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Pharma Stocks

Texas AG sues Pfizer over quality-control lapses in kids’ ADHD drug

By Brendan Pierson

(Reuters) -Texas Attorney General Ken Paxton accused Pfizer and its supplier Tris Pharma of providing children’s ADHD medicine that it knew might be ineffective to the state’s Medicaid insurance program for low-income people, in a lawsuit unsealed on Monday.

The lawsuit, filed in Harrison County, Texas District Court, alleges that Pfizer and Tris manipulated quality-control testing for the drug Quillivant XR in order to obtain passing results from tests it was required to perform under federal law between 2012 and 2018. Properly done tests frequently showed that the drug failed to dissolve as it was supposed to, a sign that it would not be released in the body as expected, the lawsuit said.

The lawsuit also alleged that Pfizer, despite knowing of the quality-control issues, persuaded Texas’ Medicaid program to add Quillivant to its list of preferred drugs.

Paxton alleged that many Texas families complained that Quillivant failed to work.

“I am horrified by the dishonesty we uncovered in this investigation,” Paxton, a Republican, said in a statement. The lawsuit accuses the companies of defrauding the state’s Medicaid program, and seeks unspecified money damages from the companies.

Pfizer said in a statement that it had examined the allegations in the complaint on “multiple occasions” and “did not find any impact on the safety of the product.” It said it believed the case had no merit and would move to dismiss it.

A spokesperson for Tris said in an email: “We categorically deny and intend to rigorously defend these allegations in the court of law.”

Tris manufactured Quillivant for Pfizer until 2018, when it acquired the product from Pfizer.

The lawsuit stems from a whistleblower complaint by Tarik Ahmed, who worked as Tris’ head of technology from 2013 to 2017.

Quillivant was developed by Nextwave Pharmaceuticals, a company acquired by Pfizer in 2012.

Like other drugs for attention deficit/hyperactivity disorder, it has been plagued by shortages, and never achieved a large national market share. Tris acquired the product in 2018.

The U.S. Food and Drug Administration in 2017 warned Tris of manufacturing lapses.

In its 2022 annual report, Pfizer said it had received a subpoena from federal prosecutors in the Manhattan-based Southern District of New York related to its relationship with Tris and the production of Quillivant in 2018, but had not heard anything further after responding.

(Reporting by Brendan Pierson in New York, Editing by Alexia Garamfalvi and Matthew Lewis)

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Crypto

US SEC sues Kraken crypto exchange over failure to register

By Jonathan Stempel

(Reuters) -Kraken, one of the world’s largest cryptocurrency exchanges, was sued on Monday by the U.S. Securities and Exchange Commission, which accused it of illegally operating as a securities exchange without first registering with the regulator.

The lawsuit in San Francisco federal court is the latest step in SEC Chair Gary Gensler’s push to bring cryptocurrency under his agency’s purview, by contending that digital assets are investment contracts subject to federal securities laws.

Kraken intends to defend itself, saying Congress should decide how to regulate cryptocurrency exchanges and calling the SEC view of digital assets “incorrect as a matter of law, false as a matter of fact, and disastrous as a matter of policy.”

The San Francisco-based exchange also said the lawsuit will not affect its more than 10 million clients.

In June, the SEC filed similar lawsuits against Binance, the world’s largest cryptocurrency exchange, and Coinbase, the largest in the United States. Both are defending against the regulator’s claims.

The SEC said Payward Inc and Payward Ventures Inc, which operate as Kraken, have since 2018 made hundreds of millions of dollars arranging crypto purchases and sales while turning a “blind eye” to securities laws designed to protect investors.

Kraken was also accused of having deficient internal controls and inadequate record keeping, reflected in part in its commingling customer money with its own and paying operating costs directly from customer accounts.

Failing to register has “resulted in a business model rife with conflicts of interest that placed investors’ funds at risk,” SEC enforcement chief Gurbir Grewal said in a statement. “Kraken’s choice of unlawful profits over investor protection is one we see far too often in this space.”

In its statement, Kraken said the SEC complaint conceded that any alleged “commingling” amounted to “no more than Kraken spending fees it has already earned.”

The SEC also accused Binance of commingling customer funds, following a Reuters report describing such conduct. Binance has denied the commingling accusation.

Monday’s lawsuit seeks a civil fine, disgorgement of ill-gotten gains, and a halt to acting as an exchange without registering.

Kraken was founded in 2011. It is backed by investors including Blockchain Capital, Digital Currency Group, Hummingbird Ventures, SkyBridge and Tribe Capital.

The case is SEC v Payward Inc et al, U.S. District Court, Northern District of California, No. 23-06003.

(Reporting by Jonathan Stempel in New York; Additional reporting by Chris Prentice; Editing by David Gregorio, Stephen Coates and Chris Reese)

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Resource Stocks

Lithium miner SQM loses $1 billion in market value as lower prices dent profit

By Sarah Morland

(Reuters) -Chile’s SQM, the world’s second-largest lithium producer, saw more than $1 billion wiped from its market value on Thursday as investors reacted to a third quarter profit hammered by sliding prices of the key battery metal.

SQM’s Santiago-listed shares had lost around 8% by early afternoon trading, accounting for some 1 trillion Chilean pesos ($1.13 billion), a day after the company said its net income had more than halved from a year earlier.

In a conference with analysts, executives said they would not slow output, and instead continue producing lithium at maximum capacity and building up warehouse inventories, though sales volumes could be limited in line with market indices.

“The idea is to be prepared when inventories return to the normal level and customer purchases are reactivated,” said SQM’s lithium vice-president Carlos Diaz.

Prices for lithium, an ultralight metal used for electric vehicle (EV) batteries, have dropped more than 60% on fears of softening global demand for EVs. They hit a two-year low this month.

Nevertheless, SQM executives said they expect EV demand to remain resilient in the long-term.

SQM’s senior commercial vice-president for lithium Felipe Smith attributed lower prices to softer EV demand outside China coupled with high component supplies causing excess inventories to accumulate across the whole battery supply chain.

Smith said SQM could contract its sales volumes in line with market indices, adding the firm had also entered into several new long-term index-linked supply deals.

Chile is looking to boost state control over its lithium industry with state miner Codelco leading talks with private miners such as SQM.

The talks cover areas such as how lithium production will be run on the Atacama salt flats, taking into account relations with local communities and environmental sustainability.

“We both agreed that having a sustainable operation in the long-term is the most important target,” SQM Chief Executive Ricardo Ramos said of the talks with Codelco over the Atacama development, adding that he did not expect significant production growth there.

($1 = 882.4700 Chilean pesos)

(Reporting by Sarah Morland; Editing by Valentine Hilaire and Jane Merriman, Kirsten Donovan)

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Technology

Toyota’s Camry, best-selling car in US, goes all-hybrid

By Joseph White

DETROIT (Reuters) – The next generation of the Toyota Camry, the best-selling sedan in the U.S. market, will come with only a gas-electric hybrid powertrain, the boldest move yet by the Japanese automaker to push hybrid technology into the heart of the U.S. market.

The 2025 Camry will combine a 2.5-liter gasoline engine with an electric drive system tuned to deliver more power in both front-wheel drive and all-wheel drive versions of the car, Toyota said.

Compliance with tougher U.S. fuel economy rules was a factor in Toyota’s decision to make the new Camry an all-hybrid vehicle line, dropping four- and six-cylinder combustion models that made up about 85% of sales in the current model year, David Christ, head of the Toyota brand in North America, told Reuters. Another factor behind the decision was “the performance we were able to get out of the hybrid,” he said.

While Toyota has accelerated development of electric-vehicle technology, it is still betting that demand for hybrids and plug-in hybrids will remain robust as the automaker takes a “multi-pathway” approach seeking to satisfy customer needs in every market.

The hybrid powertrain and a new electronic all-wheel drive system deliver 232 combined horsepower – nearly 15% more than the outgoing Camry with a mechanical all-wheel drive system, Toyota said.

Toyota executives unveiled the ninth generation of the midsized Camry sedan on Tuesday in Los Angeles, ahead of the Los Angeles Auto Show that opens on Friday.

The new Camry will compete in a segment largely abandoned by the Detroit brands, with the exception of General Motors’ Chevrolet Malibu. The new Camry’s direct competitors – putting aside scores of compact and midsized SUVs – will include a few remaining sedans such as the Honda Accord, the Hyundai Sonata and Tesla’s all-electric Model 3.

The Tesla Model 3 outsold the Camry in California, a key market for Toyota, during the first nine months of 2023, according to data from the California New Car Dealers Association.

Toyota did not disclose pricing or fuel-efficiency figures for the 2025 Camry, due in showrooms next spring. The cheapest Camry hybrid model currently sells for about $2,400 more than the most inexpensive combustion Camry.

Most of the hybrid powertrains sell at a $1,500 to $2,000 premium to combustion models, Christ said. “We think the value the hybrid powertrain brings is worth that kind of premium.”

A current Camry hybrid is rated at 52 miles (84 km) per gallon in combined city and highway driving, compared with a 32-mpg rating for the conventional four-cylinder Camry. The hybrid saves $650 a year in fuel costs compared with the combustion model, according to U.S. government fuel economy data.

Toyota previously switched its Sienna minivan to an all-hybrid powertrain approach. The Sienna is “our second-fastest turning car and the car we have the most reservations for,” Christ said.

(Reporting by Joe White in Detroit; Editing by Matthew Lewis)`

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Business Technology

Rivian signs agreements with Georgia to start building EV factory (Nov 13)

(Reuters) – (This Nov. 13 story has been corrected throughout to remove the reference to Rivian’s plans to raise nearly $15 bln in debt for an EV plant in Georgia and instead to say that the company has signed an agreement with the state that will allow it to start building a planned EV factory)

Rivian Automotive said in a filing on Monday it signed agreements with the state of Georgia that will allow it to start building a planned electric-vehicle factory.

The agreement provides for Rivian to rent land, and machinery to operate the plant, for which the company will pay about $300 million in property tax payments.

Rivian first announced its $5 billion EV factory just outside of Atlanta, Georgia in late 2021. Those lease payments to Georgia could increase if the investment Rivian committed to increases beyond $5 billion. The agreement is set to expire Dec. 1, 2047.

The new plant will employ more than 7,500 people and eventually build 400,000 vehicles a year.

(Reporting by Anirudh Saligrama in Bengaluru; Editing by Rashmi Aich)

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Pharma Stocks

Wegovy’s heart benefits due to more than weight loss, Novo says

By Patrick Wingrove

PHILADELPHIA (Reuters) -Novo Nordisk on Saturday said the heart protective benefits of its wildly popular Wegovy obesity treatment are due to more than weight loss alone, according to new data presented at a major medical meeting on Saturday.

Early data from the Danish drugmaker’s Select trial released in August demonstrated that Wegovy, which has been shown to help patients lose an average of 15% of their weight, also reduced incidence of heart attack, stroke or death from heart disease by 20%.

Full results from the study, presented at the American Heart Association annual scientific meeting in Philadelphia in front of a standing room only crowd and published in the New England Journal of Medicine, suggest the drug has other beneficial effects beyond the known health benefits from losing weight.

The heart risk difference between patients who received Wegovy, known chemically as semaglutide, and those on placebo began to appear almost immediately after starting treatment, researchers said.

In the study of overweight and obese patients based on body mass index who had preexisting heart disease but not diabetes, Wegovy reduced the risk of non-fatal heart attack by 28%, non-fatal stroke by 7% and heart-related death by 15% compared to a placebo.

Given that patients had not started losing weight when the cardiovascular benefits first appeared suggests the heart protection was not purely the result of weight loss, Novo said.

Dr Chad Weldy, a cardiologist at Stanford University, said on the sidelines of the conference that it was important to note that the trial did not study how semaglutide might stop heart disease from happening and only looked at how to stop it from getting worse.

Despite that, the size of the patient population covered by this trial should make doctors think about the sorts of patients who should be prescribed Wegovy based on the data.

“Anyone who has had a heart attack or obstructive coronary disease and has a body mass index of more than 27 fits in with this study, which is a very large patient population,” he said.

Dr Bruno Halpern, head of the obesity center at Hospital 9 de Julho in São Paulo, Brazil, also said at the conference that Wegovy should now be a frontline treatment for heart disease.

The study researchers said that while understanding of the mechanisms of the cardiovascular protection from semaglutide remain speculative, there was a consistent effect on associated risk factors that support the idea that multiple pathways are behind the drug’s clinical benefit.

The associated risk factors include inflammation, blood pressure and blood sugar control, all of which can impact heart health.

John Deanfield, one of the study’s authors and cardiology professor at University College London, said at the medical meeting that the trial data would spur a debate over where Wegovy fits into doctors’ treatments.

“When do we start these drugs in our patients? How do we stop them? How much weight do we want them to lose to get the benefit?” he said.

Patients on Wegovy experienced decreases in C-reactive proteins, an indication of inflammation, similar to those reported with cholesterol lowering statins, which are known to significantly lower heart risks, researchers reported.

“The cardiovascular benefit (of Wegovy) is a combination of many factors, but I would call out glycemic (blood sugar) control, weight loss and inflammation,” Martin Lange, Novo Nordisk’s head of development, said in an interview.

In the 17,604-patient trial with a mean duration of 33 months, almost 1,500 of those taking Wegovy discontinued treatment due to adverse side effects, mostly gastrointestinal disorders like nausea and vomiting, compared to 718 patients in the placebo group, according to the study.

Though the trial was not conducted to test weight loss, participants lost an average of nearly 10% of their total body weight. Novo said patients in the heart study were not required to track diet and exercise as they are in obesity trials.

The study showed Wegovy to be safe and well-tolerated in line with previous semaglutide trials, Novo said.

It was unclear whether the results could be applied to all GLP1-class drugs or were specific to semaglutide, Barclays analyst Emily Field said in an interview.

Lange said he expected the company’s application to have Wegovy’s label updated to include the heart benefits to be approved in the U.S. in the first half of next year and in the EU in the second half. Drug regulators can update the information on medicine labels to include new data or reflect new indications for use after initial approval.

U.S. and UK drug regulators approved Eli Lilly’s rival weight-loss treatment on Wednesday, which had previously been approved and marketed as Mounjaro for diabetes.

(Reporting by Patrick WingroveEditing by Caroline Humer, Bill Berkrot and Diane Craft)

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Categories
Technology

OpenAI investors see more startup opportunities despite ChatGPT expansion

(This Nov. 9 story has been corrected to say Avery Klemmer is an investor, not a partner, in paragraph 7)

By Krystal Hu

(Reuters) – OpenAI’s announcement on artificial intelligence “apps” do not spell the death knell for nascent startups building AI products, two OpenAI investors said at a Reuters NEXT conference on Thursday.

Investors are still hunting for new AI products that could help consumers interact better with the technology and address deep tech issues such as brain computer interface, they said.

The owner of the wildly popular ChatGPT chatbot earlier this week unveiled a marketplace that allows users to access personalized AI “apps” for tasks like teaching math or designing stickers.

The news sparked fear among AI startup founders who worry they will not be able to compete with OpenAI, which is trying to build an AI empire with products aimed at both consumers and enterprises.

“There’s so much room for continued innovation in AI. We’re in an intermediary step in a decades-long revolution,” Konstantine Buhler, partner at Sequoia Capital, told the conference. “You can play a very big role in how this is shaped.”

Sequoia invested in OpenAI in 2021, the maker of ChatGPT, in which Microsoft also has a larger stake.

Avery Klemmer, investor at Thrive Capital, which recently increased its investment in OpenAI, also said she sees opportunities for the rise of consumer applications beside ChatGPT.

She expects more innovations based on the existing format of AI chatbots popularized by ChatGPT.

“I think there will be really novel formats and forms of engagement that get invented,” Klemmer said.

Despite recent frenzied investments into the technology by companies and venture capital firms, analysts and investors say development of AI products is still in the early stages.

While it’s still relatively expensive to build applications using large language models, the accelerated pace of research in the space could result in a rapid decline in the cost of AI inference, or using an AI model to make predictions, and inspire new products, Jill Chase, partner at CapitalG, told Reuters NEXT.

“The cost of inference coming down so dramatically may seem like a small thing, but it’s hugely impactful for what types of businesses can be created and what use cases incumbents can empower,” she said.

(Reporting by Krystal Hu in New York; Editing by Sayantani Ghosh and Deepa Babington)

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Asia Business Economy Technology US

AI stocks surge as investors bet on growth prospects

(Reuters) -Shares of artificial intelligence-based (AI) product makers zoomed on Friday, as a strong forecast from retail darling C3.ai Inc amplified an ongoing euphoria in the segment driven by the launch of OpenAI’s ChatGPT.

C3.a1 forecast better-than-expected revenue and profit for both the fourth quarter and fiscal year 2023, after its third-quarter results topped Wall Street estimates.

Shares of the AI software provider were up 16% at $24.80, and were one of the top five trending stocks on StockTwits. If the gains hold, the stock is set to notch its strongest one-day gain in a month.

“The company is starting to gain momentum in building significant enterprise opportunities in its pipeline with its suite of innovative enterprise AI solutions,” said Wedbush analyst Daniel Ives.

The firm’s aim to turn cash positive and adjusted profitable by the end of fiscal year 2024 also boosted the stock, but Ives believes the execution of these ambitions is key to regain the Street’s confidence heading into 2023.

Retail investors have flocked to small-cap firms building AI tools as companies such as Google-parent Alphabet Inc and Microsoft Corp have locked horns to make AI the next big growth driver.

Microsoft’s investment in OpenAI’s ChatGPT boosted AI firms’ popularity further. Chatbots like the ChatGPT are software applications that aim to mimic human conversation using artificial intelligence.

Other major AI stocks also surged on Friday with BigBear.ai, conversation intelligence firm SoundHound AI, and Thailand’s security firm Guardforce AI jumping between 5% and 20%.

So far this year, these stocks, including C3.ai, have surged 33.9%-321.6%, as of the previous day’s close.

“AI could become the new gold rush on Wall Street,” said Adam Sarhan, chief executive officer of 50 Park Investments in Florida.

“But it still needs some more time to mature a bit, better price action, and prove that it can generate profits for investors.”

(Reporting by Ankika Biswas in Bengaluru; editing by Uttaresh Venkateshwaran)

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Business Europe Politics Technology Top News US

Lockheed’s HIMARS Plant Gearing Up to Meet Demand After Ukraine Success

By Mike Stone

CAMDEN, Arkansas (Reuters) – Lockheed Martin’s mobile rocket launcher plant in Camden, Arkansas is gearing up to boost production of the HIMARS system after its success on the battlefield in Ukraine drove up demand from other nations, executives said on Monday.

The High Mobility Artillery Rocket System (HIMARS) is now a widely recognized weapon after mobile phone camera footage of the war in Ukraine showed the launchers in action.

“When you have a combat proven system that is out there and in the news – daily – then that’s driving that demand,” said Jennifer McManus, the vice president for operations of Lockheed’s missile business.

Lockheed Martin makes HIMARS and refurbishes an older version in Camden, a small town southwest of Little Rock.

Thanks to some investments made over the last year in the 282,000 square foot building where the ground vehicles are made, Lockheed only needs a few upgrades to meet that increased production rate, Lockheed executives said.

The list includes a paint booth, non-skid coating mixer, tire assembly manipulator arm and an axel installation track, the executives told Reuters.

On an earnings call with investors Lockheed’s CEO said “on HIMARS specifically, we’ve already met with our long lead supply chain to plan for increasing production to 96 of these units a year.” Lockheed started 2022 with a HIMARS launcher production rate of 48, but has since ramped up to 60 year.

The HIMARS launcher had been growing in popularity even before its success in Ukraine.

Poland was cleared in February to purchase 18 HIMARS launchers and 468 launcher loader kits that can be in installed on Polish-made trucks to turn into them into similar launch platforms. Talks for that deal began in 2017, a Lockheed spokesperson told Reuters.

 

(Reporting by Mike Stone in Camden, Arkansas; Editing by Stephen Coates)

 

 

 

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Asia Business Crypto Economy Technology US

Cryptoverse: Bitcoin moves towards Satoshi’s payment dream

By Medha Singh and Lisa Pauline Mattackal

(Reuters) – Satoshi Nakamoto would be proud. Adolescent bitcoin may finally be repaying its creator’s faith.

The 15-year-old cryptocurrency has filled many roles – from source of speculation to hedge against inflation – but has struggled to find a clear identity. Now there are growing signs it’s edging towards its intended purpose: payments.

“The development in terms of building out crypto payments has continued apace, even if it’s gone somewhat unnoticed because of the volatility in the broader market,” said Richard Mico, U.S. CEO of Banxa, a payment-and-compliance infrastructure provider.

The amount of bitcoin stored on the Lightning Network – a payment protocol layered on top of the blockchain – has jumped by two-thirds over the past year to hit an all-time high of 5,580 coin, according to crypto data firm The Block.

Crypto payment specialists have also seen strong volumes.

U.S.-based BitPay said transaction volumes jumped 18% last year versus 2021. CoinsPaid said volumes in the fourth quarter of 2022 rose 32% compared with a year before.

BITCOIN AND BRAZILIAN REAL

So why has crypto failed to fulfill pseudonymous inventor Nakamoto’s dream, spelt out in a famed 2008 white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System”?

Price volatility, slow processing speeds and persistent regulatory uncertainty are among the factors that have rendered cryptocurrencies unwieldy as a means of payment. Few merchants price good or services in crypto.

Nonetheless, proponents say bitcoin offers lower transaction costs and quicker speeds than traditional cash, especially for cross-border transfers.

Aside from bitcoin, other cryptocurrencies including stablecoins, which are pegged to the value of traditional currencies, have emerged as popular options, particularly for cross-border payments, remittances, plus in emerging markets where the value of local currencies have been hit by inflation.

Stellar, a blockchain that enables cross-border payments, saw the number of trades on its platform increase to 103.4 million last month from 50.6 million in January 2022.

Volumes for trades across exchanges between bitcoin and Turkey’s lira and Brazil’s real increased by 232% and 72%, respectively, CryptoCompare data showed.

CAN YOU HANDLE THE STRESS?

It’s not all smooth sailing for the widespread adoption of crypto for payments; for one thing, there’s the question of whether blockchains are ready to handle the stress of processing thousands of transactions at a time, especially without a simultaneous jump in transaction fees.

Efforts by some of the world’s largest economies, including Japan, China and India, to create their own digital currencies (CBDCs) could also choke crypto payments growth, say some market players. For others, though, growing interest in CBDCs is evidence that blockchain payments tech is here to stay.

Traditional finance firms looking to embrace crypto payments have also shrugged off recent market volatility. One, Visa inking a deal this month with crypto firm WireX to directly issue crypto-enabled debit and prepaid cards.

“Crypto is evolving into a viable alternative for more and more people around the world,” said Mico at Banxa.

 

(Reporting by Lisa Pauline Mattackal and Medha Singh in Bengaluru; Editing by Tom Wilson and Pravin Char)