Despite ‘robust’ Syfovre growth, concerned Apellis investors sent shares down 10%

 Apellis’ geographic atrophy drug Syfovre delivered what CEO Cedric Francois called “robust” growth in the first quarter, as its sales topped analysts’ expectations. But investors still dragged the company’s shares down by 10% on Tuesday.

The stock selloff after Apellis’ earnings call was driven by “lack of investor confidence around management’s comments and its attempts to address near-term headwinds that are likely to hit the company” in the second quarter from Astellas’ competitor drug Izervay, Mizuho analyst Graig Suvannavejh, Ph.D., observed in a note to clients Wednesday.

The additional threat from Izervay comes in the form of a permanent J-code, which went into effect in April. A J-code in drug billing can streamline the reimbursement process and improve uptake of an injectable drug.

Both Izervay and Syfovre are new complement inhibitors. Despite the increasing competitive pressure, Apellis executives on Tuesday repeatedly argued that Syfovre’s clinical profile can withstand the challenge and that the GA market is large enough for several products.

For now, Syfovre holds 85% of the market share, Apellis’ chief operating officer, Adam Townsend, said on the conference call. But it was only a few days ago that Astellas said on its own earnings call that Izervay had reached about 25% market share.

The two firms are calculating market share differently, Townsend explained. While Apellis focuses on the number of patients treated, Astellas measures product vials shipped, which may also include doses that remain at wholesalers and in doctors’ fridges.

Amid the competing launches, one disadvantage for Syfovre is an eye inflammation concern flagged by experts in July of 2023. So far, the vasculitis rate remains rare and stable at about 1 in 10,000 injections, and it’s more of a problem following a first injection, Townsend said. According to the Apellis exec, retina specialists are getting comfortable with the rare problem as they gain more knowledge about the therapy; many who had previously paused or decreased their use of Syfovre are back, he said.

“The efficacy is something that really stands out for Syfovre versus our competitor, which, at the end of the day, we think will be the most important,” Townsend said.

As for the GA market overall, only about 12% of an estimated 1.5 million patients are diagnosed and being treated by a specialist, according to Townsend.

In a bid to reach more patients with its therapy, Apellis recently launched a branded direct-to-consumer campaign. The good news is, capacity isn’t “remotely a problem,” Townsend said, as retinal physicians have said they can accept many more patients.

“Competition is healthy, and competition does grow an incredibly large market,” he said.

Francois wasn’t exaggerating when he said Syfovre just had a “robust” quarter. Revenue from the GA drug reached $137.5 million, compared with Bloomberg's consensus estimate of $127.4 million, according to Mizuho.

Apellis distributed 72,000 commercial doses of Syfovre in the first quarter, up from 55,000 in the last three months of 2023. The company also continues to see a double-digit increase in new treatment sites each week, with the roster climbing to 2,000, Townsend said.

As for Astellas, the Japanese drugmaker distributed about 50,000 Izervay vials during its launch from September to March, analysts at Evercore ISI pointed out in their Tuesday note to clients. By comparison, Apellis shipped more than 400,000 vials in the same timeframe.

Nevertheless, Astellas CEO Naoki Okamura during an earnings call on April 26 said Izervay is tracking above the company’s expectations. For Astellas’ fiscal year that ends in March 2025, the company expects Izervay sales of 46.4 billion Japanese yen ($300 million).

Apellis did not provide a sales projection for Syfovre this week. Wall Street consensus currently has the drug reaching $640 million this year, according to Mizuho.

https://www.fiercepharma.com/pharma/despite-robust-syfovre-growth-concerned-apellis-investors-sent-shares-down-10

State Dept Hiding Documents That "Credibly Suggest" COVID-19 Lab Leak: House Investigators

 The House Select Subcommittee on the Coronavirus Pandemic has revealed that classified documents from the State Department "credibly suggest" that COVID-19 originated from a "lab-related accident in Wuhan, China," and that the CCP "attempted to cover up the lab leak."

In a Tuesday letter to Secretary of Stater Antony Blinken, Committee Chairman Brad Wenstrup (R-OH) asks that the State Department declassify the records to "share the truth" about the origins of COVID-19 with the American people.

Wenstrup noted that the documents were previously unclassified and released in a 'highly redacted' form to satisfy a Freedom of Information Act (FOIA) request, but the unredacted version which remains classified suggests:

1. COVID-19 originated from a lab-related accident in Wuhan, China;
2. The CCP acted to prevent, and in fact obstructed, a fulsome investigation into these matters; and
3. A seamless relationship between the WIV and the Chinese People’s Liberation Army.

Wenstrup has requested a 'staff level briefing' by May 14, and notes that the briefing was previously requested on April 24 of this year, "with the goal of it occurring prior to the Select Subcommittee's hearing with the President of EcoHealth Alliance, Inc. - and known WIV collaborator--Dr. Peter Daszak," but that "the Department responded that it could not support a briefing on that timeline.

The highly redacted version of the letter can be seen below:

https://www.zerohedge.com/covid-19/state-department-hiding-documents-credibly-suggest-covid-19-lab-leak-house-investigators

Y-mAbs misses on revenue

 

• Revenue: Reported $19.93 million for Q1 2024, slightly below the estimate of $22.22 million.

• Net Loss: Posted a net loss of $6.63 million for Q1 2024, exceeding the estimated loss of $4.86 million.

• Earnings Per Share (EPS): Recorded a loss of $0.15 per share, slightly higher than the estimated loss of $0.14 per share.

• Gross Margin: Maintained a consistent gross margin around 89%, closely aligned with the previous years 90%.

• U.S. DANYELZA Net Product Revenues: Increased by 11% year-over-year to $18.6 million, driven by higher demand across new and existing accounts.

• Research and Development Expenses: Slightly decreased by 1% to $13.3 million, reflecting a balance between reduced personnel costs and increased clinical trial expenses.

• Cash Position: Ended the quarter with $75.7 million in cash and cash equivalents, expected to support operations into 2027.

https://finance.yahoo.com/news/y-mabs-therapeutics-reports-q1-221247270.html

State official won’t say how many illegal pot shops as NYC begins crackdown: ‘Larger than we’d like’

 A state cannabis regulator refused to give an estimate of how many illegal pot shops there are in New York while Mayor Adams announced a five-borough “Padlock to Protect” program Tuesday to close down the illicit weed stores.

“It’s much larger than we’d like it to be,” Pascale Bernard, the state Office Cannabis Management’s deputy director of intergovernmental affairs, said during a Tuesday meeting at Queens Borough Hall.

Borough President Donovan Richards then asked for a “guesstimate” on the number of illicit shops that have been the scourge of neighborhoods across the Big Apple and a thorn in the side of the budding legal cannabis market.

“I wouldn’t want to put out a number that is either inflated or deflated,” Bernard said.

“We recognize this is an issue,” she added.

She said a new state law recently approved by Gov. Kathy Hochul and the legislature will make it easier and “turn the tide” against the illegal shops.

Richards was not impressed by the lack of specifics at the meeting that included district managers from the borough’s community boards.

“They should at least have a guesstimate. I was trying to smoke them out,”‘ the borough president quipped.  

Adams and city Sheriff Anthony Miranda said there are about 2,900 suspected stores illegally selling marijuana in the city.

By comparison, 55 of the 119 licensed shops statewide are in the city.

3

A state cannabis regulator refused to say how many illegal pot shops there are in New York while Mayor Eric Adams announced a “Padlock to Protect” program to close down illicit weed stores.Michael Appleton/Mayoral Photography Office

More than 20 shops were inspected on Tuesday — including the Bud & Beyond, at 386 Canal St. near West Broadway, and Big City Smoke Shop at 110 Church St.

The sheriff’s office, the NYPD and the Department of Consumer and Worker Production took part in the inspections.

Adams gave a pep talk to the cannabis cops at the city sheriff’s in Long Island City before the raids to stress the importance of the mission, including protecting youths who’ve been targeted by the illegal industry with colorful candy-looking packaging for cannabis edibles.  

“Today, our administration is delivering on a promise to shut down unlicensed smoke and cannabis shops, protect our young people, and ensure that the future of legal cannabis burns bright in New York City,” Hizzoner said.

3

“It’s much larger than we’d like it to be,” Pascale Bernard, the state Office Cannabis Management’s deputy director of intergovernmental affairs, said during a Tuesday meeting at Queens Borough Hall.Michael Appleton/Mayoral Photography Office

“Thanks to Gov. Kathy Hochul and our partners in the state Legislature, New York City is now using the full force of the law across every borough to padlock and protect our streets. Legal cannabis remains the right choice for our city, but to those who choose to break the law — we will shut you down.”

Miranda said a majority of the locations visited Tuesday were closed after vast quantities of cannabis and illegal hallucinogens such as the “magic mushroom” Psilocybin were found on the premises.

He said residents as well as the illegal head shops took notice.

“We’ve gotten a great response from the community,” the sheriff said late Tuesday afternoon.

3

Borough President Donovan Richards then asked for a “guesstimate” on the number of illicit shops that have been the scourge of neighborhoods across the Big Apple and a thorn in the side of the budding legal cannabis market.Michael Appleton/Mayoral Photography Office

“As for the illegal cannabis shops, they know we’re coming. It’s a question of when.”

The new law gives authorities an immediate cease-and-desist and sealing order to keep the illicit shops closed pending an administrative review.

Previously, shops would reopen just days after a raid.

The owners and landlords of the buildings face stiff penalties for refusing to abide by closure orders.

Still, some elected officials and civic leaders said they will oppose the opening of state-licensed cannabis shops until the illegal ones are closed — among them Staten Island Borough President Vito Fossella.

He was skeptical that the crackdown would end the illicit market.

“It is like whack-a-mole; when authorities close one shop, two or three more open to take its place. For the three currently operating legal dispensaries, there are over 100 illegal smoke shops infesting the most frequented corners of Staten Island, especially those frequented by families and schoolchildren,” Fossella said.

“Existing law enforcement resources are not adequate to contain the proliferation of these pot shops, thinly disguised as ‘convenience’ stores or ‘gift’ shops … We propose that the Office of Cannabis Management should cease granting new licenses to cannabis dispensaries until the Sheriff’s Office and other local authorities have padlocked and permanently closed each and every illegal smoke shop on Staten Island.”

Community Board 9 in central Queens covering Kew Gardens, Richmond Hill, Ozone Park and Woodhaven also said it would oppose any licensed weed shops until all the illegal ones have been shut down in the area.

Miranda said the sheriff’s office has a staff of 250 workers but stopped short of saying how many are assigned to cannabis enforcement.

https://nypost.com/2024/05/07/us-news/state-wont-say-how-many-illegal-pot-shops-there-are-as-nyc-cracks-down/

Myriad Strong Growth, Guidance

 

• Revenue Growth: Achieved 12% year-over-year in Q1.

• Adjusted EBITDA: Reported positive in Q1.

• Adjusted EPS: Near breakeven in Q1.

• Hereditary Cancer Testing Revenue: Grew 16% year-over-year.

• Prenatal Revenue: Increased 22% year-over-year.

• GeneSight Revenue: Increased 21% year-over-year.

• Adjusted Gross Margin: Improved by 80 basis points year-over-year to 58.5% in Q1.

• Adjusted Operating Expenses: Decreased by 4% year-over-year.

• Net Promoter Score: Increased to 74 in Q1 from 70 in full year 2023.

• Full Year 2024 Revenue Guidance: Projected between $820 million and $840 million.

• Full Year 2024 Adjusted EPS Guidance: Between breakeven and $0.05.

Q: Congrats on the quarter. Maybe Paul or maybe Mark, just talk a little bit about the runway that you see for future market share gains in both hereditary cancer and Prenatal. You made some comments that it's sort of just at the beginning, so would love to know kind of where you see that runway and how long? And then how sticky are the new relationships that you're building? I'd assume if you get those relationships, it's probably easier to keep them over time, post winning them. I just want to get some color around that. A: Paul J. Diaz - Myriad Genetics, Inc. - CEO, President & Director: Yes, Matt. Well, look, first, it's the early phase of this, particularly for large accounts, these institutions take a while to make changes. I would say what's happened, and Mark will elaborate here, is that we're in the room now, certainly with 2 or 3 other competitors and people are revisiting their choices. And as I said earlier, we're really focused on the things that they tell us they care about, ease of use, clinically-differentiated products. And that's where EMR and the other point-of-care things really matter. But you're absolutely right that these relationships I think will be stickier. I mean you know I come from a large hospital system world. And once these institutions make changes without the disruptions that we're seeing now, it's very hard to kind of get in. Now that being said, genomic testing is not #1, 2, 3 or 10 on the list of a hospital system's priorities, but we're pretty excited. I think that expectations should be, though, that the business we hope to sign in the back half of the year certainly could give us a lot of momentum going into '25. But you really won't see the what I think is a big opportunity to fully come through until '25. But Mark, why don't you take it.

Q: Great. And then maybe just as my follow-up, a related question. Perhaps, again for you, Mark, just given the change in incentives for the commercial team to revenue from volume, does that help salespeople target the right customers? I'm sure in this market dislocation, there's a number of customers that might not be economically viable. And this change in incentive, does it focus your salespeople on attracting the right customers? And what has the reception been from your commercial team to this change in incentive? A: Mark S. Verratti - Myriad Genetics, Inc. - Chief Commercial Officer: Yes, Matt, you are spot on, right? I think when we make those changes, it -- it just allows our team to focus their attention. It isn't that we're excluding any particular patient or any particular provider. But from a point of focus and even to Scott's comments, just all of our efforts around revenue cycle management, making sure that the order, making sure that the provider knows what the guidelines, making sure the provider has an understanding that what the specific payer coverage is and making sure that at time of ordering, we're collecting as much information as we can, absolutely allows us to be able to pull through increased ASP. And that's something that I think in this space, Matt, just really was not -- teams just really didn't have that type of focus. So I would definitely agree with you there. And I would say the acceptance from the sales force has been 100% aligned. That's -- obviously, that's how they get paid. That's how they get compensated, but it's also about the way that they spend their time in the field, right, where they're not wasting time focusing in areas that aren't going to benefit the company and they're certainly not going to benefit them.

Q: I want to start with a high-level one. Scott and Sam, it's now been a few months since you joined the company. I'm curious where you are in the process of essentially evaluating the firm, evaluating your teams. Essentially, what's better, what's worse? It just would be interesting to get an update on kind of your early learnings and kind of what -- where you think you are in essentially starting to play offense in your leadership roles at the new firm? A: Scott J. Leffler - Myriad Genetics, Inc. - CFO: Sure. I'll start off and then hand it over to Sam. First of all, thanks very much for the question. I could not be more thrilled to be at Myriad, but also with everything that I've seen and learned, both about the company itself and the momentum that it has, but also in terms of the overall broader market opportunity that we see in front of us. I just feel privileged to have joined the company at what is a very special inflection point where so much great work and so much great investment has already been done. And I think you can see a lot of the fruits of that effort in our results from Q1 but also to now see the landscape in front of us in terms of the ability to accelerate growth throughout 2024 and going forward. So if there is any learning that I've had in the last 3 months at the company, is how extraordinary the progress that has been made but the momentum also that we have going forward (inaudible) forward. Sam?

Q: Congrats on a strong quarter. Maybe first one, obviously, you had a really solid start to the year. You maintained the full year guide. You talked about, I think, just prudence. But could you speak to -- it didn't sound like there were -- I think you called out $3 million maybe in prior period benefits, so most of the beat was all organic. So is there anything that would prevent you from seeing this strength continue? Just wondering why not kind of raise the guide now? A: Paul J. Diaz - Myriad Genetics, Inc. - CEO, President & Director: We agree, Dan. We're just putting one foot in front of the other here. It's a really strong start to the year, particularly on the ASP side, that we see run through the year. And we certainly can build on that, hopefully exceed guidance as we go through the rest of the year, but just didn't see clear to get ahead of ourselves at this point.

Q: On reproductive health, a couple of larger players have exited the market. And you clearly have made progress in capturing share, but how are you gaining share without compromising on going forward when the business model of (inaudible) the market? A: Paul J. Diaz - Myriad Genetics, Inc. - CEO, President & Director: I'm not really sure if I followed, you didn't come through particularly clearly. I think the question was how are we gaining share profitably. I'm sorry, could you just restate the question, please?

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

https://finance.yahoo.com/news/myriad-genetics-inc-mygn-q1-074746479.html

Private US Firm With Special Forces Veterans To Take Control Of Rafah Border Crossing

 Despite the Biden administration repeatedly warning Israeli leadership in public against a full-scale Rafah invasion, President Biden actually greenlighted the IDF's takeover of the Rafah border crossing, Axios has revealed. The report comes amid questions over whether Netanyahu has crossed Biden's "red line" on Rafah.

The report insists that Israel hasn't crossed that line, so long as the scope of the operation remains limited and does not result in mass civilian displacement and humanitarian catastrophe. Speaking of the Biden-Netanyahu phone call on Monday, a senor Israeli official told Axios, "Biden didn't pull the hand break on the capture of the Rafah crossing during the call." So far the IDF has focused on airstrikes and limited ground incursions in the city's east, after dropping thousands of leaflets telling civilians to exit the area.

However, the US administration has taken the unprecedented step of withholding ammo and bomb shipments to Israel in order to send a 'message'. 

An Israeli Haaretz report issued Tuesday has further revealed that there was actually some level of cooperation and coordination with Washington on an IDF tank unit's takeover of Rafah crossing. This was reportedly to ensure no weapons for Hamas can pass into the Strip via the large crossing.

The US, Israel, and Egypt have agreed that a private American security firm will take control of Rafah Crossing and oversee it. As of Wednesday, the IDF has announced it reopened the crossing, and it is retaining full control for now.

"The parties agreed that a private American security company will assume management of the crossing after the IDF concludes its operation. Israel has also pledged not to damage the crossing's facilities to ensure its continuous operation," wrote Haaretz. However, "State Department spokesperson Matthew Miller said on Wednesday that he is not aware of Israel agreeing to transfer control of the crossing."

This is also to exert leverage in negotiations. "Israel believes that Hamas' loss of control over the Rafah crossing would be a significant setback for the group," Haaretz noted. "It will not be able to collect taxes imposed on trucks and goods and will no longer be able to bring in weapons and other items banned from entering Gaza."

Haaretz revealed limited details on the US defense firm in question and has not named it. It employs elite former US military personnel such as ex-special forces operators: 

As part of Israel's efforts to win agreement for a Rafah operation, negotiations have been underway with a private company in the U.S. that specializes in assisting armies and governments around the world engaged in military conflicts. The company has operated in several African and Middle Eastern countries, guarding strategic sites like oil fields, airports, army bases and sensitive border crossings. It employs veterans of elite U.S. Army units.

Under the understandings between the three countries, when Israel has completed its limited operation in the border crossing area, the U.S. company will take responsibility for operating the facility. That includes monitoring goods arriving in the Gaza Strip from Egypt and preventing Hamas from re-establishing control of the crossing. According to the agreement, Israel and the U.S. will assist the company as necessary.

It the report is accurate, it would mean American military contractors would be put in harm's way, and that US elite veterans could eventually enter a firefight with Palestinian militants.

US contractors on the ground would certainly also be seen as a key target for Hamas and other Palestinian militant groups (such as PIJ). Hamas has long warned that any foreign troops or military entity that enters the Gaza Strip will find itself under attack.

But there has yet to be any official government confirmation of the US contractor plan for Rafah crossing from either Washington or Tel Aviv, and time will tell if such a controversial plan comes to fruition. If it happens, this means American military contractors would be active in two major hot conflicts: Ukraine and Gaza (not to mention in eastern Syria and Iraq as well).

https://www.zerohedge.com/geopolitical/private-us-firm-special-forces-veterans-take-control-rafah-border-crossing

Ukraine Passes Bill To Recruit Prisoners For Depleted Army Ranks

 The severe manpower crisis of Ukraine's armed forces continues to be on display, particularly after the recent decision of the government to deny embassy and consular services for Ukrainian men of fighting age who live abroad but refuse to come back home.

Ukraine's parliament on Wednesday just once again upped the controversy and advanced a dramatic change in law and national policy. It passed a bill enabling select prisoners to be released in order to fight in the armed forces.

"The parliament has voted 'yes,'" MP Olena Shuliak, head of Zelensky's party, announced in a social media post. "The draft law opens the possibility for certain categories of prisoners who expressed a desire to defend their country to join the Defense Forces," she said.

Ironically Moscow has previously come under international condemnation and mockery for just such a policy.

AFP and other international outlets acknowledged this as follows: "Long-opposed to the measure and having criticized Moscow's mobilization of prisoners to fill its ranks, Kyiv has recently U-turned amid fresh Russian advances on the battlefield," a report said.

The legislation still has to be signed by parliament's chairperson and President Zelensky in order to come into force as an active policy. The bill includes the following reported stipulations and parameters:

• Prisoners must volunteer
• Only those with three or more years left on their sentence can apply
• Those convicted of violent sexual crimes are not eligible
• Former high-ranking officials and those guilty of "serious corruption" are not eligible
• Prisoners who killed two or people are not eligible

One glaring aspect is that it appears literal murderers can possibly still go free if they join the army, so long as they killed no more than one person, based on the AFP's reporting

The following unexpected and bizarre line is in the AFP report detailing the new Ukrainian bill:

Among those not eligible to serve include those found guilty of sexual violence, killing two or more people, serious corruption and former high-ranking officials, Shuliak said.

However, some conflicting information has emerged. The below is via a Ukrainian news source:

Shuliak told Ukrainska Pravda that the following will not be eligible to join the Armed Forces of Ukraine: those who have committed premeditated murder, rapists and paedophiles, corrupt officials, those who have committed crimes against the foundations of Ukraine's national security, and those who have held a particularly responsible position, including MPs and ministers.

Meanwhile, Ukrainians living abroad are said to be outraged at the government's efforts to lure them back to Ukraine by the denial of consular services. One 19-year old man living abroad told Al Jazeera the following:

“I support individual battalions in Ukraine with donations every month – this is my duty,” said Anton, who works as a waiter.

“But I don’t want to fight, as I don’t trust our government. They don’t care about people. And they don’t care if there’s a war going on, they’re corrupt and keep stealing the money that we pay for the army. Why go to war for a state who only wants to steal?” he said bitterly.

Another 35-year old man currently in Poland (where many Ukrainian families fled once the war began) told Al Jazeera as follows: "If the army could guarantee that my work would be aligned with my skills and knowledge, I would go back. I could help with drones and other technology. But getting a rifle and shooting would not be the most efficient way of utilizing my skills."

Ukraine forces continue losing ground along front line positions in the east. Not only are they outgunned, but the more experienced fighters who have been in it from nearly the beginning are exhausted, with commanders having few options in terms of rotating in fresh battalions from the back.

https://www.zerohedge.com/geopolitical/ukraine-passes-bill-which-taps-prisons-fill-depleted-army-ranks