Asia’s “glamazons” can apply a dash of Western color. Johnson & Johnson, L’Oreal and other giants have splashed out on cutting-edge cosmetics in Japan and Korea, seeking clout and innovation. Yet local beauty brands like Shiseido and snail mask supremo Amorepacific have room to grow too: they can reverse the trend.Asia’s $105 billionbeauty industry has attracted plenty of admirers. In October, US healthcare group J&J snapped up shares it did not already own in Japanese skincare firm Ci:z Holdings for $2.1 billion, while Unilever acquired Carver Korea in 2017. From 2014 to 2018, there were 179 beauty deals involving Japanese and Korean targets, for a total of $8.5 billion, according to Refinitiv data – more than double the number of acquisitions in the five preceding years. Western giants look to Asia’s younger, growing markets to fight signs of ageing back home. As each one of the ten steps in a typical Korean beauty routine requires a different product – from hydrating serum to lip mask – there are plenty of new ideas to be had and extra revenue to boot. But Asian firms can gain from going the other way, tapping new customers and know-how, for example, in the technology behind personalized creams and make-up.Shiseido has already taken some steps. Recent acquisitions include MatchCo, which scans customers’ skin tones via its mobile app to deliver customized foundation makeup, and a biometrics company with synthetic skin technology patents. The $24 billion Japanese group has said it wants to be a top-five brand in Europe in 2020, suggesting plenty of ambition. Meanwhile, its EBITDA has nearly doubled to 120 billion yen ($1.1 billion) in the five years to 2017, and its debt burden has come down from 2013 highs of just under 40 percent of equity, to modest levels around 15 percent, leaving plenty of room for manoeuvre.Others too can do more abroad, like Korea’sAmorepacific, which owns ginseng-based Sulwhasoo. Chairman Suh Kyung-bae’s empire has been hit by cooler consumption in China. Growth outside the region could balance that, while adding more premium, tech-enabled beauty. Time for Asia’s beauty queens to go west.
Monday, December 24, 2018
FDA: CBD Products Mostly Illegal
Cannabis stocks were moving lower Monday morning after the Food and Drug Administrationsuggested hemp-derived cannabidiol, or CBD, is mostly illegal.
What Happened
The farm bill signed by President Donald Trump last week designated hemp as an agricultural crop.
Yet CBD oil is a drug ingredient and cannot be included in products without FDA approval.
“Selling unapproved products with unsubstantiated therapeutic claims is not only a violation of the law, but also can put patients at risk, as these products have not been proven to be safe or effective,” FDA Commissioner Scott Gottlieb said in a statement.
Why It’s Important
Parts of hemp are already safe as food ingredients in the FDA’s view, including hemp seeds, hemp seed protein and hemp seed oil.The FDA said these are safe for use in food products under the condition they are not marketed as a treatment for diseases.
With $42M, Ex-Ignyta CEO Aims At Cancer Again With Startup, Erasca
Just over a year after steering cancer drug developer Ignyta into a $1.7 billion sale to Roche, Jonathan Lim is back at it again. Ignyta’s former co-founder and head executive has co-founded another biotech in San Diego, Erasca, which also wants to make new cancer therapies.
Erasca on Tuesday closed a $42 million Series A round led by Lim’s own investment firm, City Hill Ventures, and Boston-based Cormorant Asset Management. Other, unnamed institutional and individual investors also participated. The company quietly launched in July; Roche (NASDAQ: RXDX) closed the Ignya buyout in February.
Ignyta was best known as one of the companies trying to develop “tissue agnostic” cancer drugs; that is, drugs that home in on a tumor’s genetic fingerprint, regardless of where in the body it forms. Ignyta’s entrectinib, for instance, is being tested against a variety of different tumors with so-called NTRK fusions.
Erasca appears to have even bigger ambitions. Its name is a portmanteau of “erase” and “cancer.” And Lim, in prepared remarks, said the aim of the company is to develop drugs that can cure (or “erase”) cancer, rather than keep it at bay or manage it with chronic treatment.
That’s a lofty claim; cancer has frustrated scientists for years because of its ability to mutate, develop resistance to drugs, and evade our body’s defenses. And Erasca has yet to provide the key details underlying its approach, only saying in a statement that it has “multiple discovery programs underway for undisclosed targets that are biological drivers of cancer.” It’ll disclose those targets once they get to clinical testing, and also plans to add to its pipeline via deals with research institutions and biopharma.
Lim is the company’s co-founder and executive chairman. As of this month, he is also a venture partner at Arch Venture Partners.
Since 2003, when Lim—a physician by training—joined San Diego’s Halozyme Therapeutics (NASDAQ: HALO) as CEO, he has started or led a series of biotech companies in Southern California.
Lim headed Halozyme for seven years, then, in December of 2010, started City Hill.
In 2011, Lim teamed up with former employees of Biogen Idec (now, based in Cambridge, MA, called simply Biogen (NASDAQ: BIIB)) to start Eclipse Therapeutics. Eclipse, which was developing drugs to target cancer stem cells, was acquired by Australia’s Bionomics for $10 million in 2012.
Lim also co-founded Ignyta, originally called NexDx, in 2011. It started out focusing on better diagnostics and drugs for autoimmune diseases. But it pivoted to precision cancer medicines later on. City Hill led Ignyta’s $6 million Series B financing round.
While at Ignyta, Lim also co-founded Bonti, a Newport Beach, CA-based company that Allergan (NYSE: AGN) snapped up in October. The Botox maker paid $195 million upfront, a deal which, among other pipeline products, scored it an investigational compound Bonti was testing as a faster acting, shorter-duration version of the Ireland-based biopharma company’s flagship facial injectable.
Lim started Erasca this year with Ignyta alum Robert Shoemaker and Gary Yeung, who has stints at cancer diagnostics company Guardant Health (NASDAQ: GH) and antibody startup Annexon Biosciences.
Shoemaker is Erasca’s vice president of biology; Yeung, who prior to his time at Guardant and Annexon spent 13 years at Genentech, is its chief business officer. Erasca, which is based in the San Diego community of La Jolla, employs about a dozen people.
2 Beaten-Down Biotech Stocks That Look Like Bargains
Get ready, bargain shoppers. The Nasdaq Biotechnology Index has plummeted 24% since the beginning of October and it looks like this pair received more lashes than they deserved.
Agenus Inc. (NASDAQ: AGEN) and Gilead Sciences Inc. (NASDAQ: GILD) look like bargains right now, but market-beating gains are far from guaranteed. Here’s what you need to know about potential calamities on their paths to growth.
Agenus Inc.: Shots on goal
This biotech has taken a lot of shots on goal that have sailed wide, but its recently depressed market cap seems a little too pessimistic right now. A recent $150 million cash injection from Gilead Sciences for rights to three early stage cancer therapy candidates only pushed the stock’s market cap up to around $277 million at recent prices.
Agenus has two checkpoint inhibitors in development that just might find a partner desperate enough to license them, but it’s the company’s partnered early stage assets that make this stock look like a risky bargain right now. Agenus’ collaboration with Merck & Co. moved an undisclosed candidate into clinical trials this summer, and success would trigger significant milestone payments.
Gilead’s surprising upfront payment will keep Agenus from asking shareholders for more money in 2019, and perhaps much longer. The new collaboration partners have three oncology candidates nearly ready to enter clinical trials. Beginning the studies will trigger milestone payments that begin small and could eventually total $1.7 billion.
Biotech collaboration partners rarely recognize a fraction of potential milestone payments. That said, Agenus’ partners are taking a lot of shots on goal. Positive results from any one of several early stage clinical trials could send this stock soaring from its present levels.
Gilead Sciences Inc.: Let’s try oncology again
In 2017, Gilead’s $12 billion foray into the oncology space seemed bold, but investors are increasingly worried the biotech made a huge mistake. Yescarta launched in October 2017, but sales during the three months ended this Sept. 30, 2018, reached just $75 million.
The stock’s fallen 18% since the beginning of October, but a new CEO on the way could give it some lift in the new year. Daniel O’Day will step down as head of Roche‘s pharmaceutical segment to become chairman and CEO of Gilead in March.
Chemical synthesis breakthrough holds promise for future antibiotics
University of Colorado Boulder chemistry researchers have developed a novel way to synthesize and optimize a naturally-occurring antibiotic compound that could one day be used to fight lethal drug-resistant infections such as Staphylococcus aureus, commonly known as MRSA.
Antibiotic-resistant infections afflict over 2 million people annually and result in over 23,000 deaths in the U.S. each year, according to the Centers for Disease Control and Prevention (CDC). A 2018 study by the CDC’s European counterpart found that drug-resistant superbugs were responsible for 33,000 deaths across Europe in 2015.
Researchers have previously identified thiopeptides, a naturally-occurring antibiotic compound, as a promising avenue of study. Thiopeptides have shown some effectiveness against MRSA and certain other bacterial species in limited trials, but their structural diversity makes it difficult to synthesize the molecules at a scale large enough for therapeutic use.
To make better use of thiopeptides, CU Boulder researchers went back to basics and re-examined previous assumptions about the foundational chemical properties of these molecules.
“We re-evaluated the structural commonalities of these thiopeptides in light of current superbugs, because no one had looked at them and analyzed them in modern context,” said Maciej Walczak, lead author of the new research and an assistant professor in CU Boulder’s Department of Chemistry.
The researchers invented a new catalyst to drive reactions that facilitate the synthesis of the thiopeptides and form the essential scaffolding needed to curtail bacterial growth. Their efforts resulted in two new broadly representative antibiotics: micrococcin P1 and thiocillin I. The compounds are efficient, scaleable and produce no harmful byproducts.
“The results exceeded our expectations,” Walczak said. “It’s a very clean reaction. The only waste produced is water and the fact that this is a very green method could be important going forward as the technology scales up.”
The study, which was funded by the National Science Foundation and co-authored by CU Boulder postdoctoral researcher Siddhartha Akasapu and graduate students Aaron Hinds and Wyatt Powell, was recently published in the journal Chemical Science.
The new chemical synthesis methodology is just a starting point, Walczak said. He and his colleagues plan to use their findings as a platform for selecting and rationing parts of the thiopeptide molecules in order to optimize their properties and apply them broadly to other bacterial classes.
The antibiotic compounds will need to complete clinical trials before they can be approved for human use, a process that can take many years. Still, the need for scientific innovation in the field of antibiotic resistant superbugs is greater than ever, Walczak said.
“Multi-drug resistance is an important global health problem and it’s going to become even more so in the years to come,” he said.
Story Source:
Materials provided by University of Colorado at Boulder. Note: Content may be edited for style and length.
Journal Reference:
- Siddhartha Akasapu, Aaron B. Hinds, Wyatt C. Powell, Maciej A. Walczak. Total synthesis of micrococcin P1 and thiocillin I enabled by Mo(vi) catalyst. Chemical Science, 2019; DOI: 10.1039/C8SC04885A
Bio-Rad Labs sets stage for big Pleasanton expansion
Bio-Rad Laboratories, setting the stage for a big expansion in the East Bay, has bought a two-building complex in Pleasanton’s Hacienda Business Park to accommodate plans for more workers.
Hercules-based Bio-Rad on Nov. 28 paid $24.2 million for two buildings that make up the Gibraltar Center office complex in Pleasanton, Alameda County public records show.
Together, the Pleasanton buildings that Bio-Rad recently purchased total 101,000 square feet, said Jim Ellis, a principal executive with Ellis Partners, a real estate developer that heads up a partnership that sold the buildings to Bio-Rad.
“We recently purchased two buildings in Pleasanton to house operations of our Digital Biology program at Bio-Rad,” said Tina Cuccia, a spokeswoman for Bio-Rad.
One building, totaling 60,000 square feet, is at 5667 Gibraltar Drive and is empty. The other building, which is already occupied by Bio-Rad, is 41,000 square feet in size and is located at 5731 West Las Positas Blvd.
“This deal is a win-win for both Bio-Rad and us,” Ellis said. “Bio-Rad has room to expand and we were able to execute the sale of a good office property.”
Bio-Rad launched its Digital Biology Center in 2012, according to information on the Bio-Rad website. Bio-Rad makes an array of products used in clinical, laboratory and medical testing of blood, tissue and fluid.
“New strategies for diagnosis of inherited disorders, cancer, and infectious disease” are among the technology breakthroughs that Bio-Rad anticipates from its Digital Biology group that’s expanding in Pleasanton.
Potentially, 500 people could work in the office complex once Bio-Rad fully occupies both buildings. The larger two-story building, which now is empty, could accommodate about 300 employees and the smaller one-story building could contain 200 employees.
“We have occupied one of the buildings for several years and we are looking forward to utilizing the additional building,” Cuccia said.
Bio-Rad is one of the Bay Area’s large publicly held companies, measured by revenue. Over the 12 months that ended in September, Bio-Rad earned $1.28 billion on revenue of $2.29 billion, according to the Yahoo Finance site.
Bio-Rad didn’t provide a time frame to move into the vacant building.
The tech company said this part of the East Bay is fertile ground for advanced technology firms.
“We believe this northeast extension of Silicon Valley is a rapidly growing commercial area for technology companies and feel Bio-Rad benefits from having a presence here,” Cuccia said.
Seeds Of Market Collapse In Fed’s ‘Autopilot’ Balance Sheet Normalization?
A lot of talk last week centered around the potential for the Federal Reserve to revise their planned “normalization” of holdings on their balance sheet. In particular in the post FOMC press conference, Powell said, “I think that the runoff of the balance sheet has been smooth and has served its purpose and I don’t see us changing that,”…and then “The amount of runoff that we have had so far is pretty small and if you just run the quantitative easing models in reverse, you would get a pretty small adjustment in economic growth, and real outcomes.”
Trouble is, the correlation of changes in the Fed’s balance sheet to asset prices are unambiguous that Powell is either unwittingly wrong or, more likely, knowingly collapsing an asset bubble that was in large part created by the Federal Reserve itself.
Fed Held Treasury’s
To set the table, the chart below shows the total Federal Reserve holdings of US Treasury’s (blue line) and weekly changes (yellow columns) from 2003 to present. The August ’07 through January ’09 period is noteworthy as the only period with a like Treasury holding drawdown to what we are presently witnessing. The subsequent highlighted areas show the periods of no growth in Treasury holdings, or most recently the outright declines. The most recent period represents just $230 billion reduction of a proposed $1 trillion total “normalization” in Treasury holdings.
Perhaps the reason equities tanked when Powell suggested that the Fed’s plan to normalize its balance sheet was on “auto-pilot” can be seen in the chart below. Red line is the Wilshire 5000 (representing all publicly traded US equities) and yellow columns are the weekly change in the Federal Reserve’s holdings of Treasury’s. On the five occasions (highlighted again) since 2007 that the Fed has ceased buying or outright sold Treasury’s, the Wilshire has gone into convulsions or outright cracked lower.
*Of course the 2016-2017 period of Wilshire gains versus no gain in Treasury holdings can perhaps be explained by “yuge” increases in deficit spending, impending tax cuts, and record corporate profits / buybacks during the tail end of ZIRP?
Fed Held MBS
To round out the picture, the growth in Federal Reserve held MBS (mortgage backed securities). Red line is total and blue line, the weekly change, since 2009.
To round out the picture, the growth in Federal Reserve held MBS (mortgage backed securities). Red line is total and blue line, the weekly change, since 2009.
For comparison sake, the relatively more benign (?) impact of the change in MBS holdings on the Wilshire 5000.
And if we stack the weekly change in the Fed’s Treasury and MBS holdings together against the Wilshire 5000…and extrapolate that this is just the beginning of a process that will continue until either the market collapses or the Fed has finished “normalization” sometime in 2021(?), the rush to the exits may be more easily understood.
Finally, we narrow in from 2017 through present (plus a callout for the initiation of the Fed’s balance sheet reduction). As the Fed has been ramping up its reductions, the market has become increasingly unstable even before the most recent fall began.
So What?
The Fed is communicating that they have shed less than $400 billion of perhaps a total $2 trillion “normalization”. Given the major market impacts during the relatively minor balance sheet reductions in 2007 and again at present, there is every reason to believe a 50%+ fall in the asset prices is imminent absent a policy “U-turn” by the Fed.
Of course, that “U-turn” would (will) be an admission that the process of hyper-monetization that began in 2009 was and still is a one-way ticket.
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