Investors scour the globe for shelter as Wall Street shakes

 Global investors are eyeing European and emerging market assets to protect themselves from further turbulence in U.S. stocks and bonds as stubborn inflation causes bets on the timing of Federal Reserve interest rate cuts to be revised.

April was a washout on Wall Street, with the S&P 500 share index and U.S. Treasuries posting their biggest monthly loss since September.

Money managers are now looking for ways to limit losses if the trend does not reverse.

That could entail the restructuring of portfolios that had been lifted for years by richly-valued U.S. equities, said Sonja Laud, CIO at Legal & General Investment Management, which manages roughly $1.5 trillion.

"Diversification will be a lot more important going forward," she said, adding that LGIM was not expecting superior returns from global stocks but now preferred European shares to those from the United States.

Amelie Derambure, senior multi-asset manager at Amundi, Europe's biggest asset manager, said she still expected long-term gains from U.S. stocks but had bought put options to protect against a 10% fall. She had also switched some cash out of Treasuries into euro zone bonds.

The S&P 500 fell 4.2% in April.

ENTER EUROPE

U.S. stocks have provided about 80% of the price return of the MSCI World share index since 2020 in dollar terms, Pictet Asset Management calculates

The "Magnificent Seven" group of tech stocks, supercharged by an artificial intelligence boom, contributed over 60% of the S&P's total return last year.

But as sticky inflation drives expectations that the Fed will hold U.S. borrowing costs at a 23-year high of 5.25%-5.5% or even hike again, the cost of betting on long-term gains from big tech's hefty AI investments versus holding cash is rising.

A sharp fall in Facebook owner Meta's shares in April highlighted the risks of hoping for stellar tech earnings in an environment where rates stay high. Until recently, markets had expected the Fed to start cutting in June.

The S&P remains highly valued, with a price-to-earnings multiple almost 7 percentage points above Europe's Stoxx 600 , LSEG data shows.

Investors said the Stoxx appealed because it is stacked with companies in so-called value sectors such as banking and energy which benefit from steady global growth but tend not to suffer when borrowing costs rise.

"We are increasing exposure to Europe," said Luca Paolini, chief strategist at Pictet Asset Management. "The general macro outlook is supportive for a cheap, cyclical value market."

European fund manager Carmignac reduced some U.S. tech holdings in April and was seeking opportunities closer to home, the group's head of cross-asset Frederic Leroux said.

"Diversifying towards Europe today makes a lot of sense," he said. "Each time you have a new wave of (U.S.) inflation you will see a big outperformance for Europe."

Moderating euro zone inflation means the European Central Bank is expected to start cutting interest rates on June 6.

Ross Yarrow, managing director for U.S. equities at investment bank Baird, said global investors were mostly negative on towards U.S. stocks on valuation grounds.

But superior revenue growth also helped Wall Street outpace Europe in 12 of the past 16 years, he said.

TREASURY BEARS

An index of Treasury bonds, dropped around 2% in April, its worst month since September.

Amundi's Derambure said she still expected Fed cuts but had topped up on euro zone government bonds in recent weeks to wait "for this washout in U.S. fixed income to be over".

Traders expect 35 bps of U.S. rate cuts this year but 65 bps in the euro zone, where inflation has dropped closer to the ECB's 2% target.

According to Barclays strategists, Treasuries may not rally even when the Fed does cut because of high and rising U.S. government debt.

Emerging market bonds are picking up buyers, however, as investors hope to see robust economic growth in the likes of India, Indonesia and Vietnam.

LGIM's Laud added that she was positive on Indian bonds, which have been snapped up by foreign investors ahead of inclusion in a major debt index later this year and as the economy booms.

"Within fixed income we see the best opportunities from a risk perspective (from) dollar-based emerging market debt," Manulife's chief investment officer for multi-asset solutions Nathan Thooft said.

TANGLED

Diversifying from U.S. assets could be tough.

The Stoxx tends to track the S&P, with an 88% correlation between the two markets since 1986, Baird's Yarrow calculates.

Treasuries also strongly influence other debt markets, with a 1 percentage point rise in 10-year U.S. yields commonly pulling global yields 56 basis points higher, a Barclays study found.

"It is always very difficult to say, OK I want to be lighter on the U.S. and investing more in other parts of the world," said Carmignac's Leroux.

"But even with correlations, you have moments where you can find outperformance somewhere else."

https://www.marketscreener.com/quote/currency/AUSTRALIAN-DOLLAR-US-DOLL-2373531/news/Investors-scour-the-globe-for-shelter-as-Wall-Street-shakes-46589175/

Senate Passes Ban Of Russian Uranium Imports, Risks Market "Havoc", Soaring Prices

 With shares of CCJ tumbling earlier today after the company reported soggy Q1 earnings, despite its recent initiating coverage report by an enthusiastic Goldman Sachs which sees the Uranium company at the forefront of the "Next AI trade" and slapped it with a $55 price target (as we reported previously), the uranium trade suddenly found itself in need of a miracle.

It got that after hours, when the Senate voted late on Tuesday to approve legislation banning the import of enriched uranium from Russia - the same Russia which supplies 25% of the uranium used by the 90 US commercial nuclear reactors - and sending the measure to the White House which has said it supports efforts to block the Kremlin’s shipments of the reactor fuel and is expected to sign the deal, guaranteeing that uranium prices will soar.

The Prohibiting Russian Uranium Imports Act, approved by unanimous consent and which must be sign by Biden before becoming law -  would bar US imports 90 days after enactment while allowing temporary waivers until January 2028.

Some context for what this ban would mean for the US: Russia provided almost a quarter of the enriched uranium used to fuel America’s fleet of more than 90 commercial reactors, making it the No. 1 foreign supplier, according to US Energy Department data. Those sales provide an estimated $1 billion a year to Russia, but replacing that supply could be a challenge and risks raising the costs of enriched uranium by about 20%.

The White House had called for a “long-term ban” on Russian imports, which is needed to unlock some $2.7 billion to stand up a domestic uranium industry made available by Congress earlier this year, contingent on there being limits on the import of Russian uranium in place.

“This is a national security priority as dependence on Russian sources of uranium creates risk to the US economy and the civil nuclear industry that has been further strained by Russia’s war in Ukraine,” the White House said earlier in a fact sheet. “Without action, Russia will continue its hold on the global uranium market to the detriment of US allies and partners.”

The House bill was approved by voice vote in December amid growing congressional support to cut off Russia in the wake of its invasion of Ukraine. The US has banned imports of Russian oil and worked with Group of Seven allies to impose a price cap on seaborne exports of crude and petroleum products.

To be sure, there are loopholes: the legislation, which expires at the end of 2040, permits the Department of Energy to issue waivers authorizing the entire volume of Russian uranium imports allowed under export limits set in an anti-dumping agreement between the Department of Commerce and Russia through 2027.

Without those waivers, an approximate 20% jump is possible from the current enrichment spot price of $165 per separative work unit to a record high of as much as $200 per SWU, according to Jonathan Hinze, president of nuclear fuel market research firm UxC. Enriched uranium is measured in separative work units, or SWU, which account for the volume and enrichment density of the radioactive metal.

“But if there is an immediate ban it could be even more extreme,” Hinze said. “There are very limited supplies available.”

Still, since the government is now intimately involved in every aspect of the uranium procurement, it is virtually guaranteed that prices will soar, which is why CCJ stock recouped almost all of its losses after hours.

And while the Biden admin's decision may be mostly posturing, it’s possible Russia will respond with a unilateral export ban if the US bars imports. Last December, Tenex, a Russian state-owned uranium company, warned American customers that the Kremlin may preemptively bar exports of its nuclear fuel to the US if lawmakers in Washington pass legislation prohibiting imports starting in 2028.

Tenex’s US subsidiary told electric companies including Constellation Energy Corp., Duke Energy Corp. and Dominion Energy to prepare for such an outcome.

“Tenex completely refutes as inaccurate the information regarding the alleged ‘warnings’ of a potential ‘pre-emptive’ ban on enriched uranium supplies to the United States,” Rosatom’s press office said in an emailed statement.

As Bloomberg reported at the time, "a move to bar exports would risk wreaking havoc in uranium markets, causing prices to spike for the nuclear reactor fuel that may be harder for smaller utilities to absorb."

An import ban will take some time to affect operators of US nuclear power plants. Reactors are typically refueled every 18 months to 24 months, and fuel purchases are negotiated long in advance. That means most but not all utilities have already lined up enough uranium to keep their reactors running for at least the next few years. Still, negotiations for subsequent commodity procurement take place all the time, and while there is no immediate risk of scarcity, once the 2026 refueling negotiations take place, watch as Uranium stocks explode to new all time high.

https://www.zerohedge.com/markets/senate-passes-ban-russian-uranium-imports-risking-havoc-and-soaring-price-uranium-markets

Robert Hariri: Developing Cost-Effective Cell Therapies From Placentas

 Iovance Biotherapeutics priced its recently approved Amtagvi, the first-ever cell therapy of its type, at $515,000. Bristol Myers Squibb’s CAR-T treatment Breyanzi, which received FDA approval for two additional indications in March, carries a list price of about $487,000. Those prices do not sit well with regenerative medicine pioneer Robert Hariri, who told BioSpace that “cell therapy will go the way of the dinosaur if we expect each treatment to cost a half a million dollars.”

Hariri, currently CEO, chairman and founder of placenta-derived stem cell developer Celularity, specifically said that CAR-T therapy involving patients’ own cells—a type of therapy that has been on the market since 2017 and now features six commercial products—is “not a scalable revolution in healthcare until it can fit the economic constraints.” Instead, he said he believes in the potential of cell therapies derived from donor cells, especially from placentas. “The placenta is nature’s professional and universal donor,” Hariri said.

A former surgeon, Hariri discovered placental pluripotent stem cells in 2000 while building Anthrogenesis, a company bought by Celgene two years later. After the buyout, Hariri served as CEO of Celgene Cellular Therapeutics. During his time there, he became interested in applying stem cells to slow the aging process, and joined with Craig Venter and Peter Diamandis to found Human Longevity in 2013. Celgene spun off Florham Park, N.J.–based Celularity in 2016, and Hairiri joined the company. He's now using placental stem cells to target cancer, autoimmune disease and more, ushering therapies for Crohn’s disease and facioscapulohumeral muscular dystrophy through early-stage trials. 

Hariri said he believes that cell therapies will supercede biologics for autoimmune diseases in the next few years. “Had there not been such a rush to chase oncology because of the CAR-T revolution, we would be a lot further along in treating autoimmune diseases,” he said.

On the side, Hariri is an aerospace entrepreneur and licensed pilot who has flown with legendary former astronaut Buzz Aldrin.

On a Mission

Hariri, once a practicing physician, left the hospital world after his fellowship and has been following an entrepreneurial path ever since. His mission is to create what he calls “living-cell medicine”—and to make it cost-effective.

“For 30 years, I have focused on the fact that for cell therapy to have a meaningful role in medicine, it has to do more than just transform the way the patients are treated and their outcomes,” Hariri said. “It has to fit in an already stressed healthcare system economically.”

When human embryonic stem cells were discovered in the late 1990s, Hariri was a neurosurgery fellow at what is now Weill Cornell Medical Center in New York, specializing in head and spinal cord injuries. He saw embryonic stem cells as a potential way to restore motor function in severely injured patients.

But those cells came from discarded embryos from in vitro fertilization, which drew the ire of anti-abortion activists. “It’s very tough to commercialize a product when half the population is opposed to it,” Hariri noted.

It also was difficult to control the quality of the supply of embryos, which is problematic in a heavily regulated industry like biopharma manufacturing, Hariri said. “Looking at all the science around embryonic-derived cells as well as fetal-derived material [from abortions], I was very concerned about the qualitative drift from donor to donor to donor.”

Hariri found that there was “tremendous consistency” in the quality of cells derived from postpartum placentas, however. Given that hospitals typically have placental residue incinerated, repurposing it to harvest stem cells is a “green” technology in Hariri’s eyes. “We are saving hospitals from having to pay to incinerate this waste material and we’re turning it into a range of useful therapeutic products,” he said.

The idea of harvesting stem cells from placentas rather than embryos to create new therapies eventually caught the attention of the staunchly anti-abortion Roman Catholic Church, and in 2018, Pope Francis presented Hariri with the Pontifical Medal for Innovation. “The Vatican recognized this because they saw it as a superior alternative to the destruction of embryos,” Hariri said. Celularity has also received halal certification for its placental stem cell technology, allowing the company to operate in Muslim countries.

“Medical approaches to treating disease have to fit into the social norms in order to be deployable without resistance, without opposition,” Hariri said. “You can’t operate if you’re going to offend or potentially violate some of those social standards.”

Celularity’s Studies and Struggles

Hariri said that Crohn’s was an easy choice for developing placenta-derived treatments because many women see autoimmune diseases go into remission during pregnancy and then flare up after giving birth. In a Phase I trial, Celularity’s stromal cells generated from placenta-derived stem cells helped reduce inflammation and limit fistulas in a small population of patients with Crohn’s.

Celularity also has a clinical-stage placenta-based stem cell therapy for facioscapulohumeral muscular dystrophy, a genetic disorder that affects the muscles of the face, shoulders and upper arms. The asset, called PDA-002, is set to begin a Phase I/II study later this year, and the company recently requested FDA orphan drug designation to expedite its development.

Celularity has had some financial struggles, though. The company laid off 188 workers in March 2023 as part of a strategic review after its stock price plummeted. This year, with the price languishing below Nasdaq’s $1 minimum, the company was forced to execute a 1-for-10 reverse stock split in February to avoid delisting.

While one forecast estimated that the worldwide placental stem cell market would grow by 22% annually between 2022 and 2030, no such stem cell therapies have received FDA approval. Everything in commercial stage to date has been derived from other sources.

Reversing Aging

Hariri also sees placental cells as a fountain of youth of sorts, helping to stave off the ravages of aging, which was the reason why he, Venter and Diamandis founded Human Longevity. He has long been interested in the potential of natural killer (NK) cells, and Celularity will present preclinical data next month about how its placenta-derived NK cells might be able to remove senescent and other harmful cells from the body.

“If we can use cell therapy in a number of different ways to control the degenerative processes in aging . . . then we may in fact be able to shift much of the disease burden that occurs in our 50s, 60s and 70s,” he said. “If we can tune up your immune system as you age, that almost by definition is going to have beneficial consequences for your health.”

https://www.biospace.com/article/robert-hariri-committed-to-developing-cost-effective-cell-therapies-from-placentas/

GE HealthCare Techs Misses EPS, Misses Revenue for Q1 2024

GE HealthCare Technologies (NASDAQ: GEHC), one-third of the industrial behemoth that used to be General Electric, saw its shares crater 13.7% through 1:30 p.m. ET after reporting a narrow earnings miss Tuesday.

Heading into earnings, analysts forecast GE HealthCare would earn $0.91 per share (adjusted for one-time items) on $4.8 billion in the first quarter of 2024 sales. Instead, the company reported a $0.90 per-share profit and sales of $4.6 billion.

GE HealthCare Q1 sales and earnings

Sales for the quarter declined 1% instead of growing as they were expected to do, which is one reason investors were disappointed. GE HealthCare also noted that its book-to-bill ratio was an anemic 1.03, implying little chance of sales ticking significantly higher in the near term.

On the plus side, net profit margins did tick up 10 basis points, and earnings moved markedly higher -- up 6% on an adjusted basis and up nearly 100% as calculated according to generally accepted accounting principles (GAAP).

GAAP earnings, by the way, were $0.81 per share.

Is GE HealthCare stock a sell?

Turning to guidance, management did not give a GAAP forecast for 2024 earnings, saying only that adjusted earnings will range from $4.20 to $4.35 per share -- 7% to 11% growth year over year. At the midpoint of that guidance range, this would imply GE HealthCare is an 18 price-to-earnings (P/E) stock growing at 9%, resulting in a price-to-earnings-to-growth (PEG) ratio of 2 (which seems expensive).

And that's the good news. Valued on its free-cash-flow (FCF) projection of $1.8 billion this year, GE HealthCare stock sells for closer to a 22.5 multiple, giving the stock a price-to-FCF ratio of about 2.5. (And both these valuations get even more expensive once GE HealthCare's $7.3 billion net debt load is factored into the equation.)

While it's encouraging to see management forecast faster sales and earnings growth as the year progresses, when you get right down to it, GE HealthCare stock simply costs too much today. Investors are right to sell it.

https://finance.yahoo.com/news/why-ge-healthcare-technologies-stock-182400256.html

Third Point on Major Holdings Performance in Q1

 Quarterly Review and Outlook Third Point funds delivered solid results in the First Quarter, driven in part by the strong performance of large cap tech companies as well as continued gains from Bath & Body Works and Vistra. Just as during COVID when everyone became an expert in virology, today you would be hard pressed to find an investor who does not have a complex view on “macro.” Last week was a good example of equity investors’ currently mercurial nature, with the market experiencing sharp swings based on interpretations of noisy and inconclusive reports of economic data. While we don’t attempt to make short-term “macro” forecasts, our current framework is to look at three important dynamics—two economic and one structural—to guide our current allocations and where to look for new opportunities. 

1) Rates and inflation: We believe that we are no longer in an inflationary economy based on our analysis of labor, rents, and other key components of inflation and thus, absolute and real rates are near the top of their ranges. 

2) Economic growth and earnings: We are in the soft-landing camp and see some impending weakness in labor which could impact demand in certain sectors, but expect that future Fed action will temper the extent of future economic declines.

 3) Artificial Intelligence and Energy Transition: We shared our views on AI’s transformational potential in recent letters and it is a key element of the thesis for nearly half of our equity positions today. Unlike in past periods of technological paradigm shifts, this new technology favors incumbents who are deploying their financial and intellectual war chests to win the AI arms race. Right now, what we see as the best-run “legacy” companies like Microsoft and Amazon (both of which we own) have built enormous competitive advantages and seen their growth vectors accelerate. Below, we discuss London Stock Exchange Group, Alphabet and TSMC, positions whose catalysts for further value creation are primarily “AI-driven”. 

We also see the energy transition and growth in data centers affecting scores of industrial, materials and energy companies as demand for infrastructure and certain commodities surges. In the category of “better to be lucky than smart,” below we also share how a deep value name we acquired for its capital allocation and attractive valuation became an AI darling.

 Vistra 

Vistra is one of the largest independent power producers (“IPPs”) and retail electricity providers in the country. In 2023, Vistra’s natural gas, nuclear and coal plants generated over 20% of electricity consumed in Texas.

Unlike regulated utilities, where profits are determined by capital invested, Vistra operates in deregulated markets (primarily ERCOT and PJM), where they generate and sell electricity at market prices. Historically, Vistra has been valued at a steep discount to both the regulated utility sector and the broader market in part due to the challenging fundamentals of merchant power. Stagnant domestic electricity demand combined with an oversupply of natural gas has made US electricity prices among the lowest in the world. Meanwhile, significant growth in subsidized renewable generation has created major intraday price volatility in Vistra’s core markets, with power prices sometimes going negative during periods of abundant sunshine or wind. Bankruptcies, including Vistra’s former parent company TXU in 2014, have become commonplace in the sector over the last decade. 

In response to this challenging environment, we believe Vistra’s capital allocation strategy has been brilliant. The company shut down unprofitable coal plants to improve its carbon footprint and mitigate oversupply. Given the market was valuing its remaining gas assets at pennies on the dollar relative to the cost of new builds, management patiently invested in maintaining the existing fleet and deployed excess cash flow into share purchases, reducing its share count by ~33% from 2018 to 2023 at an average purchase price of about 1/3 of current trading levels.

 In March of 2023, Vistra made its latest smart capital allocation move, acquiring the nuclear generation assets of Energy Harbor (yet another bankrupt IPP), which served as the catalyst for Third Point acquiring shares. The timing of this deal was prescient, as nuclear is finally being recognized for its merits as the only carbon-free source of 24/7 power generation. Unfortunately, onerous regulatory requirements make it very difficult to build nuclear plants economically outside of China. Vistra seems to have channeled Mark Twain and thought: “buy nuclear generation, they’re not making it anymore”. 

After our investment, the market started to focus on two trends that we think will have profoundly positive impacts on Vistra’s future value: increased penetration of intermittent generation (renewables), and an inflection in power demand from AI/data centers and electric vehicles.

While increased renewable generation is clearly a positive for reducing CO2 emissions, many supporters of green energy are naïve to the impacts of solar and wind on the reliability of grids (lower) and volatility of electricity prices (higher). Price signals have become so distorted that rather than building new dispatchable (gas) power generation, we are shuttering capacity. However, when the wind stops blowing or the sun stops shining, we are increasingly reliant on huge amounts of dispatchable generation to turn on quickly, even though it may have been losing money an hour prior. Counterintuitively, electricity generated by gas in Texas has grown 30% since 2016 despite a twenty-fold increase in solar and a three-fold increase in wind. Texas recently created a $10 billion fund to incentivize new gas generation to strengthen the grid. We believe the only way to incentivize new capacity is to improve the long-term profit outlook for dispatchable gas assets via market reforms or other legislation and expect this to benefit those like Vistra who already own existing dispatchable generation. 

We also believe US electricity demand is poised for significant growth for the first time in decades, and Vistra’s fleet of baseload power (both nuclear and natural gas) is uniquely positioned to benefit. As the AI arms race commences, McKinsey estimates new data center build could drive an incremental 800 TWh of global electricity demand by 2030, with 40% of this driven by Generative AI1. The US is expected to capture roughly half of this demand, as bargain-basement power prices make it the world’s leading destination for new data centers despite higher labor and real estate costs. We expect data centers to drive domestic demand growth to accelerate 1-2% per annum over the next five years against a baseload supply backdrop that continues to decline as coal is phased out. Rising electric vehicle penetration is subsequently expected to add an additional 1% to annual growth (Pacific Gas & Electric, who serves a region with over 20% EV penetration, highlights that every two new EVs is equivalent to a new household in terms of demand)

Because many data centers require 24/7 power (which cannot easily be provided by renewables) and connection timelines for utility grids exceed three years in some cases, hyperscalers have shown growing interest in contracting directly with nuclear plants behind the meter to ensure speedy, consistent access to electricity. For example, Amazon recently signed a 20-year agreement with nuclear operator Talen to buy power at a ~60% premium to market prices. Despite this premium, nuclear remains by far the cheapest direct source of clean energy for a hyperscaler; the estimated levelized cost of electricity for a renewables system fit to provide 24/7 power is an eyewatering $200 per MWh, roughly triple what Amazon will pay Talen2. 

Vistra is in the pole position to capitalize on these trends, and we expect the discount applied to their assets to continue to narrow as their business becomes increasingly essential to serving domestic power demand. 

Alphabet 

During Q1, the funds made a substantial investment in Alphabet as the market worried about the impact of LLMs, personal assistants, and answer engines such as Perplexity AI on Google Search. We have owned Alphabet in the past and have long admired its exceptional business model and its proven ability to maintain a leading position across an array of preeminent products such as Search, Gmail, Android, GCP, and YouTube. 

The concern that in an AI world, changes in the way consumers will eventually interact with their personal devices and with the internet can result in risks to Alphabet’s core business Search is not entirely unfounded. Alphabet, however, has both a substantial distribution and technology advantage over competitors and is positioned to use its AI capabilities to unify, enhance, and better monetize the entire suite of its products.

 In early March, Gemini’s initial blunders further contributed to the narrative that Alphabet will end up an AI loser. Assigning primacy to a small operational misstep while demoting the fact that the company has been building world-class capabilities in AI for over a decade, created an attractive entry point for a long-term investor. While it is easy to forget that the original paper on Transformers which paved the way for the rise of LLMs was published by Google engineers, and that it was Alphabet that built two of the leading AI research organizations (Google Brain and DeepMind), when news reports previewed Apple’s intentions to embed Gemini into iOS, investors paid attention. We believe the moment when Gemini takes a seat at the economic table is approaching. Page 7 

As to the question of disruption of Google Search, it is important to imagine that generative AI is likely to take content creation costs to zero, not unlike when the internet took distribution costs to zero. The post-AI internet will have lower barriers to entry in a lot of content- and information-dependent industries while at the same time increasing customer acquisition costs. Google stands to benefit from this megatrend. We envision the eventuality of a world of greatly reduced content creation costs and a proliferation of information, a lot of it in the form of ad-supported content full of AI fakes. Against that backdrop, Google Search will be increasingly important as a source of truth. 

Despite recent efforts to contain expense growth, Alphabet full-time employees have grown at a 14% CAGR since 2017 and the median total compensation per employee, at $280,000, is the second highest among major technology companies. This excessive increase in the company’s employee base, combined with a slowdown in revenue growth, has resulted in Alphabet achieving significantly lower revenue per employee than companies like Netflix, Apple, Meta and Nvidia. However, we are encouraged by improvements evident in the most recent quarter as well as management’s decisive handling of employee unrest, in sharp contrast to its prior capitulation to a mob of angry employees in its cancellation of Project Maven in 2018. 

Sincerely, Daniel S. Loeb CEO

https://assets.thirdpointlimited.com/f/166217/x/785ef96e1a/third-point-q1-2024-investor-letter_tpil.pdf

WHO Pandemic Treaty Ignores Covid Policy Mistakes

 by Kevin Bardosh & Jay Bhattarcharya via RealClearPolicy,

The World Health Organization is urging the U.S. and 193 other governments to commit next month to a new global treaty to prevent and manage future pandemics. Current estimates suggest over $31 billion per year will be needed to fund its obligations, a cost most lower income countries cannot afford. But that isn’t the only reason to oppose it. Validating this treaty is a vote for the disastrous policies of the Covid years. Rather than taking time for deep reflection and serious reform, those pushing the pandemic treaty are set on ignoring and institutionalizing the WHO’s mistakes.

From the Spring of 2020, many experts warned that the panic begun in Wuhan’s unprecedented lockdown would cause wide-ranging damage—and indeed they did. School closures deprived a generation of children—especially poor children—of access to basic education. Businesses were shuttered. Vaccine and mask mandates made public health an authoritarian exercise of power devoid of science. Border quarantines promulgated the idea that the rest of the world is unclean.  

But few experts care to seriously dissect these errors. How many schools of public health—in America or Europe—held serious debates during the Covid response, or since? Very few.

Opposing the treaty is a signal to the WHO and global health community that they cannot whitewash these mistakes. Next time, we need to ensure a better balance between trade-offs, evidence-based policies, and democratic rights. Such a view seeks to restore the WHO’s own definition of health into pandemic response: “a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.”

Yet the governing philosophy of the WHO emergency program is the exact opposite. Its leaders chastise the world to “move faster’ and “do more.” Bill Gates, the agency’s single largest private donor, is convinced lockdown benefits vastly outweighed their harms. He’s wrong. 

Read through the current draft of the treaty itself and you will find a whole section dedicated to “fighting misinformation.” There is no section focused on preventing harm. Those speaking out about these dangers have been subjected to harsh censorship. Once esteemed professionals were summarily fired for describing the reality of what was happening. The authors of the anti-lockdown Great Barrington Declaration—professors at Stanford, Harvard, and Oxford—were subject to a “devastating takedown” at the hands of Dr. Fauci and top scientific bureaucrats at the National Institutes of Health and the WHO. 

Public health came to resemble the police, and those pushing the new WHO treaty want to go further. It calls for more mandates, more vaccine passports, and more censorship—our new global health “Lockdown Doctrine.”

Proponents of the treaty would have you believe that it is merely a tool that countries can use to guide future pandemic response efforts, that it cannot trump national sovereignty or be used to force failed policies on entire populations. But the lifeblood of international treaties is not in the dried ink. Treaties are constantly ignored. Nonetheless, they do one thing very well: they create an illusion of consensus, signaling to those with power and influence. These priorities are then filtered down into national laws and plans where they can do tremendous damage. 

How can national governments seriously endorse an international agreement when their own domestic Covid evaluations are ongoing? The UK Covid Inquiry is set to end in 2026. Australia’s commission is ongoing. Italy and Ireland have only recently announced them. Most have none planned. 

The rush needs to slow down. The U.S. should avoid signing until a thorough, bipartisan review of WHO’s Covid pandemic management is accomplished. Until then, a vote for a pandemic treaty is a vote against real, positive change. 

Kevin Bardosh is Director and Head of Research at Collateral Global. Jay Battacharya is a Professor at Stanford School of Medicine.

https://www.zerohedge.com/geopolitical/world-health-organizations-pandemic-treaty-ignores-covid-policy-mistakes

Health Canada Asked Pfizer For DNA Fragment Size In COVID Vax, Tied To 'Probability' Of Genomic 'Integration'

 by Noé Chartier via The Epoch Times (emphasis ours),

Canada’s drug regulator asked Pfizer to provide data on the size of DNA fragments in its COVID-19 vaccine, due to genomic integration concerns, shortly after learning the pharma giant withheld information on DNA sequences contained in its product.

“Concerning the residual plasmid DNA in the drug substance, provide data/information characterizing [...] the size distribution of the residual DNA fragments [and] residual intact circular plasmid,” says a request for clarification Health Canada issued to Pfizer on Aug. 4, 2023.

The information was released as part of records obtained through an access-to-information request. It shows, in part, that a Health Canada official was keeping the department’s counterparts in the United States and Europe apprised of the department’s interactions with Pfizer, in a bid to harmonize the regulators’ approaches regarding the recently discovered DNA fragment impurities.

“As you are aware, the fragment size is related to the probability of integration, and the WHO guidance assumes a fragment size of generally less than 200 bp,” Dr. Dean Smith, a senior scientific evaluator in Health Canada’s Vaccine Quality Division, wrote in an October 2023 email to counterparts at the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA).

DNA plasmids are used in the manufacturing process of mRNA vaccines and residual elements are supposed to be cleaned out below a certain threshold. Pfizer said DNA in its products is below the 10ng/dose guideline established by the World Health Organization (WHO) and followed by Health Canada, according to the official records.

This assertion has been challenged by independent scientists, who found quantities of DNA in the vaccines to be above the threshold. They have also found the DNA fragments are larger than 200 base pairs (bp).

Virologist Dr. David Speicher, who has studied Canadian mRNA vials, told The Epoch Times the average size of fragments his study found is 214 base pairs (bp), with some as large as 3.5 kilobase (kb).

While small fragments frequently integrate spontaneously into the genome, these mutations are stopped through either DNA repair mechanisms or cellular death, Dr. Speicher said.

“Larger fragments are much more problematic, especially if attached to an SV40 enhancer, because they can integrate into the genome where they can get transcribed and then translated into proteins,” he added. Independent scientists like Dr. Speicher found the undisclosed SV40 enhancer in Pfizer shots, a piece of biotechnology used to drive gene expression.

Depending on the DNA fragment size, it can produce functional or aberrant proteins, Dr. Speicher explains. “These proteins can affect cellular metabolism, an immune response, as well as an increased risk for cancer. The risk of integration and associated health problems increases with the number of shots.”

The Florida State Surgeon General Dr. Joseph A. Ladapo has called for a halt of mRNA shots, citing concern about these risks. Dr. Philip Buckhaults, professor of cancer genomics and director of the Cancer Genetics Lab at the University of South Carolina, has initiated a study to investigate the risks.

Health Canada has not studied those risks, but told The Epoch Times last summer “the presence of residual plasmid DNA in the mRNA COVID-19 vaccines does not change the safety assessment of these vaccines.”

Seeking Clarifications

Despite providing this answer to media in the summer of 2023, Health Canada scientists were privately discussing working with international partners to have Pfizer remove DNA fragments and SV40 sequences from its vaccines and they prepared several requests for clarification to the company.

In an August 2023 email to a colleague providing information to relay to Pfizer, Health Canada senior biologist evaluator Dr. Michael Wall said his department would “continue to work with international regulatory partners to achieve harmonization regarding removal of these sequence elements from the plasmid for future strain changes.”

Records show Health Canada was blindsided by the presence of undisclosed genetic substances in the Pfizer-BioNTech vaccines, almost four years after the initial emergency authorization.

After Pfizer filed its submission for the authorization of its updated Omicron XBB.1.5 shot on July 21, 2023, Health Canada sent the company several Quality Clarifax—requests for additional information if deficiencies are identified in drug submissions—with the first one dated Aug. 4, 2023.

Regarding the residual plasmid DNA in the COVID-19 vaccines, Health Canada asked Pfizer to provide data on the size distribution of the DNA fragments and on residual intact circular plasmid.

Pfizer said this data was “not readily available and will require time to generate,” in a response on Aug. 11, 2023. The pharma giant added that Pfizer, the drug sponsor, and BioNTech, the manufacturer, had not been previously requested to provide this data across global markets.

Pfizer committed to provide the data by Dec. 1, but the response is not captured in the information package released under the access-to-information regime.

In a subsequent request for information sent on Aug. 22, 2023, Health Canada noted Pfizer’s commitment to provide the information and added a request by asking Pfizer to address “whether the residual DNA plasmid is capable of replication in bacteria.”

Virologist Dr. Speicher, commenting on the agency’s request, noted that plasmids need to be circular to be replicated in a bacterial host, and that fragments can’t do so.

“So if they were intact circular plasmids and injected, they could be taken up by our host bacteria, especially in the gut,” he said. “If the plasmid could propagate in bacteria into our body it could lead to a bacterial spike factory and drive kanamycin/neomycin resistance.”

“This would cause an increase in antibiotic resistance of the bacteria including pathogens and increase spike production, and we know that spike is toxic on so many levels,” he said.

Dr. Speicher added that Pfizer should have tested for this before putting its products to market. The fact that it did not have the data indicates it did not test for it, he said.

SV40 Enhancer

The request for information that Health Canada sent to Pfizer mainly focused on the presence of the Simian Virus 40 (SV40) enhancer-promoter in the Pfizer-BioNTech shots.

Health Canada and other regulators like the FDA and EMA were not aware of its presence, since Pfizer “chose not to” disclose it, according to a separate email from Health Canada scientist Dr. Smith.

Many sections of the Clarifax are redacted under the Access to Information Act, with reasons such as content containing proprietary information or which could lead to a material gain or loss for a third party, in this case Pfizer and BioNTech.

The information disclosed shows that Health Canada challenged Pfizer on SV40 and asked for a “justification for the SV40 regulatory elements in the plasmid.”

Pfizer responded that the “SV40 regulatory region sequences [redacted] in the submission since this [redacted] is relevant neither for plasmid production in E. coli nor for production of mRNA.”

This is the position that has been adopted by Health Canada. In response to questions by the media and parliamentarians, the regulator has stated the SV40 enhancer-promoter is “inactive” and has “no functional role.”

But Pfizer and Health Canada have not addressed why the SV40 enhancer-promoter is present in the vaccine if it is not used in the production of mRNA and has no functional role. Genomics expert Kevin McKernan has questioned this when faced with responses from regulators.

Mr. McKernan made the initial DNA and SV40 fragments discovery and published his study in April 2023. His pre-print paper on the matter appears twice in the Health Canada information package released via access-to-information.

Mr. McKernan has pointed out that regulators could have discovered the SV40 sequences themselves had they run the plasmid through a computer annotation tool.

“If you ever used plasmid annotation tools, they annotate everything on the map and they don’t leave anything unannotated,” he told the International Covid Summit in February. 

He provided his assessment to the summit of why Pfizer went this route. “They’re hiding the fact that this tool [SV40 enhancer] is used as a gene therapy tool and would classify their system as a gene therapy,” he said. “Because it’s a nuclear targeting sequence it moves DNA directly to the nucleus within hours in all cell lines.”

The American Society of Gene and Cell Therapy (ASGCT) classifies the mRNA injections as gene therapy, whereas Health Canada does not.

“The mRNA from the vaccines does not enter the cell nucleus or interact with the DNA at all, so it does not constitute gene therapy,” said Health Canada in a response to a parliamentarian on Dec. 13. The ASGCT also says the mRNA doesn’t alter the “recipient’s generic material” and is only present in the body “transiently.” However, because the vaccine introduces “new genetic material into cells for a short period of time to induce antibodies,” the American organization considers it gene therapy.

Pfizer said in a response to the Aug. 4 Health Canada request for information that the “SV40 promotor/enhancer DNA does not contain known oncogenes, infectious agents, or regions that could lead to functional transcripts, the DNA does not present any specific safety concerns.”

Health Canada also said in a document tabled in Parliament in March that “any claims the presence of the SV40 promoter enhancer sequence is linked to an increased risk of cancer are unfounded.” Health Canada itself has not studied the risks.

‘Drive Gene Expression’

A senior Health Canada’s scientist’s view on the role of SV40 fragments is captured in an Oct. 26 email written in response to questions from Chief Medical Officer Dr. Supriya Sharma.

Dr. Tong Wu of Health Canada’s Vaccine Quality Division responded that the “SV40 promoter enhancer is widely used to drive gene expression in mammalian cells.” He added, however, that it “serves no purpose in the manufacturing of Pfizer COVID-19 vaccines.”

Dr. Wu said it was unexpected to find the sequence in the finished product, since “Pfizer did not identify the presence of SV40 promoter enhancer on the plasmid template used to produce mRNA, in their original filing.”

Dr. Wu also said that “to the best of our knowledge,” no other vaccine approved in Canada contains the SV40 sequence.

Pfizer was contacted for comment, but the company hasn’t responded to inquiries.

Matthew Horwood contributed to this report.

https://www.zerohedge.com/political/health-canada-asked-pfizer-dna-fragments-size-covid-shots-linked-probability-genomic