Astellas strikes $1.7bn SIRP drug deal with Elpiscience

 Astellas has struck a deal with fellow Japanese pharma company Elpiscience to develop up to four cancer immunotherapies that work by revving up the activity of macrophages against tumour cells.

The deal – which includes upfront and near-term payments of up to $37 million, research funding, and more than $1.7 billion in milestone payments – centres around ES019, the lead drug in Elpiscience’s bispecific macrophage engager (BiME) pipeline.

Astellas has licensed rights to ES019 and a second unnamed programme and has also taken an option on up to two additional BiME candidates.

ES019 targets two checkpoint inhibitors – PD-L1 and SIRP-alpha – that work in different ways to boost immune responses against cancers. Targeting SIRP-alpha primes macrophages to attack and destroy cancer cells, while already marketed PD-1 and PD-L1 checkpoint inhibitors call in an attack from T-lymphocytes.

SIRP-alpha is an emerging area of interest for the biopharma industry, as macrophages are the most abundant type of innate immune cells in the body, playing an important role in eliminating aberrant cells. It is part of a ‘don’t eat me’ signalling pathway that is governed by the interaction of SIRP-alpha and CD47, another big research area in cancer immunotherapy.

It is thought that blockade of that interaction can restore the ability of macrophages to phagocytose or 'eat' cancer cells and – crucially – may offer a new option for the sizeable proportion of cancer patients who do not respond to PD-1/PD-L1 cancer immunotherapies alone, or develop resistance to them.

ES019 is still in preclinical development, but, according to Astellas, has shown evidence that it can stimulate “highly potent” phagocytosis in lab studies.

Drugs targeting the SIRP-alpha/CD47 axis have yet to reach the market, and Gilead Sciences’ anti-CD47 antibody-based therapy magrolimab – currently leading the pack – failed a phase 3 trial in myelodysplastic syndromes (MDS) and has also run into some toxicity issues in a study involving patients with follow-up indication acute myeloid leukaemia (AML).

Toxicity problems have also been seen with some other CD47 candidates, including Surface Oncology’s SRF231 and BMS/Celgene’s CC-9002 – both now discontinued – and the pipeline has also been culled as a result of other decisions by developers.

AbbVie recently pulled out of an R&D partnership with I-Mab on lemzoparlimab, stopping trials in MDS and AML, although it said the decision was taken for strategic reasons, rather than any clinical issue with the drug. I-Mab is continuing to develop the drug independently in China.

BMS, meanwhile, switched its attention to SIRP-alpha with its CC-9251 candidate, but that also failed to make it out of early-stage development. There are plenty of other companies with candidates still in development, however, including Pfizer, Boehringer Ingelheim, ALX Oncology, Akeso Biopharma, and Waterstone Hanxbio.

https://pharmaphorum.com/news/astellas-strikes-17bn-sirp-drug-deal-elpiscience

China Evergrande's EV unit says vice chairman detained, stock plunges

 China Evergrande New Energy Vehicle Group said on Monday an executive director Liu Yongzhuo, who is the firm's vice chairman, has been detained, sending the stock tumbling as much as 23% in resumed trade.

The electric vehicle arm of the embattled property developer China Evergrande Group said Liu has been detained on suspicion of "illegal crimes" but did not elaborate further.

The shares, which were suspended from trading in the morning session pending the statement, fell to as low as HK$0.32 but have since regained ground and was last down 1.2%.

The stock plunged 18.6% in the first week of 2024 after it said last Monday that plans for it to sell shares to U.S.-listed NWTN had been scrapped.

Hui Ka Yan, chairman and founder of parent Evergrande Group, the most indebted property developer in the world, has also been under investigation for suspected crimes, according to a filing in late September.

https://finance.yahoo.com/news/china-evergrande-ev-unit-says-013703693.html

Illumina expands collaboration with Janssen to advance molecular residual disease cancer test

 Illumina Inc. (NASDAQ: ILMN), a global leader in DNA sequencing and array-based technologies, today announced it has signed an agreement with Janssen Research & Development, LLC (Janssen). This collaboration will be the first relating to the development of Illumina's novel molecular residual disease (MRD) assay, a whole-genome sequencing (WGS) multi-cancer research solution that detects circulating tumor DNA (ctDNA) to better understand the persistence or recurrence of disease following clinical intervention.

In oncology, MRD testing is increasingly being used as a prognostic indicator of disease recurrence after treatment by helping clinicians assess the effectiveness of a patient's current course of clinical intervention and guide their decisions about precision therapy. MRD testing for solid tumors shows promise for improving the standard of care where current disease-monitoring tools fall short in accurately identifying patients' response to treatment.

https://www.prnewswire.com/news-releases/illumina-expands-collaboration-with-janssen-to-advance-molecular-residual-disease-cancer-test-302026993.html

Naturally-occurring molecule shows promise as effective first-line treatment for prostate cancer

 Scientists at Nottingham Trent University wanted to investigate the anti-cancer properties of carnosine against cells derived from both primary and metastatic prostate cancer—where the cancer began and where it had spread to another part of the body.

Carnosine, which can be produced by the body and is also found in meat, has long been advocated for use as an antioxidant to facilitate healthy aging.

There have been reports of carnosine being effective against the development of a number of different cancers but this is the first time it has been studied in relation to prostate cancer.

The researchers found that carnosine stopped the cells from multiplying and at higher doses even killed cancer from both primary and metastatic cancer cells, while remaining safe to the healthy non-dividing cells.

The research, which also involved University Hospitals Leicester NHS Trust and Manchester Metropolitan University, is published in the Journal of Cellular and Molecular Medicine.

Although carnosine is rapidly degraded by enzymes in the body the researchers argue that it could potentially be an initial treatment for prostate cancer if a constant slow release mechanism is used.

This could include injecting carnosine inside the tumor and releasing it in sufficient quantity before it begins to degrade and lose its effect.

Another approach could be through administration of carnosine-like molecules that are resistant to enzymatic degradation.

The hope then would be that the tumor growth could be monitored via the level of prostate specific antigen (PSA) in the blood and if it continued to grow then the patient would have the option for surgery.

If surgery is performed first it can lead to detrimental scarring as tissues fuse together potentially complicating further surgery.

Prostate cancer is the most common cancer in men in the U.K., with more than 52,000 diagnosed every year on average. One in eight men will be diagnosed with prostate cancer in their lifetime.

Current treatments for organ-confined prostate cancer are not cancer-specific and are commonly accompanied by side effects including urinary incontinence and erectile dysfunction.

Treatments include radiation therapy, chemotherapy, hormone deprivation therapy or a prostatectomy—the partial or complete removal of the prostate through surgery.

"Our results show that carnosine has a significant inhibitory effect in vitro on the proliferation of human prostate cancer cell lines," said lead researcher Dr. Stephanie McArdle, a scientist in Nottingham Trent University's John van Geest Cancer Research Center.

"While carnosine has previously been shown to have an anti-tumor effect, its potential role in prostate cancer cells specifically was unknown.

"These are encouraging results and support the need for further human in vivo work to determine the potential use of carnosine as a first line of treatment against the disease.

"It is possible that carnosine-based strategies could be used alone or as a supplementary therapy to surgical or other conventional treatments."

More information: K. Habra et al, Anticancer actions of carnosine in cellular models of prostate cancer, Journal of Cellular and Molecular Medicine (2023). DOI: 10.1111/jcmm.18061

https://medicalxpress.com/news/2024-01-naturally-molecule-effective-line-treatment.html

Why cancer immunotherapy can cause colitis

 Researchers at the University of Michigan Health Rogel Cancer Center have identified a mechanism that causes severe gastrointestinal problems with immune-based cancer treatment.

They also found a way to deliver immunotherapy's cancer-killing impact without the unwelcome side effect.

The findings are published in Science.

"This is a good example of how understanding a mechanism helps you to develop an alternative therapy that's more beneficial. Once we identified the mechanism causing the colitis, we could then develop ways to overcome this problem and prevent colitis while preserving the anti-tumor effect," said senior study author Gabriel Nunez, M.D., Paul de Kruif Professor of Pathology at Michigan Medicine.

Immunotherapy has emerged as a promising treatment for several types of cancer. But immune checkpoint inhibitors can also cause severe side effects, including colitis, which is inflammation in the digestive tract.

Colitis can cause severe gastrointestinal discomfort, and some patients will discontinue their cancer treatment because of it.

The problem facing researchers was that while patients were developing colitis, the laboratory mice were not. So researchers couldn't study what was causing this side effect.

To get past this, the Rogel team, led by first author Bernard C. Lo, Ph.D., created a new mouse model, injecting microbiota from wild-caught mice into the traditional mouse model.

In this model, the mice did develop colitis after administration of antibodies used for tumor immunotherapy. Now, researchers could trace back the mechanism to see what was causing this reaction.

In fact, colitis developed because of the composition of the gut microbiota, which caused immune T cells to be hyper-activated while regulatory T cells that put the brakes on T cell activation were deleted in the gut.

This was happening within a specific domain of the immune checkpoint antibodies.

Researchers then removed that domain, which they found still resulted in a strong anti-tumor response but without inducing colitis.

"Previously, there were some data that suggested the presence of certain bacteria correlated with response to therapy. But it was not proven that microbiota were critical to develop colitis. This work for the first time shows that microbiota are essential to develop colitis from immune checkpoint inhibition," Nunez said.

To follow up what they saw in mice, researchers reanalyzed previously reported data from studies of human cells from patients treated with immune checkpoint antibodies, which reinforced the role of regulatory T cells in inducing colitis.

The antibody they used to stop the colitis was developed by Takeda Pharmaceuticals.

The Rogel team plans additional studies to further understand the mechanisms causing colitis and seeks clinical partners to move this knowledge to a clinical trial.

Additional authors are Ilona Kryczek, Jiali Yu, Linda Vatan, Roberta Caruso, Masanori Matsumoto, Yosuke Sato, Michael H. Shaw, Naohiro Inohara, Yuying Xie, Yu Leo Lei and Weiping Zou.

More information: Bernard C. Lo et al, Microbiota-dependent activation of CD4 + T cells induces CTLA-4 blockade–associated colitis via Fcγ receptors, Science (2024). DOI: 10.1126/science.adh8342

https://medicalxpress.com/news/2024-01-cancer-immunotherapy-colitis.html

'High-Flying Profit Forecasts Head Back Down to Earth'

 S&P 500 earnings estimates for 2024 are too optimistic, about half of survey respondents say, citing risk of an economic slowdown

Investors anticipating blockbuster profits in 2024 will be disappointed, according to Bloomberg’s latest Markets Live Pulse survey.

The consensus estimate of sell-side analysts is that S&P 500 earnings this year will reach historic levels, but those forecasts are too high, according to 50% of 380 MLIV Pulse respondents. The poll shows an economic slowdown is the biggest risk for the bottom lines this year.

The findings imply profits won’t be a key catalyst for stock market gains this year after a 24% rally in the S&P 500 in 2023. While corporate earnings held up better-than-estimated last year, helping boost stock valuations, the key US index snapped a nine-week gaining streak in the first week of January.

“Investors have priced significant expectations of a benign soft-landing scenario for 2024,” said Rajeev De Mello, a global macro portfolio manager at Gama Asset Management SA. “I am more cautious.”

Economic weakness could result from faltering US consumer spending growth, according to 40% of participants. Another 38% expect this year’s shopping patterns to mirror last year’s, allowing for a Goldilocks scenario where the economy is not running too hot or too cold.

“Earnings expectations seem a bit high in some areas, like some consumer areas, for example,” said Nicole Kornitzer, portfolio manager of the Buffalo International Fund at Kornitzer Capital Management Inc. "Consumers seem to be frustrated by all the past price hikes."

As a result, the majority of respondents are counting on so-called value stocks, such as JPMorgan Chase & Co. or oil giant Exxon Mobil Corp., as a winning strategy this year. Shares of JPMorgan, which kicks off earnings season on Jan. 12 when it reports results, already hit a record this year.

And even as value stocks are expected to lead, survey participants foresee the top six lenders in the US to keep focusing on cost management by maintaining head count. Only 3% assume the biggest banks will expand their workforce with the majority roughly split between expecting banks to keep employment flat or continuing to cut jobs.

De Mello said financials and energy — key value sectors — could have different trajectories this year. “Financials are still reasonably priced while energy stocks will depend on the oil price” which is one of the main conduits of geopolitical risk into the financial markets, and geopolitical risk is rising, he added.

Still, the preference for value signals a likely end to 2023’s growth-stock fueled equity market boon. In 2023, the biggest gainer on the Nasdaq 100, Nvidia Corp., more than tripled in value closing last year at $495 a share, but 86% of respondents don’t expect the chipmaker to reach $1,000 this year.

Bullishness has likely peaked for now. HSBC Holdings Plc strategist Max Kettner cut his overweight stance on equities to a tactical underweight, awaiting a better re-entry point, such as when sentiment and positioning become less stretched again. Sanford C. Bernstein strategists Sarah McCarthy and Mark Diver also recommend short-term caution on equities after extreme bullish sentiment.

Nonetheless, Wall Street strategists and investors alike still expect equity markets to rally in 2024. Almost a third of respondents plan to increase their exposure to S&P 500 over the next month, the highest level since the MLIV Pulse survey started asking the question in August 2022.

“Markets need to breathe from time to time. You have to consider that against the fact that investors are still highly skeptical of the economy and earnings,” said eToro US investment analyst Callie Cox. “Spending is holding up well, but profit growth is expected to come from cost-cutting. It’s progress, but not the kind of progress you’d ideally like to see. Investors could struggle with this dynamic.”

https://www.bloomberg.com/news/articles/2024-01-08/s-p-500-spy-earnings-expectations-are-too-high-survey-shows

Oil slips as higher OPEC supply, Saudi price cuts offset Mideast worries

 Oil prices dipped in early trade on Monday on sharp price cuts by top exporter Saudi Arabia and a rise in OPEC output, offsetting worries about escalating geopolitical tensions in the Middle East.

Brent crude fell 9 cents, or 0.1%, to $78.67 a barrel by 0057 GMT, while U.S. West Texas Intermediate crude futures shed 10 cents, or 0.1%, to $73.71 a barrel.

Both contracts climbed more than 2% in the first week of 2024 after investors returned from holidays to focus on geopolitical risks in the Middle East following attacks by Yemeni Houthis on ships in the Red Sea.

U.S. Secretary of State Antony Blinken, who is in the Middle East this week, warned that the Gaza conflict could spread across the region without concerted peace efforts, although Israeli Prime Minister Benjamin Netanyahu vowed to continue the war until Hamas was eliminated.

Offsetting the upward pressure on prices from geopolitical concerns, output from the Organization of the Petroleum Exporting Countries (OPEC) rose 70,000 barrels per day (bpd) in December to 27.88 million bpd, according to a Reuters survey.

Rising supply and competition with rival producers, prompted Saudi Arabia on Sunday to cut the February official selling price (OSP) of its flagship Arab Light crude to Asia to the lowest level in 27 months.

"If we were just to focus on the fundamentals including, higher inventories, higher OPEC/non-OPEC production, and a lower than expected Saudi OSP, it would be impossible to be anything other than bearish crude oil," IG analyst Tony Sycamore said.

"However, that doesn’t take into account the fact that geopolitical tensions on the Middle East are undeniably rising again which will mean limited downside."

In the U.S., oil drilling rigs were up by one at 501 last week, Baker Hughes said in its weekly report.

JPMorgan forecasted 26 oil rigs to be added this year, most of them in the Permian during the first half of the year.

https://finance.yahoo.com/news/oil-slips-higher-opec-supply-010640140.html