Volatility returned to equity markets with the VIX spiking to the highest level (60+) since the March 2020 COVID lockdowns. Weak employment data last week has traders pricing in >100 bps of rate cuts by year end as many are arguing the Fed is behind the curve. Some are even calling for an emergency Fed rate cut within the next week as markets around the world are in turmoil.
Weakness may have been exacerbated by continued unwinding of yen carry trades following last week's BoJ rate hike. Pharma and Biotech earning season is in full swing with many companies reporting topline and EPS beats. Inelastic demand for innovative medicines is expected to sustain this favorable earnings trajectory regardless of the direction of travel for the broader economy. The 10 year yield fell in parallel with the S&P Select Biotech Index, breaking the longer term trend. It appears only a matter of time before lower cost of capital returns to be a tailwind for the sector.
Regulatory:
Actinium Pharma (ATNM) crashed >70% after FDA told the company the current clinical data set is insufficient and they would need to run a clinical trial demonstrating radiotherapy Iomab-B has an overall survival benefit in a randomized head-to-head trial for approval
Clinical:
ALX Oncology (ALXO) shares were under pressure, falling >40%, after reporting deteriorating gastric cancer response data relative to an earlier interim analysis. The trial added investigational CD47 therapy evorpacept on top of a three drug combo highlighting the perils of multiple combination development on top of active therapies
Pepgen (PEPG) announced the 5 mg dose of PGN-EDO51 in DMD patients showed 1.49% dystrophin expression or a 0.70% increase from baseline (muscle normalized) or 0.61% dystrophin expression or a 0.26% increase from baseline (absolute mean change). Shares fell >40% as investors were expecting 1-6% bases on prior management commentary and preclinical modeling
Celldex (CLDX) reported positive data from a Phase 2 study of barzolvolimab for antihistamine refractory chronic inducible urticaria (CIndU). Shares were volatile on a report of an investigator reported anaphylaxis case that was later adjudicated by a 3-person independent panel which concluded that there was no evidence of anaphylaxis
Culling the Herd:
Arbutus Biopharma (ABUS) announced a reduction in force of ~40%, eliminating HBV discovery efforts, to extend cash runway through 4Q 2026. The trial date for ongoing LNP litigation with MRNA is April 21, 2025
FibroGen (FGEN) announced it will terminate pamrevlumab development after two trials in pancreatic cancer failed. FGEN will reduce the US workforce by 75%
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