US Futures Steady Ahead Of US Jobs Data

US equity futures trade flat, recovering from an earlier loss as big as 0.6% and set for a 2% gain…

Published

2 years ago

July 8, 2022

US Futures Steady Ahead Of US Jobs Data

US equity futures trade flat, recovering from an earlier loss as big as 0.6% and set for a 2% gain on the week, as investors awaited the June payrolls data (full preview here) to gauge whether the world’s largest economy will avoid a recession. At the same time, the yen and dollar both found haven demand with newsflow dominated by the assassination of former Japan prime minister Shinzo Abe.

Contracts on the S&P 500 dipped 0.1% to just above 3,900, signaling US stocks would likely retain weekly gains absent a payrolls shock report. Treasuries rose, with the 10-year yield dropping 1 basis point to 2.97%. The Bloomberg Commodity Index headed for the longest streak of weekly losses since March 2020.

Shockwaves spread across the world and global markets as Japan’s former Prime Minister Shinzo Abe was assassinated. Asian stocks pared an increase and the yen, a haven asset, strengthened. Before the shooting, the possibility of 1.5 trillion yuan ($220 billion) of stimulus in China, mostly for infrastructure, had aided sentiment.

In the US, Twitter shares fell 4% in premarket trading on Friday after a report said that Elon Musk’s $44 billion proposed takeover of the social media company was in “serious jeopardy. Here are some other notable premarket movers:

GameStop (GME US) shares fell 6.8% in US premarket trading after the video-game retailer fired its CFO Mike Recupero and announced that it was cutting jobs.
Upstart (UPST US) shares drop 17% in US premarket trading after the consumer- finance company reported preliminary revenue for the second quarter that missed prior guidance.
Levi Strauss (LEVI US) shares rose 4.6% in US after-hours trading on Thursday. Analysts are positive on the casual clothing maker’s earnings beating estimates, saying it highlights the strength of its brand and a positive performance in a difficult environment for retailers.
Six Flags (SIX US) drops 2% in US premarket trading. It has been cut to neutral and price targets lowered for Cedar Fair and SeaWorld at Citi, citing signs of weakness across the industry “with the month of June particularly problematic.”

"With the recession talk taking center stage, investors are increasingly focused on the jobs figures,” Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, wrote in a note. “A strong read could bring forward the idea that the US economy could soft-land despite tighter Fed policy, or that the Fed would allow itself to get more aggressive to fight inflation.”

And speaking of jobs, the June US nonfarm payrolls growth is expected to print 268k vs 390k in May with the whisper number lower around 245k. In previewing Friday's nonfarm payrolls report, Goldman trader Matthew Fleury wrote that "the market wants not too hot not too cold to keep this bid. Strong enough to say the world isn't going into recession. Not too strong to send US10s back to 3.25% on the day. Not too cold to highlight US data deteriorating while inflation will stay high and fed hiking 75bps into dramatic slowdown. Something like 175k to 250k.”

Global markets are increasingly positioned for the possibility of a US recession as the Federal Reserve delivers successive rate hikes to tame elevated inflation. On Thursday, two of the Fed’s most hawkish policy makers backed raising interest rates another 75 basis points this month, while playing down recession fears. Governor Christopher Waller and James Bullard, president of the St. Louis Fed, both stressed the need to get policy into restrictive territory to confront the hottest price pressures in 40 years, even if this meant slowing growth. Both are voting members of the Federal Open Market Committee this year. Meanwhile, investors suspended their judgment on the question, keeping key portions of the US yield curve - such as the 2s10s - inverted and awaiting Friday’s nonfarm payrolls report.

In Europe, the Stoxx 600 Index erased a loss as carmakers rallied, as investor attention turned to the second-quarter earnings season from worries around a potential recession. Stoxx Europe 600 Index up 0.6%, autos and construction sectors lead gains. Miners, banks and consumer discretionary stocks were the weakest within the Stoxx 600

Earlier in the session, Asia Pacific shares climbed as speculation about stimulus in China and commentary from Federal Reserve officials soothed investor concerns about a slowdown in global growth. The MSCI Asia Pacific Index added as much as 1.1%, led higher by tech and material shares, amid reports that China could allow 1.5 trillion yuan of bond sales by local governments. Tech-heavy markets such as South Korea and Taiwan led the region’s advance, while Japan shares trimmed their advance after reports that former Prime Minister Shinzo Abe was shot during a campaign event. Abe later died, NHK reported.

The MSCI Asia gauge is poised for a weekly gain of about 1.3% as chip shares rebounded, helped by better-than-expected sales at Samsung Electronics. Still, the Asia tech gauge’s advance has lagged the Nasdaq 100’s climb this week as worries remain about the region’s growth outlook. “A lot of it is simply sentiment driven -- the market is still on edge with arguments on both sides for a hard or soft landing,” said Justin Tang, head of Asian research at United First Partners. “The Chinese stimulus is interesting from a timing perspective given the fast tracking of the sales from the next year’s quota, indicating pro-activity from the central government,” he added

India’s benchmark equities index posted its best weekly advance since April as a decline in commodity prices eased concerns of higher inflation and tighter monetary policy measures. The S&P BSE Sensex climbed 0.6% to 54,481.84 in Mumbai, taking its weekly advance to nearly 3%. The NSE Nifty 50 Index advanced 0.5% on Friday. Most markets in Asia climbed amid China’s stimulus measures to support infrastructure and shore up the economy. Top private sector lender ICICI Bank Ltd., which climbed to its highest level since April 21, offered the biggest boost to the Sensex. The index saw 21 of its 30 member stocks trading higher. Fifteen of 19 sectoral indexes compiled by BSE Ltd. gained, led by a gauge of capital goods companies. The price of Brent crude, a major import item for India, has declined more than 14% since the end of May to trade near $105 a barrel on Friday. Lower oil prices will help reduce the import bill, support the local currency and keep consumer price inflation tethered.

Australia's S&P/ASX 200 index posted a weekly gain of 2.1%, the most since mid-March, lifted by some easing of recession fears. The benchmark rose 0.5% Friday to close the week at 6,678, with mining and energy stocks leading advances. The materials subgauge rose as much as 2.9% before paring some gains as iron-ore futures cooled, with the possibility of major stimulus in China having provided a brief lift to sentiment. In New Zealand, the S&P/NZX 50 index rose 0.5% to 11,169.24.

In FX, the Bloomberg Dollar Spot Index swung from a loss and the yen rose versus its Group-of-10 peers after the news that former Japanese Prime Minister Shinzo Abe was assassinated in the western city of Nara during campaigning for Sunday’s national election. The yen climbed as much as 0.5% against the dollar. Treasuries also gained after the news. The Australian dollar fell and bonds pared declines the news of the shooting.

Treasuries rose on Friday, with the two- and 10-year yield curve remaining inverted for a fourth day. Slowdown fears dogged Europe too, where the closely watched yield spread between Italy and Germany narrowed 4 basis points, even as the region’s central bank was expected to begin monetary tightening. Bunds outperform Treasuries as gilts lag: front-end yields lead, with 2-year richer by ~1.9bp on the day, steepening 2s10s spread slightly; 10-year around 2.98% with bunds trading ~4bp richer in the sector and gilts lagging by ~3bp. Bunds bull steepened, paring some of Thursday’s bear flattening move ahead of scheduled comments by ECB speakers including President Lagarde, as well as US jobs numbers which are expected to slow.

Bitcoin fell but held above $21,000 apiece.

In commodities, WTI traded within Thursday’s range, falling 0.2% to trade near $102.57. Brent rises 0.2% above $105. Most base metals trade in the red; LME tin falls 3.4%, underperforming peers. Spot gold falls roughly $3 to trade near $1,737/oz

Looking to the day ahead now, and the main highlight will be the US jobs report for June. Otherwise, data releases include Italian industrial production for May. From central banks, we’ll hear from ECB President Lagarde, the ECB’s Muller and Villeroy, and the Fed’s Williams.

Market Snapshot

S&P 500 futures down 0.4% to 3,888.50
STOXX Europe 600 down 0.3% to 413.92
MXAP up 0.4% to 158.62
MXAPJ up 0.4% to 524.45
Nikkei up 0.1% to 26,517.19
Topix up 0.3% to 1,887.43
Hang Seng Index up 0.4% to 21,725.78
Shanghai Composite down 0.2% to 3,356.08
Sensex up 0.4% to 54,375.89
Australia S&P/ASX 200 up 0.5% to 6,678.01
Kospi up 0.7% to 2,350.61
Gold spot down 0.0% to $1,739.85
U.S. Dollar Index up 0.36% to 107.52
German 10Y yield little changed at 1.28%
Euro down 0.5% to $1.0109
Brent Futures down 0.2% to $104.40/bbl

Top Overnight News from Bloomberg

The shooting of former Japanese Prime Minister Shinzo Abe is spurring market debate over a potential loss of support for the Bank of Japan’s super-easy monetary policy after an initial rush to haven assets Friday.
Britain’s labor market grew at the slowest pace in 16 months, suggesting the rapid hiring spree following the pandemic is starting to give way to more normal trends, a survey showed
A weakening Swedish currency is piling pressure on the Riksbank to do more to tamp down on inflation, only a week after it hiked its main interest rate by the most in two decades
Denmark’s central bank expects the country to return to lower interest rates once the current push toward rate hikes has passed, Governor Lars Rohde said in an interview with newspaper Borsen
The ECB’s first major climate stress test shows banks facing a hit of 70 billion euros ($71 billion) if the transition to a lower-carbon economy is disorderly
The German parliament has passed a set of legislation to secure the country’s energy supply as Moscow reduces gas flows to Europe
Global food prices dropped from near a record amid prospects for fresh supplies and fears about a recession, potentially offering some respite to strained households
China’s Ministry of Finance is considering allowing local governments to sell 1.5 trillion yuan ($220 billion) of special bonds in the second half of this year, an unprecedented acceleration of infrastructure funding aimed at shoring up the country’s beleaguered economy

A more detailed look at global markets courtesy of Newsquawk

Asia-Pacific stocks were higher across the board as the region took impetus from Wall St's fourth consecutive win streak, but with gains capped heading into the NFP jobs data. ASX 200 was led higher by the energy sector and amid hopes of thawing Australia–China relations. Nikkei 225 traded positive but pared a majority of its gains following the shooting of former PM Abe. Hang Seng and Shanghai Comp. kept afloat amid stimulus hopes with China reportedly considering USD 220bln of stimulus although gains were capped in the mainland amid weakness in the property sector and after Chinese Premier Li noted China's economy is recovering but the foundation was not yet solid.

Top Asian News

China's military said it is conducting a military exercise around Taiwan and US support for Taiwan 'separatist forces' is futile which will only disturb the peace in the Taiwan Strait, according to state media.
China Defence Ministry said China firmly opposes the visit by a US senator to Taiwan which severely damages the relationship of the two countries and two militaries, while it added that the drill near Taiwan is directed at US and Taiwan provocation, according to Reuters.
Former Japanese PM Abe has died following the earlier shooting during a speech in Nara, via NHK.
After 18 Years, Thailand Post to Raise Prices as Inflation Bites
World Leaders React to Shooting of Japan’s Ex Leader Shinzo Abe
TikTok Owner Loses Musical.ly Co-Founder After Edtech Flop

European bourses have been choppy throughout the session, moving between modest gains and losses despite a lack of fresh fundamental drivers; Euro Stoxx 50 -0.1%. US futures have been steadier, consistently posting modest losses, ES -0.3%, going into the BLS release. Sectoral performance is mixed, with Energy modestly outperforming while the likes of Basic Resources lag amid base metal pricing in wake of renewed USD strength. China's CPCA says 1.97mln passenger cars were sold in June (prev. 1.37mln in May); Tesla (TSLA) sold 78,906 China-made vehicles in June (prev. 32,165 in May), via Reuters. Acer (2553 TW) June sales +3.1% YY; H1 -0.4% YY. Q2 prelim. revenue TWD 72.35bln, -9.3% YY.

Top European News

Citi Strategists Add AB InBev, Bayer, Compass to Focus List
Polish Industry Is Seeking Compensation in Case of Gas Rationing
Blatter, Platini Acquitted by Swiss Criminal Court, AFP Reports
Crops Climb as Traders Eye Output Prospects Amid Tight Reserves

DXY breaches final 2002 hurdle on the way through 107.500 ahead of NFP with upward impetus from weakness in several index components and other Dollar counterparts, index to reaches 107.790 before waning.
Yen bucks broad trend following fatal shooting of ex-Japanese PM Abe at pre-election campaign event, USD/JPY capped around 136.00.
Sterling slides after short-lived reprieve from political upheaval, Cable holds in low 1.1900 area after 1.2050+ pop.
Euro extends declines before finding some technical props; EUR/USD back on 1.0100 handle vs 1.0072 low in line with a key Fib retracement level.
Loonie loses recovery momentum in the run up to Canadian LFS and US BLS showdown, USD/CAD around 1.3000 within 1.3025-1.2953 range.
Aussie and Kiwi unable to resist latest Greenback advances, but underpinned by partial rebound in some commodities; AUD/USD tests support into 0.6800 from circa 0.6861 peak, NZD/USD hovers around 0.6150 from high just shy of 0.6200.
Lira laments latest CBRT survey showing further rise in end 2020 Turkish CPI and USD/TRY forecasts, latter now up to 18.9881 vs current 17.3200 spot price.

Fixed Income

Bonds relatively becalmed awaiting US and Canadian employment data double-header.
Bunds, Gilts and T-note all rangy between 151.17-150.42, 115.63-12 and 118-20/08 parameters.
UK debt lagging sub-par in the hiatus before a new Tory leader and PM is appointed and this also weighing on the underperforming Sonia strip.
Italian Economy Minister Franco says he is confident that market conditions will stabilize and domestic bond yields will fall to reflect fundamentals.

Central Banks

ECB says the top 41 banks would suffer credit and market losses of at least EUR 70bln from higher carbon prices, floods and droughts; just 20% consider climate risk as a variable when granting loans.
ECB's Visco says a hike larger than 25bps could be appropriate in September if medium-term inflation expectations do not improve. IT/GE 10yr spread peak of 250bps in early June was not consistent with economic fundamentals. Comments were essentially in-fitting with existing ECB guidance and his recent remarks.

Commodities

Fresh fundamentals have been somewhat limited and focused on familiar themes; however, commodities broadly are dented amid renewed and pronounced USD upside.
Crude posts losses of less than USD 1/bbl in comparison to the sizeable USD 16/bbl ranges seen this week.
Kuwait set August KEC crude OSP for Asia at Oman/Dubai + USD 7.15/bbl, according to Reuters.
UK's CMA says there is cause for concerns in some parts of the road fuel market.
Spot gold is in-fitting, modestly softer but essentially unchanged on the session given the sizeable recent moves and near USD 100/oz weekly parameters.

US Event Calendar

08:30: June Change in Nonfarm Payrolls, est. 268,000, prior 390,000
- June Change in Manufact. Payrolls, est. 21,000, prior 18,000
- June Change in Private Payrolls, est. 237,000, prior 333,000
June Unemployment Rate, est. 3.6%, prior 3.6%
- June Labor Force Participation Rate, est. 62.4%, prior 62.3%
June Underemployment Rate, prior 7.1%
June Average Hourly Earnings YoY, est. 5.0%, prior 5.2%; MoM, est. 0.3%, prior 0.3%
- June Average Weekly Hours, est. 34.6, prior 34.6
10:00: May Wholesale Trade Sales MoM, est. 1.0%, prior 0.7%
10:00: May Wholesale Inventories MoM, est. 2.0%, prior 2.0%
11:00: Fed’s Williams Speaks in Puerto Rico
15:00: May Consumer Credit, est. $30.9b, prior $38.1b

DB's Jim Reid concludes the overnight wrap

I honestly feel exhausted after this week. Bonds and commodities have been swinging to both sides of the inflation / disinflation ledger in a pretty violent manner in such a short space of time. To recover I've managed to secure two early rounds of golf this weekend with the quid pro quo that I have all Saturday afternoon and evening to look after the kids while my wife goes to see Pearl Jam in Hyde Park! I'm slightly jealous as the album "Ten" was strangely my revision album of choice during my university exams. I was addicted. That might explain the odd way I look at economics!

Economics is one category you can vote for me in the global II fixed income poll that started this week. All of us at DB would appreciate your support if you value our research. Click here (pdf) to see all the categories I would appreciate your support in. Feel free to let me know if you voted so I can feel better about myself!

So in an exhausting week, and in spite of a march of bad news, the S&P 500 (+1.50% overnight) has for now successfully climbed a July wall of worry to be up every day so far with the first four consecutive day increase since late March. Payrolls awaits us today and given that we think it will be tough to call a proper recession until employment cracks, these are important events.

That's not the only one coming up with US CPI next Wednesday and then the "wait and see to what happens next" after the scheduled Nord Stream gas pipeline closure (July 11-21) ends. When it comes to recession risk, Tim and Henry on my team have just launched a new weekly “Recession Watch” product (link here). It’s a brief 2-pager, and they’ll be publishing it each Thursday following the US claims data that our economists have shown to be one of the best leading indicators for growth. Yesterday’s numbers came in worse than expected however, with the weekly initial jobless claims at 235k in the week through July 2 (vs. 230k expected), which is their highest level since January, whilst continuing claims for the week through June 25 also rose to a 9-week high of 1.375m (vs 1.328m expected) which brings the 4 week moving average +2.2% above its lows over the last year. Remember that in the 60 years of this data, every time we've had an +11.5% rise in the 4 week moving average from the lows over the previous year we've generally had a recession start relatively quickly (average 2 months).

In terms of what to expect from payrolls, our US economists think that nonfarm payrolls will have grown by just +225k (consensus at +268k), which would be the slowest pace of monthly job growth in 18 months. However, they do think this will be enough to push the unemployment rate down to 3.5%, which is an important milestone as that was the pre-pandemic low in the unemployment rate back in February 2020.

Ahead of all that, markets were in a buoyant mood and as discussed at the top, the S&P 500 advanced +1.50% with an outperformance among more cyclical industries. Indeed, the NASDAQ gained +2.28% and the small-cap Russell 2000 was up +2.43%, so some strong increases in a number of areas. And in turn, investors grew more optimistic about the ability of central banks to keep hiking rates, with Fed funds futures taking the expected terminal rate up by +3.5bps as those growth fears abated somewhat. That enabled Treasury yields to rise across the curve, with those on the 10yr (+6.7bps) moving back above the 3% mark intraday but just dipping below by the close (2.9945%), even if the 2s10s curve remained in inversion territory (-2.6bps at the close) for a 3rd consecutive day. This morning yields are down -1.48bps to 2.979% as we go to press. Meanwhile, some of the more hawkish Fed officials, Governor Waller and President Bullard, re-iterated the tone expressed in the minutes the day prior. Namely, they support 75bp hikes in July and that the risks are for inflation expectations to explode asymmetrically higher. Both still sounded an optimistic tone about the chances of avoiding a hard landing recession, choosing to emphasise strong GDI and labour market numbers over GDP which has dragged due to large trade deficits.

It was much the same story in Europe yesterday as well, with the STOXX 600 climbing +1.88%, and yields on 10yr bunds (+11.1bps), OATs (+9.6bps) and BTPs (+15.3bps) all moving higher. That said, there was continued bad news on the energy side, with natural gas futures (+7.13%) advancing for a 7th day running to close at €183 per megawatt-hour. That comes just days ahead of the scheduled closure of the Nord Stream pipeline, and yesterday saw German economy minister Habeck appeal to Canada’s government to release a turbine for Nord Stream that’s been affected by sanctions, amidst fears that Russia could use the missing turbine as a reason to stop the flow of gas. Reports from Reuters overnight suggest that Ukraine opposes Germany’s plea for Canada to hand Russia a turbine that would enable the latter to send gas supplies back to Germany, with Ukraine citing such a manuevre as a circumvention of sanctions.

On a related theme, one-month forward German electricity prices also continued to run higher, increasing +7.28% and are threatening €400 for the first time since Russia’s invasion, having closed at €398. Against that backdrop, the euro weakened a further -0.22% against the US Dollar, closing at its lowest level since 2002 once again.

On the topic of commodities, yesterday saw something of a bounceback after consistent recent losses across the board. Brent crude oil prices rebounded by +3.93%, closing at $104.65/bbl, which is some way from the levels beneath $100/bbl where they were trading a little more than 24 hours previously. Similarly, copper (+4.80%) recovered from a 19-month low, whilst gold (+0.07%) advanced from a 9-month low.

Here in the UK, we had another day of dramatic political developments as Prime Minister Johnson finally announced his resignation following a raft of ministerial departures. Whilst it had looked as though Johnson would try to ride the situation out 24 hours ago, not long after we went to press, his newly appointed chancellor Nadhim Zahawi (who’s only been in the job since Tuesday night) publicly called for him to go, and shortly after that the news leaked through that Johnson planned to resign. In his statement outside 10 Downing Street, Johnson said that he would remain PM until a successor is chosen, but there have been calls from a number of MPs and even former Conservative PM John Major for him to be removed from office immediately, so there are doubts as to how long he’ll remain be in place. Meanwhile, the opposition Labour Party said that if Johnson didn’t step down straight away, they’d hold a vote of no confidence in Parliament.

Asian equity markets are higher in early trading tracking overnight gains on Wall Street. Adding to the positive sentiment is the story from yesterday of the possibility that the Chinese government will give a huge stimulus shot to the struggling economy by allowing local governments to sell 1.5 trillion yuan ($220 billion) of special bonds in 2H as support for infrastructure funding. This morning the Kospi (+0.91%) is leading gains across the region with the Hang Seng (+0.39%), Shanghai Composite (+0.18%) and CSI (+0.19%) all trading in positive territory. Elsewhere, the Nikkei (+0.51%) gave up its initial bigger gains after former Japanese Prime Minister Shinzo Abe was taken to hospital after being shot (more below). Outside of Asia, US equity futures point to a negative start with contracts on the S&P 500 (-0.38%) and NASDAQ 100 (-0.46%) falling after a good run so far this month.

Early morning data showed that Japan’s household spending surprisingly slipped -0.5% y/y in May (v/s +2.1% expected), declining for the third straight month and compared to the previous month’s -1.7% drop. Separately, Japan’s current account surplus narrowed to ¥128.4 billion in May (v/s ¥172.0 billion expected) on ballooning imports and against a surplus of ¥501.1 billion in April. In addition to higher energy costs, the yen's sharp depreciation against the US dollar also caused import prices to rise in the nation. Looking ahead, China's June inflation data which are due to be released over the weekend will be closely watched.

In a very shocking event, Japan’s longest serving PM Shinzo Abe was shot while giving a stump speech in the city of Nara (Southern Japan) for the parliamentary elections for the upper house scheduled on Sunday. Media reports are not immediately clear on how serious Abe’s injuries are.

Before we look at the day ahead, on the data side, yesterday saw German industrial production grow by +0.2% in May (vs. +0.4% expected), although the previous month’s growth was revised up to +1.3% (vs. +0.7% previously).

To the day ahead now, and the main highlight will be the US jobs report for June. Otherwise, data releases include Italian industrial production for May. From central banks, we’ll hear from ECB President Lagarde, the ECB’s Muller and Villeroy, and the Fed’s Williams.

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International

EyePoint poaches medical chief from Apellis; Sandoz CFO, longtime BioNTech exec to retire

Ramiro Ribeiro
After six years as head of clinical development at Apellis Pharmaceuticals, Ramiro Ribeiro is joining EyePoint Pharmaceuticals as CMO.
“The…

Published

40 mins ago

March 8, 2024

Alex Hoffman

Ramiro Ribeiro

After six years as head of clinical development at Apellis Pharmaceuticals, Ramiro Ribeiro is joining EyePoint Pharmaceuticals as CMO.

“The retinal community is relatively small, so everybody knows each other,” Ribeiro told Endpoints News in an interview. “As soon as I started to talk about EyePoint, I got really good feedback from KOLs and physicians on its scientific standards and quality of work.”

Ribeiro kicked off his career as a clinician in Brazil, earning a doctorate in stem cell therapy for retinal diseases. He previously held roles at Alcon and Ophthotech Corporation, now known as Astellas’ M&A prize Iveric Bio.

At Apellis, Ribeiro oversaw the Phase III development, filing and approval of Syfovre, the first drug for geographic atrophy secondary to age-related macular degeneration (AMD). The complement C3 inhibitor went on to make $275 million in 2023 despite reports of a rare side effect that only emerged after commercialization.

Now, Ribeiro is hoping to replicate that success with EyePoint’s lead candidate, EYP-1901 for wet AMD, which is set to enter the Phase III LUGANO trial in the second half of the year after passing a Phase II test in December.

Ribeiro told Endpoints he was optimistic about the company’s intraocular sustained-delivery tech, which he said could help address treatment burden and compliance issues seen with injectables. He also has plans to expand the EyePoint team.

“My goal is not just execution of the Phase III study — of course that’s a priority — but also looking at the pipeline and which different assets we can bring in to leverage the strength of the team that we have,” Ribeiro said.

— Ayisha Sharma

Remco Steenbergen

→ Sandoz CFO Colin Bond will retire on June 30 and board member Remco Steenbergen will replace him. Steenbergen, who will step down from the board when he takes over on July 1, had a 20-year career with Philips and has held the group CFO post at Deutsche Lufthansa since January 2021. Bond joined Sandoz nearly two years ago and is the former finance chief at Evotec and Vifor Pharma. Investors didn’t react warmly to Wednesday’s news as shares fell by almost 4%.

The Swiss generics and biosimilars company, which finally split from Novartis in October 2023, has also nominated FogPharma CEO Mathai Mammen to the board of directors. The ex-R&D chief at J&J will be joined by two other new faces, Swisscom chairman Michael Rechsteiner and former Unilever CFO Graeme Pitkethly.

On Monday, Sandoz said it completed its $70 million purchase of Coherus BioSciences’ Lucentis biosimilar Cimerli sooner than expected. The FDA then approved its first two biosimilars of Amgen’s denosumab the next day, in a move that could whittle away at the pharma giant’s market share for Prolia and Xgeva.

Sean Marett

→ BioNTech’s chief business and commercial officer Sean Marett will retire on July 1 and will have an advisory role “until the end of the year,” the German drugmaker said in a release. Legal chief James Ryan will assume CBO responsibilities and BioNTech plans to name a new chief commercial officer by the end of the month. Marett was hired as BioNTech’s COO in 2012 after gigs at GSK, Evotec and Next Pharma, and led its commercial efforts as the Pfizer-partnered Comirnaty received the first FDA approval for a Covid-19 vaccine. BioNTech has also built a cancer portfolio that TD Cowen’s Yaron Werber described as “one of the most extensive” in biotech, from antibody-drug conjugates to CAR-T therapies.

Chris Austin

→ GSK has plucked Chris Austin from Flagship and he’ll start his new gig as the pharma giant’s SVP, research technologies on April 1. After a long career at NIH in which he was director of the National Center for Advancing Translational Sciences (NCATS), Austin became CEO of Flagship’s Vesalius Therapeutics, which debuted with a $75 million Series A two years ago this week but made job cuts that affected 43% of its employees six months into the life of the company. In response to Austin’s departure, John Mendlein — who chairs the board at Sail Biomedicines and has board seats at a few other Flagship biotechs — will become chairman and interim CEO at Vesalius “later this month.”

→ BioMarin has lined up Cristin Hubbard to replace Jeff Ajer as chief commercial officer on May 20. Hubbard worked for new BioMarin chief Alexander Hardy as Genentech’s SVP, global product strategy, immunology, infectious diseases and ophthalmology, and they had been colleagues for years before Hardy was named Genentech CEO in 2019. She shifted to Roche Diagnostics as global head of partnering in 2021 and had been head of global product strategy for Roche’s pharmaceutical division since last May. Sales of the hemophilia A gene therapy Roctavian have fallen well short of expectations, but Hardy insisted in a recent investor call that BioMarin is “still very much at the early stage” in the launch.

Pilar de la Rocha

→ BeiGene has promoted Pilar de la Rocha to head of Europe, global clinical operations. After 13 years in a variety of roles at Novartis, de la Rocha was named global head of global clinical operations excellence at the Brukinsa maker in the summer of 2022. A short time ago, BeiGene ended its natural killer cell therapy alliance with Shoreline Biosciences, saying that it was “a result of BeiGene’s internal prioritization decisions and does not reflect any deficit in Shoreline’s platform technology.”

Andy Crockett

→ Andy Crockett has resigned as CEO of KalVista Pharmaceuticals. Crockett had been running the company since its launch in 2011 and will hand the keys to president Ben Palleiko, who joined KalVista in 2016 as CFO. Serious safety issues ended a Phase II study of its hereditary angioedema drug KVD824, but KalVista is mounting a comeback with positive Phase III results for sebetralstat in the same indication and could compete with Takeda’s injectable Firazyr. “If approved, sebetralstat may offer a compelling treatment option for patients and their caregivers given the long-standing preference for an effective and safe oral therapy that provides rapid symptom relief for HAE attacks,” Crockett said last month.

Steven Lo

→ Vaxart has tapped Steven Lo as its permanent president and CEO, while interim chief Michael Finney will stay on as chairman. Endpoints News last caught up with Lo when he became CEO at Valitor, the UC Berkeley spinout that raised a $28 million Series B round in October 2022. The ex-Zosano Pharma CEO had a handful of roles in his 13 years at Genentech before his appointments as chief commercial officer of Corcept Therapeutics and Puma Biotechnology. Andrei Floroiu resigned as Vaxart’s CEO in mid-January.

Kartik Krishnan

→ Kartik Krishnan has taken over for Martin Driscoll as CEO of OncoNano Medicine, and Melissa Paoloni has moved up to COO at the cancer biotech located in the Dallas-Fort Worth suburb of Southlake. The execs were colleagues at Arcus Biosciences, Gilead’s TIGIT partner: Krishnan spent two and a half years in the CMO post, while Paoloni was VP of corporate development and external alliances. In 2022, Krishnan took the CMO job at OncoNano and was just promoted to president and head of R&D last November. Paoloni came on board as OncoNano’s SVP, corporate development and strategy not long after Krishnan’s first promotion.

→ Genesis Research Group, a consultancy specializing in market access, has brought in David Miller as chairman and CEO, replacing co-founder Frank Corvino — who is transitioning to the role of vice chairman and senior advisor. Miller joins the New Jersey-based team with a number of roles under his belt from Biogen (SVP of global market access), Elan (VP of pharmacoeconomics) and GSK (VP of global health outcomes).

Adrian Schreyer

→ Adrian Schreyer helped build Exscientia’s AI drug discovery platform from the ground up, but he has packed his bags for Nimbus Therapeutics’ AI partner Anagenex. The new chief technology officer joined Exscientia in 2013 as head of molecular informatics and was elevated to technology chief five years later. He then held the role of VP, AI technology until January, a month before Exscientia fired CEO Andrew Hopkins.

→ Paul O’Neill has been promoted from SVP to EVP, quality & operations, specialty brands at Mallinckrodt. Before his arrival at the Irish pharma in March 2023, O’Neill was executive director of biologics operations in the second half of his 12-year career with Merck driving supply strategy for Keytruda. Mallinckrodt’s specialty brands portfolio includes its controversial Acthar Gel (a treatment for flares in a number of chronic and autoimmune indications) and the hepatorenal syndrome med Terlivaz.

David Ford

→ Staying in Ireland, Prothena has enlisted David Ford as its first chief people officer. Ford worked in human resources at Sanofi from 2002-17 and then led the HR team at Intercept, which was sold to Italian pharma Alfasigma in late September. We recently told you that Daniel Welch, the former InterMune CEO who was a board member at Intercept for six years, will succeed Lars Ekman as Prothena’s chairman.

Ben Stephens

→ Co-founded by Sanofi R&D chief Houman Ashrafian and backed by GSK, Eli Lilly partner Sitryx stapled an additional $39 million to its Series A last fall. It has now welcomed a pair of execs: Ben Stephens (COO) had been finance director for ViaNautis Bio and Rinri Therapeutics, and Gordon Dingwall (head of clinical operations) is a Roche and AstraZeneca vet who led development operations at Mission Therapeutics. Dingwall has also served as a clinical operations leader for Shionogi and Freeline Therapeutics.

Steve Alley

→ MBrace Therapeutics, an antibody-drug conjugate specialist that nabbed $85 million in Series B financing last November, has named Steve Alley as CSO. Alley spent two decades at Seagen before the $43 billion buyout by Pfizer and was the ADC maker’s executive director, translational sciences.

→ California cancer drug developer Apollomics, which has been mired in Nasdaq compliance problems nearly a year after it joined the public markets through a SPAC merger, has recruited Matthew Plunkett as CFO. Plunkett has held the same title at Nkarta as well as Imago BioSciences — leading the companies to $290 million and $155 million IPOs, respectively — and at Aeovian Pharmaceuticals since March 2022.

Heinrich Haas

→ Co-founded by Oxford professor Adrian Hill — the co-inventor of AstraZeneca’s Covid-19 vaccine — lipid nanoparticle biotech NeoVac has brought in Heinrich Haas as chief technology officer. During his nine years at BioNTech, Haas was VP of RNA formulation and drug delivery.

Kimberly Lee

→ New Jersey-based neuro biotech 4M Therapeutics is making its Peer Review debut by introducing Kimberly Lee as CBO. Lee was hired at Taysha Gene Therapies during its meteoric rise in 2020 and got promoted to chief corporate affairs officer in 2022. Earlier, she led corporate strategy and investor relations efforts for Lexicon Pharmaceuticals.

→ Another Peer Review newcomer, Osmol Therapeutics, has tapped former Exelixis clinical development chief Ron Weitzman as interim CMO. Weitzman only lasted seven months as medical chief of Tango Therapeutics after Marc Rudoltz had a similarly short stay in that position. Osmol is going after chemotherapy-induced peripheral neuropathy and chemotherapy-induced cognitive impairment with its lead asset OSM-0205.

→ Last August, cardiometabolic disease player NeuroBo Pharmaceuticals locked in Hyung Heon Kim as president and CEO. Now, the company is giving Marshall Woodworth the title of CFO and principal financial and accounting officer, after he served in the interim since last October. Before NeuroBo, Woodworth had a string of CFO roles at Nevakar, Braeburn Pharmaceuticals, Aerocrine and Fureix Pharmaceuticals.

Claire Poll

→ Claire Poll has retired after more than 17 years as Verona Pharma’s general counsel, and the company has appointed Andrew Fisher as her successor. In his own 17-year tenure at United Therapeutics that ended in 2018, Fisher was chief strategy officer and deputy general counsel. The FDA will decide on Verona’s non-cystic fibrosis bronchiectasis candidate ensifentrine by June 26.

Nancy Lurker

→ Alkermes won its proxy battle with Sarissa Capital Management and is tinkering with its board nearly nine months later. The newest director, Bristol Myers Squibb alum Nancy Lurker, ran EyePoint Pharmaceuticals from 2016-23 and still has a board seat there. For a brief period, Lurker was chief marketing officer for Novartis’ US subsidiary.

→ Chaired by former Celgene business development chief George Golumbeski, Shattuck Labs has expanded its board to nine members by bringing in ex-Seagen CEO Clay Siegall and Tempus CSO Kate Sasser. Siegall holds the top spots at Immunome and chairs the board at Tourmaline Bio, while Sasser came to Tempus from Genmab in 2022.

Scott Myers

→ Ex-AMAG Pharmaceuticals and Rainier Therapeutics chief Scott Myers has been named chairman of the board at Convergent Therapeutics, a radiopharma player that secured a $90 million Series A last May. Former Magenta exec Steve Mahoney replaced Myers as CEO of Viridian Therapeutics a few months ago.

→ Montreal-based Find Therapeutics has elected Tony Johnson to the board of directors. Johnson is in his first year as CEO of Domain Therapeutics. He is also the former chief executive at Goldfinch Bio, the kidney disease biotech that closed its doors last year.

Habib Dable

→ Former Acceleron chief Habib Dable has replaced Kala Bio CEO Mark Iwicki as chairman of the board at Aerovate Therapeutics, which is signing up patients for Phase IIb and Phase III studies of its lead drug AV-101 for pulmonary arterial hypertension. Dable joined Aerovate’s board in July and works part-time as a venture partner for RA Capital Management.

Julie Cherrington

→ In the burgeoning world of ADCs, Elevation Oncology is developing one of its own that targets Claudin 18.2. Its board is now up to eight members with the additions of Julie Cherrington and Mirati CMO Alan Sandler. Cherrington, a venture partner at Brandon Capital Partners, also chairs the boards at Actym Therapeutics and Tolremo Therapeutics. Sandler took the CMO job at Mirati in November 2022 and will stay in that position after Bristol Myers acquired the Krazati maker.

Patty Allen

→ Lonnie Moulder’s Zenas BioPharma has welcomed Patty Allen to the board of directors. Allen was a key figure in Vividion’s $2 billion sale to Bayer as the San Diego biotech’s CFO, and she’s a board member at Deciphera Pharmaceuticals, SwanBio Therapeutics and Anokion.

→ In January 2023, Y-mAbs Therapeutics cut 35% of its staff to focus on commercialization of Danyelza. This week, the company has reserved a seat on its board of directors for Nektar Therapeutics CMO Mary Tagliaferri. Tagliaferri also sits on the boards of Enzo Biochem and is a former board member of RayzeBio.

→ The ex-Biogen neurodegeneration leader at the center of Aduhelm’s controversial approval is now on the scientific advisory board at Asceneuron, a Swiss-based company focused on Alzheimer’s and Parkinson’s. Samantha Budd-Haeberlein tops the list of new SAB members, which also includes Henrik Zetterberg, Rik Ossenkoppele and Christopher van Dyck.

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Is the biotech market rally real? Data suggest comeback in private, public markets

After some halting starts, false dawns and fragile rallies, the biotech market may finally be back.
No, really.
In the last several months, several important…

Published

40 mins ago

March 8, 2024

Andrew Dunn

After some halting starts, false dawns and fragile rallies, the biotech market may finally be back.

No, really.

In the last several months, several important signals have added up to what feels like a rally, with more depth and certainty than some of the short-lived upticks during the doldrums of 2022 and 2023, when only the industry’s most optimistic souls were willing to call it a comeback.

But now, public biotechs are releasing positive data and raising money in follow-on offerings with ease. Biopharmas have already raised $13.7 billion in secondary raises in 2024, according to Stifel’s Tim Opler. Biotech’s benchmark index, the $XBI, is up 56% from last year’s lows and has broken the $100 mark, thanks to gains that go deep into the 120-company index. And in the private markets, crossover rounds are trickling back, and IPOs are showing signs of life.

Investors and executives told Endpoints News that this moment feels different, encouraged by a return to the basics, a focus on data, and signs of a healthier — if smaller — biotech ecosystem.

Chris Garabedian

“We should be beyond any of the lows,” said Chris Garabedian, a venture portfolio manager at Perceptive Advisors and founder of the firm’s early-stage investing unit Xontogeny. “We are going to see continued forward momentum.”

Investor sentiment is “very different from what it was in ‘22 to ‘23, where it was all doom and gloom,” MoonLake Immunotherapeutics CEO Jorge Santos da Silva said. A year ago, “The question was like, ‘What are the 22 ways in which you can die?’ That has really changed.”

The XBI cracking $100 is encouraging, but a deeper look at the index shows more signs of strength. The exchange-traded fund, which lets investors buy shares of its basket of 120 biotech companies, has seen $457 million in net inflows over the past month, according to YCharts data. And about 80% of biotechs on the index — which includes giants like Vertex $VRTX and small companies like Avidity Biosciences $RNA — have seen their stock in the green over the past three months.

Some of that gain is clearly driven by a surge in M&A, including the buyouts of Seagen, Horizon, Cerevel, and Karuna, all of which have returned billions of dollars back to investors who need to put it back to work in the private or public markets. And industry insiders have said there’s also a breadth in the disease areas drawing interest, including obesity, cancer, cardiology, neurology, and inflammation.

Even ARCH Venture Partners managing director Bob Nelsen voiced some broader — albeit measured — optimism for the market.

“For our internal base case, we’re still assuming that things are going to suck like they have in the last couple of years,” Nelsen told Endpoints. “But we all believe that it has turned.”

Nelsen still implores his portfolio companies and limited partners to “assume it’s going to be worse than you think.” But his optimism is driven by two major trends: the easing of macro factors like interest rates and the persistence of M&A. He’s closely watching whether generalist investors — whose huge dollars can swing a sector up or down, as they did dramatically during the pandemic — will come back to biotech.

“The conventional wisdom in Q4 is, they were never coming back in the market,” he said. “Turns out, in Q4 they were buying.”

From atonement to ‘FOMO’

Jorge Santos da Silva

Da Silva said the industry had been “paying for our sins” committed in the boom years of 2019 to 2021, when hundreds of biotechs went public — many far from going into the clinic. Along with layoffs and company closures, it resulted in an infestation of the corporate walking dead in companies trading at values below the amount of cash on their books.

But the number of those companies with negative equity value has dropped in the past few months, suggesting that a much-needed cleanup from the go-go years is well in progress.

“I call it a detox,” da Silva said. “Whatever we did was clearly excessive and everyone knew it at the time. But when you’re at a party, it’s like, ‘Oh my God, this is crazy, but let’s keep going.’ The detox phase is definitely coming to an end.”

Otello Stampacchia

Otello Stampacchia, the managing director of the Boston-based VC firm Omega Funds, said the mood is even “getting a little bit bubblicious” for biotechs with clinical-stage drug candidates in large markets with meaningful milestones in the next 12 to 18 months.

“There’s really a rush to get into those, particularly now that the indices have started flipping their dynamic,” said Stampacchia, who founded Omega two decades ago. “Up until early last fall, nobody wanted to catch the falling knife. It’s now the exact opposite dynamic, and there’s a bit of crowding in some of these names.”

“There’s real FOMO to invest in the right therapeutic products and the right therapeutic companies,” he added.

That’s carried through the private and public markets, Stampacchia said, noting that Omega participated in Alumis’ recent $259 million Series C raise — biotech’s biggest round this year. He said he was “incredibly surprised by the amount of demand there was for the deal.” All told, Omega has seen roughly half a dozen of its portfolio companies raise close to half a billion dollars over the last few months, with increased valuations.

“In each case, it really wasn’t difficult to syndicate,” he said. “There’s real demand.”

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