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RayzeBio upsizes its offering, Neumora sticks to original plan in Friday IPO doubleheader

Two Phase III biotechs will join the Nasdaq Friday morning, with radiopharma startup RayzeBio and brain disease drug developer Neumora raising $311 million…

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Two Phase III biotechs will join the Nasdaq Friday morning, with radiopharma startup RayzeBio and brain disease drug developer Neumora raising $311 million and $250 million, respectively.

RayzeBio and Neumora wooed investors during a relatively icy IPO market, which is beginning to thaw as other biotech startups are lining up to go public. The Friday doubleheader — the second of its kind in recent months after Apogee and Sagimet entered Wall Street on the same day in July — could be a boon to other private biotechs eager to go public this fall, which is anticipated to be about 10 companies, per industry insiders.

RayzeBio won over more investor support than initially expected, selling 16.1 million shares $RYZB versus an original plan to offload 13.2 million units of common stock, while another stockholder in RayzeBio is offering 1.16 million shares. It priced at $18, the high end of the range that it proposed earlier this week. Neumora, though, kept its offering at the same size as proposed earlier this week, selling 14.7 million shares $NMRA at the mid-point of $17 apiece.

RayzeBio is enrolling for a Phase III trial of RYZ101, its actinium-based radioligand drug for gastroenteropancreatic neuroendocrine tumors. It’s also building a manufacturing facility in Indiana and exploring the potential of RYZ101 and other candidates in various other tumor types.

It’ll be a while before Neumora’s biggest test. Topline results from the first of three Phase III trials in major depressive disorder are at least nine months out, per the company’s roadmap. Late-stage topline results can be a make-or-break moment in this environment.

Neumora had already won over ample investor support in the private markets. It reeled in more than $600 million from the likes of Amgen and SoftBank after ARCH Venture Partners catapulted the company into the spotlight two years ago, combining a suite of biotechs: BlackThorn Therapeutics, Syllable Life Sciences, Abelian Therapeutics, Propellex Bio and Alairion.

The IPO proceeds, on top of about $334 million still available at the end of June, will bankroll its operations for at least 30 months, Neumora said.

Henry Gosebruch

As a late-stage biotech, Neumora is viewed as a less risky bet than the preclinical-heavy days of the 2021 biotech IPO landscape. It also beefed up its leadership team in recent months, poaching ex-AbbVie strategy chief Henry Gosebruch as CEO in July and naming Amgen vet Rob Lenz as head of R&D.

Neumora’s Phase III trials will test a once-daily oral kappa-opioid receptor antagonist with the goal of securing a monotherapy label after heading to regulators in 2025. The idea is that hitting a system involved in stress will improve brain function in areas critical to motivation and reward, Neumora consultant and Baylor professor Sanjay Mathew previously told Endpoints News.

The KOASTAL studies will see if the investigational drug, dubbed navacaprant, can lessen patients’ depression as viewed from a measure known as the Montgomery-Asberg Depression Rating Scale. Another pharma working on a similar type of depression drug, Johnson & Johnson’s Janssen (soon to be Johnson & Johnson Innovative Medicine), is using the same scale in its Phase III trials, which are testing aticaprant as an adjunctive.

Neumora also plans to study navacaprant’s potential in people with bipolar depression with a trial in the first half of next year.

If navacaprant succeeds in the difficult R&D field of depression treatments, it could enter a market of 28 million people, Neumora estimates. It could also be a major boon to former BlackThorn stockholders, who could gain up to $365 million in development and regulatory milestones and up to $450 million in sales-based biobucks.

Also on the docket are programs licensed from Neumora’s biggest investor, Amgen, including preclinical-stage assets for Parkinson’s and ALS.

A Phase I is underway for a V1aR antagonist named NMRA-511, which is expected to be studied in people with agitation in Alzheimer’s disease in 2024. Neumora also plans to ask the FDA for clinical trial clearance for an investigational schizophrenia drug by year’s end. It hopes to differentiate itself from Karuna Therapeutics, which could launch a new type of schizophrenia medicine by the time Neumora makes it into late-stage testing.

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The Year Of Cascading Crises

The Year Of Cascading Crises

Authored by James Rickards via DailyReckoning.com,

I often write about different crises, but usually one at…

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The Year Of Cascading Crises

Authored by James Rickards via DailyReckoning.com,

I often write about different crises, but usually one at a time. Whether it’s a market crash, recession, bank failures, etc. I take them on an individual basis.

But what about a cascade of crises? What about a situation in which one crisis comes after another for a prolonged period? Each crisis might be manageable, but the sheer volume of crises and their cumulative effect might push society to the breaking point.

It may seem hyperbolic at first glance, but it’s not — it’s entirely plausible. Now, I’m not necessarily predicting that we’ll get a cascade of crises. But it’s possible, and you should be prepared just in case.

That’s because it looks like 2024 might be a year in which the crises do cascade. And the crises will not be natural disasters (although that could happen) but more like social and political disasters.

Here’s what might play out over the next 10 months and the reasons why:

Much of what is to come is in response to the likely victory of Donald Trump in the race for the presidency. One cannot overstate the sheer fear of Trump by the globalists, Davos crowd, progressives, climate alarmists, DEI gurus and just about anyone else who can’t stand Trump.

This fear often manifests itself in the form of Trump derangement syndrome (TDS), which is a genuine form of mental illness, not just a simple disagreement with Trump’s policies. And TDS is contagious.

I’m not saying this to defend Trump (he has many flaws); I’m just pointing out the degree to which his critics hate and fear him.

Confidence in the Rule of Law Is Gone

The key question is:

“What would the anti-Trumpers in government and the media do to stop Trump?”

The answer is:

“Whatever it takes.”

Trump is not just an opposing politician; he’s an existential threat to a 50-year-old globalist, anti-nationalist agenda. To keep him out of the White House, his political opponents have resorted to lawfare: the use of law to handicap a political opponent.

We see this in the New York civil case in which a judge has now ruled that Trump and his companies must pay a $355 million fine (in addition to what may amount to $100 million in interest payments) for a non-crime. Trump simply did not commit fraud under any plausible interpretation of the law. No one even claims to have been defrauded.

There’s also the defamation verdict awarding $83 million to a plaintiff that is out of all proportion to any actual damages, and the classified documents case in Florida.

We also see elite attacks in the Jan. 6 case in Washington, D.C., the notorious Stormy Daniels hush money case brought by the biased and incompetent N.Y. District Attorney Alvin Bragg, the mass RICO case brought by the unethical and compromised Fulton County, Georgia, district attorney, Fani Willis — and finally the efforts to kick Trump’s name off the ballot using Section 3 of the 14th Amendment by claiming Trump is an “insurrectionist.”

Dubious at Best

All of these cases are legally dubious at best. While I’m not a constitutional scholar, I am an attorney with decades of legal experience. And based on that experience, it’s clear that these cases are politically motivated. But in their zeal to get Trump, prosecutors and judges may have overreached.

The Washington, D.C., case may be dismissed because the U.S. special prosecutor was not properly appointed under Department of Justice rules. There are also presidential immunity issues pending before the Supreme Court.

Meanwhile, the Georgia case may also be dismissed because of unethical conduct and lack of disclosure by Fani Willis. Damages in the defamation case may be greatly reduced on appeal.

Likewise, the Stormy Daniels case is on thin legal ice. And the Supreme Court is likely to rule any day that the 14th Amendment insurrection clause does not apply to Trump’s actions.

Meanwhile, it’s difficult to see how the Florida classified documents case can result in a conviction after the kid gloves treatment given to Joe Biden in his classified documents case.

And Trump can appeal the New York civil ruling, although it’ll be more difficult than a standard appeal because under the statute, Trump would have to turn over the entire $450 million while the appeal is decided. Trump’s rich, but that’s a lot of money even for a guy like Trump to round up.

New York Gov. Kathy Hochul has assured nervous New York business owners that they have nothing to fear from this ruling, urging them to remain in New York. But that just proves that this case was about nothing more than taking down Trump.

The Damage Is Done

The fact that Trump may survive this legal onslaught (or issue a self-pardon upon election) does not alter the damage done.

Confidence in the rule of law has been badly eroded. The biased and unbalanced application of the law to Trump has increased the already extreme polarization that exists in the U.S. This polarization is the foundation for the other social dysfunctions to follow.

Here’s a summary of the social and infrastructure crises that may follow on the political crisis described above:

  • Energy shortages and blackouts due to Green New Scam policies and the simple physics of trying to maintain a baseline load in the power grid using intermittent sources such as windmills and solar
  • A new pandemic promoted to impose unnecessary lockdowns that act as cover for ballot-box stuffing, extensive ballot harvesting, drop-box abuse and other scams intended to rig the vote for Biden
  • A stock market meltdown as Congress tries to reduce out-of-control fiscal deficits and markets realize that excessive government spending was the only thing keeping the economy going in the first place
  • The rollout of central bank digital currencies (CBDCs) that will be used as a surveillance tool to identify those whom Biden calls “enemies of the people.” The targets will be Trump supporters and MAGA Republicans
  • Chinese hacking of critical infrastructure systems including air traffic control, banking and capital markets.
  • As these crises cascade, don’t be surprised if the White House imposes martial law and even takes steps to suspend the elections.

Blood in the Streets

One event which I find highly likely and a possible cover for some of these other events is blood in the streets of Chicago from Aug. 19–21, 2024. That’s the time and place of the Democratic National Convention to nominate their candidate for president.

The convention will likely come under attack from Antifa, the pro-Palestinians, climate activists and others. The new mayor of Chicago, Brandon Johnson, is even more radical than Lori Lightfoot. He will let the demonstrators do what they want and tell the police to stand down. The riots, looting, arson and violence will take on a life of their own.

A good example of this is found in Norman Mailer’s book Miami and the Siege of Chicago (1968), which covered the riots at the Democratic convention (also in Chicago) in 1968 at the height of the war in Vietnam.

The difference between then and now is that in 1968, Chicago Mayor Richard Daley let the police pound the protestors into submission. This time, Brandon Johnson will let the protestors tear up the city. In any case, events of this type can be a catalyst for extreme remedies coming from the White House that could then be used to manipulate election results.

I realize that may sound paranoid or conspiratorial. But you have to realize the lengths to which these political operators will go to stop Trump. Once you do, you’ll see it’s not nearly as far-fetched.

What Can You Do to Survive?

The events I’m talking about would likely result in market turmoil. That’s why it’s prudent to increase your cash allocation, decrease your stock allocation (especially tech stocks) and have gold bullion coins and at least one monster box (containing 500 one-ounce American Silver Eagles available from the U.S. Mint). Land and fine art are other valuable assets.

Basically, you want assets that are not vulnerable to bank failure and are not in digital form because of hacking and power grid failures. If you are in stocks, I would allocate funds to major oil companies, major defense contractors, mining companies and agriculture firms such as Cargill and ADM. Treasury notes are another good play because interest rates should plunge in any recession emerging from the chaos.

Again, I’m not making a hard prediction that these events will occur. I’m simply stating that there’s a genuine possibility that they may occur, and that you should be prepared.

And as they say, an ounce of prevention is worth a pound of cure.

Tyler Durden Wed, 02/21/2024 - 16:15

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The Fed’s Big Problem, There Are Two Economies But Only One Interest Rate

The Fed’s Big Problem, There Are Two Economies But Only One Interest Rate

Authored by Mike Shedlock via MishTalk.com,

On average, the economy…

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The Fed's Big Problem, There Are Two Economies But Only One Interest Rate

Authored by Mike Shedlock via MishTalk.com,

On average, the economy looks OK. But averages are misleading. Several large groups of people are struggling. They all have one thing in common.

Case-Shiller home price index, CPI rent index, and the index of hourly earnings for production and nonsupervisory workers.

Who’s Unhappy?

Those looking to buy a home but cannot afford the record high prices, are not faring well in this economy.

The last great time to buy a home was in 2012. Over the next eight years, home prices moved further and further away from wages.

When the Covid pandemic hit in 2020, we had record QE, record fiscal stimulus, mortgage rates hit record lows, and inflation hit the highest levels in 40 years.

In response, home prices soared out of sight. Worse yet, the price of rent rose at least 0.4 percent for 28 straight months.

Rent of Primary Residence vs OER

Data from the BLS, chart by Mish

Rent vs OER Chart Notes

  • OER stands for Owners’ Equivalent Rent. It is the price one would pay to rent their own house, unfurnished without rent.

  • Rent of primary residence is just what one would expect. It is measured price of rent, unfurnished, without utilities.

Mass Confusion Over OER

Contrary to widespread myth, OER is a measured price with very minor imputations that do not matter. OER is designed to track rent prices and it does. It is a measured price.

Much of the confusion comes from a misquoted BLS statement on OER, emphasis mine.

The expenditure weight in the CPI market basket for OER is based on the following question that the Consumer Expenditure Survey asks of consumers who own their primary residence: “If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?

Note that these responses are not used in estimating price change for the shelter categories, only the weight.

People quote that question as if that is how the BLS measures prices. It doesn’t. Prices, except for minor, irrelevant imputations, are based on actual measured rents.

No One Pays OER

The problem with OER is the weight not the measure. No one actually pays OER. Rather, people pay mortgages.

Yet, OER it is the single largest component of the CPI with a weight of 26.769 percent. Rent has a weight of 7.671 percent.

Many people conclude that the CPI is overstated because no one pays OER. The problem with this idea is home prices are at record highs and home prices are not in the CPI at all.

Homes are not in the CPI because economists consider them a capital expense not a personal expense.

But so what? Inflation matters not just consumer inflation. The Fed has made a big mess of things by ignoring obvious housing bubbles.

30-year mortgage Rates

Mortgage rates courtesy of Mortgage News Daily, annotations by Mish

When the Fed slashed interest rates to zero, mortgage rates fell below 3.0% for an extended period allowing everyone to refinance at 3.0 percent or below. Most did.

OER rose from 332 to 403 between January of 2020 and January of 2024. That’s a gain of 21.4 percent.

Rent rose from 338 to 412. That’s a gain of 21.9 percent.

Whereas the renter is struggling, the homeowner refinanced lower putting extra money in his pocket every month.

Home owners also benefitted from rising wages, rising value of their home and a stable, not rising mortgage payment.

Winners and Losers

  • The homeowners are generally doing OK. The home ownership rate is 65.7 percent.

  • The 34.3 percent who rent are generally not doing OK.

The study did not break things down by home owners vs renters, but I suspect most of the use is by renters.

According to the latest CPI report, rent was up at least 0.4 percent for the 29th straight month. Shelter, a broader category, rose 0.6 percent. Food rose 0.4 percent.

CPI data from the BLS, chart by Mish

Whereas home owners have a fixed payment, likely refinanced lower than their initial mortgage, renters faces huge increases, not every month, but once a year, big bang.

For discussion please see Another Hotter Than Expected CPI Led by Shelter, Up Another 0.6 Percent

The stress is easy to spot by demographics.

Credit Card and Auto Delinquencies Soar

Credit card debt surged to a record high in the fourth quarter. Even more troubling is a steep climb in 90 day or longer delinquencies.

Record High Credit Card Debt

Credit card debt rose to a new record high of $1.13 trillion, up $50 billion in the quarter. Even more troubling is the surge in serious delinquencies, defined as 90 days or more past due.

For nearly all age groups, serious delinquencies are the highest since 2011 at best.

Auto Loan Delinquencies

Serious delinquencies on auto loans have jumped from under 3 percent in mid-2021 to to 5 percent at the end of 2023 for age group 18-29.

Age group 30-39 is also troubling. Serious delinquencies for age groups 18-29 and 30-39 are at the highest levels since 2010.

For further discussion please see Credit Card and Auto Delinquencies Soar, Especially Age Group 18 to 39

Generational Homeownership Rates

Home ownership rates courtesy of Apartment List

The above chart is from the Apartment List’s 2023 Millennial Homeownership Report

Those struggling with rent are more likely to Millennials and Zoomers than Generation X, Baby Boomers, or members of the Silent Generation.

The same age groups struggling with credit card and auto delinquencies.

On Average Everything is Great

Average it up as Fed and all the clueless economic and political writers do, and things look great.

This is why we have seen countless stories attempting to explain why people should be happy.

Krugman Blames Partisanship

OK, there is a fair amount of partisanship in the polls.

However, Biden isn’t struggling from partisanship alone. If that was the reason, Biden would not be polling so miserably with Democrats in general, blacks, and younger voters.

In addition to Biden’s Age and Senility, this allegedly booming economy left behind the renters and everyone under the age of 40 struggling to make ends meet.

Powell Pleads Patience

In Jerome Powell’s Interview with 60 Minutes, the Fed Chairman Tells 60 Minutes US Fiscal Path is Unsustainable

Powell: When high inflation really threatens to become persistent, we use our tools to bring down inflation. It’s very important for that young couple — and particularly for younger couples starting out who may not have great financial means, that we succeed in this effort.

60 Minutes: You’re asking the American people for patience?

Powell: Yes. And I think people have been patient and have been through a pretty difficult time. And I think now we’re coming through that time and starting to feel a little bit better about things.

Powell, Krugman, and most of the economic writers, even at the Wall Street Journal have not managed to figure out over a third of the nation is struggling.

Many Are Addicted to “Buy Now, Pay Later” Plans

Buy Now Pay Later, BNPL, plans are increasingly popular. It’s another sign of consumer credit stress.

For discussion, please see Many Are Addicted to “Buy Now, Pay Later” Plans, It’s a Big Trap

The study did not break things down by home owners vs renters, but I strongly suspect most of the BNPL use is by renters.

What About Jobs?

Jobs Soar but Full Time Employment Is Barely Changed Since May 2022

Nonfarm payrolls and employment levels from the BLS, chart by Mish.

But hey, that’s OK because on average, the economy is great. Or do we really mean, on average the stock market is great, and the average homeowner is fine?

Hello Mr. Powell

There are two economies (the homeowners/asset holders and everyone else). However, there is only one interest rate. Patience please says Powell.

Lowering rates risks risks fueling the housing bubble and the most expensive stock market in history.

Hello Mr. Powell, it’s your move.

Tyler Durden Wed, 02/21/2024 - 07:20

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Dozens Of Major Companies Say 2024 Will Be The Year Of Cost Cutting

Dozens Of Major Companies Say 2024 Will Be The Year Of Cost Cutting

We already know that the Biden administration and the BLS are ignoring…

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Dozens Of Major Companies Say 2024 Will Be The Year Of Cost Cutting

We already know that the Biden administration and the BLS are ignoring the massive layoffs happening across corporate America in favor of pushing some asinine narrative that 'Bidenomics', whatever that even means, is somehow creating jobs other than 2nd and 3rd jobs for senior citizens driving Uber when they should be retired. 

Now, it's becoming clear that 2024 could be the year when corporations continue 'cost cutting', which could mean a number of strategies, almost all of which result in less employees and less pay instead of more. 

Executives from various industries, including toy, cosmetics, and technology sectors, are cutting costs and jobs, even in profitable companies such as Mattel, PayPal, Cisco, Nike, Estée Lauder, and Levi Strauss, CNBC wrote this week.

Macy's plans to shut five stores and cut over 2,300 jobs, while airlines like JetBlue and Spirit offer buyouts, and United reduces in-flight services. This trend is driven by consumer caution and investor pressure for companies to adapt to changing demand and higher expenses, the report says.

Significant labor contracts in sectors like airlines and UPS have raised costs, challenging businesses accustomed to passing these on to consumers. Remember those celebrations people were having about UPS drivers winning their new contracts just months ago? UPS is already laying off drivers as a result.

Walmart is expanding its store network, contrasting with the broader cost-cutting movement. Major banks have already reduced their workforce significantly, anticipating economic shifts. U.S. companies announced significant job cuts in January, indicating a focus on profit optimization amid steady earnings reports without relying on substantial price or sales increases.

A full list of major companies that have laid off workers or implemented strategies to cut costs include:

  • Mattel
  • PayPal
  • Cisco
  • Nike
  • Estée Lauder
  • Levi Strauss
  • Macy’s
  • JetBlue Airways
  • Spirit Airlines
  • United Airlines
  • UPS
  • Meta (parent of Facebook and Instagram)
  • Amazon
  • Alphabet (parent of Google)
  • Microsoft
  • Warner Bros. Discovery
  • Disney
  • Paramount Global
  • Comcast (parent company of NBCUniversal)
  • Delta Air Lines
  • General Motors
  • Ford Motor
  • Stellantis
  • Chipotle
  • Wells Fargo
  • Goldman Sachs
  • Walmart
  • Target
  • Home Depot

Meta's restructuring in 2023 set a precedent for tech giants like Amazon, Alphabet, Microsoft, and Cisco to reduce their workforces. But the trend extends beyond tech, with UPS cutting 12,000 jobs and others in retail and entertainment also announcing layoffs.

Significant cost savings have been announced by major corporations, including Warner Bros. Discovery and Disney, with the latter aiming for $7.5 billion in savings.

Paramount Global and NBCUniversal have also trimmed their staffs. Cost-cutting measures have reached various sectors, including airlines adjusting services and deferring expenses, and automakers scaling back investments due to challenges in demand and EV adoption.

“You’re seeing a rebalancing happening in the labor markets, in the capital markets. And that rebalancing is still going to play out and gradually lead to a more sustainable environment of lower inflation and lower interest rates, and perhaps a little bit slower growth, said Gregory Daco, chief economist for EY.

He continued, telling CNBC: “You are in an environment where cost fatigue is very much part of the equation for consumers and business leaders. The cost of most everything is much higher than it was before the pandemic, whether it’s goods, inputs, equipment, labor, even interest rates.”

Even Chipotle is experimenting with robots to boost efficiency. These adjustments reflect a broader recalibration after the pandemic's disruptions, with companies aiming for a sustainable balance in a potentially slower economic growth environment.

Tyler Durden Wed, 02/21/2024 - 05:45

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