2024

By Manas Mishra and Pratik Jain

(Reuters) – The U.S. Food and Drug Administration approved nearly 50% more novel drugs in 2023 than in 2022, putting it back on pace with historical levels, an improvement analysts and investors said could lead to increased investment in biotech firms.

FDA nods for innovative therapies containing an active ingredient or molecule not previously approved, rose to 55 in 2023, up from 37 in 2022 and 51 in 2021. Historical data shows the FDA typically green lights about 45-50 new drugs a year and hit a peak of 59 in 2018.

The agency approved several high-profile therapies such as Eli Lilly’s obesity drug Zepbound and Eisai and Biogen’s Alzheimer’s treatment Leqembi. It also approved five gene therapies in addition to the 55 novel drugs, including a sickle cell disease treatment from Vertex Pharmaceuticals and CRISPR Therapeutics using the latter’s innovative gene editing technology.

“It is good to see the FDA approvals go up,” said John Stanford, executive director of Incubate, a Washington-based group of life sciences investors. He called the advance of gene editing technology particularly encouraging.

“Our scientists can do a lot more, and from that perspective we are excited about what’s coming down the pipeline, not just in 2024, but beyond that,” he said.

The FDA in a statement said, “the number of novel drugs approved varies from year to year, and may be due to a variety of factors.” Those include the complexity of new drugs in development as well as advances in scientific understanding of diseases and disease targets, it said.

The agency did not provide a specific reason for the big drop in approvals in 2022.

TD Cowen analyst Ritu Baral said the COVID-19 pandemic was likely a factor. When the pandemic hit, the agency moved from approving drugs at record pace to operating with a remote workforce, which caused disruption and issues such as delayed inspections that affected drug reviews.

“We’re back at those peak levels, which hopefully means that the workflow disruptions, staffing and bandwidth issues and, most importantly, communications with developers, have hopefully been improving, Baral said, adding that she expects a similar level of FDA approvals in 2024.

INVESTMENT DECLINES

Investment in biotech companies over the past two years has been a fraction of historical levels.

After 108 initial public offerings (IPOs) in 2021, there were only 18 each in 2022 and in 2023 as of mid-December. A basket of biotech-focused funds tracked by Piper Sandler saw $15.8 billion in capital outflow in 2023, the largest ever going back to 1992, according to the brokerage.

“2023 has been a year where the market was selective in the companies able to access capital,” William Blair analysts said in a December note.

They noted that companies developing GLP-1 weight-loss treatments, the same class as Novo Nordisk’s wildly popular Wegovy and Lilly’s Zepbound, have had better access to the IPO market.

Industry analysts also said lingering investor concern about high interest rates and government scrutiny of drugmakers could hamper a full funding recovery.

“While we don’t expect capital markets to return to peak 2020-21, we do think that conditions will improve and that the window will open up,” Jefferies analyst Michael Yee said.

Incubate’s Stanford said some investors may remain on the sidelines due to increased oversight of deals in the sector, the government’s drug price negotiation plans and the threat that the Biden administration is looking to seize patents of medicines developed with government funding if the prices are deemed to be too high.

(Reporting by Manas Mishra, Christy Santhosh and Pratik Jain in Bengaluru; Editing by Caroline Humer and Bill Berkrot)

source

By Nell Mackenzie

LONDON (Reuters) – D.E. Shaw’s largest hedge fund posted a nearly 10% return in 2023 after fees, after a mixed performance across multi strategy and macroeconomic hedge funds navigating choppy global markets, a source familiar with the matter said on Monday.

The numbers, an estimated result for the year through Dec. 31, outperformed Hedge Fund Research’s (HFR) Global Hedge Fund Index tracking hedge funds globally. It was up 2.5% for the year as of Dec. 15.

D.E. Shaw, one of the industry’s biggest managers, posted gains in its D.E. Shaw Composite Fund of 9.6%. The multi-strategy fund’s performance returned just over almost 25% in 2022, the source said.

The firm’s macro-oriented fund, the Oculus Fund, finished 2023 up a net 7.8% versus a roughly 20% increase in 2022. It also beat an index of macro economic peers tracked by HFR that was largely flat as of mid-December.

Both of D.E. Shaw’s biggest funds are closed to new money, said the source.

The New York-based hedge fund, which manages $60 billion in assets, declined to comment on the matter.

Bloomberg reported earlier on D.E. Shaw biggest funds’ annual gains.

(Reporting by Nell Mackenzie; Editing by Dhara Ranasinghe and David Evans)

source

SYDNEY (Reuters) – Asia’s factory activity weakened in December, portending a shaky start for the region’s manufacturing powerhouses in 2024 as China’s patchy economic recovery impeded a broader revival in demand.

A range of purchasing managers’ indexes (PMIs) published by S&P Global on Tuesday showed factory activity continuing to decline in most Asian economies at the end of last year and confidence broadly sagging.

The struggles for Asia’s tech-heavy economies persisted with South Korean factory activity dipping back into decline and Taiwan extending its contraction for the 19th straight month, the PMIs showed.

China’s Caixin PMI showed an unexpected acceleration in activity in December, although this contrasted with Beijing’s official PMI released on Sunday that remained in contraction territory for the third straight month.

The mixed economic prospects for China continue to cloud the outlook for its major trading partners.

“Overall, the economic outlook for (China’s) manufacturing sector continued to improve in December, with supply and demand expanding and price levels remaining stable,” Wang Zhe, Senior economist at Caixin Insight Group said.

“However, employment remained a significant challenge, and businesses expressed concerns about the future, remaining cautious in areas including hiring, raw material purchasing, and inventory management.”

Beijing has in recent months introduced a series of policies to shore up a feeble post-pandemic recovery, but the world’s second-largest economy is struggling to gain momentum amid a severe property slump, local government debt risks and soft global demand.

Elsewhere in Asia, PMIs showed activity in Malaysia’s and Vietnam’s factory sectors remained in contractionary mode, although it accelerated slightly in Indonesia.

India’s PMI for last month will be released on Wednesday and Japan’s is due on Thursday.

While Asia’s December PMIs were mostly downbeat, other recent indicators point to signs the region’s post-pandemic recovery is starting to gain traction.

Singapore’s gross domestic product sped up in the December quarter from a year earlier, helped by firmer construction and manufacturing, data showed on Monday.

South Korea’s exports also perked up in December albeit at a slower pace as weaker Chinese demand offset robust global sales for semiconductors, data showed on Monday.

(Writing by Sam Holmes. Editing by Shri Navaratnam)

source