Small Business Bankruptcies Surge In 2023, Five Reasons Why

 by Mike Shedlock via MishTalk.com,

Small business bankruptcies are at a much higher pace than any year since the Covid pandemic...

Small business bankruptcies from the American Bankruptcy Institute via the Wall Street Journal

The Wall Street Journal reports There’s No Soft Landing for These Businesses

Nearly 1,500 small businesses filed for Subchapter V bankruptcy this year through Sept. 28, nearly as many as in all of 2022, according to the American Bankruptcy Institute.

Bankruptcy petitions are just one sign of financial stress. Small-business loan delinquencies and defaults have edged upward since June 2022 and are now above prepandemic averages, according to Equifax.

An index tracking small-business owners’ confidence ticked down slightly in September, driven by heightened concerns about the economy, according to a survey of more than 750 small businesses. Fifty-two percent of respondents believed that the country is approaching or in a recession, said the survey by Vistage Worldwide, a business-coaching and peer-advisory firm.

Robert Gonzales, a bankruptcy attorney in Nashville, said he’s now getting four times as many calls as he did a year ago from small businesses considering a bankruptcy filing.

“We are just at the front end of the impact of these dramatically higher interest rates,” Gonzales said. “There are going to be plenty of small businesses that are overleveraged.”

Five Reasons for Surge in Bankruptcies

• Rising Interest Rates

• Surging Wages

• Tighter Bank Credit

• Overleverage

• Work-at-Home Curtailing Demand

Fed Rate Interest Rate Hike Expectations Are Still Higher for Even Longer

The Fed has hiked interest rates to 5.25% to 5.50%. It’s the highest in 22 years.

And Fed Rate Interest Rate Hike Expectations Are Still Higher for Even Longer

Surge in Wages

Minimum wages have surged. Unions are piling on. Small businesses have to offer prevailing wages or they cannot get workers.

In California, Minimum Wage for Fast Food Workers Jumps 30% to $20 Per Hour. Governor Gavib Newsom called it a “big deal”, I responded:

A Big Deal Indeed, Expect More Inflation

Yes, governor, this is very big deal. It will increase the cost of eating out everywhere.

The bill Newsom signed only applies to restaurants that have at least 60 locations nationwide — with an exception for restaurants that make and sell their own bread, like Panera Bread (what’s that exception all about?)

Nonetheless, the bill will force many small restaurants out of business or they will pony up too.

30 Percent Raise Coming Up!

If McDonalds pays $20, why take $15.50 elsewhere?

The $4.50 hike from $15.50 to $20 is a massive 30 percent jump.

Expect prices at all restaurant to rise. Then think ahead. This extra money is certain to increase demands for all goods and services, so guess what.

Other states will follow California.

Biden Newsome Tag Team

Biden’s energy policies have made the US less secure on oil, more dependent on China for materials needed to make batteries, fueled a surge in inflation, and ironically did not do a damn thing for the environment, arguably making matters worse.

See  The Shocking Truth About Biden’s Proposed Energy Fuel Standards for discussion of the administration’s admitted impacts of Biden’s mileage mandates.

Newsom is doing everything he can to make things even worse.

The tag team of Biden and Newsom is an inflationary sight to behold.

Bank Credit and Over-Leverage

In the wake of the failure of Silicon Valley Bank, across the board small regional banks are curtailing credit.

The regional banks over-leveraged on interest rate bets. And businesses overleveraged too, getting caught up in work-from-home environments that curtailed demand for some goods and services.

The bankruptcies will fall hard on the regional banks.

Add it all up and things rate to get worse.

https://www.zerohedge.com/personal-finance/small-business-bankruptcies-surge-2023-five-reasons-why

Taked voluntary withdrawal of EXKIVITY® (mobocertinib)for lung cancer in the U.S.

 Takeda (TSE:4502/NYSE:TAK) today announced that, following discussions with the U.S. Food and Drug Administration (FDA), it will be working with the FDA towards a voluntary withdrawal of EXKIVITY® (mobocertinib) in the U.S. for adult patients with epidermal growth factor receptor (EGFR) Exon20 insertion mutation-positive (insertion+) locally advanced or metastatic non-small cell lung cancer (NSCLC) whose disease has progressed on or after platinum-based chemotherapy. Takeda intends to similarly initiate voluntary withdrawal globally where EXKIVITY is approved and is working with regulators in other countries where it is currently available on next steps.

This decision was based on the outcome of the Phase 3 EXCLAIM-2 confirmatory trial, which did not meet its primary endpoint and thus did not fulfill the confirmatory data requirements of the Accelerated Approval granted by the U.S. FDA nor the conditional marketing approvals granted in other countries.

The EXCLAIM-2 trial was a Phase 3, multicenter, open-label study designed to investigate the safety and efficacy of EXKIVITY as a monotherapy versus platinum-based chemotherapy in first-line EGFR Exon20 insertion+ locally advanced or metastatic NSCLC. No new safety signals were observed in the EXCLAIM-2 trial. Full data from the trial will be presented at an upcoming medical meeting or published in a peer-reviewed journal.

https://www.businesswire.com/news/home/20231002169446/en/

Amicus, Blackstone Enter into $430 Million Strategic Financing

 Refinancing of Current $400M Debt at Lower Cost and Improved Amortization Schedule

Blackstone to also Purchase $30M of Amicus Common Stock

https://www.globenewswire.com/news-release/2023/10/02/2752736/15991/en/Amicus-Therapeutics-and-Blackstone-Enter-into-430-Million-Strategic-Financing-Collaboration.html

US Patent Office won't review two Novo Nordisk patents for Wegovy, Ozempic

A U.S. Patent Office tribunal on Monday rejected challenges to two key patents owned by Novo Nordisk covering the active ingredient in its weight-loss and diabetes drugs Wegovy and Ozempic brought by a generic drugmaker that is hoping to sell generic versions of the blockbuster medications.

The office's Patent Trial and Appeal Board denied the requests by Mylan Pharmaceuticals, which is owned by Viatris , to review the validity of the Wegovy and Ozempic patents. Mylan had argued that the patents were obvious based on the anti-diabetes medication liraglutide and thus should be invalidated.

Mylan has also challenged a third patent related to a method of treatment using the drugs. The board's decision on whether to review that patent is due by Friday.

A spokesperson for Novo Nordisk said the company will "vigorously defend" its intellectual property. Representatives for Viatris did not immediately respond to a request for comment.

Novo's Wegovy is the first to market in a new class of highly effective weight-loss drugs. Its booming sales have led some analysts to predict the obesity market could be worth more than $100 billion by the end of this decade.

Record profits from Wegovy and type 2 diabetes drug Ozempic - which contains the same active ingredient, semaglutide - helped Denmark-based Novo become Europe's most valuable company in September.

Novo has filed several U.S. patent lawsuits against companies including Pennsylvania-based Viatris that are seeking to market generic versions of the drugs. Viatris has separately asked a West Virginia federal court to invalidate the patents as part of the litigation.

https://www.marketscreener.com/quote/stock/NOVO-NORDISK-A-S-1412980/news/US-Patent-Office-won-t-review-two-Novo-Nordisk-patents-for-Wegovy-Ozempic-44967430/

Are Small Nuclear Reactors The Answer To Big-Tech's Energy Crisis?

 by Felicity Bradstock via OilPrice.com,

• Microsoft hints at its nuclear plans by posting a job for a "Principal Program Manager Nuclear Technology" to explore integrating SMRs into its operations.

• Small Nuclear Reactors offer quick deployment, reduced costs, and enhanced safety features, with over 80 designs under global development.

• Challenges like sourcing materials for SMR development, particularly from politically complex regions, may delay their commercial rollout.

Microsoft could be the first of several companies to prepare to use small nuclear reactor (SMR) technology for its high energy consumption, as AI and other technologies become more widely used. There has been great enthusiasm around the potential of SMRs, which could be built faster and at a much lower cost than a traditional nuclear reactor. This month, Microsoft posted a job opportunity for a “Principal Program Manager Nuclear Technology,” suggesting its interest in using SMRs in the future, to support its energy-intensive operations. As companies begin to use a vast range of digital technologies in their day-to-day operations, their energy consumption could increase substantially, making the use of low-carbon nuclear power increasingly attractive. 

SMRs are advanced nuclear reactors that have a power capacity of up to 300 MW(e) per unit, equivalent to around one-third the generating capacity of a traditional nuclear reactor. SMRs are much smaller than traditional reactors and are modular, making it simpler for them to be assembled in factories and transported to site. Because of their smaller size, it is possible to install an SMR on sites that are not suitable for bigger reactors. They are also significantly cheaper and faster to build than conventional nuclear reactors and can be constructed incrementally to meet the growing energy demand of a site. 

There are strong safety margins included in SMR production, meaning that the potential for the unsafe release of radioactivity to the environment is significantly reduced. These systems can be shut down automatically, without human assistance, in the case of a malfunction. At present, there are over 80 commercial SMR designs under development worldwide, aimed at responding to a range of needs. Although companies are still trepidatious about investing in SMRs as their economic competitiveness in use has yet to be proven. As energy companies begin to roll out SMRs within the next decade there will be a greater understanding of their applicability and the costs involved. 

Despite still being in the development stage, Microsoft appears to be one of the first companies to demonstrate its interest in SMRs. As companies continue to digitalise operations and conduct high-energy operations, they will need an increasing amount of energy to power their activities. For example, AI researchers suggest that training a “single large language deep learning model” such as OpenAI’s GPT-4 creates around 300 tonnes of CO2. The average person is responsible for creating around 5 tonnes of CO2 a year, showing just how significant this is. 

Microsoft now appears to be drawing up a roadmap for the use of SMR to power its computation needs. This month, the company posted a job description to hire a nuclear technology expert to lead the company’s technical assessment for integrating small modular nuclear reactors and microreactors “to power the datacentres that the Microsoft Cloud and AI reside on.” The post reads that Microsoft is seeking a “principal program manager for nuclear technology”, who “will be responsible for maturing and implementing a global Small Modular Reactor (SMR) and microreactor energy strategy.”

This is not the first time the tech giant has shown interest in nuclear power. In May, Microsoft signed a power purchase agreement with Helion, a nuclear fusion start-up, to purchase electricity from it starting in 2028. And Bill Gates, Microsoft’s co-founder, is the chairman of the board of Terrapower, a company that is currently developing SMR technology. Although there has been no suggestion that Terrapower will provide Microsoft with any nuclear reactors. 

Microsoft is showing an early interest in integrating nuclear power into operations. But, as more companies are using energy-intensive technologies, they will require vast amounts of energy to power their activities. Meanwhile, governments worldwide are putting increasing pressure on companies to decarbonise operations, with some introducing carbon taxes and others encouraging the use of clean energy sources through financial incentives. Renewable energy sources, such as wind and solar power, can take years to develop, and acquiring a stable clean energy source also means investment in battery technology. However, as the use of SMRs becomes more commonplace, their fast manufacturing time and small land footprint will likely appeal to companies looking for alternative clean energy sources. 

Despite the optimism around SMR technology, a commercial rollout is likely still a long way off due to recent difficulties in acquiring the materials needed to develop these reactors. Many SMRs under production at present will run on uranium at enrichments as high as 15 to 19.75 percent, known as high-assay low-enriched uranium (HALEU). However, this is currently only commercially available from Russia, with which many governments and private companies have cut ties following the Russian invasion of Ukraine last year. Chris Levesque, the CEO of TerraPower, explained “It has become clear that domestic and allied HALEU manufacturing options will not reach commercial capacity in time to meet the proposed 2028 in-service date for the Natrium demonstration plant.” 

There has been a rise in the popularity of SMR technology, thanks to its small size and relatively low-cost and fast manufacturing potential. While the commercial rollout of SMRs is still far off, it could provide the vast amounts of low-carbon energy required to meet the world’s growing electricity needs. And tech companies, such as Microsoft, will likely be some of the first to invest in SMR technology as they look to meet their rising computation needs while striving to decarbonise operations. 

 

https://www.zerohedge.com/technology/are-small-nuclear-reactors-answer-big-techs-energy-crisis

FDA starts swift review of Regeneron’s CD20 bispecific

 The FDA has started a priority review of Regeneron’s CD20xCD3 bispecific antibody odronextamab, seeking a broader label than other drugs in the class.

The US regulator is reviewing odronextamab for two forms of B-cell non-Hodgkin lymphoma (NHL) – follicular lymphoma (FL) and diffuse large B-cell lymphoma (DLBCL) – in patients previously treated with at least two prior systemic therapies.

If approved for that indication, odronextamab could steal a march on the three other CD20xCD3 bispecific antibodies on the market, which for now are all approved for one form of NHL only.

Roche’s first-to-market Lunsumio (mosunetuzumab) is currently approved only as a third-line or later therapy for FL, although, it sells another bispecific called Columvi (glofitamab) for DLBCL or large B-cell lymphoma (LBCL) arising from FL - again, after two lines of prior therapy.

AbbVie/Genmab’s recently-approved Epkinly (epcoritamab), meanwhile, is labelled for use in DLBCL patients after two or more systemic therapies, but was submitted for the FL indication in June, so could beat odronextamab to the punch if approved.

Odronextamab is intravenously administered, like Lunsumio, while Epkinly can be given by subcutaneous injection. Both Roche and Regeneron are also running clinical trials of subcutaneous formulations of their bispecific antibodies, and all three companies are running clinical trials in earlier lines of therapy, as well as other forms of NHL, in a four-way battle for market share.

Regeneron, which has also filed its bispecific antibody in the EU for the same indications, has studies on the go in mantle cell lymphoma (MCL) and marginal zone lymphoma (MZL), and is also testing odronextamab in tandem with a CD22xCD28 bispecific REGN5837 in aggressive B-cell NHL.

All four bispecific antibodies provide a simpler “off-the-shelf” alternative to CAR-T therapies like Gilead Sciences’ Yescarta (axicabtagene ciloleucel), Novartis’ Kymriah (tisagenlecleucel), and Bristol-Myers Squibb’s Breyanzi (lisocabtagene maraleucel), which have complex manufacturing and administration procedures and require in-hospital care.

Regeneron has filed for approval of Zai Lab-partnered odronextamab on the back of a pivotal phase 2 study that showed a 49% objective response rate (ORR) in heavily pre-treated DLBCL patients, who were naïve to CAR-T therapy, with a complete response rate of 31%. In the FL group, the ORR was 82% with 75% achieving a CR.

Analysts at Jefferies have said they believe Epkinly will lead the class with sales of $2.75 billion a year, with Roche’s two CD20xCD3 bispecifics making around $2 billion combined. Odronextamab is viewed as trailing the leaders, in part because it was linked to some treatment-related deaths in its trials programme and spent some time on clinical hold during its development.

https://pharmaphorum.com/news/fda-starts-swift-review-regenerons-cd20-bispecific

Drag on Oil Demand in China and US Is Limiting Rally, Citigroup’s Morse Says

 The drag on oil demand in China, Europe and the US is weighing heavily on crude prices, capping the potential gains from OPEC+ supply cuts, Citigroup Inc. analyst Ed Morse says.

China is cutting back purchases of expensive crude and exporting more high-value refined products as the country grows to be almost as important to oil markets as OPEC+, Morse said in an interview on Bloomberg Television. The nation’s pullback will counter crude’s recent rally and help shift the oil market to a surplus next year, with Brent collapsing to the low $70s a barrel, Morse wrote in a note earlier today.

https://www.bloomberg.com/news/articles/2023-10-02/citi-s-morse-sees-oil-demand-drag-in-china-us-limiting-rally