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Monday, June 17, 2024

KKR Loads Up on Risky CCC Loans as Other Fund Managers Dump the Debt

 

  • Firm is scooping up CCC rated loans amid a ‘purge’ from CLOs
  • They still see opportunities despite compressed risk premiums

Credit investors are “focusing too much on spreads” and are missing out on bargains further down the credit rating spectrum where they can find better relative value, according to KKR & Co.

“There has been so much focus on how much tighter spreads can go in credit,” the firm’s Chris Sheldon, co-head of credit and markets, and Tal Reback, director, said in a phone interview. “Compelling relative value has become less apparent in this market, and many believe there are limited pockets of opportunity.” But the reality, they said, is that there is still a lot of opportunity, it just isn’t obvious.

https://www.bloomberg.com/news/articles/2024-06-17/kkr-buys-ccc-loans-as-investors-focus-too-much-on-debt-spreads

U.S. healthcare spending rises to $4.8 trillion in 2023, outpacing GDP

  Healthcare spending in the U.S. is projected to have risen 7.5% in 2023 to $4.8 trillion, federal data showed on Wednesday, outpacing the projected annual gross domestic product growth rate of 6.1%.

Spending on Medicaid and private health insurance drove the growth, with the insured share of the population surging to a historic high of 93%, data from the U.S. Centers for Medicare and Medicaid Services (CMS) showed.

The number of insured individuals largely grew due to record high enrollment in Medicaid, with 91.2 million people being covered under the federal and state health program for the poor in 2023.

Medicare spending is projected to have grown by 8.4% to over 1 trillion and the Medicaid by 5.7% to $852 billion. Spending on private health insurance is projected to have grown by 1.1% to $1.4 trillion.

The estimated healthcare spending per person in the U.S. stood at about $14,423 in 2023 and $15,074 in 2024.

National health spending is expected to grow by 5.2% in 2024, though Medicaid enrollment is set to decline by 11.2% when over 10 million people lose coverage now that pandemic response measures guaranteeing continuous enrollment have expired. An estimated further 2 million will lose coverage in 2025.

Spending is set to grow an average of 5.6% a year between 2023 and 2032, outpacing the projected annual gross domestic product growth rate of 4.3% during the same period.

The rise will lead to an increase in the health spending share of growth domestic product to 19.7% by 2032 from 17.3% in 2022, the data showed.

Spending in the Medicare program for people over the age of 65 and the disabled is set to initially grow during the coming decade partially due to measures in President Joe Biden's signature Inflation Reduction Act which among other provisions introduced a $2,000 annual cap on out-of-pocket spending.

It will gradually fall over the following years when the effects of other provisions kick in, such as drug prices negotiated by Medicare with pharmaceutical companies that are set to apply starting 2026, and the tying of drug price increases to inflation which already started in 2023.

https://www.yahoo.com/news/u-healthcare-spending-rises-4-222516871.html

'US Surgeon General calls for social media warning labels to protect adolescents'

 U.S. Surgeon General Vivek Murthy on Monday called for a warning label to be added to social media apps as a reminder that those platforms have caused harm to young people, especially adolescents.

Murthy wrote in the New York Times on Monday that a warning label alone will not make social media safe for young people but that it can increase awareness and change behavior as shown in evidence from tobacco studies. The U.S. Congress would need to pass legislation requiring such a warning label.

For a long time, Murthy has been warning that social media can profoundly harm the mental health of youth, particularly adolescent girls. In an advisory last year, he called for safeguards from tech companies for children who are at critical stages of brain development.

A 2019 American Medical Association study showed that the risk of depression doubled for teenagers who were spending three hours a day on social media.

"It is time to require a surgeon general's warning label on social media platforms, stating that social media is associated with significant mental health harms for adolescents," Murthy wrote on Monday.

"A surgeon general's warning label, which requires congressional action, would regularly remind parents and adolescents that social media has not been proved safe," he added.

Some U.S. states have been working to pass legislation to safeguard children from the harmful effects of social media, such as anxiety, depression and other mental illnesses as a result.

New York state lawmakers this month passed legislation to bar social media platforms from exposing "addictive" algorithmic content to users under age 18 without parental consent.

In March, Florida Governor Ron DeSantis signed a bill that bans children under 14 from social media platforms and requires 14- and 15-year-olds to get parental consent.

https://finance.yahoo.com/news/us-surgeon-general-calls-social-140113917.html

'Weight-loss options for US youth are hard to come by'

 For many U.S. parents seeking help for a child with obesity, the most widely-endorsed treatment is out of reach - and it's not the popular weight-loss drug Wegovy. Leading medical groups recommend intensive behavioral counseling - 26 hours within one year - to teach children and their families practical ways to eat healthier and move more. But these programs are not widely available, and wait lists can run for several months. They are often not covered by health insurance and require a time commitment that is difficult for many families to make, according to interviews with more than a dozen doctors and parents. As a result, fewer than 1% of the nearly 15 million U.S. children with obesity get this type of structured care, the U.S. Centers for Disease Control and Prevention told Reuters. Efforts by the CDC and others to expand insurance coverage have stalled, doctors involved in the process told Reuters. "The coverage for these programs was never good, and we're not seeing any movement toward improvement," said Dr. Joseph Skelton, a professor of pediatrics and an obesity medicine specialist at Wake Forest University School of Medicine.

The prevalence of obesity among U.S. children has steadily increased, from 5% in 1980 to nearly 20% now, according to the CDC. Novo Nordisk's Wegovy was approved for adults in 2021 and for adolescents in late 2022, offering a highly effective way to lose weight for the first time. Novo still cannot meet demand for the drug among adults, with at least 25,000 first-time prescriptions dispensed each week. A much smaller, but growing, number of families are seeking the drug for their adolescents, Reuters found in February. Many doctors and parents are wary of using the medication without data on whether Wegovy can affect a child’s development, or pose other long-term risks. CHANGING HABITS Ruth Medina of Holyoke, Massachusetts, wanted to see if a change in family habits, rather than medication, could help her 15-year-old daughter, Jelainie, when she reached 200 pounds this year. The family has a history of type 2 diabetes, she said, a condition exacerbated by excess weight. "I don't want to go down that path. That's when I got scared," Medina said. Jelainie's pediatrician recommended the healthy weight program at Holyoke Health Center where children and their parents come for visits with a dietician and community health worker to set individual goals, plus group sessions about cooking, deciphering nutritional labels and other lifestyle changes. Dr. Vinny Biggs, who oversees the program, said families face a four-month wait to enroll. Medina and her daughter’s participation is covered, in part, by the state Medicaid health insurance program, Biggs said. At the family's first session this month, Jelainie cut up cauliflower, carrots and other vegetables to prepare a paella dish alongside her instructors. Mother and daughter said they liked the meal and took home leftovers and the recipe. Jelainie has lost some weight. She started walking more, playing tennis and snacking on fruits and vegetables. Her mother still worries about the appeal of the many fast-food restaurants close to their home. "We walk by so many temptations," Medina said. "I want to do whatever I can to get her to a healthy weight." RED LIGHT, GREEN LIGHT The U.S. Preventive Services Task Force, an influential federal panel of experts, says it's better to stick to lifestyle changes for adolescents with obesity until more data on the long-term safety and effectiveness of the drugs are available, according to a draft recommendation published in December. The American Academy of Pediatrics says that youth aged 12 and older should be offered medications for obesity, but only as an "adjunct to health behavior and lifestyle treatment."

The task force examined clinical trials involving intensive behavioral programs for children and found that, on average, children lost 5.7 pounds.But Wegovy and similar drugs helped people lose pounds more dramatically - 15% or more of their body weight in clinical trials. That track record, and a lack of insurance coverage for counseling, are likely to convince more families to try the medicines in the future. Some doctors say that wider Wegovy use by youth will make it even more essential for children to learn healthy-eating habits for the long run. They worry that reliance on the drugs alone could contribute to nutritional deficiencies or eating disorders. "Many of us believe it would make sense to offer behavioral counseling along with the drug," said Dr. Thomas Robinson, a professor of pediatrics and director of the Center for Healthy Weight at Stanford Medicine Children's Health in Palo Alto, California. "These drugs are very effective at reducing weight and health risks, but you don't all of a sudden adopt a healthy diet or become more physically active." At Stanford's lifestyle-counseling program, instructors give parents and their children long-established lessons about eating wisely: High-calorie foods, such as ice cream or even almonds, are "red-light" foods that should be eaten sparingly. Vegetables are a "green light" – and can be consumed in unlimited quantities. Most foods are yellow and fall somewhere in between, Robinson said. Health insurance doesn't cover Stanford's program, so families pay out-of-pocket or receive financial assistance from the hospital, Robinson said. The full cost is $3,500. Since 2022, the CDC, American Academy of Pediatrics and other key experts have pushed for better coverage of obesity counseling. In September, an American Medical Association (AMA) panel rejected one of those efforts: a request for a dedicated medical code for the 26-hour program that would help providers bill for their services. In a statement, the AMA told Reuters the application didn't meet the panel's criteria, without providing further details. In general, new codes may not be approved if they include non-clinical services, such as cooking classes, according to the AMA. Even if a code is granted, health insurers can still refuse to pay for medical services. In a statement to Reuters, the CDC said that ensuring equitable access to both obesity medications and lifestyle treatment "is pivotal so that families have access to multiple options to address child obesity and support optimal health."

https://www.yahoo.com/news/weight-loss-options-us-youth-100733124.html

Ex-Biden Appointee Arrested, Charged With Felony Over Alleged Hate Crime Hoax

 Another day, another Democrat hate crime hoax - this time allegedly by a former Biden White House appointee and current candidate for a county commissioner seat in Texas.

Patel with Joe and Jill Biden (undated): x/TaralVPatel

Taral Patel, 30, was arrested for online impersonation last week following an investigation initiated by his opponent, incumbent Andy Meyers, the NY Post reports.

The investigation was launched in October, after a September post Patel made on Facebook in which he suggested that he and his family had been victims of race-based verbal attacks perpetrated by Meyers supporters.

"These hateful images (a small sample attached here) are from a place of deep and misguided fear – incited by people like former President Donald Trump, and today’s extremist Republican party fear that immigrants are ‘taking their jobs’ and setting out to hurt our own communities," Patel wrote.

Facebook: Taral Patel

According to Patel's campaign website, he previously worked for the DOJ's criminal division in the Public Integrity Section, and was appointed by Biden to serve in the office of White House Liaison - along with the White House Asian American Native Hawaiian and Pacific Islander Committee.

Meyers began to suspect the posts weren't genuine based on some of the names such as "Antonio Scalywag," who he recognized as someone having previously assailed him online, according to ABC13. This prompted Meyers to request an investigation into Patel's claims.

Investigators subpoenaed Facebook and Google to obtain account information about the user profile, leading back to Patel. The information included his address, phone number, bank card information and more.

So last Wednesday, Texas Rangers arrested Patel for online impersonation in the 3rd degree - a felony, as well as a Class A misdemeanor for misrepresentation of identity.

Patel’s campaign website cites a number of jobs he’s previously held, including chief of staff for Fort Bend County. He says he also worked for the Department of Justice’s Criminal Division in the Public Integrity Section as deputy finance director for a governor and as a legislative staffer for the Texas House of Representatives.

What is it with Democrats and hate crime hoaxes?

Takeda flunks pivotal epilepsy tests but mulls path to market for Ovid-partnered prospect

 Takeda’s late-phase epilepsy program has failed a key test, chalking up misses on the primary endpoints in pivotal trials in two indications. But the Japanese drugmaker still plans to talk to regulators about the next steps for the Ovid Therapeutics-partnered prospect based on the “totality of the data.”

The drug candidate, the cholesterol 24 hydroxylase inhibitor soticlestat, is central to Takeda’s plans. With the company’s neuroscience unit currently lacking a launch product, and few other phase 3 readouts imminent, soticlestat represents a chance to get sales moving in the right direction. Bringing the drug to market would allow Takeda to start recouping the $196 million it paid Ovid in 2021.

Yet, the phase 3 readouts fell short of the hoped-for slam dunk. A phase 3 trial in patients with refractory Lennox-Gastaut syndrome, a severe form of epilepsy, missed its primary endpoint. The endpoint looked at the change in Major Motor Drop seizure frequency from baseline as compared to placebo.   

A phase 3 trial in refractory Dravet syndrome, another form of epilepsy, also missed its primary endpoint but Takeda identified more silver linings in its analysis of that dataset. The Dravet study narrowly missed its primary endpoint of reduction from baseline in convulsive seizure frequency as compared to placebo, achieving a p value of 0.06, and met secondary objectives.

Takeda reported significant changes in the responder rate, measures of caregiver and clinician global impression of improvement, and seizure intensity and duration scales over the 16 weeks of treatment. Sarah Sheikh head of the neuroscience therapeutic area unit at Takeda, discussed the unmet needs in the two indications and the next steps for soticlestat in a statement.

“While we would have wished for more declarative results on the primary endpoints, we are encouraged by positive outcomes seen in the totality of the data and are looking forward to engaging health authorities to determine the best path forward,” Sheikh said.

Ovid published its own statement about the results, in which it explained how the upfront payment it received from Takeda supported development of a pipeline led by two clinical candidates. The biotech said it “will prioritize and pursue its programs with financial discipline” and expects its cash runway to last into the first half of 2026. Ovid is aiming to pass several clinical milestones before its cash runs dry.

Investors were unmoved by the positive take on Ovid’s position, sending shares in the biotech down more than 60% to $1.20 in premarket trading. Ovid’s deal with Takeda included up to $660 million in milestones tied to the successful development, authorization and commercialization of soticlestat.

https://www.fiercebiotech.com/biotech/takeda-flunks-pivotal-epilepsy-tests-mulls-path-market-ovid-partnered-prospect?itm_source=parsely-api

Aerovate halts lung disease study

Shares fall.

https://www.marketwatch.com/story/aerovate-therapeutics-shares-slump-after-halting-lung-disease-study-5988cf31