Stocks closed higher last week in anticipation of the Fed to cut interest rates for the first time since the 2008 financial crisis. While this is welcomed by investors we should not lose sight of what it signals. In the past 11-years the U.S economy has underwent a record expansion which led the Fed to gradually increase rates, until now. This means the Fed is concerned that growth could be petering out and is cutting rates in an effort to retain some momentum. Fundamentally there is a lot to be happy about in our economy. Unemployment is at a 50-year low, wages are steadily rising, inflation is low, and earnings of U.S companies are growing. Where I start to get concerned is when thinking about the global geopolitical and economic landscape. The trade war with China is still unresolved and probably wont be for some time. Global manufacturing is hurting. Tensions between Iran, Saudi Arabia, and the U.S are escalating. On top of all that, campaigning for the 2020 election is underway. You can count on Democrats and Republicans alike to speak out on hot-button issues like healthcare and immigration reform that will inevitably affect U.S equities. I am still excited about the investing and trading prospects for 2019 and beyond. But, its important to be aware of these factors and trade accordingly.
Market Movers Last Week
On Friday after hours Sanofi (NASDAQ: SNY) press released that it notified Lexicon Pharmaceuticals, Inc. (Nasdaq: LXRX) that it was terminating their collaboration agreement to develop Zynquista (sotagliflozin) as a treatment for diabetes. This came on the heels of weak phase 3 data for Zynquista in diabetes. LXRX claims that SNY breached their contract and does not accept its decision to terminate the collaboration agreement. LXRX shares closed down over -50% on Friday.
Intec Pharma Ltd. (NASDAQ: NTEC) also had a rough week. NTEC closed down -84% to $.48 on Friday after a pivotal phase 3 study evaluating the safety and efficacy of Accordion Pill-Carbidopa/Levodopa (AP-CD/LD) in patients with advanced Parkinson Disease missed its primary endpoint. Likewise ACADIA Pharmaceuticals Inc. (Nasdaq: ACAD) missed its primary endpoint in a phase 3 study testing pimavanserin as an adjunctive treatment in adults with schizophrenia. ACAD closed down -9% for the week. Intra-Cellular Therapies (Nasdaq: ITCI) is another company developing a treatment for schizophrenia that saw its share price tumble. Its up for debate whether the shedding of -30% was commensurate with the news that the FDA cancelled an Advisory Committee (ADCOM) meeting slated for July 31st. The ADCOM meeting was going to evaluate Lumateperone as a treatment of schizophrenia. Another company that took a big hit was Marinus Pharmaceuticals, Inc. (NASDAQ: MRNS). MRNS closed down -71% after it announced negative phase 2 data for its lead compound ganaxolone in female patients with postpartum depression (PPD).
It was not all doom and gloom though. Achillion Pharmaceuticals, Inc. (Nasdaq: ACHN) shares rallied +95% to $4.55 after announcing positive phase 1 data in a multiple-ascending dose clinical trial in healthy volunteers. I am skeptical gains of this magnitude will hold if that was the only thing behind the spike in valuation. Another winner of the week was Chiasma, Inc. (NASDAQ: CHMA). CHMA jolted up +27% to $7.86 after hitting its primary endpoint in the company’s phase 3 clinical study evaluating Mycapssa as a maintenance treatment of adults with a hormonal disorder called “acromegaly”. Although, the CHMA actually closed down for the week after it followed the positive data with an offerings.
Earnings Radar Next Week
Monday 7/29/19: Sanofi SA (SNY)
Tuesday 7/30/19: Amgen, Inc (AMGN), EXACT Sciences Corporation (EXAS), Gilead Sciences, Inc (GILD), Incyte Corporation (INCY), Eli Lilly And Co (LLY), Merck (MRK), Pfizer (PFE)
Wednesday 7/31/19: Exelixis, Inc (EXEL), United Therapeutics Corporation (UTHR), Vertex Pharmaceuticals Incorporated (VRTX)
Thursday 8/1/19: Acorda Therapeutics Inc (ACOR), BioMarin Pharmaceutical Inc (BMRN), Emergent Biosolutions Inc (EBS)
Clinical Stage With a Catalyst
- AzurRx BioPharma Inc (AZRX) $1.0
- Phase 2 data due late summer 2019
- Deciphera Pharmaceuticals Inc (DCPH) $21.48
- Phase 3 data due mid-2019
- GlycoMimetics Inc (GLYC) $9.18
- Phase 3 data due 2H19, potentially in July or August.
- Kala Pharmaceuticals Inc (KALA) $5.66
- PDUFA on August 15th
- Leap Therapeutics Inc (LPTX) $2.19
- DKN01 program update due August 6th at 8:30 ET
- Nabriva Therapeutics (NBRV) 2.35
- PDUFA on August 19th
Let’s get this bread!
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