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.
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.
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
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.
When Tesla enjoyed an amazing ride this week, let’s look at Elon Musk’s other business SpaceX. Specifically, one of its major client bases – satellites.
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 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 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.
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.
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.
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 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).
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 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.
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.
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.
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).
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.
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.
Dots to connect: Gilead’s drug Remdesivir for Ebola, Abbvie’s Kaletra (Lopinavir/Ritonavir), Roche’s Tamiflu, Oseltamivir generic versions, JNJ’s Prezista, restaurant/coffee chains Yum China, Luckin Coffee, Starbuck, airline industry, drop in demand for oil and oil prices, other travel related industries such as Trip.com and Huazhu, second-order effects on internet-based services & healthcare services investments, etc.
