take a therapeutic earthquake to alter that perception anytime in the near term.


8. Bristol Myers Squibb: A rough year spurs a cut in R&D spending and some major late-stage R&D deals

  • R&D spending 2023:  $9.299 billion
  • R&D spending 2022: $9.5 billion
  • Change: -2%
  • Revenue: $45 billion
  • R&D as a % of revenue: 20.6%
  • Development chief: Samit Hirawat; Research chief: Robert Plenge
  • Ticker: $BMY — down 18% in the past year

The big picture:  This is a terrible time to try and explain why your Big Pharma company has structural issues that flattened or eroded sales revenue. Pfizer understands that and Bristol Myers got a bad taste of it as its shares slid 18% in the last year.

In both cases, the CEOs stepped up with a transition plan. The companies did some deals, but the late-stage stuff wasn’t cheap. And in Bristol Myers’ case, a new CEO was able to draw a line between its aging franchises and the new arrivals on the market, which saw some growth. The company line now: Just wait for the big pipeline hits to come and give us some time to weather the decline of these legacy drugs and you’ll love what you see.

Investors may not be cheering, but Bristol Myers’ stock did get some traction out of it in the last few weeks.

It was clear well before 2023 arrived that Bristol Myers understood it was facing some of those dreaded headwinds. That 2% drop in R&D spending highlighted the tight rein on spending for what remains a top 10 player in the pharma R&D world. Major figures in R&D, headed by Rupert Vessey, exited the company — in Vessey’s case, later making the flip to biotech at Flagship. And there was an unusual spat with Dragonfly after the pharma giant walked away from its $650 million investment.

New CEO Chris Boerner spotlighted the immediate strategy at hand: M&A. Mirati and KRAS came their way for $5.8 billion. RayzeBio happily landed a premium on top of the premium they had just scored in an IPO, as Bristol Myers followed rivals into radiopharmaceuticals. The $14 billion Karuna buyout put them into a late-stage race on Alzheimer’s, another R&D category that’s been enjoying a renaissance some years after pharma fled the scene.

Boerner’s bottom line in the Q4 review is that the company will steer more into bolt-on plays — rather than big buyouts — and licensing deals like the SystImmune alliance. That sets the stage for a “transition” period that will last until 2028, four long years ahead, when it’s promising “top-tier” results. It will also be looking at lower-priced competition for Opdivo.

Even before 2028, though, BMS will start losing patent protection on Eliquis. They’ve already begun price negotiations with Medicare. And Eliquis earned $12.2 billion in 2022, making it their number-one franchise. That’s left Bristol Myers and Pfizer, both under huge pressure to perform and do more late-stage deals, backing a full-court press in the courts to keep generics at bay.

Bristol Myers has had an active dealmaking arm for years, including in the wake of its big $74 billion buyout of Celgene, which also delivered Vessey to the pharma giant. That was just five years ago after Celgene had fallen on some troubled times. Celgene had been a standout in the licensing field, known for sampling a wide variety of drug plays in the industry pipeline. One of Bristol’s big failures, though, was ceding the high ground in PD-1 to Merck’s Keytruda, which has been buoying its rival for years. Bristol needs major drug franchises to make a difference in this world, and any future setbacks on the leading drugs it’s been buying now will not be welcome by investors.

There is a path forward for Bristol, of course, even as it vows to pay down debt. But it’s fairly narrow, and this field is known for some treacherous results.


9. GSK: After picking up some badly-needed revenue steam, what’s next for R&D?

  • R&D spending 2023: $7.9 billion (£6.22 billion)
  • R&D spending 2022: $7 billion (£5.5 billion)
  • Change: +13%
  • Revenue: $39 billion (£30.3 billion)
  • R&D as a % of revenue: 20.5%
  • R&D chief: Tony Wood
  • Ticker: $GSK — up 28% in the past year

The big picture: Tony Wood is still shy of his second anniversary as the CSO at GSK, but with an RSV vaccine riding high as a new blockbuster franchise and Shingrix looking every bit the long-distance franchise player GSK needs, he has a reassuring revenue foundation to work with. ViiV’s steady work in HIV — where GSK is a majority owner — also offers a confidence-building revenue stream. And the departure of the consumer unit is well into the rearview mirror now.

Its stock has done well, too, up 28% in the past year.

That’s quite a changed picture from the early days of his predecessor, Hal Barron, who came in with deep oncology experience and a big need to demonstrate a broad-based pipeline reorganization to overcome a well-earned rep for underperformance. Wood’s first moves in R&D were largely defensive, giving up some major alliances — such as a partnership with Adaptimmune — that looked shaky.

GSK has made a lot of early bets, and the risks involved naturally portend that many of its deals won’t survive. You can see that in play right through its recent decision to dump a pair of Vir partnerships in infectious diseases.

In their place, GSK has been inking major new development deals with the likes of China’s Hansoh, for ADCs. Oncology, though, is still only a small performer overall. And it’s been a focus for a while.

GSK spent a billion dollars upfront to bag a mid-stage asthma drug at Aiolos in a rare M&A deal. There was also the $2 billion Bellus buyout last fall, with an eye to creating a new franchise for chronic cough. But there’s been a notable absence of any splashy deals at GSK, with a reorg in research that offers GSK’s latest take on improving efficiency.

We’ll see how that goes.

In the meantime, GSK is doing what it can to stir up some excitement for late-stage drugs like depemokimab (again in asthma), camlipixant (from Bellus) as well as the antibiotic gepotidacin for UTIs/gonorrhea. It’s an uphill fight, though, without much megablockbuster razzmatazz built in. But GSK is a careful player.

After getting stuck with the rep for having one of the worst pipelines in pharma, though, reliable and steady progress with a high-profile launch in RSV will suit just fine. At least for now. It’s likely that investors will keep pressing for something big in Phase III, and that could cost CEO Emma Walmsley a considerable amount of BD money.


10. AbbVie: The slow-motion collapse of Humira keeps them focused on the bottom line while growing R&D spending

  • R&D spending 2023: $7.67 billion
  • R&D spending 2022: $6.51 billion
  • Change: Up 18%
  • Revenue: $54.3 billion
  • R&D as a % of revenue: 14%
  • CMO: Roopal Thakkar
  • Ticker: $ABBV — up 18% in the past year

The big picture: As Rick Gonzalez finishes his final run as CEO, he’s able to look back on a year that saw AbbVie complete its revamp period as the long-awaited — long, long-awaited — arrival of generic Humira bites into its old cash cow.

The great split at Abbott that created AbbVie set up a scenario where the company would pull out every stop to milk Humira for every conceivable dollar possible, delivering mega-returns while Gonzalez became the poster child of patent reform. The bottom line for AbbVie’s team: What’s repeated waves of congressional criticism with the stock price on the line?

Now AbbVie is able to boost expected revenue on the two big drugs developed on Gonzalez’s watch — Skyrizi and Rinvoq — with two new acquisitions to feed future sales projections. The buyout of Botox created a new, highly reliable franchise for AbbVie’s commercial team to lean on.

AbbVie is skilled at acquiring and building revenue. It had its eyes set on the ADC drug Elahere when it acquired ImmunoGen for $10 billion. Initially approved in 2022 for ovarian cancer, the drug is now being positioned for earlier lines of therapy.

Less than a week after the ImmunoGen deal was announced, AbbVie was back for a late-stage acquisition with the $8.7 billion for Cerevel’s neuro play. The deal will bring in clinical-stage assets for schizophrenia, Parkinson’s and dementia, as CNS moves back into a warmer phase in Wall Street circles. Both buyouts underscore Big Pharma’s considerable appetite for new products, with premiums in play for de-risked drug programs.

Gonzalez’s departure barely caused a murmur on the markets, which is a testament to his success in delivering for shareholders a secure, long-term rebuild. His legacy is a company with a ruthless rep for shepherding drug revenue while building a big interest in curtailing patents for pharma. But looking only at the numbers, he proved the winner at the company as the game was played during his tenure.


11. Sanofi: Paul Hudson is still out to make a great first impression in R&D

  • R&D spending 2023: $7.09 billion (6.509 billion euros)
  • R&D spending 2022: $7.08 billion (6.503 billion euros)
  • Change:  flat
  • Revenue: $41.3 billion (37.9 billion euros)
  • R&D as a % of revenue: 17.1%
  • R&D chief: Houman Ashrafian
  • Ticker: $SNY — up 2.8% in the past year

The big picture: When Paul Hudson showed up in San Francisco for JP Morgan in January, ready to talk up plans for the road ahead, he noted: “It feels like a lot longer than four years that we’ve been on this journey.”

But Hudson has always been more comfortable sounding like a newly-coined CEO, plotting a turnaround. And in the last few months, he’s played every card in that deck. The announcement late last year that Sanofi is bumping its R&D budget is central to that theme, though the news of its impact on profitability led to a rout of the stock price. And he delights in spotlighting late-stage assets, even though a slate of his early bets failed or have yet to prove themselves.

In what is now standard in pharma, Hudson made what he could out of the news he was spinning out the consumer division. Again, though, investors were less than thrilled by the gambit.

This time around the PR track, Hudson has boasting rights to the recently approved RSV drug Beyfortus, which comes with some big peak sales projections from Jefferies and much, much less from others. We’ll know soon enough if this is a winner or the latest disappointment at Sanofi. And, as always, there’s the Sanofi touchstone: Its megablockbuster Dupixent, which the pharma giant was able to partner on with Regeneron years ago — keeping the franchise fresh and expanding. Dupixent is the cash cow that gives Sanofi the financial strength needed to move ahead.

And that means there’s capacity for more dealmaking.

Not long after the San Francisco appearance, Hudson followed up on his M&A assurances with a $1.7 billion drug buyout, carving out a Phase II drug for a rare disease called alpha-1 antitrypsin deficiency, or AATD. It fits right into the zone for 2024, where pharma can only get positive attention for something within sight of an approval.

Like others on this list, Sanofi’s R&D rep will ultimately rest on its ability to deliver on the 12 would-be blockbusters the company is betting on. That includes three “products in a pipeline“: amlitelimab, frexalimab and SAR441566 (oral TNFR1si). They’re followed by tolebrutinib, lunsekimig, rilzabrutinib, an anti-TL1A in IBD, an IRAK4 degrader and itepekimab for COPD.

Behind it all, Hudson has also been promising to make Sanofi a leader in AI-assisted pharma operations. Sanofi, though, has been promising a makeover in innovation for well over a decade and has done nothing to prove it’s worked beyond staying on track with the megablockbuster it got from Regeneron. One breakout franchise delivered on Hudson’s watch would change that in a heartbeat.

We’re waiting.


12. Gilead: The CEO gambled on big innovation — and often lost. But the wagers keep coming

  • R&D spending 2023: $5.72 billion
  • R&D spending 2022: $4.98 billion
  • Change: +14.6%
  • Revenue: $27.1 billion
  • R&D as a % of revenue: 21%
  • CMO: Merdad Parsey
  • Ticker: $GILD — down 5.3% over the past year

The big picture: Daniel O’Day jumped into the CEO job at Gilead five years ago and hit the ground running. He hasn’t stopped, even though some of his biggest bets have run into brick walls.

That was apparent weeks ago with the news that Gilead would ice its work on blood cancer involving magrolimab, the CD47 drug picked up in a $5 billion buyout back in 2020. Their mid-stage work on solid tumors ground to a halt shortly after.

Rehashing and refocusing their deal with Arcus, putting in significantly more money while axing one of the Phase IIIs, didn’t help.

Gilead’s rep was built around HIV, where it has remained dominant, though more than a bit taken for granted. The old regime’s follow-up — after a cloudburst of cash for curing hep C that quickly dried up — was to buy out Kite and take a pioneering position in CAR-T, which hasn’t lived up to the financial hype that attended its arrival, despite the clear scientific innovation it brought to the field.

The stock was hammered hard in January after Trodelvy — acquired in the 2020 Immunomedics buyout, which achieved blockbuster status last year — failed a Phase III in second-line lung cancer.

But when you raise doubts and see your stock sinking, counter with a late-stage buyout. That’s clearly what O’Day had in mind when he plunked down more than $4 billion to buy CymaBay after the biotech unveiled late-stage data on seladelpar. Gilead bought a would-be blockbuster with a PDUFA date. And that’s a sign of some desperation at a company that badly needs a breakout.


13. Takeda: Moving up another notch on the top 15, as profitability wobbles, Takeda execs are still reaching for the golden ring in R&D

  • R&D spending 2023: $4.93 billion
  • R&D spending 2022: $4.49 billion
  • Change: +10%
  • Revenue: $29.54 billion
  • R&D as a % of revenue: 17%
  • R&D chief: Andy Plump
  • Ticker: $TAK — down 8.4% in the past year

The big picture: Takeda has been aggressively taking chances in R&D right from the time CEO Christophe Weber and R&D chief Andy Plump teamed up to remake the aging Japanese pharma company into a global drug player back in 2015. That meant steadily upping the ante in R&D — now up another slot in this year’s rankings — and investing in deals like the Shire buyout, which gave Plump his base in the Cambridge/Boston hub, along with a big stake in rare diseases.

For Takeda, that mission meant a broad effort to develop a major pipeline, from collaborations through Phase III. More recently, it’s been about concentrating their new work around a pair of key deals, particularly the $4 billion acquisition of Nimbus’ TYK2. It likely wasn’t much of a surprise, but their drug — which also has a $2 billion rider for milestones — cleared a Phase IIb hurdle in psoriatic arthritis.

For Takeda, it’s a clear indication of just how popular it is these days for pharma players to zero in on late-stage therapies in search of relatively near-term approvals.

Want more evidence of that?

Takeda bet $400 million in cash and more than a billion dollars in milestones to gain rights to Hutchmed’s fruquintinib and then was rewarded with an approval for treatment-naive cases of colorectal cancer in the fall. And they demonstrated its continued appetite in the rare disease space with the recent $300 million deal for Protagonist’s late-stage drug rusfertide, designed to treat a rare blood disease called polycythemia vera (PV).

The risks it’s taken on have been readily apparent to Takeda’s leaders, with its decision to drop Exkivity after flunking the Phase III NSCLC confirmatory trial, a Phase II fail for its key metachromatic leukodystrophy program, as well as a decision to drop Theravance as a partner after a seven-year alliance. The late-stage setbacks cost Takeda a $770 million write-down. Add in a loss of exclusivity for Vyvanse in 2023 — a $3 billion blockbuster in fiscal 2022 — and you have the outlines of unsteady performance for the pharma player, with Weber promising to do better in the near term.

Takeda is unusual in the Big Pharma world for winding up its fiscal year at the end of March. In order to do an apples-to-apples comparison, they prepared a summary of their R&D expenses and revenue for all of 2023 for Endpoints News.


14. Amgen: Capitalizing on a history of striking high-profile deals, Amgen stays in the spotlight

  • R&D spending 2023: $4.8 billion
  • R&D spending 2022: $4.4 billion
  • Change: Up 9%
  • Revenue: $28.2 billion
  • R&D as a % of revenue: 17%
  • R&D chief: Jay Bradner
  • Ticker: $AMGN — up 18% over the last year

The big picture: Amgen is a considerable distance from spending on research like the top 10 players in our R&D 15, but it frequently finds ways to box competitively in the biggest heavyweight category. It had done that with KRAS, taking a legit scientific advance that couldn’t quickly move the dial in a major way on the commercial side. That happens a lot in oncology. And now it’s in the spotlight with an obesity drug — branded as MariTide now — with hopes to take on the likes of Eli Lilly and Novo Nordisk.

The chutzpah originates with longtime CEO Bob Bradway, who has parlayed his Wall Street cred as a former banker at Morgan Stanley into major league status with a savvy understanding of the numbers and investors. He skillfully navigated the $28 billion Horizon buyout last year, bagging a lineup of commercial therapies as the company looks for the approaching patent cliff on Enbrel, a reliable blockbuster that has kept the revenue flowing in.

Amgen may not do a lot in M&A or Phase III, but what it does do, it does with style.

To complete the Horizon deal, Bradway had to orchestrate a deal with the FTC to skirt its objections to price bundling, which essentially leaves the pharma company on commercial probation with regular reporting to the federal agency. That took skill and boldness while maintaining the CEO’s rep for delivering on the bottom line. Its stock is up 18% over the past year.

Analysts will be watching carefully to see how Jay Bradner does in the top R&D post after the Harvard prof-and-former-NIBR chief assumes the seat of David Reese, now chief technology officer. Reese seems truly energized in his new role heading up tech, and Bradner is a die-hard research enthusiast who loves nothing better than jumping into conversations about the details of target degeneration.

Amgen is all about message.


15. Novo Nordisk: The longtime diabetes franchise player has a breakout run going in obesity — with vows to stay in front

  • R&D spending 2023: $4.7 billion (32.4 billion Danish Krone)
  • R&D spending 2022: $3.5 billion (24 billion Danish Krone)
  • Change: 34%
  • Revenue: $22 billion (232.2 billion Danish Krone)
  • R&D as a % of revenue: 14%
  • R&D chief: Marcus Schindler
  • Ticker: $NOVO — up 87% in the past year

The big picture: R&D spending as a percentage of sales has edged up a bit in the last few years, but the key driver here is GLP-1, where Novo has capitalized on its first-in-class leadership position in obesity. After decades spent in the shadow of chronic R&D failure, safety issues and a recent swarm of largely ineffective drugs, the obesity field is crushing it. That has swelled sales revenue as semaglutide glowed, so Novo’s research spending has boomed at a fast pace.

Now that the good times are rolling, and Novo already has a well-earned rep as a realistic and committed player in diabetes, which didn’t come cheap or easy, the new player on the R&D 15 is promising to stay out front — no easy task with Eli Lilly gunning for it. Novo has been snapping up new obesity tech at a furious pace, determined to stay out front.

Its one limiting factor here has been manufacturing capacity. Novo can’t satisfy the demand for a drug that is now a staple of public conversation, as the field gets a boost from a wide range of celebrities, including Oprah Winfrey. That’s marketing you could buy, but don’t have to. It’s coming for free.

With uncharacteristic bravado, Novo doubled down by striking a deal to acquire the global CDMO giant Catalent for $16.5 billion, and Lilly has been fuming about the antitrust aspects as CEO Dave Ricks complains that worldwide manufacturing capacity has either been maxed out or is not easily converted from its existing uses.

Novo’s commitment to growing R&D has international implications that far exceed the limits of its home country of Denmark, extending to hubs in Oxford, Seattle and Beijing. Most recently, Novo has committed to boosting its Boston-area research hub. And it’s likely to remain a key player in its dominant fields — unless some other tech can topple the megablockbuster that is remaking this company.

Novo may be at the end of this list in terms of R&D spending, but it has overachieved with its success for semaglutide. It has the capacity to do more and should continue to climb for several years to come as it makes a case for continued growth.


Postscript: Regeneron, with $4.44 billion in research spending — up 23% over $3.6 billion in 2022 — deserves an honorable mention in the competitive 16th spot. This year, Regeneron expects R&D spending to top up at or close to $5 billion. The company’s value has swollen on the success of its high-profile founders, Len Schleifer and George Yancopoulos, who continue to build the company — hitting a market cap in excess of $100 billion with the stock up 29% over the past year. Regeneron will likely find its way into the top 15 at some point, and we’ll be watching for it.

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Bitcoin on Wheels: The Story of Bitcoinetas

Meet the Bitcoinetas, a fleet of transformative vehicles on a mission to spread the bitcoin message everywhere they go. From Argentina to South Africa,…

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You may have seen that picture of Michael Saylor in a bitcoin-branded van, with a cheerful guy right next to the car door. This one:

Ariel Aguilar and La Bitcoineta European Edition at BTC Prague.

That car is the Bitcoineta European Edition, and the cheerful guy is Ariel Aguilar. Ariel is part of the European Bitcoineta team, and has previously driven another similar car in Argentina. In fact, there are currently five cars around the world that carry the name Bitcoineta (in some cases preceded with the Spanish definite article “La”).

Argentina: the original La Bitcoineta

The story of Bitcoinetas begins with the birth of 'La Bitcoineta' in Argentina, back in 2017. Inspired by the vibrancy of the South American Bitcoin community, the original Bitcoineta was conceived after an annual Latin American Conference (Labitconf), where the visionaries behind it recognized a unique opportunity to promote Bitcoin education in remote areas. Armed with a bright orange Bitcoin-themed exterior and a mission to bridge the gap in financial literacy, La Bitcoineta embarked on a journey to bring awareness of Bitcoin's potential benefits to villages and towns that often remained untouched by mainstream financial education initiatives. Operated by a team of dedicated volunteers, it was more than just a car; it was a symbol of hope and empowerment for those living on the fringes of financial inclusion.

The concept drawing for La Bitcoineta from December 2017.

Ariel was part of that initial Argentinian Bitcoineta team, and spent weeks on the road when the car became a reality. The original dream to bring bitcoin education even to remote areas within Argentina and other South American countries came true, and the La Bitcoineta team took part in dozens of local bitcoin meetups in the subsequent years.

The original La Bitcoineta from Argentina.

One major hiccup came in late 2018, when the car was crashed into while parked in Puerto Madryn. The car was pretty much destroyed, but since the team was possessed by a honey badger spirit, nothing could stop them from keeping true to their mission. It is a testament to the determination and resilience of the Argentinian team that the car was quickly restored and returned on its orange-pilling quest soon after.

Argentinian Bitcoineta after a major accident (no-one got hurt); the car was restored shortly after.

Over the more than 5 years that the Argentinian Bitcoineta has been running, it has traveled more than 80,000 kilometers - and as we’ll see further, it inspired multiple similar initiatives around the world.

Follow La Bitcoineta’s journey:

Twitter: https://twitter.com/labitcoineta

Instagram: https://www.instagram.com/bitcoineta/

El Salvador: Bitcoin Beach

In early 2021, the president of El Salvador passed the Bitcoin Law, making bitcoin legal tender in the country. The Labitconf team decided to celebrate this major step forward in bitcoin adoption by hosting the annual conference in San Salvador, the capital city of El Salvador. And correspondingly, the Argentinian Bitcoineta team made plans for a bold 7000-kilometer road trip to visit the Bitcoin country with the iconic Bitcoin car.

However, it proved to be impossible to cross so many borders separating Argentina and Salvador, since many governments were still imposing travel restrictions due to a Covid pandemic. So two weeks before the November event, the Labitconf team decided to fund a second Bitcoineta directly in El Salvador, as part of the Bitcoin Beach circular economy. Thus the second Bitcoineta was born.

Salvadoran’s Bitcoineta operates in the El Zonte region, where the Bitcoin Beach circular economy is located.

The eye-catching Volkswagen minibus has been donated to the Bitcoin Beach team, which uses the car for the needs of its circular economy based in El Zonte.

Follow Bitcoin Beach:

Twitter: https://twitter.com/Bitcoinbeach

South Africa: Bitcoin Ekasi

Late 2021 saw one other major development in terms of grassroots bitcoin adoption. On the other side of the planet, in South Africa, Hermann Vivier initiated the Bitcoin Ekasi project. “Ekasi” is a colloquial term for a township, and a township in the South African context is an underdeveloped urban area with a predominantly black population, a remnant of the segregationist apartheid regime. Bitcoin Ekasi emerged as an attempt to introduce bitcoin into the economy of the JCC Camp township located in Mossel Bay, and has gained a lot of success on that front.

Bitcoin Ekasi was in large part inspired by the success of the Bitcoin Beach circular economy back in El Salvador, and the respect was mutual. The Bitcoin Beach team thus decided to pass on the favor they received from the Argentinian Bitcoineta team, and provided funds to Bitcoin Ekasi for them to build a Bitcoineta of their own.

Bitcoin Ekasi’s Bitcoineta as seen at the Adopting Bitcoin Cape Town conference.
Bitcoin Ekasi’s Bitcoineta as seen at the Adopting Bitcoin Cape Town conference. Hermann Vivier is seen in the background.
South African Bitcoineta serves the needs of Bitcoin Ekasi, a local bitcoin circular economy in the JCC Camp township.

Bitcoin Ekasi emerged as a sister organization of Surfer Kids, a non-profit organization with a mission to empower marginalized youths through surfing. The Ekasi Bitcoineta thus partially serves as a means to get the kids to visit various surfer competitions in South Africa. A major highlight in this regard was when the kids got to meet Jordy Smith, one of the most successful South African surfers worldwide.

Coincidentally, South African surfers present an intriguing demographic for understanding Bitcoin due to their unique circumstances and needs. To make it as a professional surfer, the athletes need to attend competitions abroad; but since South Africa has tight currency controls in place, it is often a headache to send money abroad for travel and competition expenses. The borderless nature of Bitcoin offers a solution to these constraints, providing surfers with an alternative means of moving funds across borders without any obstacles.

Photo taken at the South African Junior Surfing Championships 2023. Back row, left to right:

Mbasa, Chuma, Jordy Smith, Sandiso. Front, left to right: Owethu, Sibulele.

To find out more about Bitcoineta South Africa and the non-profit endeavors it serves, watch Lekker Feeling, a documentary by Aubrey Strobel:

Follow Bitcoin Ekasi:

Twitter: https://twitter.com/BitcoinEkasi

Fundraiser: https://support.bitcoinekasi.com/

Europe: Bitcoineta Europa

The European Bitcoineta started its journey in early 2023, with Ariel Aguilar being one of the main catalysts behind the idea. Unlike its predecessors in El Salvador and South Africa, the European Bitcoineta was not funded by a previous team but instead secured support from individual donors, reflecting a grassroots approach to spreading financial literacy.

European Bitcoineta sports a hard-to-overlook bitcoin logo along with the message “Bitcoin is Work. Bitcoin is Time. Bitcoin is Hope.”

The European Bitcoineta is a Mercedes box van adorned with a prominent Bitcoin logo and inspiring messages, and serves as a mobile hub for education and discussion at numerous European Bitcoin conferences and local meetups. Inside its spacious interior, both notable bitcoiners and bitcoin plebs share their insights on the walls, fostering a sense of camaraderie and collaboration.

Inside the European Bitcoineta, one can find the wall of fame, where visitors can read messages from prominent bitcoiners such as Michael Saylor, Uncle Rockstar, Javier Bastardo, Hodlonaut, and many others.
On the “pleb wall”, any bitcoiner can share their message (as long as space permits).

Follow Bitcoineta Europa’s journey:

Twitter: https://twitter.com/BitcoinetaEU

Instagram: https://www.instagram.com/bitcoinetaeu/

Ghana: Bitcoineta West Africa

Embed: https://youtu.be/8oWgIU17aIY?si=hrsKmMIA7lI6jX4k

Introduced in December 2023 at the Africa Bitcoin Conference in Ghana, the fifth Bitcoineta was donated to the Ghanaian Bitcoin Cowries educational initiative as part of the Trezor Academy program.

Bitcoineta West Africa was launched in December 2023 at the Africa Bitcoin Conference. Among its elements, it bears the motto of the Trezor Academy initiative: Bitcoin. Education. Freedom.

Bitcoineta West Africa was funded by the proceeds from the bitcoin-only limited edition Trezor device, which was sold out within one day of its launch at the Bitcoin Amsterdam conference.

With plans for an extensive tour spanning Ghana, Togo, Benin, Nigeria, and potentially other countries within the ECOWAS political and economic union, Bitcoineta West Africa embodies the spirit of collaboration and solidarity in driving Bitcoin adoption and financial inclusion throughout the Global South.

Bitcoineta West Africa surrounded by a group of enthusiastic bitcoiners at the Black Star Square, Accra, Ghana.

Follow Bitcoineta West Africa’s journey:

Twitter: https://twitter.com/BitcoinetaWA

Instagram: https://www.instagram.com/bitcoinetawa/

All the Bitcoineta cars around the world share one overarching mission: to empower their local communities through bitcoin education, and thus improve the lives of common people that might have a strong need for bitcoin without being currently aware of such need. As they continue to traverse borders and break down barriers, Bitcoinetas serve as a reminder of the power of grassroots initiatives and the importance of financial education in shaping a more inclusive future. The tradition of Bitcoinetas will continue to flourish, and in the years to come we will hopefully encounter a brazenly decorated bitcoin car everywhere we go.

If the inspiring stories of Bitcoinetas have ignited a passion within you to make a difference in your community, we encourage you to take action! Reach out to one of the existing Bitcoineta teams for guidance, support, and inspiration on how to start your own initiative. Whether you're interested in spreading Bitcoin education, promoting financial literacy, or fostering empowerment in underserved areas, the Bitcoineta community is here to help you every step of the way. Together, we will orange pill the world!

This is a guest post by Josef Tetek. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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