Macquarie cuts Broadcom to Neutral, target to $437 on rising Google AI chip insourcing risk

 

Macquarie downgrades Broadcom to Neutral, cuts price target to $437 on rising Google AI chip insourcing risk

• Macquarie cites risk Google reduces reliance on Broadcom AI chips via in-house development and MediaTek partnerships.
• Broadcom reported a record AI-driven Q2 2026, underscoring unprecedented demand for its AI semiconductor products.
• Following Q2 results, several big banks raised Broadcom price targets, reflecting optimism about its expanded AI revenue outlook.
• Key Results: Q2 revenue $22.2B, +48% YoY, driven by AI semiconductors strength.
• AI Semis: Q2 AI semiconductor revenue $10.8B, +143% YoY, above prior company outlook.
• Backlog: Q2 AI semiconductor bookings exceeded $30B versus $10.8B shipped, extending visibility into 2028.
• Guidance: Q3 revenue guided to $29.4B, +84% YoY; operating margin ~67% remains stable.
• AI Outlook: 2026 AI semi revenue now expected at $56B, ~+180% YoY; 2027 still >$100B.
• Software: Infrastructure software revenue $7.2B, +9% YoY; ARR up 17% YoY; Q3 guide +31% YoY.
• Margins: Gross margin 77.1%, down 230 bps YoY; mix shift drives Q3 guide to ~74%.
• Profitability: Operating margin 67.3%, +200 bps YoY, supported by flat opex and operating leverage.
• Risk: Growing dependence on six large AI customers and mix-driven margin compression despite strong demand.
• Main concern: sustainability and concentration of AI demand amid mix-driven gross margin compression.
• Strong quarter, driven by explosive AI semiconductor demand and solid infrastructure software growth.

https://finviz.com/stock?t=AVGO&p=d

Regeneron deepens relationship with CytomX, adding up to $2B and eight targets

 

All told, CytomX Therapeutics now stands to receive up to $4 billion over the course of its partnership with Regeneron, if all milestones are met.

Regeneron continues its deal streak with an expanded collaboration with longtime partner CytomX Therapeutics to develop bispecific antibodies for cancer.

The companies first linked up in 2022, with Regeneron at the time fronting $30 million and promising up to $2 billion in milestones. The pharma is now throwing more money and potential targets into the mix, potentially doubling CytomX’s bounty. For another $37 million upfront and up to $2 billion more in contingent payments, Regeneron will add two more targets to the alliance and have the option to name six more targets in the future.

All told, CytomX could notch a $4 billion windfall from its engagement with Regeneron.

At the heart of this partnership is CytomX’s Probody platform, which it uses to mask biologic therapies. By blocking off a drug’s active sites using certain peptides, CytomX can render a therapeutic molecule inert until it enters the vicinity of cancer cells, at which point these sheathing peptides are digested by enzymes that the tumor secretes.

CytomX’s platform exploits this tumor microenvironment to ensure that its medicines are activated only when they’re needed, in turn minimizing off-target effects and toxicities, according to its website. Regeneron wants to harness this approach to develop its own conditionally activated bispecific therapies, though the pharma hasn’t yet shared specific cancer indications it plans to go after.

CytomX will collaborate with Regeneron on discovery and validation activities, while the larger company will take full responsibility for preclinical and clinical development of programs that it chooses to move forward with, according to the Wednesday release. Regeneron will also be in charge of the regulatory and commercial activities for those assets and has promised CytomX tiered royalties on net global sales.

In recent days, Regeneron has picked up its dealmaking pace. Last month, the company put up to $2.3 billion on the line in a research collaboration with Parabilis Medicines, aiming to develop antibody-helicon conjugates—opening a novel class of drugs that combine antibodies with peptides. A month earlier, Regeneron partnered with Telix for $40 million upfront and undisclosed milestones to enter the radiopharma arena.

For CytomX, the expanded Regeneron deal comes amid the pullback of other high-powered partners. In an SEC filing last month for its first-quarter report, the biotech disclosed that both Astellas and Bristol Myers Squibb have elected to pull out of their respective collaborations with CytomX.

https://www.biospace.com/deals/regeneron-deepens-relationship-with-cytomx-adding-up-to-2b-and-eight-targets

Lilly and Boehringer roll back billions in German investments over health budget cuts

 

With Germany moving to curb healthcare spending, Eli Lilly and Boehringer Ingelheim have rethought plans to invest in facilities, including a manufacturing plant for GLP-1 drugs.

Eli Lilly and Boehringer Ingelheim are scrapping plans to invest about €2 billion ($2.3 billion) in Germany in response to the country’s plans to cut healthcare spending.

On Wednesday, German newspaper Handelsblatt reported that Boehringer has dropped plans to invest €900 million (just over $1 billion) in Germany. The money was intended for infrastructure expansion from 2027 to 2030, including laboratory buildings. Hours later, Handelsblatt reported that Lilly is pulling back from plans to invest €2.3 billion ($2.68 billion) in a plant in Germany.

Lilly committed to the investment in 2023 and broke ground on the facility the next year. Amid surging demand for its GLP-1 drugs, Lilly identified the injectable product and device manufacturing facility as a way to support supply of Zepbound and Mounjaro. The company had planned to hire 1,000 people at the plant.

Now Lilly CEO Dave Ricks told Handelsblatt that his company is halving its investment in the German plant. Lilly will open the site as planned in 2027 but operate at half the intended capacity and headcount.

Boehringer and Lilly cited planned cuts to healthcare spending in Germany as the driver of their revised investment plans. In April, Germany’s leaders unveiled a draft law intended to save more than €16 billion and control insurance rates. Some of the targeted savings will come from people with health insurance paying more for prescription drugs that are currently subsidized by insurers.

Germany’s leaders pitched the draft law as a necessary response to the widening deficit at state insurers, which is forecast to balloon from €15.3 billion in 2027 to €40.4 billion in 2030. Drugmakers are opposed to the changes, though, with Ricks saying it sends a terrible signal to pharma companies.

Médard Schoenmaeckers, Boehringer’s managing director in Germany, told Handelsblatt he recognized that the country needs to address the health insurance deficit. However, Schoenmaeckers argued the current proposal is a short-sighted cost-cutting measure that clashes with the government’s stated goal of supporting the pharma industry.

The tension between the need to control healthcare spending and a desire to attract pharma investment is present across Europe. As is happening in Germany, the tension has led pharma companies to reduce investment in other countries. Last year in the U.K., Merck abandoned a $1.3 billion project, AstraZeneca paused a $270 million commitment and Sanofi suspended investment over a drug pricing row.

U.K. politicians subsequently addressed some of the industry’s concerns, agreeing to pay 25% more for new medicines as part of a deal with President Donald Trump. Germany is the industry’s latest concern, with Ricks saying the country will be the least supportive nation in Europe if the reforms go through. The changes mean future innovations will not be launched in Germany, Schoenmaeckers said.

Trump’s Most Favored Nation pricing proposals are exacerbating the risk that drugmakers will opt against launching drugs in Europe. With the proposals tying U.S. prices to what companies charge in countries including Germany, drugmakers cannot yield to price pressure from European governments without affecting their biggest market.

https://www.biospace.com/business/lilly-and-boehringer-roll-back-billions-in-german-investments-over-health-budget-cuts

ADC Therapeutics nosedives on 27 deaths in confirmatory trial for lymphoma drug

 

In addition to a high rate of deaths, ADC Therapeutics’ Zynlonta plus rituximab showed no overall survival benefit in patients with diffuse large B cell lymphoma, casting doubt on its value as a second-line treatment in this indication.

There were thrice as many deaths in patients treated with ADC Therapeutics’ lymphoma drug Zynlonta as in controls given standard immunotherapy, causing the biotech’s share price to crash more than 50% to $1.44 per share and potentially complicating the drug’s future.

The anti-CD19 antibody-drug conjugate (ADC) won the FDA’s accelerated approval in April 2021 for relapsed or refractory diffuse large B cell lymphoma (DLBCL) in third-line or later settings. The new data come from the confirmatory Phase 3 LOTIS-5 study intended to gather data that could support the drug’s full approval, potentially in earlier lines of treatment.

The trial enrolled a total of 440 patients with DLBCL who had undergone at least one prior line of systemic therapy. They were treated either with Zynlonta and rituximab or a standard course of rituximab plus gemcitabine and oxaliplatin.

In the Zynlonta arm, 27 patients died, compared with nine deaths in the control group, according to a news release on Thursday morning. The biotech described these deaths as treatment-emergent adverse events (TEAE), which captures side effects that arise within 105 days after the last dose of the study treatment or before the start of a new anti-cancer treatment, whichever happens earlier.

ADC did not say whether these deaths were definitively linked to or caused by the Zynlonta regimen. The biotech did, however, note that the overall rates of TEAE—including the deaths and other toxicities—“were impacted by the longer overall TEAE observation time” in experimental versus control arms.

The company also said that a “majority” of the deaths in the Zynlonta arm were in patients 75 years and older.

The rate of deaths in the Zynlonta arm was “strongly elevated,” analysts at Stephens told investors in a note on Thursday morning, adding that this in turn could “obscure thoughts on meaningful potential 2L [second-line] utilization.”

Aside from these safety concerns, ADC’s data on Thursday also demonstrated no overall survival benefit in patients treated with the Zynlonta-based schedule. The biotech presented this outcome by saying that the Zynlonta therapy “showed no detrimental effect” on overall survival, but Stephens nevertheless said the efficacy readout “underwhelms expectations.”

LOTIS-5 did meet its primary endpoint, however, of demonstrating a significant progression-free survival effect. Patients on the Zynlonta combo saw a 27% reduction in the risk of death or disease progression versus controls. Overall and complete response rates were likewise higher with the Zynlonta regimen, though ADC did not say whether these effects were statistically significant.

ADC will take LOTIS-5 data to the FDA to discuss a path forward for Zynlonta plus rituximab, Chief Medical Officer Mohamed Zaki said in a prepared statement on Thursday. The biotech plans to submit a supplemental application for the drug’s full approval in the fourth quarter.

https://www.biospace.com/drug-development/adc-therapeutics-nosedives-on-27-deaths-in-confirmatory-trial-for-lymphoma-drug

'Iran’s Supreme Leader warns against 'public frustration,' urges unity'

 

Iran’s Supreme Leader Mojtaba Khamenei said the United States and what he called the global imperialism is opposed to Iran’s “distinct and unyielding identity,” casting the conflict with Washington a confrontation over the nature of the Iranian nation rather than only military or diplomatic disputes.

“The system of domination, led by America, has a problem with this nation and its distinct and unyielding identity,” said a message read out on Khamenei’s behalf marking the anniversary of the death of Islamic Republic founder Ruhollah Khomeini.

He said the United States and Israel could not accept the existence of a strong and independent Iran near what he described as the eastern edge of the “false geography” of Greater Israel.

Khamenei said the enemy had suffered defeat against Iran’s armed forces and had also experienced what he called a “meaningful and deep humiliation” in the streets.

He said the enemy was now focusing its “hybrid war” on two goals: undermining public belief and creating miscalculation among officials.

The Supreme Leader said the main tools of that effort were planting “doubt, despair, fear, suspicion and division,” and urged officials and the public to respond with unity, clarity and mutual trust.

He also warned officials that any action causing public frustration or distrust would amount to helping the enemy.

“Any action that causes pessimism and disillusionment among the people is a form of assistance to the enemy of this country and its people,” he said.

He described the current moment as a new opportunity to promote what he called the school of Ruhollah Khomeini and his slain father, whom he portrayed as “martyred” but victorious.

https://www.iranintl.com/en/liveblog/202605308417

IAEA source says no observable activity at bombed Iran nuclear sites - WSJ

 

There had been no observable activities at Iranian nuclear sites bombed last year in recent months, based on satellite imagery at surface level, Wall Street Journal reporter Laurence Norman said on X, citing a source close to the International Atomic Energy Agency.

The source said it was impossible to speak with any certainty about whether the stockpile of highly enriched uranium was still at Isfahan, noting that containers with highly enriched uranium could be moved in the back of a truck.

https://www.iranintl.com/en/liveblog/202605308417

Araghchi reaffirms Iran's support for Hamas in call with senior official

 

Iranian Foreign Minister Abbas Araghchi reaffirmed Tehran’s support for Hamas and other regional armed groups in a phone call with Khalil al-Hayya, a member of the Palestinian group’s leadership council, Iran’s Foreign Ministry said Thursday.

During the call, Hayya thanked Iran for its support and backing of what he called the legitimate struggle of the Palestinian people, according to the ministry statement.

He also praised Iran’s negotiating team for insisting on a simultaneous halt to fighting on all fronts in the region, the statement said.

Hayya briefed Araghchi on the latest situation in Gaza, accusing Israel of continuing its military operations and obstructing the implementation of a ceasefire agreement.

He also offered condolences over the killing of Iran’s Supreme Leader and several commanders and officials in what the statement described as recent US and Israeli attacks, while congratulating Iran on what he called its victory in the “Ramadan war.”

Araghchi, for his part, expressed condolences over the death of Hayya’s son and several Hamas commanders in Gaza, and praised what he called the “steadfastness” of the Palestinian people and resistance groups.

The Iranian foreign minister also outlined Tehran’s latest efforts to stop the war in the region and stressed that Iran would continue its policy of supporting what it calls the legitimate resistance of regional nations, especially in Palestine and Lebanon, against Israel.

https://www.iranintl.com/en/liveblog/202605308417