Cardinal Health Inc.'s stock (CAH) slid 1% in premarket trade Tuesday, after the health services company swung to a loss for its fiscal fourth quarter from a profit a year ago. Dublin, Ohio-based Cardinal Health had a loss of $64 million, or 25 cents a share, for the quarter, after income of $138 million, or 50 cents a share, in the year-earlier period. The loss was mostly due to a non-cash, pre-tax goodwill impairment charge of $368 million in the Medical segment. Adjusted per-share earnings came to $1.55, ahead of the $1.49 FactSet consensus. Revenue rose 13% to $53.5 billion from $47.1 billion a year ago, also ahead of the $52.7 billion FactSet consensus. Chief Executive Jason Hollar said fiscal 2023 was an inflection point for the company, which saw growth in the pharmaceutical segment and "significant improvement" in the medical segment. The company is raising its fiscal 2024 guidance and now expects EPS to range from $6.50 to $6.75, up from prior guidance of $6.45 to $6.70. Revenue is expected to grow 10% to 12%. The stock has gained 21% in the year to date, while the S&P 500 has gained 17%.
Tuesday, August 15, 2023
T2 Biosystems stock surges more than 14% premarket to continue rally
Shares of micro cap T2 Biosystems Inc. (TTOO) rose 14.3% in premarket trades Tuesday, continuing a rally that saw the stock end Monday's session up 15.4%. The stock is on a two-day winning streak after ending Friday's session up 3.3%. T2 has been generating meme-like buzz recently and its stock has risen 323.9% in the last month. The company, which describes itself as a leader in the rapid detection of sepsis-causing pathogens and antibiotic-resistance genes, has a market cap of $112.72 million. Last week Alliance Global Partners raised its T2 price target to 18 cents from 7 cents following the company's second-quarter results but maintained its neutral rating for the company. "T2 announced Q2 revenue inline with their preannounced figure, but operating loss was greater than we anticipated," wrote Alliance Global Partners analyst Ben Haynor. "We continue to be believers in T2's technology, but overriding nearterm capital needs keep us on the sidelines." As of June 30, 2023, T2 had cash and cash equivalents of $16.1 million. The company raised $18.5 million in net proceeds through at-the-market sales in the second quarter and on July 6 converted $10 million, or approximately 20%, of its term loan into equity. All of the three analysts surveyed by FactSet have a hold rating for T2. The company's stock has fallen 72.5% in 2023, compared with the S&P 500 index's gain of 16.9%.
Galecto to discontinue development of lung disease treatment
Galecto Inc said on Tuesday it will dicontinue development of its lung disease treatment after it failed to meet its primary goal in a mid-stage study.
https://finance.yahoo.com/news/galecto-discontinue-development-lung-disease-113556937.html
Monday, August 14, 2023
PBOC Cuts Rates In Surprise 'Easing' Ahead Of Dismal China Data; Japan Economy Surged In Q2
An Asian avalanche of data and headlines:
Japanese GDP surged in Q2 - doubling expectations on export-led growth
Japanese domestic spending weak
PBOC surprises with rate-cuts (biggest MLF cut since 2020)
MoF fix dramatically stronger than offshore yuan
Yuan tumbles below 2023 lows on rate-cuts
China 10Y yield drops to lowest since 2020
Chinese macro data missed across the board
China gold premium to London is soaring
China did not report its (record high) youth unemployment rate
The Japanese economy grew dramatically faster than expected in the second quarter, driven by strong exports data.
GDP grew at an annualized 6.0% in Q2 (the strongest growth since Q4 2020), more than double the 2.9% growth expected...
Source: Bloomberg
Outside of the post-COVID chaos, this is strongest annualized GDP growth for Japan since Q1 2015, even as economists see headwinds on the horizon in the US, China and Europe.
The export growth was helped by a plunge in the yen during Q2 (which, again outside of the COVID craziness, is the biggest quarterly drop in the Japanese currency since Q4 2016).
In fact, as Bloomberg reports, the yen has tumbled back toward a level that triggered the first yen-buying intervention since 1998 in September as yield differentials widened.
“We believe the Ministry of Finance will start pushing back in the 145-148 range,” wrote Joey Chew, head of Asia FX research at HSBC Holdings Plc in a note.
“But, if it does not, short positions on yen will likely be rebuilt further.”
Source: Bloomberg
Perhaps the apparent strength of the Japanese economy will provide 'room' for the 'buying' intervention to stop the yen's freefall?
The anemic yen has been a double-edged sword for the economy, said Takahide Kiuchi, an economist at the Nomura Research Institute.
“It can be a positive for exporters, increasing competitiveness and revenue,” he said.
“However, it could undermine consumption.”
And sure enough, while strong external demand supported the growth, domestically things aren't so rosy as rising inflation made domestic households more hesitant to spend with private consumption dropping 0.5% QoQ - the weakest since Q1 2022...
“Compared with the January-March period, the improvement seen in consumption driven by increased activity has weakened,” said Harumi Taguchi, principal economist at S&P Global Market Intelligence.
“Rising prices are increasingly causing consumers to hold off on buying items.”
Source: Bloomberg
Additionally, the high reliance on exports makes the recent growth vulnerable to other countries’ malaise. Recent softness in China, Japan’s largest trade partner, is a particular source of worry.
“We see clear signs of slowing in China and Europe,” Mr. Kiuchi, of the Nomura Research Institute, said.
That means “the stability of this high growth is unclear.”
Japan is the world’s third-largest economy, and the largest creditor by far... meaning its growth or fragility reverberates around the world...
“The only problem - it was all export driven and masked rocky conditions in domestic demand," Bloomberg economist Taro Kimura explains.
"The drop in consumption, despite a tailwind from this year’s reopening, reflects the impact of wages lagging far behind cost-push inflation.”
...but tonight we also get a data dump from the world's second largest economy - China.
Amid a growing debt crisis, China's trade outlook looking similarly dire (with overseas shipments tumbling in July by the most in more than three years, and imports contracted for a fifth consecutive month), and China’s banks having extended the smallest amount of monthly loans since 2009, and aggregate financing was less than half the level forecast by economists; the signals heading into tonight's data suggest that China’s economy weakened further in July and Beijing was slow to arrest the decline.
Ahead of the China data dump, there was much excitement as the PBOC surprised with more 'easing' - sooner than most expected:
PBOC conducts 401b yuan of 1-year medium-term lending facility at a yield of 2.5% vs 2.65% in the last operation, the central bank says in a statement.
PBOC also sells 204b yuan of 7-day reverse repo at a yield of 1.8% vs 1.9% in the last operation
Today’s MLF operation is “totally out of expectation,” says Becky Liu, head of China macro strategy of Standard Chartered Plc:
“The cut has been aggressive, indicating the urgency of stepping up measures to shore up credit growth,” Liu notes that today’s cut “will almost certainly” be followed by cuts to China’s loan prime rates on August 20.
This was the second cut this year (the last one was in June)...
Source: Bloomberg
While the PBOC delivered a surprise rate cut, its net injection this month was merely one billion yuan, the smallest since December, when the central bank started to pumping in funds in the operation.
Given the slump in new yuan loans and aggregate financing last month, this is understandable - there’s not much demand for credit at the moment.
Redmond Wong, market strategist at Saxo Capital Markets, makes the point that today’s unexpected rate cuts follow incredibly weak loan data released late last week. Chinese banks extended the smallest amount of monthly loans since 2009 in July.
“The PBOC wants to get the banks to lend, but it seems it’s not being successful as both loan demand from households and credit-worth corporations have been weak. Banks are reluctant to lend to property companies and other private enterprises with more uncertain repayment abilities. Cutting rates can help at the margins but it may not be very effective in boosting loan demand when confidence is still weak in the corporate and household sectors.”
China fires a mini-bazooka...
The surprise action weakened the offshore yuan further (below 2023 lows)...
Source: Bloomberg
And China’s 10-year government bond dropped 6bps to 2.56%, lowest since 2020...
Source: Bloomberg
And as the yuan weakens, we note that China’s gold price is rising against levels in London, a trend that local traders say is due to government curbs on imports of the precious metal.
Source: Bloomberg
Gold's attractiveness as a potential capital outflow could be rising on the back of the weaker domestic currency, and authorities may potentially stymie that trade - lending some support to the yuan - by squeezing import quotas.
And an additional sign of support is the dramatically 'strong' fixing for the Yuan...
Source: Bloomberg
In context, that is a serious gap and we note that China has set a stronger-than-expected fixing everyday since late June (to little or no avail)...
Source: Bloomberg
And that was all before the deluge of data (suggesting Beijing knew exactly what was about to hit the wires).
Everything Missed
The July data was as follows:
China Industrial Production YTD YoY +3.7% vs +3.8% exp and +3.8% prior
China Retail Sales YTD YoY +7.3% vs +7.6% exp and +8.2% prior
China Fixed Asset Investment YTD YoY +3.5% vs +3.7% and +3.8% prior
China Property Investment YTD YoY -8.5% vs -8.1% exp and -7.9% prior
China Surveyed jobless rate rose to 5.3% vs 5.2% exp and 5.2% prior
China Youth (16-24) Unemployment Rate was not disclosed in this report (was at record high 321.3% last month)
Now that explains why they pre-emptively cut rates...
Perhaps the most notable is the fact that NBS' Fu says China will pause releasing the youth unemployment rate due to complexities in surveying.
The bureau will conduct more research on the data point, he adds.
Raymond Yeung, chief economist for greater China at Australia & New Zealand Banking Group Ltd.:
“July’s economic data are significantly below market consensus. The data turn out to have rationalized the surprising interest rate cut early in the morning.
In addition, the authorities are also aware of the recent financial events in the trust sector. There is a pressing need to revive market sentiment too.”
Finally, we note that this all matters and the Biden administration knows it.
Treasury Secretary Janet Yellen called China’s economic woes a “risk factor” for the US, but one that doesn’t significantly dent her optimism for the American economy.
“China’s slowdown will have the largest impact on its Asian neighbors, but there will be some spillovers to the United States,” Yellen told reporters following a speech in Las Vegas, where she’s touting the economic policy accomplishments of the Biden administration.
Yellen’s comments come days after President Joe Biden blasted China’s economic problems as a “ticking time bomb” and referred to Communist Party leaders as “bad folks.”
https://www.zerohedge.com/economics/japanese-economy-surged-q2
Gene therapy can stop cell division in particularly aggressive type of cancer
A new study presents a promising treatment method for so-called fusion-driven cancers, which are currently often difficult to cure. These fusion-driven cancers are caused by an error in cell division that creates a fusion of different genes. This fusion causes the cancer and drives the uncontrolled cell growth.
Using the so-called molecular scissors CRISPR/Cas9, researchers from Aarhus University have developed a gene therapy that can stop cell division in a subtype of the aggressive blood cancer acute myeloid leukaemia (AML).
The study has just been published in the scientific journal Leukemia. Even though the study focuses on blood cancer, many other types of cancer are also driven by fusion genes, for example some lung cancers and sarcomas. The researchers hypothesize that this technology can become a platform technology for specific types of cancer driven by fusion genes.
A paradigm shift in cancer therapy
So far, this gene therapy has been carried out in the laboratory on cell lines and mice. But the results are an important step towards developing a new form of treatment based on targeting the drivers of the disease, explains Associate Professor Maja Ludvigsen from the Department of Clinical Medicine at Aarhus University, who is one of the authors behind the study.
In brief, the researchers have succeeded in cutting genes that, in fusion cancers, are fused incorrectly together and which send a fatal signal to cells to begin dividing uncontrollably. When the fusion gene have been cut, the cancer cells stop dividing.
In this study, the researchers have applied this treatment to cells in a laboratory setting by opening the cell membrane using electricity, a recognised laboratory method that allows substances to pass through the cell membrane. In this way, the 'scissors' -- the enzyme Cas9 -- can target the gene together with guides that consist of RNA (guideRNAs).
"You can use this method in the laboratory, but not in patients. We need to investigate how we can get both scissors and guideRNAs into the cancer cells," says Maja Ludvigsen, who adds that the authors are already working on using fat particles as a delivery method in a parallel study. This method worked very well as a delivery strategy with the mRNA vaccine against Covid 19.
So far, the researchers have inserted cell lines with cancer in the flanks of mice. The non-treated cell lines grew into large tumours, while the treated cells, that had been exposed to the gene therapy before being inserted into the mice, resulted in much smaller tumours or none at all.
"Our gene therapy seems to be extremely effective in the laboratory. We don't know whether we can make the therapy effective enough to target all the cancer cells. But there is a hypothesis within the field of cancer research that, if you can target the majority of the cancer cells with a treatment, the immune system will take care of the rest," says Maja Ludvigsen.
The next task will be to demonstrate that the treatment with the most optimal delivery method also works in mice that have the specific fusion-driven subtype of leukaemia.
The researchers are also aiming to examine whether this treatment strategy could be a new and better treatment option for other fusion-driven cancers. But there is still some way to go. For example, the researchers do not yet know about the potential side effects of this gene therapy.
"One of the challenges is that if we cut the DNA in a cancer cell where the chromosome is placed incorrectly, then we'll also be cutting the same chromosome in other healthy cells. Since the fusion gene is not present in healthy cells, our theory is that healthy cells can repair their DNA themselves, but naturally we have to look into this more closely," explains Maja Ludvigsen.
Hope for a more effective treatment
The results created in collaboration between researchers from the Department of Clinical Medicine and the Department of Biomedicine at Aarhus University represent an important step towards understanding and treating fusion-driven cancers.
"This is still in the stage of translational research, but it's a breakthrough because we've succeeded in using the CRISPR/Cas9 technology as target treatment for the specific fusion gene that drives the cancer," says Maja Ludvigsen, who hopes clinical trials with this form of treatment can begin within five years.
"Even though there's still a lot of work to be done, the results give hope for an effective treatment for patients who have had limited opportunities until now. I hope that, in the future, we'll be able to introduce a more gentle and more effective treatment without serious side effects," says Maja Ludvigsen.
Facts: What is fusion cancer?
- Cancer occurs when cells begin to divide uncontrollably somewhere in the body. One of the reasons for this is the so-called fusion genes.
- In fusion cancer, genes fuse together incorrectly during cell division. Moreover, the fusion genes signal to the cells to divide uncontrolled and intensively, thereby driving the disease.
- In lung cancer, leukaemia and sarcomas in soft tissues are all examples of cancers with fusion-driven subtypes.
- There are also other types of cancer that are not caused by fusion genes, but rather by other genetic abnormalities, including gene mutations.
Journal Reference:
- Signe Neldeborg, Johannes Frasez Soerensen, Charlotte Thornild Møller, Marie Bill, Zongliang Gao, Rasmus O. Bak, Kasper Holm, Boe Sorensen, Mette Nyegaard, Yonglun Luo, Peter Hokland, Magnus Stougaard, Maja Ludvigsen, Christian Kanstrup Holm. Dual intron-targeted CRISPR-Cas9-mediated disruption of the AML RUNX1-RUNX1T1 fusion gene effectively inhibits proliferation and decreases tumor volume in vitro and in vivo. Leukemia, 2023; DOI: 10.1038/s41375-023-01950-9
'Infant formula safety checks can be improved with stratified sampling'
Producers of infant formula employ comprehensive food safety systems, including product testing to ensure those systems are working. A new study from the University of Illinois Urbana-Champaign finds that some testing methods are more powerful at catching contaminants than others.
Spacing out samples over time in a stratified sampling pattern is better at catching risky pathogens like Cronobacter than randomly sampling from the product as it is being produced, the researchers found. Furthermore, while taking more samples of product generally increases the chance to catch the pathogen, there is a point after which it is unlikely to increase safety.
"Our findings show that existing sampling and testing guidance is powerful, at least for the one hazard profile our team had access to for the study," said project lead Matthew J. Stasiewicz, associate professor in the Department of Food Science and Human Nutrition (FSHN), part of the College of Agricultural, Consumer and Environmental Sciences at U. of I.
"However, this work also highlights the need for additional research and data sharing efforts into patterns of contamination in infant formula production, so that sampling and testing can be better matched to current needs," he stated.
Safety systems for infant formula production include control points like milk pasteurization and steps to prevent contamination such as sanitary facility design and regular cleaning and sanitation. Product testing is an additional tool that producers are using to verify safety, and it must be powerful enough to catch a major failure before a potentially risky product is released to customers.
The study, published in the Journal of Food Protection, was supported by the Institute for the Advancement of Food and Nutrition Sciences (IAFNS) Food Microbiology Committee. The researchers used computer models to simulate sampling and testing finished formula to gauge the power of current national and international guidelines for testing programs and suggest ways to do better.
The process was based on detecting a realistic hazard, defined by what was observed in samples from Cronobacter-contaminated batches produced in Europe in the 2010s, the most current data available. The researchers found that safety plans with 30 or more grab samples had a very high probability of detecting hazards. However, there was a point of diminishing returns, where very high sample numbers -- like testing every can produced -- would not be meaningfully more powerful. They concluded that systematic or stratified random sampling patterns are more effective than simple random sampling for bulk powder testing.
"In addition to analyzing relevant scenarios, we built a web app that allows industry stakeholders to simulate various sampling scenarios and gain a deeper understanding of the effectiveness of sampling plans specific to their plants. With this knowledge, producers can proactively address risks and optimize current sampling practices," said the study's lead author Minho Kim, a doctoral student in FSHN.
For parents who are concerned about their infants becoming ill from bacterial contamination of formula, the researchers advise they talk to their doctor about safer formula feeding.
For example, one way to further reduce bacteria in formula is using hot water during reconstitution and then cooling it to body temperature prior to feeding. This simple preventative measure can greatly reduce the risk from Cronobacter contamination according to an international risk assessment. However, steps like this require care to avoid the risk of children being burned by the heated bottles.
Journal Reference:
- Minho Kim, Gustavo A. Reyes, Xianbin Cheng, Matthew J. Stasiewicz. Simulation Evaluation of Power of Sampling Plans to Detect Cronobacter in Powdered Infant Formula Production. Journal of Food Protection, 2023; 86 (8): 100115 DOI: 10.1016/j.jfp.2023.100115
Study shows promise of gene therapy for alcohol use disorder
A form of gene therapy currently used to treat Parkinson's disease may dramatically reduce alcohol use among chronic heavy drinkers, researchers at Oregon Health & Science University and institutions across the country have found.
The study in nonhuman primates showed that implanting a specific type of molecule that induces cell growth effectively resets the brain's dopamine reward pathway in animals predisposed to heavy drinking. The gene therapy procedure involves brain surgery, and may be useful in the most severe cases of alcohol use disorder.
"This was incredibly effective," said co-senior author Kathleen Grant, Ph.D., professor and chief of the Division of Neuroscience at OHSU's Oregon Primate National Research Center, or ONPRC.
The study published today in the journal Nature Medicine.
The implanted virus is not harmful and carries a gene that codes for the protein known as glial-derived neurotrophic factor, or GDNF. It was injected in a specific area of the brain of a group of rhesus macaque monkeys that voluntarily and heavily drink ethanol diluted in water. After four macaques underwent the procedure, researchers found their consumption dropped by more than 90% compared with a control group.
"Drinking went down to almost zero," Grant said. "For months on end, these animals would choose to drink water and just avoid drinking alcohol altogether. They decreased their drinking to the point that it was so low we didn't record a blood-alcohol level."
GDNF is known as a growth factor -- meaning it stimulates cells to rapidly increase in number -- which enhances the function of neurons in the brain that synthesize dopamine, a feel-good chemical released in the brain. In the case of alcohol use disorder, chronic drinking decreases the release of dopamine.
"Dopamine is involved in reinforcement of behavior, and in people finding certain things pleasurable," Grant said. "Acute alcohol use can increase dopamine. However, by drinking it chronically, the brain adapts in such a way that it decreases the release of dopamine. So when people are addicted to alcohol, they don't really feel more pleasure in drinking. It seems that they're drinking more because they feel a need to maintain an intoxicated state."
Researchers enhanced dopamine by delivering GDNF to an area of the brain where dopamine is located.
Veterinarians at the ONPRC used magnetic resonance imaging to guide the insertion of GDNF, using an adeno-associated virus in the ventral tegmental area of the brain. The adeno-associated virus is a single-stranded DNA virus that does not cause disease in its subject. The procedure is already used in adult patients with Parkinson's disease and in children to treat a rare genetic disorder known as aromatic L-amino acid decarboxylase deficiency that, among other symptoms, causes difficulty with movement.
The results were dramatic.
"The monkeys that were treated with this gene permanently started overexpressing dopamine and they decreased their drinking substantially," Grant said.
Alcohol use disorder and deaths related to alcohol remains a significant problem in the United States and around the world, with an estimated 140,000 deaths annually from alcohol-related causes, according to the National Institute on Alcohol Abuse and Alcoholism of the National Institutes of Health. The estimated worldwide annual death toll is estimated at 2.4 million.
The new study describes a form of treatment that permanently alters the brain through surgery, so the therapy would be limited to those with the most severe forms of alcohol use disorder, Grant said.
"It would be most appropriate for people who have already shown that all our normal therapeutic approaches do not work for them," she said. "They are likely to create severe harm or kill themselves or others due to their drinking."
Krystof S. Bankiewicz, M.D., Ph.D., of the University of California, San Francisco and The Ohio State University, is co-senior author along with Grant.
Co-authors include Matthew M. Ford, Ph.D., of OHSU and Lewis & Clark College; Lauren E. Vanderhooft and Jodi L. McBride, Ph.D., of OHSU; Brianna E. George, Katherine M. Holleran, Emily G. Peck, Monica H. Dawes, and Sara R. Jones, Ph.D., of Wake Forest University; Victor S. Van Laar of Ohio State; Jerusha Naidoo, Piotr Hadaczek, Ph.D., and Lluis Samaranch, Ph.D., of UCSF and Ohio State; and Kousaku Ohno, John Bringas and John R. Forsayeth, Ph.D., of UCSF.
Funding support was provided by the National Institute on Alcohol Abuse and Alcoholism of the National Institutes of Health, grant award R01AA024757; and NIH awards U01 AA013510, U01 AA014091, P60 AA010760, R24 AA019431, P51 OD011092 and P50 AA026117. The content is solely the responsibility of the authors and does not necessarily represent the official views of the NIH.
Journal Reference:
- Matthew M. Ford, Brianna E. George, Victor S. Van Laar, Katherine M. Holleran, Jerusha Naidoo, Piotr Hadaczek, Lauren E. Vanderhooft, Emily G. Peck, Monica H. Dawes, Kousaku Ohno, John Bringas, Jodi L. McBride, Lluis Samaranch, John R. Forsayeth, Sara R. Jones, Kathleen A. Grant, Krystof S. Bankiewicz. GDNF gene therapy for alcohol use disorder in male non-human primates. Nature Medicine, 2023; DOI: 10.1038/s41591-023-02463-9