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  • Jonathan Poyer

Solid CPI Bumps Biotech Index Up 1.47%. Can the Risk-On Mentality Move Beyond NVIDIA?




Macro factors remain in focus as investors await this weeks' CPI, PPI and FOMC updates.  Index returns remain highly concentrated with the stock split of Nvidia (NVDA) enabling it to become the third stock ever to reach $3T market capitalization and these (MSFT, NVDA and AAPL) now account for a record 20% of the S&P 500.  Remarkably, these big three are also worth more than the value of all stocks listed on the entire Chinese stock exchange. 


Out-sized moves in story stocks continue as meme traders seem emboldened to put on risk with the major indices at all-time record highs. Biotech remains in a holding pattern as the market seems to be chasing other shiny objects at the moment.



M&A:


  • Seres Therapeutics (MCRB) announced partner Nestle Health Sciences will acquire the remainder of microbiome asset Vowst.  Financial consideration will be negotiated in the next 90 days.  Investors that had been hoping for a straight takeout were disappointed as MCRB traded down to an all-time record low



  • Illumnia (ILMN) announced the board approved the spin-off of Grail with ILMN maintaining a minority stake of 14.5%.  ILMN purchased the diagnostics platform for $8 billion in 2021 and was pressured from both regulators and activist investors to reverse the move



Regulatory:


  • Biomea Fusion (BMEA) was under pressure, falling 60%, after FDA placed a full clinical hold on covalent menin inhibitor in diabetes due to possible drug-induced hepatotoxicity



  • Lykos Therapeutics (private) (MNMD) was under scrutiny after an FDA advisory panel voted 10-1 against the overall benefits of psychedelic drug (MDMA) for treatment of post-traumatic stress disorder.  Other companies in the space including Mindmed (MNMD) Compass Pathways (CMPS), Atai Life (ATAI) and Cybin (CYBN) were under pressure


Clinical:


  • Madrigal Pharmaceuticals (MDGL) was under pressure after Eli Lilly (LLY) reported GLP1 blockbuster tirzepatide showed MASH resolution and fibrosis reduction (54.9% vs 29.7% pbo) in late stage trial.  The Fibrosis benefit was not dose dependent and missed statistical significance on an ITT basis



  • Viking Therapeutics (VKTX) announced positive Ph2b 52-week data for VK2809 in NASH



Corporate Updates & Earnings:


  • Illumnia (ILMN) will be removed from the S&P500 and added to the S&P400

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