Vanda Pharmaceuticals (NASDAQ:VNDA) is “determining the appropriate next steps”
after the U.S. District Court for the District of Columbia ruled in
favor of the FDA in a lawsuit brought by the company prompted by a
dispute over the development of tradipitant (VLY-686) for the treatment
of gastroparesis.
The disagreement arose over the proposed treatment
duration. In April 2018, the company submitted a protocol for a 52-week
open-label extension (OLE) study for patients who had completed a Phase 2 clinical trial (four
weeks of therapy). A month later, based on agency feedback, it amended
the protocol of the Phase 2 to a three-month treatment duration while it
continued talks over a 52-week duration. In September 2018, it
submitted a protocol for a new 52-week OLE study.
In December 2018, the FDA instituted a partial
clinical hold (suspends enrollment but allows currently enrolled
patients to continue treatment) on the two proposed studies, adding that
toxicity testing in dogs, monkeys or pigs had to be done before it
would consider signing off on treatment beyond 12 weeks. The company filed suit in February 2019 (10-K, page 51).
A Phase 3 trial assessing a 12-week treatment duration is in process.
In a statement, Gilead Sciences (NASDAQ:GILD)
Chief Medical Officer Merdad Parsey, M.D., Ph.D., says the company has
supplied experimental antiviral remdesivir to a small number of patients
infected with 2019-nCoV, the coronavirus causing the current outbreak,
on an emergency basis since there are no approved treatments for the
respiratory ailment.
It is working with Chinese health authorities on a
clinical trial to determine the safety and efficacy of the nucleotide
analog (it is being developed to treat infections from Ebola and Marburg
viruses). It is also expediting laboratory testing of the drug against
2019-nCoV.
The New England Journal of Medicinereported that
the first U.S. infected person, a man in Seattle, was treated with
remdesivir on the seventh day of his hospitalization. Although he is
still an in-patient, all symptoms, except his cough (which has
improved), have resolved. The day after he received the drug, his
temperature dropped from almost 103 degrees Fahrenheit to 99.1, reaching
the normal range soon thereafter.
Five companies entered the public market this past week. The health clinic unicorn One Medical (ONEM) posted a 57.6% gain and was joined by titan of tin foil Reynolds Consumer Products (REYN), Black Diamond Therapeutics (BDTX), Arcutis Biotherapeutics (ARQT), and AnPac Bio-Medical Science (ANPC)
One Medical (ONEM)
priced at the low end of the range to raise $245 million at a $1.95
billion market cap. The company which owns and operates a 77 clinic
network of membership-based primary-care clinics expanded its gross
margin and accelerated growth in the 9mo19.
In the largest household goods IPO ever, Reynolds (REYN)
priced within the range at $26 to raise $1.2 billion at a market cap of
$5.3 billion. The company has cut $126 million in costs in the past two
years and 65% of 2018 sales were from products with #1 market share.
Reynolds finished up 9.8%.
Oncology biotech Black Diamond Therapeutics (BDTX)
priced above the range to raise $201 million at a market cap of $672
million. The Phase 1-ready biotech boasted a first day pop of 108%
despite its very early stage and limited portfolio, and finished up
107.8%.
Late-stage dermatology biotech Arcutis Biotherapeutics (ARQT)
priced its upsized deal at the high end of the range, raising $159
million ($50 million from existing shareholders) at a market cap of $657
million. The company’s leading candidate is currently in two pivotal
Phase 3 trials for psoriasis, with topline results expected in 1H21.
Arcutis finished up 28.2%
Chinese cancer screening provider AnPac Bio-Medical Science (ANPC)
priced its downsized IPO at the low end of the range to raise $16
million at a market cap of $134 million. The challenging environment for
Chinese issuers has carried into 2020, and AnPac finished down 15.7%.
Panic is a strange emotion. We can have extreme reactions to minor
events if our minds blow those up into catastrophes. We can also go
into denial about genuine threats. Panicky markets create opportunity,
as good assets are dumped alongside the not-so-good ones. What we don’t
know is whether panic is justified. As the saying goes, if you can
keep your head about you when everyone else is losing theirs, perhaps
you’re not aware of the situation!
The current situation with the coronavirus in China is a great example of a fear-filled scenario, as uncertainty is built into the situation and the possibility of a horrendous outcome
is present. Here are a few observations that may be helpful for
traders adjusting to markets quite different from what we’ve seen so far
this year:
* Volatility and Correlation – This is a different
market regime. Volume and volatility are greatly increased and
correlations among markets will be higher than recently has been the
case. When markets are more volatile, the price movement is sizing up
positions for you: risk and reward are much higher for a given
position. Adjusting sizing of positions to account for this change is
essential. Adjusting existing hedges to positions may also be
important, given shifts in correlations. For investors, portfolios that
looked invincible a week or so ago (think stocks and high-yield bonds)
may suddenly seem quite vulnerable.
* Following the Story Closely – I’m watching to see if
the virus story gains significant traction in the media outside Asia. I
have concerns. One data point: if you go online and try to order
surgical respirator masks, you’ll see a lot of sites and retailers that
are sold out. Another data point: China is treating this as a genuine emergency.
You don’t lock down tens of millions of people and build a new, large
hospital for nothing. Still another data point: Wuhan, the epicenter
of the viral outbreak, is also the location for China’s only bio-lab
designed to study BSL-4 level pathogens. Concerns about the safety of
the lab were voiced as early as 2017.
And I’m not sure we’ll ever know whether that lab has been involved in
the design and manufacturing of bio-weapons. Bottom line: when the
country closest to the situation is reacting the strongest, that
situation has to be taken seriously, especially given the mathematics of viral contagions.
* Thinking Through Broad Market Impacts – Increases in
volatility measures; flight to safe assets; and a new reason for
central banks to stick with low rate policies are some expectable
impacts. To the degree that this hampers growth in China, we can also
expect some re-rating of global growth estimates. If we thought tariffs
could slow China, this could have a far greater impact on the economic
activity of Chinese citizens and companies doing business in China.
Recall how Asian crises impacted the equity markets in the late 1990s.
That didn’t stop markets from rising to major highs by early 2000, but
that rise was punctuated by sharp declines and increased volatility.
I’m watching equity prices in China especially closely. Note that we
broke out to new highs earlier in the year and now have returned to the
prior trading range in FXI. Tough to imagine a roaring global bull
market and China not participating. Even tougher to imagine should
contagion meaningfully spread beyond China.
* Timing is Everything – Money managers who are paid
on annual performance had started 2020 nicely in the green with the bull
market in stocks and handsome returns from risk parity strategies. Are
they really going to want to go red on the year and face investors
already wondering why they don’t just invest passively in low-cost
ETFs? Just as we saw quite an unwind in January, 2018 following great
strength, a similar dynamic may be at work at present. Everyone goes
for exits at the same time when payouts are at risk. That created
opportunity later in 2018, but it was not a one and done day or two of
weakness either.
* Sometimes This Time Really *Is* Different – I recently wrote about the value of historical market analyses and how those can illuminate current market scenarios. I also noted
how, historically, very strong equity markets tend to be followed by
strength in the bigger picture. Market history is probably the best
guide we have to an uncertain future, but idiosyncratic influences can
make the present quite different from the past. Blindly following the
past can be dangerous for traders when they face unique situations such
as the September, 2001 attack.
If history plays out, the current situation could lead to a great
investment opportunity, such as those corrections in the late 1990s, but
could also last longer–and can be deeper–than investors can tolerate in
the short run. The one thing we know is that we are facing a more
uncertain global landscape, and that will likely be reflected in
volatility and increased herd behavior. http://traderfeed.blogspot.com/2020/01/trading-market-panicked-by-china-virus.html
Federal Reserve officials this week affirmed their commitment to
staying put on interest rates for the time being, but markets have other
ideas.
The fed funds futures market, where traders go to bet on the central
bank’s policy direction, is pricing in about a 58% chance of a rate cut
by June, according to the CME’s FedWatch tool. Traders are even making
room for two cuts, assigning a nearly 60% chance of another move lower
in December.
Expectations for an easing have accelerated as the coronavirus has begun to spread globally and threatens to dent China’s already decelerating growth. Stocks have surrendered their January gains and bonds are again flashing a recession signal through an inverted yield curve.
Markets, then, might be bracing against the chance of a contagion both medically and economically.
“The Fed won’t divorce itself from the human aspect of this. But it
will be about growth and whether or not this affects growth,” said
Quincy Krosby, chief market strategist at Prudential Financial. “China
is the second-largest economy in the world. If demand in China slows,
it’s going to affect some of the larger trading partners. It won’t just
be the U.S. That could stymie attempts of monetary and fiscal stimulus
to bolster global growth.”
‘Wait and see’
Central bankers tend to look through events like natural disasters
and the spread of infectious disease as one-off events unlikely to
figure into the longer-term picture and thus move interest rates.
But Fed Chairman Jerome Powell
did acknowledge the coronoavirus this week, and it’s like to come up
once officials resume making position speeches now that the January
meeting is past.
“The situation is really in its early stages and it’s very uncertain
about how far it will spread and what the macroeconomic effects will be
in China and its immediate trading partners and neighbors and around the
world,” Powell said at his post-meeting news conference
Wednesday. “So in light of that uncertainty, I’m not going to speculate
about it at this point. I would just tell you that, of course, we are
very carefully monitoring the situation.”
He added that future policy decisions are dependent on “the potential
ramifications for the U.S. economy and for the achievement of our dual
mandate” of full employment and price stability.
The Fed already is in an accommodative posture coming off a 2019
where it cuts its benchmark borrowing rate three times by a total of 75
basis points. A statement the policymakers released upped the central
bank’s commitment to boosting the inflation rate to 2%, which it considers healthy for a growing economy.
However, some officials have expressed unease with having rates so
close to zero and the limited room that would provide in an economic
downturn.
So a cut from here likely wouldn’t come unless the coronavirus presented a longer-term threat to global and U.S. growth.
“If you’re sitting at the Fed, you’re obviously worried about these
global risks. But you kind of just sit and wait,” said Jospeh LaVorgana,
chief Americas economist at Natixis. “I’d be more comfortable with them
keeping the accommodation going through the balance sheet” expansion
rather than rate cuts.
Markets, though, are clearly nervous.
Major averages Friday suffered through their worst day since October
as the Dow Jones Industrial Average had shed more than 500 points
heading into the last hour of trading. The Fed doesn’t directly respond
to market tumult, but is no doubt watching what happens.
“What this coronavirus has done now is allow the market to be that
much more worried about an inflection in the economy,” LaVorgna said.
“The smart move is the Fed should continue to expand the balance sheet
and continue to talk dovish, and then take a wait and see attitude.” https://www.cnbc.com/2020/01/31/markets-are-putting-pressure-on-the-federal-reserve-for-at-least-one-rate-cut.html
The World Health Organisation (WHO) has declared the coronavirus outbreak a public health emergency of international concern.
There have been nearly 10,000 cases of the so-called 2019-nCoV in China, 23 countries affected and more than 213 deaths globally.
China, Germany, the US and several other countries confirmed the virus can spread person to person, even from people without any symptoms.
Now there are reports of face mask shortages around the world, including Australia, the US and in many cities of China.
How concerned should we be about these shortages? Or can we just wrap
a scarf or piece of cloth around our face to protect against infection? How important are face masks?
For a disease with no drug or vaccine yet, non-pharmaceutical measures are the mainstay of control. This includes personal protective equipment, such as face masks.
But the type of face masks we typically see (surgical masks) do not provide a seal around the face or filtration of airborne particles, like those that may carry coronavirus.
They do however provide
a limited physical barrier against you transferring the virus from your
hand to the face, or from large droplets and splashes of fluid.
You also need to put on and remove your mask properly, as this advice from the World Health Organisation shows.
Disposable respirators
reduce the risk of respiratory infections. They are designed to fit
around the face and to filter 95% of airborne particles. However, these
should be reserved for health workers, who need them most. Do we really need these masks anyway?
In the disease epicenter, Wuhan, or on an evacuation flight
out of Wuhan, face masks are a sensible precaution. They are also
needed in other Chinese cities that are affected by the outbreak and
where transmission is ongoing.
However, in countries where transmission is not widespread and there
are only a handful of cases being treated in hospital isolation rooms,
masks serve no purpose in the community.
For example, there is no need for the general public to use face
masks in Australia, US and other counties where a few imported cases are
reported, and the risk of catching the virus is low.
Panic buying will result in a lack of supplies when we need them
most, for instance, if the number of cases escalates dramatically.
During the H1N1 influenza pandemic in 2009, the WHO did not recommend the general public use face masks.
The case is different for health workers, who face greater risks. It
is essential we provide health workers with the best protection, because
if they get sick or die, we lose our ability to fight the epidemic. During the SARS epidemic, 21% of all cases globally were health workers. How concerned should we be about the shortage of face masks?
This is a concern, especially if people hoard or stockpile face masks
when there is no need. We saw a shortage of masks early during the 2009
influenza pandemic. The surge in demand during such events also results
in higher prices.
Countries have started releasing stockpiles of masks and other
personal protective equipment to the health system. For example, the
Australian government this week released one million masks for general practices and pharmacists from the national medical stockpile.
There is also an existing shortage of masks in some areas of
Australia due to the bushfire response and face masks from the national
stockpile have mainly been released in those areas. What happens if the situation gets worse?
The number of cases is expected to increase and a large quantity of face masks may be needed.
If the current situation becomes a pandemic (an epidemic that goes
global), we could be facing a much greater demand for personal
protective equipment in the health sector alone.
In a modeled serious epidemic in Sydney of smallpox, if health workers use two disposable respirators a day for 6 months, over 30 million respirators will be needed for 100,000 clinical health workers.
China is the largest producer of face masks globally and it has already stepped up production to meet the high demand.
If large outbreaks happen in other countries, China may not be able
to meet the demand of face masks, respirators and other medical
supplies. Not all face masks are up to the job
Another problem is the sale of low-quality face masks due to a shortage of products on the market, as has been reported in China and Hong Kong.
Face masks are not regulated, may not filter the air, and also
typically allow large amounts of air in through the sides. With a
shortage of masks, low-quality masks could be exported to other
countries. If I can’t get hold of a mask, can I wrap a scarf around my face?
Wrapping cloth around your face probably will not protect you. That’s
because a scarf or a hanky does not provide a tight fit around the
face, isn’t designed to filter out air and may be contaminated.
However, during the Ebola epidemic, a woman nursed her entire family through the illness using home-made protective equipment and did not get infected.
In Asia, cloth masks are popular because they are cheap and re-usable. But they don’t protect you. Cloth masks may even increase your risk of infection, especially if you don’t wash them regularly. They may absorb moisture and provide a breeding ground for bugs.
So, ideally, people shouldn’t be using them. However, people may resort to cloth if there is no other choice. In a nutshell
While news of mask shortages might sound scary, if you are in a
country with few isolated cases, you don’t need one anyway as the risk
of infection is very low for the general public.
Panic buying or stockpiling also means there won’t be enough to go round should the situation worsen.
Even if you do use a face mask, they may protect against large
droplets (ones you can feel on your skin when someone sneezes) and
self-contamination from your hands, but not against smaller airborne
particles.
Don’t forget, hand-washing is also very effective in preventing infection.
More than 75,000 people—ten times the official tally of confirmed
cases—have been infected with the coronavirus in Wuhan, ground zero of a
global health emergency, according to research published Friday.
“We estimate that 75,815 individuals have been infected in Wuhan as
of January 25, 2020,” a team led by Gabriel Leung from the University of
Hong Kong reported in The Lancet.
As of January 31, the Chinese government said the number of confirmed
cases had risen above 9,700 for all of China, including 213 deaths.
For Hubei Province—including Wuhan, a city in central China of 11
million—the official figure was nearly 6,000 confirmed cases and just
over 200 deaths.
The World Health Organization on Thursday declared the outbreak a
global health emergency, but said it was not recommending any
international trade or travel restrictions.
“The apparent discrepancy between our modelled estimates of 2019-nCoV
infections and the actual number of confirmed cases in Wuhan could be
due to several factors,” Leung said in a statement.
A time lag between infection and symptom onset, delays in infected persons getting medical treatment, and the time needed to confirm cases with lab tests “could all affect overall recording and reporting,” he said.
The study found that each person infected with the virus, which
emerged in December, could have infected two to three individuals on
average, and that the epidemic had doubled in size every 6.4 days.
If the virus spreads as quickly on a national scale, “it is possible
that epidemics could be already growing in multiple major Chinese
cities, with a time lag of one to two weeks behind Wuhan,” said
co-author Joseph Wu, a professor at the University of Hong Kong.
“Large cities overseas with close transport links to China could potentially also become outbreak epicentres.”
If the new estimate of cases is accurate, it would mean that the
mortality rate of the 2019-nCoV virus is significantly lower than
preliminary figures suggested, with well under one percent of cases
proving deadly.
But a low mortality rate can still result in a large number of deaths if the virus spread widely.
The seasonal flu, for example, kills 290,000 to 650,000 people per year, according to the World Health Organization (WHO).
In the United States, the mortality rate among people infected with
influenza is 0.13 percent, the Centers for Disease Control has
calculated.
2019-nCoV is part of the coronavirus family, which was the source of two previous deadly epidemics.
The 2002/03 SARS outbreak (Severe Acute Respiratory Syndrome) started
in Guangdong Province and killed 774 people out of a total 8,096
infected. The 2012 MERS outbreak (Middle East respiratory syndrome)
killed 858 people out of the 2,494 infected.
The respective mortality rates for SARS and MERS patients was 9.5 and 34.5 percent, far higher than for the new coronavirus.
