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Week Ahead: Softness in US Real Sector, Key UK and Canadian Data, and China’s Q3 GDP

The markets absorbed two shocks last week. The
war in Israel that seems to know of no restraint underpinned oil prices and
appeared to help boost gold…

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The markets absorbed two shocks last week. The war in Israel that seems to know of no restraint underpinned oil prices and appeared to help boost gold and the Swiss franc, the only G10 currency to appreciate against the dollar. The other was the continued deluge of US Treasury supply, the coupon auctions that tailed and higher than expected PPI and CPI. Nevertheless, the US 10- and 30-year yields fell nearly 20 bp last week, snapping a six-week uninterrupted increase. In fact, it was only the second weekly decline since the week ending July 21--a dozen weeks ago.

We suggested early last week that provided the war in Israel remains contained, the markets can focus on macroeconomic drivers. This still seems like a fair assessment and December WTI, which gapped higher on Monday drifted lower in the next few sessions to close the gap before jumping ahead of the uncertainty of the weekend and amid Iran's threat to open a new front in the war if the blockade and assault on the Gaza continued. 

The focus on the US economy shifts from prices to the real sector in the days ahead. In particular, the date should show a loss of economic momentum as Q3 wound down, setting the stage for a more dramatic slowdown in Q4 from what the Atlanta Fed's GDP tracker puts slightly above 5%. Beijing has an opportunity to provide more monetary support, but the disappointment with the CPI (flat from 0.1% year-over-year) seems to be the result of food prices that may have been lowered ahead of the October holiday but the economic focus will be on the Q3 GDP, seen to accelerate over Q2 and details for September. The UK and Canada report September CPI. The UK will also report on the jobs market. Expectations for the respective central banks will be sensitive to these high-frequency data points. The swaps market puts the odds a little under 50% for the BOE and a little above 50% for the Bank of Canada.

United States: Throughout the post-Covid economic recovery, many economists have been skeptical, and recession calls have only recently been rescinded. To be sure, it is not just private sector economists. Remember last December, the median forecast by Fed officials was for the economy to grow by 0.4% this year. That was raised to 1% in June and to 2.1% in September. The Atlanta Fed has the economy tracking 4.5% in Q3. The median forecast in Bloomberg's survey is 3.0%, however, it falls to 0.5% in the current quarter. For this to be fair, the economy would have lost momentum into the end of Q3. While the headline nonfarm payrolls figures leaped by 336k, we remain struck by the details, including the loss of full-time positions for the third consecutive month (seasonally adjusted), a surge in uncontracted self-employed (gig workers), and a rise in people who hold two full-time jobs. We look for the data in the coming days to confirm a loss of momentum.

Core September retail sales (excluding autos, gasoline, building materials, and food services) may have declined for the first time in six months. A 0.3% decline would put the annualized rate in Q3 around 2% after almost 6.5% pace in Q2. After rising by more than 1% in July and August combined, industrial output is expected to fall slightly, led by a 0.2% decline in manufacturing. Existing home sales are seen falling for the fourth consecutive month, and the 3.5% decline projected by the median forecast in Bloomberg's survey would be the largest of the year. The index of Leading Economic Indicators has not risen since February 2022 and most likely did not change directions last month. The six-month annualized decline has stabilized in recent months but at -7.5% in August (-9.0% in March), it is still at levels seen in past recessions. Housing starts may be an exception to this trend of weaker data. They tumbled 11.3% in August and are expected to have bounced back by nearly 10% in September. Two regional Fed surveys for October are due. The NY State manufacturing survey recovered smartly in September (1.9 from -19.0 in August) but is likely to have fallen back below zero in October. October Philadelphia Fed's business outlook is due on October 19. The diffusion index has been negative since September 2022 with the sole exception in August before falling back in September. Lastly, the Fed's Beige Book, in preparation for the October 31-November 1 FOMC meeting will be released.

The Dollar Index recorded an outside up day in what seemed like an overreaction to the US CPI, which missed the median forecast by 0.1%. In doing so, it met the (61.8%) retracement objective of its pullback that began from the peak on October 3 near 107.35. That retracement target of 106.65 was exceeded ahead of the weekend as the Dollar Index knocked on 106.80. Recall that the 107.20 area is the halfway mark of the decline from last September's multiyear high (~114.80) to the mid-July low around 99.60. While there may be resistance around 108.00, the next retracement target is closer to 109.00. On the other hand, a break of the 105.25 area strengthens the case that a top is being forged. We note that the five- and 20-day moving averages did not cross as looked likely. The five-day moving average (~106.20) has remained above the 20-day moving average (~106.10) since late July. It offers one way to think about the trend. 

China: There are three things to watch in the coming days in China. First are interest rates. Beijing will set the benchmark one-year Medium Term Lending Facility (MLF) rate before early Monday. After the flat CPI (year-over-year) in September, there is a risk that it will be cut, but more likely it will be left unchanged at 2.50%. The volume may be reduced a little from the CNY591 bln last month. However, it does mean that most likely, banks will maintain the prime rates, even though the last cut in the MLF was not fully passed through. Second, early on October 18, Beijing will announce how the economy performed in Q3. After growing by 0.8% in Q2, China is expected to have grown by 1% in Q3. This would bring the cumulative growth this year to around 4%. The target is 5%. It will also report some of September's details, including industrial production, retail sales, and fixed asset investment. In addition, the latest readings on the property market will be reported. Third, press reports suggest Beijing is considering boosting government borrowing by as much as CNY1 trillion (~$137 bln), and overshooting the 3% budget deficit cap, to provide more support for the economy. Ostensibly, the funds would be used to fund more infrastructure projects, and water projects were specifically cited.

China's mainland markets re-opened from the extended holiday. Despite the sovereign wealth fund buying Chinese bank stocks and talk of another fund to support equities failed to prevent Chinese stocks from falling last week, even though all the other large markets in the region rose, with Japan, Taiwan, South Korea, Australia, and Hong Kong indices raising more than 1%. In fairness, the index that tracks mainland companies that trade in HK rose nearly 2.4%. The yuan softened slightly and as it has done since late August, alternating between weekly gains and losses. Using formal and informal levels, Chinese officials have stabilized the yuan, but with policy divergence still a key driver, and foreign portfolio investors still apparently reluctant to jump back in, the risk is for a weaker yuan. It should not be surprising if Chinese officials step up their efforts if the dollar nears CNY7.3125-75. Still, we suspect that if the dollar moves above JPY150, and strengthens more broadly, Beijing will begrudgingly accept further gradual yuan weakness.

Japan:  Industrial production in Japan fell 1.8% in July and the preliminary estimate was for a flat showing in August. That is subject to revision. Japan's industrial output is volatile on a month-to-month basis. The average monthly change last was zero. If the August reading holds, then the average change this year is -0.1%. The tertiary industry index is reported the following day. It rose at an annualized pace of 2% in Q1 and 4% in Q2. Japan's September trade figures are due also. With one exception (2014), the September trade balance always (past 20 years) improved from August. In August, Japan reported a trade deficit of JPY937.8 bln (~$6.5 bln). Through August, Japan has run a trade deficit of almost JPY8 trillion, down from JPY12.2 trillion in the first eight months of last year. Despite the cheap yen on a trade-weighted basis, Japanese goods exports fell on a year-over-year basis in July and August, the first declines since late 2020.

The national CPI will be released ahead of the next weekend. It is not that it does not matter, but the thunder has been stolen by the Tokyo figures, reported a few weeks ago. Here is what we know: Tokyo's headline pace slowed to 2.8% from 2.9%. The median forecast in Bloomberg's survey was for 2.7%. The core rate (excluding fresh food) slowed a little more than expected, to 2.5% from 2.8%. The measure that excludes fresh food and energy slowed to 3.8% from 4.0%. The nationwide headline measure has been stuck at 3.2%-3.3% since May. It peaked in January at 4.3%. The core rate was at 3.1% in August (and July). Excluding fresh food and energy, nationwide inflation was at 4.3%, the cyclical high seen in three of the past four months. It has not been below 4% since March. Last September, it had risen 1,8% over the previous 12 months.

In response to the US CPI, the dollar reached its best level against the yen (~JPY149.85) since the October 3 drama when the JPY150 level was momentarily breached. The market is cautious even though most seem to agree with our assessment that there likely was no material BOJ intervention. The cover needed may be a further rise in US yields. Despite the firmer PPI and CPI, the heavy Treasury supply, tailed coupon auctions, and the rise in oil prices, the 10-year US yield settled about 16 bp lower on the week. Recall that the yield had risen by about 40 bp since last month's FOMC meeting and its strong endorsement of the soft-landing higher-for-longer narrative. We suspect a close below the 20-day moving average (~JPY148.85), especially if it corresponds to softer US yields, perhaps on the back of weaker economic data, could signal a more important correction. The dollar has not closed below its 20-day moving average against the yen since late July. Below there, the October 3 low near JPY147.45 would be the next target. 

Eurozone: The high-frequency data includes the German ZEW survey, eurozone, August construction output, and the external account. There are some strong seasonal patterns with the eurozone trade balance. Without fail for the past 20 years, the trade account deteriorates in August and without fail improves in September. The July surplus was 6.47 bln euros. In July 2022, the trade deficit was 36.3 bln euros. We already know that Germany's goods balance narrowed for the second consecutive month to stand at 14.4 bln euros in August, down from 18.1 bln in July and 22.2 bln in June. France also has reported its August trade balance. Its deficit widened slightly to 8.2 bln euros from 8.1 bln. Last August, France reported a 14.76 bln euro deficit. The broader measure, the current account, has begun normalizing or reaching a new normal. In the year before Covid, the eurozone recorded an average monthly current account surplus of 24.9 bln euros a month. In 2021, the average monthly current account surplus was 28.8 bln euros. The terms of trade shock sparked by Russia's invasion of Ukraine pushed the eurozone into a deficit and it averaged a 9.3 bln euro shortfall a month in 2022. Through July, the eurozone has recorded an average current account surplus this year of 14.9 bln euros.

The euro retraced (61.8%) of its recent advance following the US CPI and posted a bearish outside down day. Follow-through selling ahead of the weekend saw the euro fray the $1.05 area. A convincing break would signal a return to the $1.0450 low made earlier this month and possibly $1.04, which is the (50%) retracement of the euro's rally from last September's multi-year low near $0.9525 to the mid-July high close to $1.1275. If $1.05 more or less holds, the euro must reclaim the $1.5060 area to signal another run toward $1.0645-50 as the correction continues.

United Kingdom: The swaps market is pricing in about a 1-in-4 chance of a Bank of England hike when it meets next on November 2, the day after the FOMC meeting concludes. The data in the coming days are going to shape the expectations. The employment data (October 17) are important, especially the wage component. That said, employment on a three-month over three-month metric fell by 207k in July, the biggest drop since October 2020. The September CPI, the following day, is also important. A 0.3% month-over-month rise would allow the year-over-year rate to slip to 6.5% from 6.7%. It would be the slowest pace since February 2022. A 0.3% increase would mean that the UK's CPI in Q3 rose at an annualized rate of less than 1%. In Q2, it rose at an annualized rate of 8%. Unlike most G10 countries, the UK's core rate has slowed to below the headline pace. The core stood at 6.2% in August. The January print of 5.8% is the low for the year. The September retail sales report on October 20 may not impact the interest rate outlook but will shed light on the strength of the consumer. Retail sales fell by 1.5% last September, meaning a flat report this September would erase the 1.4% year-over-year decline.

Sterling surpassed the (61.8%) retracement target of its rally from the October 4 low near $1.2035 to the October 11 peak three cents higher. That retracement is near $1.2150, and sterling approached $1.2130 before the weekend. Nearby resistance is seen in the $1.2200-25 area, but price action warns of a return to the early October low. Intermittent support may be seen near $1.2100. 

Canada: Canada's economic calendar is chock full in the coming days with a report nearly every day. On Monday, the market may not be so interested in wholesale sales and manufacturing sales but may be more interested in the Bank of Canada's business survey results. The economy unexpectedly contracted in Q2. Housing starts, and international transactions on Tuesday are not typically market movers, and in any case, will be overshadowed by the September CPI. The risk here is on the upside. Last September, Canada's CPI rose by 0.1%. If it rose by this year's average of 0.5%, the year-over-year rate will rise for the third consecutive month. It would reach about 4.4%, which would match the highest since February. 

The Bank of Canada puts more weight on the underlying core measures. The problem is that the trimmed mean and weighted median measures are sticky, and the central bank has noted it. The trimmed mean rose by 0.3% in August to 3.9%. It was the first increase since last October, but it offset the recent decline, and is at the highest level since April. The weighted median has not fallen since May. It stood at 4.1% in August, which is also the highest since April. Another firm reading and the market may have to take more seriously the risk of a rate hike. The swaps market is currently discounting a little more than a 25% chance of a hike at the October 25 meeting and about a 45% chance of a hike before the end of the year. The calendar is light on Wednesday, and Thursday's industrial and raw material prices do not draw much attention. Instead, Friday (October 20), August retail sales pose headline risk. In July, headline retail sales rose by 0.3%, but were held back by weak autos. Without autos, retail sales rose 1.0%, which offset in full the decline posted in May and June. We know that auto sales rose by about 1.5% (seasonally adjusted) in Land rose another 3.7% in September.

The US dollar extended the pullback from the CAD1.3785 high on October 5 to a low near CAD1.3570 in the first part of last week. It jumped to CAD1.3700 after the US CPI to meet the (61.8%) retracement objective. It stalled ahead of the weekend and sipped back to almost CAD1.3635 area. The next area of support is seen in around CAD1.3600-20. A break of CAD1.3560 is needed to signal a deeper greenback correction.

Australia: The Australian dollar may see new lows for the year before the employment data is reported early on October 19. Through August, Australia has grown an average of 37.7k jobs a month, of which 23.3k have been full-time posts. In the first eight months of 2022, the averages were 50.1k and 51.1k, respectively (a small net loss of part-time jobs). The market sees little chance (~6%) of a rate hike at the November 7 meeting and less than a 25% chance of a hike before the year's out. It had been twice that before the Reserve Bank of Australia met earlier this month. It leaves the Aussie vulnerable to a backing up of US rates, when Australia's two-year discount to the is more than 110 bp. The US premium has not been much more than 120 bp since March. In what will be a blow to the center-left government, Australian voters appear set to reject a proposal that would establish indigenous advisory committee to parliament. The immediate political consequences for the Albanese-led government are modest and the economic consequences, less so. The Australian dollar unwound the six-day rally ahead of the weekend falling back to $0.6285, the year's low set earlier this month. There is little in the way of last October's two-decade low around $0.6170. 

Separately, New Zealand looks poised to put in a new government, led by the National Party and its conservative ally ACT. It will likely require the support of the New Zealand First Party to secure a majority. NZ First and Labour have ruled out working with each other in campaign declarations. Still, it might not prevent the New Zealand dollar from succumbing to the pressure of a rebounding greenback and retesting the $0.5860 area.

Mexico:  The peso benefited from local developments and the broader decline in the greenback. However, the peso stalled as the dollar recovered and US rates rose after the September CPI report. Mexico reported a continued easing of price pressures (September CPI 4.45% and 5.76% core) and a firm August industrial production (0.3% month-over-month and a 0.3% rise in manufacturing output). Industrial production has risen at a 6.3% annualized rate in the three months through August., the same manufacturing. The data highlight in the week ahead is not until the end of the week: August retail sales. A modest rise will not prevent the year-over-year rate from falling for the second consecutive month. In August 2022, retail sales rose by a heady 1.1%. Mexico's retail sales have risen by an average of 0.4% a month through July, while last year's average monthly increase was 0.6%. Such an outcome in August would see the year-over-year rate fall to 4.4%-4.6%. More broadly, the IMF revised up its June forecast for Mexico's GDP by 0.6 percentage points this year and next to 3.2% and 2.1%, respectively.

The dollar's movement against the Mexican peso has followed the general pattern discussed above. Its gains accelerated in the first part of October, reaching almost MXN18.49 on October 6, its highest level since March. It pulled back to about MXN17.7550 before the US CPI report and then bounced back to around MXN18.0850 before consolidating ahead of the weekend below MXN18.00. That pullback met the (61.8%) retracement of the dollar's gains since the low in late September. A break of last week's low could signal a return to the September low near MXN17.35. On the upside, a break of the MXN18.12 may be a signal that the position squaring may not be over. 


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

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

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

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

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

Why did Novo do this?

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

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

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

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

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

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

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

Kasim Kutay

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

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

What does it mean for Catalent’s customers? 

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

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

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

Nicole Paulk

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

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

Are shareholders and regulators happy? 

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

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

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

Alessandro Maselli

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

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

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

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

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

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

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

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

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

Amber Tong and Reynald Castañeda contributed reporting.

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

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

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

Credit: Insilico Medicine

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

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

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

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

 

About Insilico Medicine

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


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

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

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

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

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

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

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

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This popular vacation destination will soon have a nomad visa

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

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

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

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

'Not be given a residence card of residence certificate'

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

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

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

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