GSK to Approach FDA With Positive Phase III Data For Long-Acting Asthma Med

 

GSK’s twice-yearly depemokimab reduced asthma attacks by half and cut clinic visits by nearly three-quarters, positioning it for an estimated $4 billion in peak sales if approved.

GSK’s new long-acting asthma treatment reduced serious attacks by more than 50% and led to a 72% reduction in exacerbations that required hospitalization or an ER visit, according to detailed Phase III data revealed at the European Respiratory Society and published in the New England Journal of Medicine on Monday.

The full readout comes after GSK revealed in May that depemokimab met the primary endpoints in two late-stage trials called SWIFT-1 and SWIFT-2. The studies compared the therapy to placebo in adults and adolescents with severe asthma with type 2 inflammation characterized by blood eosinophil count.

Patients in the parallel trials had a 54% reduction in severe exacerbations or serious asthma attacks and a 72% reduction in exacerbations that required hospitalization or emergency department visits, GSK said. The studies met the main goal of achieving s statistically significant and clinically meaningful reduction in exacerbations over 52 weeks as comparfed to placebo.

Depemokimab, an anti-IL-5 therapy, missed on a secondary endpoint that looked at overall health and quality of life, as well as one that examined the severity of disease via forced expiratory volume. GSK’s Kaivan Khavandi, global head of Respiratory/Immunology R&D, explained in a call with reporters that there was a high placebo response on those endpoints. The miss is not expected to impact GSK’s strategy as reducing the actual exacerbations is the tougher and more important clinical outcome, he said.

The treatment is one of GSK’s planned 12 major product launches over the next few years that are expected to generate £38 billion ($50 million) in sales by 2031. The drug itself is expected to bring in £3 billion ($4 billion) in peak sales if approved.

Patients with severe asthma already have a number of approved options, but Khavandi said that there’s an unmet need for less burdensome treatments. Existing options include GSK’s own Nucala, which was originally approved in 2015 for severe asthma. It has since garnered multiple expansions for related conditions and patient populations.

Other competitors in the anti–IL-5 class include Teva Pharma’s Cinqair and AstraZeneca’s Fasenra.

“We know from real world data that 40% of participants taking those short acting biologics discontinued treatments by one year,” Khavandi said in a call with reporters. “And of course, this is a chronic condition where it’s fundamentally important that there’s sustained suppression of inflammation to be able to have that durability in reducing exacerbations.”

Depemokimab is administered by injection twice yearly, which Khavandi said should lead to increased adherence and durability of treatment. This attribute will become a key pillar of GSK’s marketing strategy as depemokimab moves toward launch. The company said it intends to immediately take the data to regulators around the world.

At the same time, GSK is testing depemokimab in several other indications including chronic rhinositis with nasal polyps. The company intends to coordinate its submission strategy for the two lead indications.

Data from the depemokimab trials has also shown structural changes in airway remodeling, which is suggestive that the drug could be getting to the underlying cause of the disease, Khavandi explained.

https://www.biospace.com/drug-development/gsk-to-approach-fda-with-positive-phase-iii-data-for-long-acting-asthma-med

'BIOSECURE Act Threatens Already Strained U.S. Supply Chain'

 

As Congress considers a bill that aims to distance U.S. biopharma from five Chinese companies, the industry must emphasize the importance of prioritizing patient care over power plays.

The U.S. Congress will reconvene on September 9, and the legislative focus on China-related issues is intensifying. Bloomberg reports that Republican congressional offices have been notified to expect House votes on key measures, including the BIOSECURE Act, which will lead to ripple effects in global collaboration for drug development and manufacturing. If the BIOSECURE Act is passed, it will become more important for the affected U.S. and Chinese pharmaceutical companies to tell a coherent narrative that highlights the potential patient care impact of such disruptions.

The BIOSECURE Act initially seemed to be losing traction when it missed its first chance to be considered by Congress on June 11, 2024. At that time, the U.S. House Rules Committee did not include it in the list of amendments to the National Defense Authorization Act (NDAA). While this development might have suggested the bill was petering out, the latest Bloomberg report indicates it is again gathering steam. After factoring in the strong bipartisan support shown by a 40-1 House Oversight Committee vote in May, Bloomberg Intelligence forecasts a high likelihood of the bill’s passage.

There are potentially long-term consequences for Chinese companies mentioned—BGI Group, MGI, Complete Genomics, WuXi AppTec and WuXi Biologics—as well as their U.S. biotech and pharmaceutical customers. According to a survey from the industry association Biotechnology Innovation Organization (BIO), 79% of 124 biopharma companies surveyed have at least one contract or product with a China-based or China-owned CDMO/CMO. Although the latest markup of the legislation grants up to eight years to switch away from named manufacturing partners, the effects will likely be felt quickly, as U.S. companies are already looking to distance themselves from these firms.

This is against the backdrop of an already-strained U.S. drug supply chain. According to the American Society of Health-System Pharmacists, the number of active drug shortages in the U.S. stood at 300 in the second quarter of 2024. Additional restrictions imposed by the BIOSECURE Act are likely to exacerbate these shortages if the legislation is passed.

U.S. pharmaceutical companies like Gilead Sciences and Vertex Pharmaceuticals have raised concerns about this bill in their filings, citing potential increased costs, delays in clinical trials and FDA submission challenges. Even though the latest May House amendment limits the BIOSECURE Act to Federal Acquisition Regulation (FAR) contracts, excluding Medicaid and Medicare, more companies may express similar sentiments if this bill passes. This bill could significantly impact the broader pharmaceutical ecosystem, though the extent depends on how federal agencies interpret it.

Smaller U.S. pharmaceutical companies should also be prepared to communicate the increased costs they may face. A U.S. CEO interviewed by the Boston Business Journal initially believed her startup wouldn’t be affected since it doesn’t collaborate with the companies named in the bill. However, she soon recognized that rising demand for U.S. domestic R&D and contract research organization (CRO) services could drive up costs, noting that the bill may make development more expensive in the short and potentially long term.

By framing the narrative around a fact-based discussion on the impact and risks to patient care, U.S. companies could minimize potential unintended effects. Their communications strategy should focus on educating stakeholders, including the media, policymakers and patients, about the crucial role partnerships with China-based firms play in ensuring a stable supply of various medications.

In addition, both U.S.- and China-based pharmaceutical companies might wish to carefully consider their next steps with the relevant industry associations such as BIO and others. Engaging with these associations to further illustrate the potential impact on U.S. patients could be a crucial strategy. Silence in the face of uncertainty could lead to worse outcomes.

As for Chinese biotech companies, whether they are named in the BIOSECURE Act or not, they should step up the cadence of their international communications, reassuring clients and signaling their commitment to the global market. Engaging in open dialogue with stakeholders, including U.S. clients and investors, could go a long way toward mitigating concerns and building trust.

Given the geopolitical factors, navigating this situation requires a delicate balance between maintaining a low profile and ensuring that the right messages reach the right audiences at the right time. Ultimately, by proactively managing their narratives, these companies can help safeguard patient care while also protecting their position in the global market.

JX (Jaxon) Tan founded Momentum AI Communications, a boutique PR consultancy based in Singapore, with a mission to simplify science and spark engagement. He was previously based in China, where he led international communications for a leading biotech company and was head of content (APAC) for PR Newswire. 

Ivy Yang is a columnist for the Financial Times Chinese and founder of Wavelet Strategy in New York. Her writing focuses on analyzing strategies and challenges faced by global companies as they enter new markets amid increasing geopolitical tensions

https://www.biospace.com/business/opinion-biosecure-act-threatens-already-strained-u-s-supply-chain

Late-Stage Alzheimer’s Pipeline Goes Beyond Amyloid and Tau

 

The next generation of Alzheimer’s therapeutics is moving away from amyloid plaques and tau tangles, offering multiple approaches to slow cognitive decline.

Over the past two years, Eisai and Biogen’s Leqembi and Eli Lilly’s Kisunla, both anti-amyloid antibodies, made history as the first real options to slow cognitive decline associated with Alzheimer’s disease. For years, amyloid plaques and tau tangles have been a primary target of Alzheimer’s disease research and drug development, but while affecting these proteins may yield some benefit, the illness continues to progress. Today, multiple therapeutics are in Phase III trials with other targets, suggesting that within the next few years it may become possible to treat Alzheimer’s via multiple pathways.

There are currently 32 Alzheimer’s therapeutics in 48 Phase III trials, according to a recent paper by neuroscientist Jeffrey Cummings, a professor at the University of Nevada. Six of those target amyloid-β and one targets tau, but the others aim to affect neuroprotection growth factors, neurotransmitters, neurogenesis, inflammation and proteinopathies. Of those, 21 are meant to be disease-modifying.

“Alzheimer’s disease is quite complex in its biology and diagnosis,” Rebecca Edelmayer, vice president of scientific engagement for the Alzheimer’s Association, told BioSpace. “We’re moving to a point where we have better understanding of the disease and what contributes to its symptomology, so those biological underpinnings become targets.”

These approaches won’t necessarily replace Leqembi and Kisunla, but they could increase therapeutic options to better manage the disease.

The First Anti-Amyloid Antibodies for Alzheimer’s

In January 2023, the FDA approved Leqembi as the second disease-modifying treatment for Alzheimer’s disease. The third, Kisunla, followed in July 2024. (The first drug, Eisai and Biogen’s Aduhelm, was discontinued earlier this year.)

While Leqembi and Kisunla are a positive step forward, experts suggest there is room for improvement. As measured by the Clinical Dementia Rating Sum of Boxes (CDR-SB), Leqembi reduced clinical decline by 27%, whereas Kisunla reduced clinical decline by 29%.

In addition to limited efficacy, the drugs both have notable side effects, specifically, the risk of amyloid-related imaging abnormalities (ARIA), the increase in lateral ventricular volume and the simultaneous loss of whole brain volume. A finding of ARIA on imaging tests is indicative of a brain bleed or swelling.

When physician online community Sermo questioned 268 neurologists, it found a diversity of opinion on how to best determine clinical benefit. Forty percent of those surveyed have treated Alzheimer’s patients with Leqembi or Kisunla.

“There’s debate about whether the two already approved therapeutics are that compelling, so the bar is low,” Andrew Tsai, senior vice president of equity research for the biopharma analyst Jefferies, told BioSpace.

A major difference between the two is that Leqembi is infused intravenously twice monthly, while Kisunla is infused only once per month. But any infusion is a pain point for many patients, not to mention a cost to the healthcare system, so easier administration is the goal for several next- gen Alzheimer’s therapeutics. Lilly’s drug is also designed to stop treatment once plaque clearance is achieved.

Phase III Alzheimer’s Candidates

Athira’s Fosgonimeton

Athira Pharma’s fosgonimeton is a small-molecule therapeutic that may be injected daily at home. The company recently reported data from a Phase II/III trial of the drug, which enhances signaling by neurotrophic hepatocyte growth factor (HGF).

The trial, which included 315 patients with mild-to-moderate Alzheimer’s disease, failed to meet its primary and key secondary endpoints regarding improvements in cognition and function at the 26-week point. However, pre-specified subgroups experienced rapid disease progression, while both cognition and function either stabilized or improved. Biomarkers also showed improvement, according to the company.

In preclinical models of Alzheimer’s disease, fosgonimeton has “been shown to reduce inflammation, improve mitochondrial and synaptic function and reduce amyloid toxicity and p-tau aggregation,” Chief Medical Officer Javier San Martin told BioSpace in an email.

“[While] Leqembi and Kisunla are monoclonal antibodies targeting removal of amyloid plaque from the brain with the expectation that by removing amyloid the neurons will be preserved . . . fosgonimeton focuses on improving neuronal health regardless whether the insult is amyloid, tau or other misfolded proteins,” he said.

Anavex’s ANAVEX 2-73

In New York, Anavex Life Sciences Corp. is targeting neuronal homeostasis in an ongoing Phase IIb/III study with blarcamesine, an oral, once-daily therapeutic that works “through autophagy through SIGMAR1 activation.”

“Blarcamesine’s ability to reduce pathological brain volume loss could be defined as disease-modifying,” Andrew Barwicki, company spokesperson, told BioSpace.

In the Phase IIb/III trial, blarcamesine slowed clinical progression of Alzheimer’s by 38.5% at 48 weeks, compared to placebo. Analysis of the Phase IIb/III trial showed no associated neuroimaging adverse events and, unlike Kisunla and Leqembi, blarcamesine is not expected to require routine MRI monitoring.

“Blarcamesine could be appealing because of its route of administration and good comparative safety profile,” Barwicki suggested.

Anavex anticipates submitting a full regulatory package to the European Medicines Agency by the end of this year.

Novo Nordisk’s Semaglutide

Novo Nordisk is testing semaglutide, its wildly popular glucagon-like peptide-1 (GLP-1) receptor agonist for weight loss and other indications, in patients with early Alzheimer’s. Completion of the Phase III study is expected in October 2026. Early studies by independent scientists suggest semaglutide reduces neuroinflammation, which impairs cell signaling. It also may improve vascularization.

Neurim’s Piromelatine

At Neurim Pharmaceuticals, a Phase III trial in Alzheimer’s patients with mild dementia will determine whether piromelatine can improve cognition and function by improving sleep quality. The hypothesis is that sleep disturbances increase synaptic and metabolic activity, impairing the brain’s ability to clear wastes, which then increases amyloid beta aggregation. Piromelatine works by activating certain melatonin and serotonin receptor agonists.

Cassava Sciences’ Simufilam

Finally, Austin, Texas–based Cassava Sciences seeks to restore the brain’s shape and function by stabilizing the scaffolding protein filamin A (FLNA), thus purportedly blocking signaling from soluble amyloid beta.

But Cassava’s conduct around simufilam has spurred an investigation by the U.S. Department of Justice. The company’s former science advisor, Hoau-Yan Wang, was indicted in June for allegedly falsifying scientific data that led to the awards of some $16 million in NIH grants between 2015 and 2023. The charges include allegedly misconstruing data about how “a potential treatment” and its diagnostic test would work.

The company’s August corporate overview reiterates a February news release, noting that patients with mild Alzheimer’s who were treated with its oral therapeutic, simufilam, continuously for two years had no decline in their ADAS-Cog scores. Non-continuous treatment resulted in a one-point ADAS-Cog decline.

In late July, Cassava added an open-label extension to its ongoing Phase II and III clinical trials for Alzheimer’s, which attracted 89% of its Phase III patients.

According to August’s corporate overview, Cassava expects topline results from its 804-patient RETHINK-ALZ trial by year’s end.

Combinations Are Key

Alzheimer’s is a very hetergeneous disease and there is no magic bullet for treatment. Given the many different mechanisms of action of emerging Alzheimer’s therapeutics, “there may be a case for teaming up and using certain therapeutics in combination,” Tsai said.

“We’re excited to see the clinical trial pipeline diversity over time,” Edelmayer added, but the solution may involve more than therapeutics. Ultimately, “Treatment may require a combination of powerful, FDA-approved therapies in conjunction with brain-healthy lifestyles. We envision a future where there are many treatments that address the disease in multiple ways.”

https://www.biospace.com/drug-development/late-stage-alzheimers-pipeline-goes-beyond-amyloid-and-tau

Summit Declares NSCLC Victory Over Keytruda, Analysts Advise Caution With China-Only Data

 

In advanced non-small cell lung cancer, Summit Therapeutics’ ivonescimab appears to be 49% more effective at reducing the risk of disease progression or death versus Merck’s Keytruda in a late-stage study. However, analysts contend the caveat is that the trial was conducted in an entirely Chinese patient population.

Summit Therapeutics on Sunday revealed more data from the Phase III HARMONi-2 trial, demonstrating that its investigational bispecific antibody ivonescimab outperformed Merck’s blockbuster PD-1 inhibitor Keytruda (pembrolizumab) as a first-line treatment option in patients with advanced non-small cell lung cancer.

After a median follow-up of nearly nine months, median progression-free survival (PFS) in ivonescimab-treated patients was 11.14 months, versus just 5.82 months in Keytruda counterparts. Ivonescimab cut the risk of disease progression or death by nearly 50% compared with Keytruda, an effect that was strongly statistically significant, with a p-value of less than 0.0001.

The findings held up in various subgroup analyses, including in patients with high and low expression levels of the PD-L1 protein, as well as in squamous and non-squamous disease groups.

Summit’s bispecific also outperformed Merck’s blockbuster in terms of key secondary endpoints. Overall response rate was 50% in patients treated with ivonescimab, versus 38.5% in the Keytruda arm. Disease control rates in the respective treatment groups were 89.9% and 70.5%.

Overall survival (OS) data were not yet mature at the time of the analysis. Summit presented these data at the International Association for the Study of Lung Cancer’s 2024 World Conference on Lung Cancer.

“HARMONi-2 clearly demonstrates that ivonescimab has the potential to be the next generation in PD-1 directed immunotherapy,” Summit CEO Maky Zanganeh said in a statement, noting that Sunday’s results highlight the potential of ivonescimab in lung cancer “and prospectively other tumors.”

With these findings, Summit will take ivonescimab into the multi-regional, late-stage HARMONi-7 study, set to start in early 2025, Zanganeh said.

Despite Sunday’s promising readout, analysts recommend a more level-headed interpretation of Summit’s data, with BMO Capital Markets’ Evan Seigerman arguing that ivonescimab is “not yet the Keytruda slayer.”

There are several reasons for the analyst’s ambivalence, not least of which is that HARMONi-2 was conducted entirely in China. “Results may or may not be generalizable beyond the China-focused patient population initially assessed,” Seigerman wrote in a note to investors, adding that Summit will likely need more U.S. data before the FDA can consider ivonescimab for approval.

Summit has also yet to release ivonescimab’s OS data, which many physicians consider as an important factor for their treatment decisions.

“Merck has a very large amount of data for pembrolizumab in multiple tumors that are unlikely to be penetrated anytime soon, even if ivonescimab begins to run trials challenging in these indications,” Seigerman wrote.

Truist Securities analyst Srikripa Devarakonda in an investor note remarked that Summit’s study “is in a single region, and we believe might not be sufficient for a U.S. approval.” The firm awaits further data from a global study including the U.S.

Devarakonda also noted that even if Summit launches HARMONi-7 early next year, with an eye toward securing U.S. approval, it will still likely “take a couple of years.” And with Keytruda’s impending patent cliff in 2028, ivonescimab’s impact on Merck might not have too big of an impact on Merck.

https://www.biospace.com/drug-development/summit-declares-nsclc-victory-over-keytruda-analysts-advise-caution-with-china-only-data

AstraZeneca, Daiichi Sankyo Turn to AI to Explain Phase III NSCLC Miss for Dato-DXd

 

Using a computational biomarker, the companies say they can identify which patients would derive significant clinical benefit from their experimental antibody-drug conjugate. AstraZeneca and Roche are co-developing and commercializing a companion diagnostic for the biomarker.

AstraZeneca and Daiichi Sankyo unveiled a novel AI-powered biomarker on Sunday which can predict clinical outcomes in non-small cell lung cancer patients treated with the partners’ investigational antibody-drug conjugate datopotamab deruxtecan.

Using this computational biomarker—called the normalized membrane ratio (NMR) of the TROP2 protein by quantitative continuous scoring (QCS), or TROP2-QCS for short—AstraZeneca and Daiichi Sankyo were able to identify which patients would derive significant clinical benefit from datopotamab deruxtecan (Dato-DXd).

The partners conducted an exploratory analysis of their Phase III TROPION-Lung01 study and found that in patients positive for TROP2-QCS, Dato-DXd led to a 43% drop in the risk of disease progression or death versus docetaxel. This effect was statistically significant, according to the companies. Median progression-free survival (PFS) was 6.9 months in the Dato-DXd arm, versus 4.1 months in docetaxel comparators.

By contrast, in the primary analysis of the overall study population—without taking into account TROP2-QCS—Dato-DXd could only lower the risk of disease progression or death by 25% versus docetaxel.

Ken Takeshita, Daiichi Sankyo’s global head of R&D, in a statement said that the findings from QCS analysis “support the potential of TROP2, as measured by quantitative continuous scoring, as a predictive biomarker” for Dato-DXd. The new AI biomarker can also “begin to answer the question of why certain patients with non-small cell lung cancer (NSCLC) respond better to treatment,” Takeshita said.

The partners unveiled TROP2-QCS at the International Association for the Study of Lung Cancer’s 2024 World Conference on Lung Cancer. AstraZeneca will work with Roche Tissue Diagnostics business to collaboratively develop and commercialize the AI biomarker, the pharma announced.

While most biomarkers typically rely on the simple expression levels of certain proteins in a cancer cell, TROP2-QCS instead looks at the amount of TROP2 expressed on tumor cells’ membrane relative to the protein’s expression in the cytoplasm. Patients are then classified as TROP2-QCS-positive if at least 75% of their tumor cells have an NMR below a prespecified value, which is indicative of a higher TROP2 expression in the cytoplasm.

TROP2-QCS was developed using AstraZeneca’s QCS “fully automated computational pathology” platform, which uses AI to generate biomarker data beyond the simple presence or absence of a protein. According to the pharma’s website, QCS also determines the intensity of the signal and its localization in the cell.

AstraZeneca and Daiichi Sankyo used QCS to explain the failure of TROPION-Lung01, which in May 2024 showed that Dato-DXd failed to significantly improve overall survival in NSCLC patients. At the time, the partners zeroed in on patients with non-squamous disease, in whom the antibody-drug conjugate resulted in a “clinically meaningful improvement” in overall survival.

According to the QCS analysis on Sunday, “a greater proportion” of patients with non-squamous NSCLC were also TROP2-QCS-positive—66% versus the 44% biomarker positivity in patients with squamous disease.

With data from TROPION-Lung01, AstraZeneca and Daiichi Sankyo have filed for Dato-DXd’s approval in previously treated patients with non-squamous NSCLC. The FDA’s decision is due in the fourth quarter of this year.

https://www.biospace.com/drug-development/astrazeneca-daiichi-sankyo-turn-to-ai-to-explain-phase-iii-nsclc-miss-for-dato-dxd

Fed Beige Book Conditions Are Worse Now Than the Start of the Great Recession

 Let’s compare current Beige Book conditions to those at the beginning of the Great Recession.

Beige Book January 2008

Let’s take a look at the Fed’s Beige Book Summary of Economic Conditions in the 12 Fed districts in January of 2008. The Great Recession had begun.

Reports from the twelve Federal Reserve Districts suggest that economic activity increased modestly during the survey period of mid-November through December, but at a slower pace compared with the previous survey period. Among Districts, seven reported a slight increase in activity, two reported mixed conditions, and activity in three Districts was described as slowing.

Beige Book March 2008

Next consider Fed’s Beige Book Summary of Economic Conditions in the 12 Fed districts in March of 2008. The Great Recession was underway.

Reports from the twelve Federal Reserve Districts suggest that economic growth has slowed since the beginning of the year. Two-thirds of the Districts cited softening or weakening in the pace of business activity, while the others referred to subdued, slow, or modest growth. Retail activity in most Districts was reported to be weak or softening, although tourism generally continued to expand. Services industries in many Districts, including staffing services in Boston, port activity in New York, and truck freight volume in Cleveland, appeared to be slowing, but activity in services provided some positive news in Richmond and Dallas. Manufacturing was said to be sluggish or to have slowed in about half the Districts, while several others indicated manufacturing results were mixed or trends were steady.

Beige Book July 2008

Next consider Fed’s Beige Book Summary of Economic Conditions in the 12 Fed districts in July of 2008. The Great Recession was in the seventh month.

Reports from the twelve Federal Reserve Districts suggest that the pace of economic activity slowed somewhat since the last report. Five eastern Districts noted a weakening or softening in their overall economies, while Chicago characterized its economy as sluggish and Kansas City noted a moderation in growth. St. Louis said activity was stable and San Francisco reported little or no growth. Cleveland and Minneapolis reported slight increases in economic activity, while Dallas described growth as steady and moderate.

Beige Book Most Downbeat in Ages

September 2024 Fed Beige Book Shows Flat or Declining Economy in 9 of 12 Fed Districts

On September 5, 2024, I noted Fed Beige Book Shows Flat or Declining Economy in 9 of 12 Fed Districts

Overall Activity

• Economic activity grew slightly in three Districts, while the number of Districts that reported flat or declining activity rose from five in the prior period to nine in the current period.
• Employment levels were steady overall, though there were isolated reports that firms filled only necessary positions, reduced hours and shifts, or lowered overall employment levels through attrition. Still, reports of layoffs remained rare.
• On balance, wage growth was modest, while increases in nonlabor input costs and selling prices ranged from slight to moderate.
• Consumer spending ticked down in most Districts, having generally held steady during the prior reporting period.

By District

• Increased Modestly: Boston and Dallas
• Increased Slightly: Chicago
• Flat, Unchanged, Stable: New York, Kansas City, San Francisco, St. Louis
• Decline Slightly: Philadelphia, Atlanta, Minneapolis, Cleveland, Richmond

Strongly Push for 50 Basis Points

That is how I see it too. But the market disagrees. We will have a better idea on Wednesday.

September 2024 vs July 2008

• Increasing Sep 2024: (3) Boston, Dallas, and Chicago
• Increasing July 2008: (4) Kansas City, Cleveland, Minneapolis, and Dallas
• Flat Stable Sep 2024: (4) New York, Kansas City, San Francisco, St. Louis
• Flat Stable July 2008: (3) Chicago, San Francisco, St. Louis
• Decline Slightly Sep 2024: (5) Philadelphia, Atlanta, Minneapolis, Cleveland, Richmond
• Weakening July 2008: (5) New York, Philadelphia, Atlanta, Richmond, Boston

Small Businesses Reducing Workers for the Last Four Months

On Thursday, I noted Small Businesses Reducing Workers for the Last Four Months

ADP data shows small businesses with 1-49 workers have been reducing workers for four months. Those with 20-49 workers have shed workers for 7 straight months.

Hmmm. That must be nothing .

On September 3, I noted Construction Spending Growth Slows in May, Stops in June, Negative in July

Again, that’s nothing.

BLS Negative Job Revisions 15 of Last 21 Months

Also note BLS Negative Job Revisions 15 of Last 21 Months

And the current economic headline conditions are worse than the conditions heading into the 7th month of the Great Recession.

Well, I’m sure that’s nothing too.

https://mishtalk.com/economics/fed-beige-book-conditions-are-worse-now-than-the-start-of-the-great-recession/

Oil Rises As Major US Refineries In Path Of Strengthening Gulf Storm

 Oil and gasoline futures moved higher early Monday as the National Hurricane Center tracked a potential tropical system that threatened parts of the US Gulf Coast later this week. The storm could slam into the upper Texas and Louisiana coasts, accounting for about 60% of US refining capacity. 

Potential Tropical Cyclone Six, or Invest 91L, churns in the southwestern Gulf of Mexico early Monday and is forecasted to become a hurricane before it reaches the northwestern US Gulf Coast late Wednesday. The storm emerges right on time, at the peak of the Atlantic hurricane season. It is interesting to note that this hurricane season has been very quiet.

"While it is too soon to pinpoint the exact location and magnitude of impacts, the potential for life-threatening storm surge and damage winds are increasing for portions of the Upper Texas and Louisiana coastlines beginning Tuesday night," the NHC wrote in its latest update. 

The latest hurricane trajectory models show strong consensus that the tropical system could make landfall along the Louisiana coast.

This area of the Gulf Coast is home to approximately 60% of US refining capacity. Bloomberg data shows several refineries are in the storm's cone of uncertainty. 

"A small recovery in prices is underway this morning, inspired by hurricane warnings that might threaten the US Gulf Coast, but the wider conversation remains on where demand will come from and what OPEC+ can do," PVM analyst John Evans told Reuters. 

In recent weeks, Goldman's commodity analyst—now without "supercycle" permeable Jeff Currie—Daan Struyven slashed his expected range for Brent oil prices by $5 to $70-$85 per barrel, citing weaker Chinese oil demand, high inventories, and rising US shale production. The biggest driver for the cut is his belief that "OPEC will raise production in Q4..." 

Morgan Stanley has also recently revised its oil price forecasts downward, reflecting expectations of increased supply from OPEC and non-OPEC producers amid signs of weakening global demand. The bank now anticipates that while the crude oil market will remain tight through the third quarter, it will begin to stabilize in the fourth quarter and potentially move into a surplus by 2025.

Morgan Stanley has cut its forecast for the fourth quarter to $80 per barrel, down from $85, and now expects prices to gradually decline to $75 per barrel by the end of 2025, slightly lower than their previous estimate of $76.

None of this is new to the market, where sentiment is ultra-bear... 

However, a tropical system that supercharges in the Gulf of Mexico's warm waters and knocks out a few refineries could easily send energy prices back up. That would spike gas prices at the pump again, putting the Biden-Harris team in a difficult spot ahead of the November elections. 

https://www.zerohedge.com/commodities/oil-rises-major-us-refineries-path-strengthening-gulf-storm