Surge in Government Spending Drives Up GDPNow Forecast

 GDPNow data from the Atlanta Fed, chart by Mish

Chart Notes

• The blue line is the base forecast. It is about all the public sees or hears about when the BEA releases its GDP report.
• The red line is Real Final Sales (RFS). That is the bottom line estimate for the economy.  
• The yellow line (new this month) is RFS to domestic buyers, the rest is exports.
• The green line (also new this month) is RFS to private domestic buyers. It excludes government and an exports.

Although it's October 26, the recent data reflects changes in September due to report lags. 

GDPNow Current Estimate

Please consider the October 26 update to the GDPNow Forecast for Q3 GDP, emphasis mine.

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2022 is 3.1 percent on October 26, up from 2.9 percent on October 19. After recent releases from the US Census Bureau, the US Department of the Treasury's Bureau of the Fiscal Service, and the National Association of Realtors, the nowcast of third-quarter real government spending growth increased from 2.4 percent to 3.8 percent, while the nowcast of the contribution of the change in real net exports to third-quarter real GDP growth decreased from 2.23 percentage points to 2.19 percentage points.

This is the last GDPNow forecast for the third quarter. The first GDPNow forecast for the fourth quarter of 2022 will be on Friday, October 28. 

 

Spotlight on Current Numbers

• Base Number: 3.1 Percent 
• RFS: 3.1 Percent
• RFS Domestic: 0.8 Percent
• RFS Private Domestic: 0.2 Percent

Federal Debt Held By the Public 

Federal Debt Chart from St. Louis Fed

That chart is through the second quarter of 2022. It's guaranteed to rise for the third quarter. 

Federal Government Outlays 2021 vs 2022

• July 2021: $564 billion
• August 2021: $439 billion
• September 2021: $524 billion
• July 2022: $480 billion
• August 2022: $523 billion
• September 2022: $917 billion!

Data from US Treasury Statements.

Flashback September 15 2022

On September 15, I reported GDPNow Forecast for Q3 Plunges to 0.5 Percent on Weak Consumer Spending

Here are a couple of pertinent comments I made in that post.

Government spending added 0.6 percentage points to RFS and now helps to prop up the economy.

Quick - Send more money to Ukraine and escalate student loan writeoffs to aid spending.

What Happened Next?

• We had a massive surge in the base forecast from 0.3 percent to 3.1 percent.
• Meanwhile, RFS Private surged all the way to (drum roll please) to 0.2 percent.

Hooray, recession is postponed, assuming the GDPNow estimate is in the ballpark. Lovely. 

Exports and government spending led the surge. How much of those exports were military aid? 

Blue Chip Forecast 

GDPNow vs Blue Chip Forecast via Atlanta Fed

The Blue Chip professional forecasters do not seem as convinced as the Atlanta Fed and I am not either, but the Blue Chip data lags. It's only through October 5. 

The GDPNow model may or may not have gone a bit haywire on trade balances and government spending. We find out tomorrow. 

But there is a lesson here: Don't underestimate a determined president's ability to boost spending ahead of elections.  

https://mishtalk.com/economics/a-huge-surge-in-government-spending-drives-up-gdpnow-forecast

FDA Guidance Raises Concerns about Y-mAbs’ Neuroblastoma Treatment before Adcomm

 FDA scientists raised questions about the efficacy of Y-mAbs Therapeutics’ experimental neuroblastoma treatment, omburtamab, two days before the regulator’s Oncologic Drugs Advisory Committee meets to examine data supporting the BLA.

The adcomm released briefing documents that question the potential of omburtamab as a treatment for pediatric patients with CNS/leptomeningeal metastasis from neuroblastoma.

The FDA honed in on three key issues with the submitted data that could become a stumbling block for potential approval.

First, the FDA stated the external control population is not fit-for-purpose as a comparator. The regulatory team said this is primarily due to substantive differences between the study and control populations that limit the ability to attribute survival differences to the effect of omburtamab.

The FDA stated that patients who participated in the Y-mAbs study “received multimodality treatment for CNS/LM relapse” prior to receiving omburtamab.

The agency highlighted potential sources of bias in the treatment population that could have skewed trial results, and conducted its own analyses to determine if this was a factor. Its findings showed the results in survival “cannot be reliably attributed to omburtamab,” the FDA said in its briefing documents.

Lastly, the regulator noted that Y-mAbs' BLA does not include reliable response rate data supporting omburtamab’s efficacy. The FDA’s scientists said no patient in the Y-mAbs study demonstrated a response that can be “unequivocally attributed” to omburtamab.

Based on these concerns, the FDA staff said it cannot establish a substantive risk-benefit relationship for the use of omburtamab in patients with CNS/LM relapsed neuroblastoma.

“There is no reliable information on tumor response rate, leading to significant questions as to whether the submitted study can be considered an adequate and well-controlled trial necessary to establish effectiveness,” the FDA wrote.

CNS/LM is a rare and usually fatal complication of neuroblastoma in which the disease spreads to the membranes, or meninges, surrounding the brain and spinal cord in the central nervous system.

Omburtamab targets an immune checkpoint molecule called B7-H3.

In May, the FDA accepted the BLA under priority review. It was supported by data from two Phase II studies, 101 and 03-133. The data from these clinical trials has not yet been published. The company anticipates publishing the data later this year.

Y-mAbs’ shares have fallen more than 10% in Wednesday trading. BioSpace has reached out to the company but had not heard back as of press time. 

This isn’t the first time Y-mAbs has faced difficulty getting omburtamab across the finish line. Two years ago, the FDA handed the company a Refusal to File letter. The letter raised concerns about Chemistry, Manufacturing and Control module and also said the Clinical module of the BLA required further detail.

Earlier this month, Y-mAbs announced interim results from 32 patients who participated in a separate study of omburtamab radiolabeled with Iodine-131. One-year overall survival was 73.5%, with a median follow-up of 25 months, the company revealed.

Additionally, interim results from this study showed an objective response rate of 31.3% in patients with measurable disease. This was after central review based on criteria from both the Response Assessment in Neuro-Oncology and the European Association of Neuro-Oncology/European Society for Medical Oncology. A total of 75% of the patient population with measurable disease achieved disease control.

A little more than 40% of patients experienced a serious adverse event. Y-mAbs reported the SAEs were primarily related to myelosuppression.

This study is expected to bolster the clinical data submitted with the BLA, the company said.

The FDA has set a PDUFA date for Nov. 30.

https://www.biospace.com/article/fda-briefing-docs-raise-concerns-before-adcomm-for-y-mabs-neuroblastoma-treatment/

FDA keeps Jazz lung cancer accelerated OK for now despite failed trial, calls for withdrawal

 Even when a drug’s confirmatory trial fails, the FDA may still give companies a second chance before pulling accelerated approvals. Jazz Pharmaceuticals’ lung cancer drug Zepzelca is the latest to be granted that mercy, though not without some objections.

The FDA has turned down a citizen petition by the law firm Foley Hoag that had asked the agency to pull Zepzelca’s accelerated approval in previously treated small cell lung cancer.

The decision comes after Zepzelca, when used on top of chemotherapy, failed to beat chemo alone in a phase 3 trial in patients who had progressed after one prior platinum-containing therapy. After that trial fail, the FDA says it has signed off on two other phase 3 studies as the drug’s new confirmatory trials.

It’s not unprecedented for the FDA to allow a cancer drug’s accelerated approval to remain on the market after a failed confirmatory trial, especially when another confirmatory study has been agreed upon. For example, after a phase 3 flop, Merck & Co.’s Keytruda was able to temporarily keep its accelerated approval as a second-line liver cancer treatment pending a readout from an alternative confirmatory study. In that case, the FDA had backing from an independent advisory committee.

But this practice has raised one obvious question: Just how many chances can be afforded to an accelerated approval before a withdrawal?

“[I]t is possible that any drug will eventually yield significant results,” University of California Irvine health policy experts David Benjamin, M.D., and Vinay Prasad, M.D., wrote in an article in The Lancet Oncology about Zepzelca’s case in May. The two researchers voiced concerns that the FDA hadn’t already revoked Zepzelca at that time.

As a single agent, Zepzelca won its initial approval in 2020 based on tumor response data. In the approval letter, the FDA specified that a phase 3 study dubbed Atlantis could serve as the confirmatory trial, with data on patient survival expected by February 2021.

In December 2020, however, Jazz reported that Zepzelca’s combination with doxorubicin failed to outdo physician’s choice of chemotherapy in second-line SCLC. At that time, Jazz was quick to note that the study tested Zepzelca at 2mg/m2, which is a lower dose than the FDA-approved 3.2mg/m2.

In its response to the withdrawal petition, FDA acknowledged that Atlantis could have satisfied the postmarketing requirement of a confirmatory trial, and that its results aren’t adequate to verify Zepzelca’s benefit. But the agency disagreed that the drug should be pulled based on those results at this time.

“When a confirmatory trial does not meet its endpoint, it does not necessarily mean that the drug is not effective for the indication approved through accelerated approval,” the FDA said.

For Zepzelca specifically, the use of a lower dose “raises the possibility” that the main reason for the trial failure is that the drug simply didn’t achieve its intended efficacy based on the approved dose, the FDA said. Further, the addition of doxorubicin may have led to increased toxicity and hence increased discontinuation of therapy, the agency argued.

Moreover, while the FDA has recently approved new treatments in first-line SCLC, there’s still an unmet medical need in the second line, where Zepzelca is approved, the agency added.

To help seal the deal, Jazz has offered up two trials to confirm Zepzelca’s efficacy, and the FDA has signed off on them. The first one—and perhaps the more relevant one—launched in late 2021. Dubbed Lagoon, the three-arm trial will test Zepzelca monotherapy at the currently FDA-approved daily dose of 3.2mg/m2, and at 2mg/m2 in combination with chemotherapy irinotecan. Investigators will pit those study arms against physician’s choice of chemo in second-line SCLC.

But as UC Irvine’s Benjamin and Prasad noted in their article, the Lagoon trial bears an estimated primary completion date years from now—in May 2025.

“Moving forward, the oncology field should consider how many chances a drug should be given, and how long patients with cancer must wait for confirmatory survival results,” the two researchers wrote.

As for the other confirmatory study, Jazz is collaborating with Roche on a phase 3 trial called Imforte. The trial is combining Roche’s Tecentriq with Zepzelca as a maintenance therapy in patients with extensive-stage SCLC. The study’s estimated primary completion date is in September 2025.

https://www.fiercepharma.com/pharma/fda-lets-jazzs-lung-cancer-accelerated-approval-stay-now-despite-failed-trial-and-call

Flu and RSV viruses found to fuse together to form hybrid viruses

 A team of researchers at the University of Glasgow has found that when placed together in human tissue, the influenza virus A and the respiratory syncytial virus (RSV) can fuse together, forming a hybrid virus. In their paper published in the journal Nature Microbiology, the group describes how they conducted experiments that involved mixing different types of viruses in Petri dishes containing human lung cells and what they found by doing so.

Prior research has shown that the influenza virus tends to infect the windpipe, throat and nose, resulting in flu-associated symptoms. RSV infections, on the other hand, tend to infect cells in the throat and lungs. As cases of RSV have been rising as the flu season approaches in the Western hemisphere this year, the researchers wondered what happens to people who are unfortunate enough to be infected by both viruses at the same time.

In their work, the researchers placed lung cells in a Petri dish and then added samples of both viruses. They then stood back and watched to see what would happen. They found that after infecting the cells the two types of viruses fused into a hybrid virus. The result was a virus that was shaped somewhat like a palm tree where the RSV virus formed the trunk and the influenza virus formed the leafy part at the top.

In taking a closer look at the hybrid, the researchers found that it was capable of infecting other nearby cells. They also found that when they did so, antibodies that arrived to fight the flu infection did not work as they usually would. This was because the hybrid had infected some of the cells with RSV proteins.

Though they have not verified it yet, the researchers suspect the hybrid is likely more able to infect a wider type of cells than either of the viruses alone. They also note that such infections could potentially lead to serious lung infections because RSV viruses tend to travel deeper into the lungs.

The researchers plan to continue their study of the hybrid virus, looking first to determine if it can form inside of the human body. They also want to know if other types of hybrid viruses are forming when people are infected with more than one virus.

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Explore further

Time-dependent viral interference between influenza virus and coronavirus in the infection of differ

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More information: Joanne Haney et al, Coinfection by influenza A virus and respiratory syncytial virus produces hybrid virus particles, Nature Microbiology (2022). DOI: 10.1038/s41564-022-01242-5

https://medicalxpress.com/news/2022-10-flu-rsv-viruses-fuse-hybrid.html

How tumors suppress the development of metastases

 Why do metastases often only appear after the original tumor has been surgically removed? Scientists from the German Cancer Research Center (Deutsches Krebsforschungszentrum, DKFZ) and the Mannheim Medical Faculty of Heidelberg University have now published an explanation for this phenomenon.

They were able to identify a messenger substance of the cancer cells that locally promotes the growth of the primary tumor. In the blood, the messenger is split into two fragments, one of which suppresses metastasis. Tumor-bearing mice treated with the metastasis-inhibiting fragment survived cancer longer than untreated animals.

Cancer doctors are familiar with the observation: in many of their patients, the usually life-threatening metastases only appear after the original tumor has been surgically removed. This phenomenon is particularly common in breast cancer and black skin cancer. Physicians have derived the concept of "concomitant tumor resistance" from this observation. It states that the original cancer focus, also called the primary tumor, can suppress the growth of the daughter tumors known as metastases.

The causes of this phenomenon are as yet poorly understood. Experts assume that the immune system plays a role, together with so-called angiogenic factors, which influence the connection of the metastases to the blood vessel system. From a size of about one millimeter, the daughter tumors depend on being supplied by blood vessels.

Researchers were able to show several years ago that, depending on the tissue environment, tumors either release messenger substances that promote the formation of new blood vessels or factors that suppress the sprouting of new veins.

Scientists led by Hellmut Augustin and Moritz Felcht of the German Cancer Research Center and the Mannheim Medical School of Heidelberg University have now taken a closer look at the messenger angiopoietin-like 4 (ANGPLT4). "We became aware of ANGPLT4 because there are many contradictory publications on this factor," Augustin said.

"While ANGPLT4 was initially described as promoting the formation of new blood vessels and thus also promoting cancer, other studies were able to prove the exact opposite and show that ANGPLT4 inhibits the development of metastases."

In comprehensive series of experiments on human and mouse tumors, the Heidelberg-Mannheim team elucidated a surprising mechanism. Among 38 different messenger substances that act on vascularization and possibly on concomitant tumor resistance, ANGPLT4 was found to be one of the molecules most strongly correlated with progressive tumor growth

ANGPLT4 is produced by cells of the primary tumor and locally promotes its growth. However, if the messenger substance is released into the bloodstream, it is cleaved. The two cleavage products are called nANGPLT4 and cANGPLT4. For reasons not yet fully understood, the n fragment (nANGPLT4) is found almost exclusively in serum. nANGPLT4, however, binds to a different receptor than either the intact molecule or the c fragment.

This receptor switch leads to the suppression of vessel growth and thus also the outgrowth of macrometastases. The researchers demonstrated this in numerous experimental approaches: Tumors transferred to mice formed fewer metastases after treatment with the n-fragment, and the animals survived longer.

"Of course, surgical removal of the primary tumors remains the gold standard in the treatment of most cancers," says Moritz Fecht. "But we now understand that this simultaneously dries up the source of the metastasis-suppressing n fragment. If nANGPLT4 is missing, individual dormant metastatic tumor cells can become active and grow into a dangerous macrometastasis," says Moritz Felcht.

"By cleaving the protein in the body and the resulting opposite functions in tumor metastasis, we can now explain the contradictory results of previous studies."

"Many cancer patients could benefit from drugs that effectively suppress metastatic outgrowth. However, some of these agents have already failed in clinical trials. But in view of the enormous gain that such a drug could mean for those affected, it is worthwhile to continue researching ANGPLT4 preclinically and then clinically," Hellmut Augustin says.

The research was published in the Journal of Experimental Medicine.

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Explore further

Preventing metastasis: An antibody with therapeutic potential

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More information: Corinne Hübers et al, Primary tumor–derived systemic nANGPTL4 inhibits metastasis, Journal of Experimental Medicine (2022). DOI: 10.1084/jem.20202595

https://medicalxpress.com/news/2022-10-tumors-suppress-metastases.html

Cyclacel: Prelim Data in Phase 1/2 Clinical Trial of Oral Fadraciclib in Solid Tumors and Lymphoma

  Cyclacel Pharmaceuticals, Inc. (NASDAQ: CYCC, NASDAQ: CYCCP; Cyclacel or the Company), a biopharmaceutical company developing innovative medicines based on cancer cell biology, reported today preliminary dose escalation data from its ongoing 065-101 Phase 1/2 clinical study of oral fadraciclib, a cyclin dependent kinase (CDK) 2/9 inhibitor, for the treatment of patients with advanced solid tumors and lymphoma. Of the 18 patients evaluable for response, two out of three T cell lymphoma patients treated achieved partial response and 11 out of 15 patients with various solid tumors achieved stable disease. No dose-limiting toxicities have been observed thus far. Data were presented during a poster presentation at the 34^th EORTC-NCI-AACR (ENA) Symposium on Molecular Targets and Cancer Therapeutics, which is being held on October 26-28, in Barcelona, Spain.

https://www.biospace.com/article/releases/cyclacel-reports-preliminary-data-from-its-phase-1-2-clinical-trial-of-oral-fadraciclib-in-patients-with-solid-tumors-and-lymphoma-at-ena-2022/

MS Drug Advances from Merck, BMS and More Showcased at ECTRIMS Conference

 Merck, Bristol Myers Squibb, Biogen and others presented their latest data from multiple sclerosis (MS) programs at the 38th European Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS) conference in Amsterdam. 

Some data highlighted a mostly positive overlap with treatment regimens for other diseases such as COVID-19.

Covid-19 Vaccine Response Studies

A post-hoc analysis of vaccinated patients in Merck's evobrutinib trial extension showed 96% of patients with RMS treated with evobrutinib withstood two doses of an mRNA COVID-19 vaccine.

Researchers said this increased antibody response demonstrated a preserved response to novel and recall antigens.

This is the first time a BTK inhibitor in RMS has shown such findings, highlighting the modulation of B cell function. This data informs a potential alternative treatment to B cell depletion approaches.

Merck's Evobrutinib and BMS' Ozanimod Show Long-Term Efficacy

EMD Serono, the healthcare business sector of Merck KGaA, Darmstadt, Germany, reported Phase II clinical trial data demonstrating the success of investigational evobrutinib with RMS patients.

After three and a half years of treatment, RMS patients showed low annualized relapse rates (ARR) and stable scores on the Expanded Disability Status Scale (EDSS). Throughout the duration of the open-label extension of the trial, the number of T1 gadolinium-enhancing (Gd+) lesions and T2 lesion volume also remained low.

Evobrutinib works as a CNS penetrant immunomodulator, meaning it could be an effective treatment for RMS due to the way it approaches peripheral and central drivers of inflammation, by inhibiting Bruton's tyrosine kinase signaling in B cells and microglia.

Biogen Reports Individualized Disease Management Studies for MS

An analysis of RMS patients, age 21 and older, who took at least one prior disease-modifying treatment, showed a higher overall improvement in disease activity when treated with TYSABRI versus Ocrevus, Biogen reported. This higher improvement was measured via disease activity and emotional, physical and cognitive symptoms.

Overall, patients preferred the TYSABRI subcutaneous route of administration over the Ocrevus intravenous route of administration. 

Atara Announced New MRI Biomarker 

ATA188 is an investigational Epstein-Barr virus (EBV)-targeted T-cell immunotherapy to be used in progressive MS. 

“New biomarker imaging data presented at ECTRIMS suggest brain structural changes and potential remyelination may underlie clinical disability improvements observed with ATA188 treatment,” said Atara's Chief Medical Officer A.J. Joshi in a  press release.

https://www.biospace.com/article/biopharma-reports-out-ms-drug-advances-at-ectrims-conference-/