By stating the macro issues, we can understand (if one can) the market conditions, position and components. The market futures on Thursday high-lighted opening losses after the government said jobless claims fell last week, but revised the figures for the prior week upward. The mixed data come a day ahead of the monthly nonfarm payrolls report. Weekly jobless claims dip 1,000 to 400,000.
US stocks plunged Thursday, erasing the Dow gains for the year, and putting the S&P into correction, as investors buckled under uncertainty about the economy. The Dow average fell as much as 372.9 points and was recently down 336 points, or 2.9%, at 11,557.07. The S&P 500 sank nearly 42 points, or 3.3%, to 1,218.74. It’s down more than 10% from its closing bull-market high reached April 29 — a drop that some classify as a correction. The NASDAQ had lost 95.21 points, or 3.5%, to 2,597.75.
The stock market drops intensifying investor fears about a slowdown in global economic growth and worries about Europe’s ongoing debt crisis, which is centered now on Italy and Spain. As Japan intervened to weaken its currency and EU stock markets turned negative across the board, United States stocks fell by around 3 percent in morning trading in New York.
A fear haunting markets in the US is that the economy may be heading for a double-dip recession. Although the fractious debt ceiling debate is now past, markets fear spending cuts and weaker economic data point to a weaker economy. The latest weekly jobless data Thursday again showed the economy was still fragile.
The NASDAQ is now … DOWN -63.70 (-2.37%) to 2,629.37 and seems to be easing. The Dow is also … DOWN -252.67 <from -304.78> (-2.12%) to 11,643.77 and also easing. Remembering, my old and recent fear component; the DOW is UNDER 12,000.
Regenerative medicine/stem cell universe shares are … “much lower and setting up for a BIGGER drama - tomorrow – as stocks sell off … some believe it will fall further… however, the contrarian view is … extreme pessimism … begets a BUYING opportunity … stocks are much cheaper … from our early call this past week” on 8/4/11
Who is UP … NO ONE …
What’s new in the regenerative medicine/stem cell market …
Biotechnology Tax Breaks gain Backers while Congress cuts Debt: 7 bipartisan House lawmakers, including 3 who are members of the tax-writing Ways and Means committee, are backing legislation that would give new tax benefits to biotechnology, pharmaceutical and medical-device companies. The legislation would offer businesses in the area of “life sciences” a choice of 2 tax breaks: 1 is a credit of 40% for the 1st $150M of research. That is double the current 20% R&D tax credit. Companies are subject now to a top marginal rate of 35% when repatriating overseas profits. Both options could be renewed annually for 5 years. The other would be the opportunity to bring home to the US up to $150M annually in overseas profits at a low tax rate of 5.25%, with the requirement that the money be used to hire scientists or invest in research. The bottom line, even in times of fiscal constraints, it is extremely important for us to create the environment for job creation for an industry that … needs incentives. The intensity of competition from Singapore, China, India and other growing economies justifies using tax policy to reinforce private sector efforts to expand biotechnology specifically regenerative medicine companies and related companies. A potential tax holiday component is a relatively inexpensive way to promote job growth because it focuses on overseas profits that wouldn’t be repatriated to the US without a lower tax.
Ruling upholds Gene Patent, What is Next: The Court of Appeals for the Federal Circuit, which specializes in patent cases, said that Myriad Genetics was entitled to patents on 2 human genes used to predict if women have an increased risk of getting breast and ovarian cancer. The court ruled that DNA isolated from the body was eligible for patents because it was “markedly different” in its chemical structure from DNA that exists inside the chromosomes in the body. As a result, the isolated DNA is not simply a product of nature, which would not be eligible for a patent. The 2 to1 decision on the gene patenting issue was also a rejection of arguments made by the Obama administration, which had filed a friend of the court brief arguing that isolated DNA should not be patented. The brief went against the long-standing policy of the United States Patent and Trademark Office to grant such patents. (Andrew Pollack, NY Times) The bottom line, a federal appeals court ruled on Friday, 7/29/11 that gene(s) can be patented, overturning a lower court decision that had shocked the biotechnology industry. Thousands of human genes have been patented, and some patents are essential for encouraging innovation. The court had said that Myriad’s patent claims on the process of analyzing whether a patient’s genes had mutations that raised the risk of cancer was not patentable because it involved only “patent-ineligible abstract mental steps. “The claims cover molecules that are markedly different – have a distinctive chemical identity and nature – from molecules that exist in nature,” Judge Alan D. Lourie wrote for the court. The prevailing opinion rejected that analogy, saying that isolating DNA created a new chemical entity. It was not simply a matter of separating or purifying the DNA, he said, and not like snapping off a leaf or extracting a mineral from the earth. The next legal iteration will be whether Induced Pluripotent Stem Cell (iPSC) patents will be subject to similar constraints.
Verastem, new head of Research: Jonathan Pachter PhD was appointed as Vice President and Head of Research; has more than 20 years of experience leading discovery programs in small molecule and monoclonal antibody therapeutics for the treatment of cancer. He previously served as Head of Cancer Biology at OSI Pharmaceuticals (acquired by Astellas). His team was responsible for the development of EMT (epithelial-mesenchymal transition) models to discover drugs that inhibit this process and the cancer stem cells that result. Dr. Pachter has advanced 7 small molecule agents into development including OSI-906, currently in Phase III trials in cancer patients, and one monoclonal antibody, robatumumab, which advanced to Phase II clinical trials. Dr. Pachter has also made key contributions to the regulatory approval of Temozolomide for treatment of glioblastoma. He is an author of more than 40 peer-reviewed publications and inventor on numerous patents. Dr Pachter did his postdoctoral work in pharmacology at Yale University School of Medicine and holds a Ph.D. from Baylor College of Medicine.
Study: Rats with damaged discs benefit from cell-based spinal discs: Spinal discs made of sheep cells and collagen replaced diseased discs and integrated with the spines of rats six months after implantation, scientists reported in the journal Proceedings of the National Academy of Sciences. Although the bioengineered spinal discs are still years away from human testing, such implants might one day treat patients with back pain related to degenerative disc disease. http://consumer.healthday.com/Article.asp?AID=655362
Dendreon to lay off workers due to slow Provenge sales: DNDN said it plans to cut jobs due to slower-than-expected sales of its prostate cancer drug, Provenge, because physicians are concerned about the complexity of the process of seeking reimbursement for the immunotherapy. DNDN said it is optimistic that the use of Provenge will rise after Medicare announced it will cover the treatment and released an electronic code that aims to streamline the reimbursement process. The bottom line, DNDN expects that adoption of the new reimbursement paradigm will take time; accordingly, DNDN is withdrawing its previous guidance of $350-400 million in revenue for 2011 and currently expects modest quarter over quarter revenue growth for the remainder of this year. DNDN expects to reduce expenses, including workforce reductions, to align with its near-term manufacturing requirements.
NIH appoints Director of Intramural Center for Regenerative Medicine: NIH Director Francis S. Collins, appointed of Mahendra S. Rao, MD, PhD as the director for the new NIH Intramural Center for Regenerative Medicine (NIH-CRM). The NIH-CRM is an initiative to create a world-class center of excellence in stem cell technology on the NIH campus, including induced pluripotent stem cells (iPSC), which can have applications in many systems and organs of the body. This is an initiative of the NIH Common Fund and will be administered by the National Institute of Arthritis and Musculoskeletal and Skin Diseases (NIAMS). Dr. Rao is internationally renowned for his research involving human embryonic stem cells (hESCs) and other somatic stem cells. He has worked in the stem cell field for more than 20 years, with stints in academia, government and regulatory affairs and industry. He received his M.D. from Bombay University in India and his Ph.D. in developmental neurobiology from the California Institute of Technology, Pasadena. Following postdoctoral training at Case Western Reserve University, Cleveland, he established his research laboratory in neural development at the University of Utah, Salt Lake City. He next joined the National Institute on Aging as chief of the Neurosciences Section, where he studied neural progenitor cells and continued to explore his longstanding interest in their clinical potential. Most recently, he spent 6 years as the vice president of Regenerative Medicine at Life Technologies, Carlsbad, Calif. He co-founded Q Therapeutics, a neural stem cell company based in Salt Lake City. He also served internationally on advisory boards for companies involved in stem cell processing and therapy, on committees including the FDA’s Cellular Tissue and Gene Therapies Advisory Committee chair, and as the California Institute of Regenerative Medicine and International Society for Stem Cell Research liaison to the International Society for Cellular Therapy.