Category: lenS & thoughtS

Current Anti-Aging Startups Roundup

Anti-aging is a centuries-long problem and we don’t have an answer.

Here is a summary of current notable efforts that might provide some sort of solution.

Biopharma/Therapeutics Approach

Unity Biotechnology – eliminate senescent cells
Source: Unity Cellular Senescence Investor & Analyst Presentation on Dec. 11, 2018
  • Lead candidate UBX0101, a first-in-class senolytic molecule
  • UBX1967
    • January 2019, completed license agreement with Ascentage Pharma, granting Unity the exclusive worldwide development and commercialization rights and non-exclusive manufacturing rights outside of Greater China (China, Hong Kong, Macau and Taiwan) for UBX1967 in all non-oncology indications. Inside Greater China, UNITY is obligated to commercialize UBX1967 through a joint venture with Ascentage Pharma. The UBX1967 License Agreement also grants UNITY the right to continue its preclinical development efforts with respect to another Ascentage Pharma-controlled Bcl-2 inhibitor compound that will serve as a back-up to UBX1967.
    • Per the 2016 pact, should Unity choose to license at least one more products, the Chinese biotech will gain a total of 1,333,338 shares
    • plans to file an IND application for UBX1967 in the second half of 2019
Calico – A previous google company
  • Founded in 2013, Calico started within Google (later Alphabet) and soon jump-started with huge fundings – a $1.5 billion initiative/collaboration in September 2014 with Abbvie. “AbbVie and Calico will each initially provide up to $250 million to fund the collaboration with the potential for both sides to contribute an additional $500 million.”
  • In June 2018, the collaboration was extended with another $1 billion. “AbbVie and Calico will each commit to contribute an additional $500 million to the collaboration.”
  • It was also cited that “since 2014, the collaboration between the two companies has produced more than two dozen early-stage programs addressing disease states across oncology and neuroscience and yielded new insights into the biology of aging.”
samumed
Napa Therapeutics

Data Approach

Juvenescence AI
  • A subsidiary of Juvenescence, a joint effort of Juvenescence + Insilico Medicine
  • Formed in July 2017
Human Longevity
  • Was valued at $1.6 billion in 2017 with fundings from Celgene, Illumina, GE Ventures, etc.
  • Declined to a valuation of $310 million according to a WSJ report

Portfolio Approach

Juvenescence
Life Biosciences
  • Jan. 2019 Series B of $50 million
  • co-founded in 2017 by David Sinclair and Tristan Edwards
  • 8 Subsidiaries
    • Prana Biotechnology (an initial $7.5 million investment in Jan.2019)
    • Lua, HIPAA-compliant medical technology platform (acquired in Oct. 2018)
    • Senolytic Therapeutics acquired at a very early stage
    • Jumpstart Fertility acquired at a very early stage
    • the other four were formed in-house (Selphagy Tx, Spotlight Biosciences, Continuum Biosciences, Animal Biosciences)

Somehow, reminded me of Theranos… also an area that might not be reguated by FDA… (Ageing is not a disease by FDA’s definition) and some are backed by non-traditional biotech VC firms… But most seemed to be more experienced and sophisticated in biology and medicine (than Theranos’ average).

Trees and Global Warming

Planting trees seems to be one of the most common and economic solution to reduce CO2 and is well-recognized around the globe. It is also one of the “negative-emissions technologies” to help meet Paris Agreement targets – afforestation and reforestation.

However, climate changes are not that simple and global temperature won’t be restored just by planting trees.

Clearly, we have omitted some “negative impacts” of trees since the beginning. More efforts are definitely needed to plant trees more effective.

One of the problems is “albedo effect”. Tree leaves absorb more sunlight than do other types of land cover. Forests can reduce Earth’s surface albedo, meaning that the planet reflects less incoming sunlight back into space, leading to warming. (Nature)

Also, trees themselves are emitting CH4 and N2O, greenhouse gases.

Source: Nature

The question, raised on New York Times with Prof. Unger at Yale in 2014, had previously attracted lots of debates.

I think it is more or less similar to companies’ earnings projection. Before launching a new product, earnings projection looks great. But it is often overestimated. Other cost items will appear, leaving the product a thinner margin.

Trees are the same. Simply planting trees probably won’t give us the estimated benefits. While I believe the “net effect” is good, we do need more sophisticated understanding and solutions regarding trees.

 

US Government Shutdown – an Incomplete List of Direct Effects in Business

On Jan 10, Fed Chair Jerome Powell commented at the Economic Club about government shutdown…

In the short term, if government shutdowns don’t last very long, they have typically not left much of a mark on the economy… A longer shutdown is something we haven’t had. If we have an extended shutdown, and I do think that that would show up in the data pretty clearly,… we would have a less clear picture into the economy if it were to go on much longer.

Here is an incomplete list of effects in business…

Saudi Arabia: Surplus to Deficits, Turnaround, Diversification

Saudi Arabia’s financial situation has been closely linked to oil prices.

Saudi Arabia Oil and Non-oil revenues 2012 to 2016 | Source: Saudi Arabia Ministry of Finance statement about the national budget for 2017

The majority of the revenue is from oil exports. Its oil revenue has decreased more than 50% due to the oil price slump in 2014.

Oil comprises 30-40 percent of the real GDP of Saudi Arabia.

Saudi understood the need to diversify decades ago. It became more serious after the 2014 oil price shock. But that means more expenditure and efforts to push for the economic reform.

A “Vision 2030” was announced in 2016. (original English copy)

While expenditure kept increasing, Saudi government has quickly generated its deficits since 2014. Deficit in 2015 is at a similar level of its surplus in 2012 – a SAR 740 billion difference in 3 years. And debts are accumulated quickly.

Saudi has planned to eliminate its deficit by 2023, which could be easily done if oil price maintains.

In Dec 2018, Saudi released its budget of 2019, which includes an expenditure of over SAR 1 trillion and a deficit of ​SAR 131 billion.

While the sixth straight deficit is not something to worry about, the real question is to what level Saudi can diversify its economy and becomes a sustainable nation even without oil. (the contribution of non-oil revenues to total revenues up from 12% in 2014 to 32% in 2018)

Lowered iPhone Sales Forecast and More

Since Apple announced that it would stop reporting the iPhone unit sales number during Q3 earnings call, things have not become easier.

iPhone Ban in China

The fight between Qualcomm and Apple has led to a sales ban on older iPhone models in China, ordered from a Chinese court (福州市中级人民法院). The case was filed against Apple in China in late 2017, saying the iPhone maker infringed patents on features related to resizing photographs and managing apps on a touch screen.

Apple said it planned a software update that would solve the issue; also, the ban would likely take time to enforce, according to Reuters.

iPhone Ban in German

In German, Apple will be pulling iPhone 7 and iPhone 8 models from its stores there following a win for Qualcomm in the District Court of Munich, which ruled that Apple’s devices were infringing on Qualcomm’s intellectual property related to power savings in smartphones. (The Verge)

Qualcomm said on Thursday (Jan.3) that it posted security bonds of 1.34 billion euros ($1.52 billion) to enforce the German court order.

Apple Outlook Cut Citing Weaker iPhone Demands in China

On Jan 2, a letter from Apple CEO Tim Cook to investors said sales will be about $84 billion in the quarter ended Dec. 29, down from earlier estimates of $89 billion to $93 billion. Apple posted sales of $88.3 billion in the fiscal first quarter a year earlier, so the new forecast would mean Apple is reporting a holiday quarter slowdown for the first time since Cook became CEO in 2011. (Bloomberg)

Apple shares fell 10% to $142.19, the biggest drop in almost six years, the next day.

In the letter, Cook said Apple’s gross margin will be approximately 38%. (also discussed in a previous post about Apple’s pricing strategy)

Chinese Phone Makers Gaining In Zero-growth Market

Although 2018 Q4 numbers are not yet available, Q3 numbers tell the same story. According to IDC Quarterly Mobile Phone Tracker on Nov 1.

Company 3Q18 Shipment Volumes (millions) 3Q18 Market Share 3Q17 Shipment Volumes (millions) 3Q17 Market Share 3Q18/3Q17 Change
Samsung 72.2 20.3% 83.3 22.1% -13.4%
Huawei 52.0 14.6% 39.1 10.4% 32.9%
Apple 46.9 13.2% 46.7 12.4% 0.5%
Xiaomi 34.3 9.7% 28.3 7.5% 21.2%
OPPO 29.9 8.4% 30.6 8.1% -2.1%
Others 119.9 33.8% 149.8 39.6% -19.9%
Total 355.2 100.0% 377.8 100.0% -6.0%

And in Gartner’s December report…

Vendor 3Q18 Units (thousands) 3Q18 Market Share (%) 3Q17 Units (thousands) 3Q17 Market Share (%)
Samsung 73,360.1 18.9 85,605.3 22.3
Huawei 52,218.4 13.4 36,501.8 9.5
Apple 45,746.6 11.8 45,441.9 11.8
Xiaomi 33,219.7 8.5 26,853.2 7.0
OPPO 30,563.4 7.9 29,449.2 7.7
Others 153,960.0 39.6 159,742.0 41.6
Total 389,068.2 100.0 383,593.4 100.0

What is good for Apple…

From Cook’s letter, we know Apple’s wearables sales grew by almost 50% year-over-year, as Apple Watch and AirPods were wildly popular among holiday shoppers.

Loxo and Pan-Cancer Treatments

In the first week of 2019, besides the BMS-Celgene merger, the $8 billion acquisition of Loxo Oncology by Eli Lilly is the largest deal announced.

For a premium of 68%, what is special with Loxo?

Its approval of Vitrakvi in Nov 2018 is definitely a remarkable one, marking the second approval by the FDA based on a patient’s tumor’s molecular information (TRK fusion), regardless of the location of the tumor within the body. (pancan)

That has been the trend since targeted therapies were proved to be extraordinarily effective in certain types of cancer, usually characterized by gene mutations. EGFR is probably the most famous one.

But FDA approvals were still linked to the tumor locations until May 2017 when Merck’s Keytruda was approved upon a biomarker – microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR).

Before Keytruda became the first cancer treatment for any solid tumor with a specific genetic feature, it had been approved for the treatment of certain patients with metastatic melanoma, metastatic non-small cell lung cancer, recurrent or metastatic head and neck cancer, refractory classical Hodgkin lymphoma, and urothelial carcinoma.

Loxo’s Vitrakvi, however, received its approval solely based on biomarkers since the beginning. Also, Vitrakvi is the first targeted therapy to be approved this way.

And this big step forward for precision medicine is now acquired by Eli Lilly.

Source: Bloomberg

2019 – A Year of Alliance?

As the first week of 2019 developed with JPM Healthcare Conference in San Francisco and CES in Las Vegas, several alliances across big companies attracted attentions. This might be a year of further cooperations as free growth is not possible and some major developments need different domain knowledge & power.

Intel & Facebook – AI chips (new Nervana Neural Network Processor for Inference) in the second half of this year, according to Reuters, and following the previous collaboration.

Qualcomm & Ford – demonstrating driving situations utilizing C-V2X direct communications, following last year’s partnership announcement.

Celgene & Bristol-Myers Squibb – collaboration-like merger for a stronger presence in oncology & immunology. (news release)

GM & DoorDash – deliver food in self-driving cars. (CNN)

and last month…

Starbucks & UberEats – expanding the partnership to more than 2,000 stores in the United States next year, about a quarter of all of the company’s locations in the country. (TechCrunch)

The Race in Aerospace – Positions of Private Equity Firms

~$40bn Apollo acquisition – GE Capital Aviation Services (GECAS), GE’s aircraft leasing operations

  • Bidder: Apollo, an offer as much as $40 billion according to Bloomberg & Reuters
  • GECAS has a fleet of more than 1,900 planes, which it provides to airlines under long-term leases.
  • 1/4/2019

~$1bn KKR investment – Altavair, focusing on the acquisition of new and used commercial aircraft for leasing to passenger airlines and cargo operators

  • Investor: KKR, $1 billion capital commitment to acquire commercial aircraft in partnership with Altavair + a 50% interest in Altavair; Altavair will be KKR’s partner for aircraft leasing investments going forward
  • Since its inception in 2003, Altavair has completed over $8 billion in commercial aircraft lease transactions with over 40 airline customers in 27 countries representing over 200 individual Boeing and Airbus aircraft
  • 1/3/2019, KKR Commits to Invest $1 Billion with Altavair

~$5bn Carlyle acquisition – StandardAero, largest independent maintenance, repair and overhaul (MRO) providers

  • Bidder: Carlyle, for more than $5 billion (Reuters) from Veritas
  • Veritas acquired StandardAero from Dubai Aerospace Enterprise Ltd (DAE) for $2.1 billion, including debt, in 2015
  • Carlyle first acquired StandardAero in 2004. In 2007, DAE simultaneously purchased StandardAero and Landmark Aviation, also an aircraft maintenance services company, from Carlyle in a transaction valued at $1.8 billion, including debt.
  • 12/18/2018, The Carlyle Group to Acquire Leading Aircraft Engine MRO Provider StandardAero from Veritas Capital

~$15bn Apollo acquisition – Arconic (ARNC), aluminum products used around the world by aerospace manufacturers

  • Bidder 1: Blackstone, Carlyle, Onex and Canada Pension Plan Investment Board
  • (winning) Bidder 2: Apollo, seems winning with a potential acquisition price of $22; also considered is a spin-off of its cladding operation with potential liability from the Grenfell Tower fire of two years ago.
  • 10/8/2018, early report on bidders
Arconic in 2018 | Source: Bloomberg

Half of the 2018 Top 10 Movies in US Are Made by Disney…

2018 Top 10 movies in US

Here is the list by gross sales in US, according to boxofficemojo.com

Rank Movie Title (click to view) Studio Total Gross / Theaters Opening / Theaters Open Close
1 Black Panther BV $700,059,566 4,084 $202,003,951 4,020 2/16 8/9
2 Avengers: Infinity War BV $678,815,482 4,474 $257,698,183 4,474 4/27 9/13
3 Incredibles 2 BV $608,581,744 4,410 $182,687,905 4,410 6/15 12/13
4 Jurassic World: Fallen Kingdom Uni. $416,769,345 4,485 $148,024,610 4,475 6/22 10/4
5 Deadpool 2 Fox $318,491,426 4,349 $125,507,153 4,349 5/18 10/18
6 Aquaman WB $270,596,781 4,184 $67,873,522 4,125 12/21 –
7 Dr. Seuss’ The Grinch (2018) Uni. $269,848,350 4,141 $67,572,855 4,141 11/9 –
8 Mission: Impossible – Fallout Par. $220,159,104 4,395 $61,236,534 4,386 7/27 10/18
9 Ant-Man and the Wasp BV $216,648,740 4,206 $75,812,205 4,206 7/6 11/1
10 Solo: A Star Wars Story BV $213,767,512 4,381 $84,420,489 4,381 5/25 9/20

* BV (Buena Vista) was the brand name which was historically often used for divisions and subsidiaries of The Walt Disney Company, whose primary studios, the Walt Disney Studios, are located on Buena Vista Street in Burbank, California

Top 3 are all from Disney, as are #9 & #10, making Disney occupy half of the Top 10 seats of best-selling movies in US.

And according to ComScore, 2018’s movie business hit all-time benchmarks of $11.9 billion in North America and $41.7 billion globally, with Disney taking in nearly a fifth of that figure. (Variety)

Among Disney’s domestic box office of $3.09 billion, its top 3 got ~$1.99 billion (64.32%), top 5 got ~$2.42 billion (78.25%).

Besides, Disney’s movies in Top 10 all have rating of 7.0 or above, averaging at ~7.56 on IMDb (beating the Top 10 average of 7.35)

2018 US Top 3 Movies | Source: IMDb

Overall…

Total US movie sales is barely growing. The figures below are not inflation-adjusted.

But the number of movie productions is increasing, partially due to a lack of funding after financial crisis (bottomed in 2009 with 521 movies that year).

Yearly US Box Office 2008-2018 | Source: boxofficemojo.com

As streaming is disrupting the market, increasing the number of production seemed to be a way to make up for the total revenue?

Then expenses are up and industry margin is low. It is a sure thing that movies are hard to survive alone.

Then no wonder the consolidation kicked in.

Disney bought Marvel for $4 billion in late 2009, bought Lucasfilm for $4 billion in late 2012. Before the financial crisis, Disney also got Pixar in a $7.4 billion in stock.

With the completion of $71 billion acquisition of Fox, Disney will add X-Men and Avatar to its list of movie series.

Warner Bros. will be under a new umbrella – AT&T’s, together with HBO and Turner.

Universal has been under Comcast since 2011.

Paramount is under Viacom and has teamed up with Netflix.

Movie is not a studio business anymore.

Tesla Model 3 Sales in 2018 Q4 – Not so Exciting

Model 3 has Little QoQ Growth

Tesla had very impressive numbers in Q3, when Model 3 delivery (55,840) was almost tripled from Q2 (18,440).

While no one is expecting another jump, the Q4 numbers are kinda lackluster, especially when adding Model 3 delivery and in transit numbers.

Tesla shares fall 9% on Wednesday when those numbers were reported.

$2,000 Price Cut and Phase-out of Tax Credit

Tesla also announced a price cut of $2,000 for Model S, Model X and Model 3 in the US. The move will partially offset the phase-out of the $7,500 federal tax credit for EV.

[Phase-out will start in the second calendar quarter when the manufacturer has 200,000 plug-in registered in US. The credit is reduced to $3,750 for the next 6 months, then to $1,875 for the next 6 months before expiring completely.]

Source: InsideEVs

According to InsideEVs’ estimate, Tesla hit the 200,000 first in the second half of 2018, while General Motors was second with a breakout month of sales for the Bolt and Volt in November 2018.

The next four manufacturer in EV are Nissan (126,875), Ford (111,715), Toyota (93,011), BMW (79,679).

A combination of flat delivery + in transit Model 3, and a price reduction, warned people about the actual demand for Model 3.

Good news are: 1) people may just be waiting for the basic Model 3, aka $35,000 version that Elon touted but analysts said money-losing for Tesla; 2) Tesla is still way ahead in the EV market

2018 Monthly Sales Chart