The Union Flag

UK’s national flag might be the one that records the most amount of world history.

Source: britannica.com

The official full name of UK is “The United Kingdom of Great Britain and Northern Ireland”, while Great Britain is the island consisting of England, Scotland, and Wales.

Map of Britain
Source: BBC

UK’s flag consists of three elements.

Flag of England

Flag of England
Source: britannica.com

The origin of the flag, the Cross of St. George, its association with St. George (the patron saint of England), and its adoption by England lack thorough and clear documentation.

The end result is that St. George finally rose to the position of the primary patron saint of England during the English Reformation when all religious flags, including all saints’ banners except for his were abolished.

Flag of Scotland

Image result for Flag of Scotland
Source: Wikipedia

The flag is associated with the Cross of St. Andrew. The tradition of Saint Andrew being the patron saint of Scotland develops in the 13th to 14th centuries.

In 1286, when Scotland was ruled by the Guardians of Scotland in the absence of a king, the saint was depicted on the Guardians’ seal, used to authenticate their legal documents and communications to the rest of Europe.

Image of the seal of the Guardians of Scotland, Facsimile of the seal of the Guardians of Scotland showing St Andrew on the cross, 1292 (Crown Copyright, National Records of Scotland, RH5/55)
Source: nrscotland.gov.uk

The Parliament of Scotland decreed in 1385 that every Scottish and French soldier (fighting against the English under Richard II) “shall have a sign before and behind, namely a white St. Andrew’s Cross”.

Wales

Wales virtually became an English colony after the invasion (The conquest of Wales by Edward I) between 1277 and 1283.

Ireland

Henry (King Henry VIII of England) was proclaimed King of Ireland by the Crown of Ireland Act 1542, an Act of the Irish Parliament, which placed the new Kingdom of Ireland in personal union with the Kingdom of England.

The Union Flag

In 1603, the year of Queen Elizabeth I‘s death, England and Scotland existed as completely separate nations, each with their own monarch and parliament. Elizabeth, being a spinster and therefore childless, expressed a deathbed wish that her cousin, King James VI of Scotland, be named as her successor to the English throne. Thus, the Scottish monarch was projected into the unique position of ruling two nations simultaneously. He ruled Scotland as King James VI and England as King James I.

In the spring of 1606, to symbolize the monarchical unification of the two nations under himself, James created a banner to this end, by fully superimposing the English red cross (with a narrow white border to represent its normal white field) upon the Scottish flag. This became known as the Union Flag (the Union Jack), and it was the forerunner of the present flag of Great Britain.
The Union Jack | Source: usg.edu

In 1707, during the reign of Queen Anne, the parliaments of England and Scotland were united to form the new nation of Great Britain, and Anne officially adopted the 101 year old banner as the national flag of the newly created nation.

Saint Patrick’s Saltire

The St. Patrick’s Saltire, also known as the Cross of St Patrick, after Saint Patrick, the main patron saint of Ireland. “The Saltire became an established Irish symbol in 1783 with the founding of the Order of Saint Patrick by King George III to mark the legislative independence of the Kingdom of Ireland which lasted from 1783 to 1801.

In 1801, when Ireland became a part of Great Britain, the Union Flag was redesigned to include the Cross of St. Patrick (red, diagonal), the patron saint of Ireland. It is in this form that the British flag exists today.

Image result for uk flag
Source: Wikipedia

 

 

Casper’s IPO And Valuation

DTC is a buzzword that attracts capital in the private market.

However, public market usually doesn’t have much patience or appetite for future stories.

Casper, the magical mattress unicorn, which raised $100 million in March 2019, marketing itself as a “Sleep Economy” company, is receiving a market cap of $400 million (EV ~$300 million).


The main problem though, is not about the DTC model.

Brands such as Canada Goose and Lululemon are counting on DTC to grow.

The slowing revenue growth rate is also okay. Public market is not relentlessly looking for 100% or 50% growth.

Indeed, Canada Goose and Lululemon, which grew at sub-25% in the last 12 month, are valued at over 4x and 8x sales respectively.

Casper, which is expected to grow at 23% for 2019, has EV/Revenue below 1x.


The cost structure is where things are different.

From 2019 April to December (FY20Q1-Q3), Canada Goose‘s SG&A expenses are 31.2% of revenue.

From 2019 February to October (FY19Q1-Q3), Lululemon‘s SG&A expenses are 36.4% of revenue.

That ratio is 70.5% for Casper from Jan to Sep 2019.

Plus the differences in gross margin, the unprofitable DTC brand growing at sub-25% still needs additional efforts to prove its business is viable/sustainable.

A CBInsights Report: The Most Well-Funded Tech Startups In Europe

Read the original report here.


  • The top-funded startup in Europe is global communications company OneWeb in the UK, with almost $3.5B in total disclosed equity funding.
  • Rounding out the top 3 most well-funded startups in the region are online payments service provider Klarna in Sweden ($1.1B in disclosed equity funding) and mobile banking platform N26 in Germany ($683M).
  • Eight of the 37 companies featured in our map are unicorns, with disclosed valuations of $1B+ (all tracked in real time on the CB Insights global unicorn club tracker). These unicorns are: Klarna ($5.5B valuation, Sweden), N26 ($3.5B, Germany), BlaBlaCar ($1.6B, France), Vinted ($1.1B, Lithuania), Acronis ($1B, Switzerland), Glovo ($1B, Spain), OutSystems ($1B, Portugal), and Bolt ($1B, Estonia).
  • The region is home to 16 countries whose most well-funded tech startup has raised over $100M in equity funding. Only OneWeb and Klarna have raised more than $1B+ in equity funding.
  • The least well-funded startup on the map is Serbia-based data analysis tool Content Insights, which has raised $3.6M.
  • Since our last update of this map in April, only 1 featured startup has exited: Switzerland-based Veeam Software, which was acquired by VC firm Insight Partners in January 2020 at a valuation of $5B+.
Source: CBInsights
STARTUP CONTINENT: THE MOST WELL-FUNDED TECH STARTUPS IN EUROPE
Company Country  Total Equity Funding ($M)
OneWeb United Kingdom 3469
Klarna Sweden 1122
N26 Germany 683
Glovo Spain 513
BlaBlaCar France 449
OutSystems Portugal 422
Picnic Netherlands 329
Vinted Lithuania 260
RELEX Solutions Finland 222
AMCS Group Ireland 202
Trustpilot Denmark 179
Acronis Switzerland 178
Bolt Estonia 177
Tricentis Austria 174
DocPlanner Group Poland 137
Odoo Belgium 104
Job Today Luxembourg 81
ivi Russian Federation 81
Kolonial.no Norway 61
AImotive Hungary 51
Satispay Italy 50
Mews Systems Czech Republic 42
PDFfiler Ukraine 30
Lidyana Turkey 25.17
Capital.com Cyprus 25
Netdata Greece 21
Software Group Bulgaria 17
FintechOS Romania 16
Gambling.com Group Malta 16
Banuba Belarus 12
Minit Slovakia 11
TripCreator Iceland 10
Gjirafa Albania 8.7
Mintos Latvia 7.8
Gideon Brothers Croatia 5.7
Eligma Slovenia 4.4
Content Insights Serbia 3.6

「News of the Week」Tesla, $968.99/share

Financial Times – Tesla shares surge again despite Saudi Arabian exit

  • Tesla made the company the world’s second-largest carmaker by market value.
  • The stock rose as much as 24.2 per cent to $968.99 about 12 minutes out from the closing bell, closing at $887.06.
  • The stock has more than doubled since the start of the year.
  • The stock notched their most actively traded day on Feb 4, with ~61 million volume.
  • Tesla reported a $105 million profit for 19Q4 the week before
  • Short squeeze – On top of the record dollar loss of $5.8bn in January, short-sellers lost a further $3.2bn as the extraordinary share price rally accelerated on the first day’s trading of the new month.
  • Tesla’s recent delivery from its Shanghai factory to the China market added to the enthusiasm. It is the first fully foreign-owned car plant in the country.

CAR-T Therapies: 2+ Years Into Commercialization (4)

Kymriah Manufacturing

In 2012, Novartis acquired a specialized facility from the former Dendreon for $43 million. Dendreon went bankrupt trying to establish its once-promising prostate cancer vaccine Provenge.

Dendreon’s Morris Plains, New Jersey, facility is a 173,100 square foot state-of-the-art IMF.

In July 2018, before EU approval, Novartis announced that it had signed an agreement with CellforCure, a French CDMO, to produce CAR-T cell therapies. Manufacturing at Cell for Cure’s site in Les Ulis, a city southwest of Paris, would mimic the processes Novartis has in place at its Morris Plains, New Jersey hub.

In August 2018, when Kymriah get approved in EU, Norvartis said it will spend CHF90 million over three years on an existing building at a production site in Stein, Switzerland. Novartis expects to initially have 260 positions and create up to 450 new jobs by 2021.

New manufacturing capacities are keys to scale up revenue and Novartis acknowledged existing production problems with out-of-spec doses.

In September 2018, Novartis paid $40 million for a 9% stake in Cellular Biomedicine Group (CBMG), a Shanghai-based firm which will manufacture CAR-T cell therapy Kymriah for the China market and license select proprietary technology to Novartis for global use.

In December 2018, Novartis went further to acquire CellforCure from LFB including the cell and gene manufacturing facility located in Les Ulis and the related adjacent land.

The Switzerland facility completed the first clinical production batch in September 2019 and inaugurated at the end of November.

In addition to manufacturing areas for novel CAR-T cell therapies, the new building also hosts the production of innovative, difficult-to-manufacture solid dosage forms such as tablets and capsules.

CAR-T Therapies: 2+ Years Into Commercialization (3)

The manufacturing process of personalized cell therapies is more complex than mass production of traditional drugs.

The location is also extremely important which affects turnaround time.

Yescarta Manufacturing

Kite’s original lease of a 18,000 sqft site in Santa Monica supported its clinical trials while its 43,500 Los Angles facility opened in 2016 was designed for commercialization launch.

The El Segundo site is estimated to have the capacity to produce up to 5,000 patient therapies per year. The plant’s location, adjacent to Los Angeles International Airport, is intended to expedite receipt and shipment of engineered T-cells from and to patients across the United States and Europe. According to Kite, the time from when a patient’s materials are shipped to the facility to when the engineered T cells are returned to the patient is approximately 14 days.

When Yescarta was approved in Oct 2017, Gilead’s statement said in the ZUMA-1 pivotal trial, Kite demonstrated a 99 percent manufacturing success rate with a median manufacturing turnaround time of 17 days, which is important to patients given the potential for rapid disease progression in this population.”

In 2018, three month before Yescarta is approved in Europe, Kite leased a new facility in the Netherlands to engineer cell therapies in Europe – a 117,000 square-foot site in Hoofddorp (SEGRO Park Amsterdam Airport). The plant is expected to be operational in 2020 and saving 3-4 days in delivery (from Europe to LA). The current time including international delivery, from apheresis to delivery of Yescarta, is 26-29 days.

Meanwhile, in addition to the Netherlands facility, Kite said it had recently purchased a new building in Santa Monica from Astellas Pharma Inc. that will be used for cell therapy research, development and the expansion of clinical manufacturing capabilities, and has leased a 26,000 square-foot facility in Gaithersburg, Maryland.

In July 2018, it also added Michael Amoroso as Senior Vice President and Head of Worldwide Commercial, Cell Therapy. Mr. Amoroso was leading Ensai’s American commercialization of oncology business; but more importantly, he worked at Celgene on several oncology roles before serving as Commercial Lead, Global Marketing for Celgene’s CAR T programs. His current title is CMO of Kite.

In April 2019, Kite announced plans for a new 20-acre site in Frederick County, Maryland. Kite bought the 20-acre Urbana site in November 2018 for $7.5 million. The facility will have 62,000 square feet of office space and 217,000 square feet of manufacturing, plant, and shipping space.

Source: fiercepharma, Frederick County Office of Economic Development

On Gilead’s 2019 1st quarter earnings call, its new CEO said they will separate Kite into its own business unit.

In July 2019, Kite announced that Christi L. Shaw will join as CEO of Kite. Ms. Shaw was serving as Senior Vice President of Eli Lilly &. Co., and President of Lilly Bio-Medicines.

Later in July 2019, Kite announced plans for a new 67,000-square-foot facility in Oceanside, California, dedicated to the development and manufacturing of viral vectors, a critical starting material in the production of cell therapies. The facility will go live in the second half of 2021.

CAR-T Therapies: 2+ Years Into Commercialization (2)

Attaching a chart of quarterly sales for the two CAR-T products discussed before.

With Yescarta’s annual sales of $456 million in 2019 and Kymriah catching up, the acquisition price paid in 2017 by Gilead was indeed very high.

In its 19Q4 earnings, Gilead disclosed an $800 million write-down related to a Kite Pharma setback in indolent non-Hodgkin lymphoma. That followed an $820 million write-down this time last year related to Kite’s multiple myeloma candidate KITE-585.  [fiercepharma]

The competition will become more fierce as BMY just submitted application for its CAR-T therapy acquired from Celgene (Celgene acquired from Juno) -lisocabtagene maraleucel (liso-cel). The treatment is also for adult patients with relapsed or refractory (R/R) large B-cell lymphoma (LBCL) after at least two prior therapies.

BMY’s data: among patients evaluable for efficacy (n=256), the overall response rate (ORR) was 73% (187/256, 95% CI: 67 – 78) with 53% of patients (136/256, 95% CI: 47 – 59) achieving a complete response (CR). Responses were similar across all patient subgroups. Among all patients, 79% (213/269) had grade 3 or higher treatment-emergent adverse events (TEAE). Instances of any grade cytokine release syndrome (CRS) occurred in 42% (113/269) of patients at a median onset of 5 days and grade 3 or higher CRS occurring in 2% (6/269) of patients.

CAR-T Therapies: 2+ Years Into Commercialization (1)

Approvals and Acquisition

Back in 2017, when Kymriah by Novartis was first approved by FDA, it marked the beginning of commercializing CAR-T cell therapies in the US.

KYMRIAH (kim rye uh)

CAR-T therapies have shown superior effects in treating blood cancers. Kymriah’s initial approved indication is B-cell precursor ALL that is refractory or in second or later relapse for patients up to 25 years of age. There are approximately 3,100 patients aged 20 and younger are diagnosed with ALL each year; 15-20 percent of pediatric B cell precursor ALL patients relapse after their initial remission.

On Aug 28, 11 days after Kymriah’s approval, another CAR-T cell therapy company Kite Pharma was acquired by Gilead for $11.9 billion. The $180.00 per share acquisition price represents a 29% premium to Kite’s closing on Friday, August 25, and a 50% premium to the company’s 30-day volume weighted average stock price.

At the time of acquisition, Kite’s lead candidate was under FDA’s priority review and had submitted the first CAR-T therapy application in Europe for the treatment of relapsed/refractory DLBCL, TFL and PMBCL with the European Medicines Agency (EMA).

On Oct 18, FDA approved Kite’s Yescarta for use in adult patients with large B-cell lymphoma after at least two other kinds of treatment failed, including diffuse large B-cell lymphoma (DLBCL), primary mediastinal large B-cell lymphoma, high grade B-cell lymphoma and DLBCL arising from follicular lymphoma. DLBCL is the most common type of NHL in adults, with 24,000 new cases diagnosed each year in the US (1/3 of newly diagnosed NHL).

YESCARTA® logo

Concurrently, in Gilead’s press release, it estimated that in the US each year there are approximately 7,500 patients with refractory DLBCL who are eligible for CAR T therapy.

In May 2018, FDA expanded Kymriah’s approval for adults with relapsed or refractory large B-cell lymphoma as well.

In August 2018, Yescarta received European Marketing Authorization for adult patients with relapsed or refractory DLBCL and PMBCL, after two or more lines of systemic therapy; Kymriah was approved in EU for the treatment of pediatric and young adult patients up to 25 years of age with B-cell acute lymphoblastic leukemia (ALL) that is refractory, in relapse post-transplant or in second or later relapse; and for the treatment of adult patients with relapsed or refractory (r/r) diffuse large B-cell lymphoma (DLBCL) after two or more lines of systemic therapy.

In March 2019, Japan’s Ministry of Health, Labor and Welfare (MHLW) has approved Kymriah (tisagenlecleucel) for the treatment of two distinct indications – CD19-positive relapsed or refractory (r/r) B-cell acute lymphoblastic leukemia (ALL) and CD19-positive r/r diffuse large B-cell lymphoma (DLBCL).


Clinical Trails and Data

r/r ALL

Kymriah was first approved by FDA based on 82.5% overall remission rate (ORR) reported at 3 months, of which all were MRD– (n=52/63).

  • lower limit of the 95% confidence interval for ORR is 70.9%, which is above the pre-set null hypothesis rate of 20%
  • 40 subjects (63.5%) had the best response of CR within the first 3 months after infusion
  • 12 subjects (19.0%) had the best response of CRi.
  • Among the 52 responders, the median duration of response (DOR) was not yet reached (range: 1.2 to 14.1+ months) with the median follow-up of 4.8 months.
  • 84% (n=57) experienced Grade 3 or higher events
  • Cytokine release syndrome (CRS) occurred in 79% of patients; CRS Grade 3 or higher occurred in 49% of patients

On ASH 2018, Novartis presented an updated ORR rate of 82.3% (n=65/79); relapse-free survival was 62% at 24 months.

ORR and MRD Remission

r/r DLBCL

Yescarta was approved in 2017 based on an ORR of 72% (n=73/101), with a CR rate of 51%. SAEs Grade 3 or higher occurred in 48 (44%) patients. CRS occurred in 94% of patients; CRS Grade 3 or higher occurred in 13% of patients.

On ASH 2019, Gilead provided updates on ZUMA-1 that median overall survival (OS) was 25.8 months.

When Kymriah was approved for r/r DLBCL in 2018, the overall response rate (ORR) was 50% at 3 months (n=34/68). On ASH 2019, in the 24-month analysis of the JULIET trial, ORR was 52% (N=115).

Youtube’s First Official Financial Result

It has been more than 13 years since Youtube was acquired for $1.65 billion by Google back in October 2006.

Founded in February 2005, with $11.5 million total venture funding and 65 employees at that time, Youtube commanded 46% of visits to U.S. online-video sites in September. That compared with a 21% share for the video activities of News Corp.’s MySpace site and 11% for Google Video. Youtube had close to 20 million monthly visitors in August 2006.

A year and half before Youtube’s acquisition, MySpace’s parent company Intermix Media Inc. was acquired by News Corp. for $580 million.

Back then, Google reported total revenues of $6.14 billion in 2005 and $10.60 billion in 2006, and had a market value of $132 billion. Its net income was $3 billion in 2006 with $3.6 billion cash flow from operations and more than $11 billion cash balance.


On Monday Feb 3, 2020, Alphabet first provided the breakdown for some of its non-Google-search businesses, including Youtube.

Year Ended December 31,
2017
2018
2019
Google Search & other
$
69,811
$
85,296
$
98,115
YouTube ads(1)
8,150
11,155
15,149

(1) YouTube non-advertising revenues are included in Google other revenues.

Youtube ads generated $4,717 million revenue in 2019 Q4 – a ~$19 billion run rate.

Using a multiple of 5.0x, Youtube could be valued at ~$100 billion – a 60 times return for google acquisition or an IRR of 37% for 13 years.


I guess the success formula is: with the right synergies, acquire early & provide support to grow it.


Alphabet 2019 10-K

2019 Q4 Earnings Call Transcript