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Bitcoin proxy MicroStrategy to join the Nasdaq 100 and heavily traded 'QQQ' ETF

Aseem — Sat, 14 Dec 2024 01:24:20 +0000

MicroStrategy, the preferred high beta play on the price of bitcoin, will join the Nasdaq 100 index, a move that could further increase demand for the controversial stock that has been on a torrid run this year alongside the price of the cryptocurrency.

The Nasdaq 100 comprises 100 of the largest nonfinancial companies in the tech-focused Nasdaq Composite index. A stock’s addition means that ETFs – including the highly popular Invesco QQQ Trust, which has $325 billion in assets – will become automatic buyers as well.

Shares of the bitcoin proxy could be set to gain off the move. They’re up more than sixfold this year, compared with bitcoin’s nearly 140% gain in the same period.

The change, which will become effective before the market open on Dec. 23, was announced Friday after the stock market close. MicroStrategy was widely telegraphed as a potential contender for membership by investors who were looking forward to the index’s rebalancing this week.

“This would lead to inclusion of MSTR in some of the largest ETFs such as QQQ (5th largest ETF) etc, leading to one-time fresh buying … and ongoing participation in future inflows,” said Gautam Chhugani, an analyst at Bernstein, in a note this week ahead of the reshuffle.

Additionally, “the market will likely set its sight on S&P 500 inclusion for 2025,” Chhugani said. “Currently, due to profitability of its software business, it may be challenging to be considered for S&P 500 inclusion.”

The Nasdaq changes the constitution of the Nasdaq 100 index annually. The companies selected for inclusion are based largely on market cap rankings on the last trading day of November, which was Nov. 29 this year. Stocks must also meet eligibility requirements around liquidity and the free float percentage of their shares.

MicroStrategy originally sold enterprise software, but the firm has increasingly become a bitcoin holding company. It first added bitcoin to its balance sheet in 2020, with Michael Saylor as CEO at the time, and has been leaning into that strategy in the years since. MicroStrategy now issues convertible notes to leverage its purchases, and its stock’s daily trading sometimes looks like a more volatile version of bitcoin.

The company now has a market cap of roughly $90 billion despite having less than $500 million in revenue over its previous four quarters, according to FactSet. Saylor told CNBC’s “Squawk Box” earlier this month that he sees the company’s role as “securitizing bitcoin.”

“Primarily, our job is to bridge the traditional capital markets that want bonds, or they want fixed income, or they want equity, or they want options, and we plug that into the crypto economy. And we use bitcoin as the vehicle to do that,” said Saylor, who is now the company’s executive chairman.

MicroStrategy began cranking up its purchases after the U.S. presidential election. The victory of pro-crypto President-elect Donald Trump — specifically his promise to establish a national strategic bitcoin stockpile — has propelled bitcoin to new all-time highs, achieved in part by the company’s purchases. MicroStrategy now owns 423,650 bitcoins. It bought 149,880 of them in four different purchases over the past month, beginning Nov. 11.

As part of MicroStrategy’s hot streak this year, activists have been pushing bitcoin investing as an agenda item in shareholder meetings at companies like Microsoft and Amazon. Mining stocks like Mara Holdings have also begun employing Saylor’s bitcoin yield strategy.

Palantir Technologies and Axon Enterprise will also be joining the Nasdaq 100 later this month. Illumina, Moderna and Super Micro Computer will be removed from the index.

Last year, the Nasdaq 100 added six companies in its annual reconstitution, including DoorDash. Five of those six stocks rose the Monday after the announcement, with an average move of 1.21%.

—With reporting by Jesse Pound.

How President-elect Donald Trump's policies may affect investors in these 8 market sectors

Harsh — Tue, 26 Nov 2024 19:22:18 +0000

President-elect Donald Trump at a viewing of a test-flight launch of the SpaceX Starship rocket in Brownsville, Texas, Nov. 19, 2024.

Brandon Bell | Getty Images News | Getty Images

As Inauguration Day nears, investors are trying to unravel what booms or busts lay ahead under President-elect Donald Trump.

Trump’s campaign promises — from tariffs to mass deportations, tax cuts and deregulation — and his picks to lead federal agencies suggest both risks and rewards for various investment sectors, according to market experts.

Republican control of both chambers of Congress may grant Trump greater leeway to enact his pledges, experts said. However, their scope and timing is far from clear.

More from FA Playbook:

Here’s a look at other stories impacting the financial advisor business.

“There’s so much uncertainty right now,” said Jeremy Goldberg, a certified financial planner, portfolio manager and research analyst at Professional Advisory Services, which ranked No. 37 on CNBC’s annual Financial Advisor 100 list.

“I wouldn’t be making large bets one way or another,” Goldberg said.

tailpipe-emissions rule expected to push broader adoption of EVs and hybrids. He also intends to kill consumer EV tax credits worth up to $7,500 — although states such as California may try to enact their own EV rebates, blunting the impact.

Losing the federal credit would make EVs more costly, driving down sales and perhaps making “per unit economics even less favorable” for automakers, John Murphy, a research analyst at Bank of America Securities, wrote in a Nov. 21 research note.

Some companies seem well-positioned, though: Ford Motor, for example, “has a healthy pipeline of hybrid vehicles as well as traditional [internal combustion engine] vehicles to supplement the EV offerings,” Murphy wrote.

Tariffs and trade conflict pose threats to the auto industry, since the U.S. relies heavily on other nations to manufacture cars and parts, said Callie Cox, chief market strategist at Ritholtz Wealth Management.

They “could affect the cost and availability of cars we see in the U.S. market,” Cox said.

Economists expect tariffs and other Trump policies to be inflationary.

In that case, the Federal Reserve may have to keep interest rates higher for longer than anticipated. Higher borrowing costs may weigh on consumers’ desire or ability to buy cars, Cox said.

However, lower EV production could be a boon for companies that manufacture traditional gasoline cars, experts said.

Trump has also called for a “drill, baby, drill” approach to oil production. Greater supply could reduce gas prices, supporting demand for gas vehicles, experts said. But trade wars and sanctions on Iran and Venezuela could have the opposite impact, too.

— Greg Iacurci

CNBC FA 100 list.

“The larger banks probably benefit more from that,” Spinelli said.

Less regulation — combined with the prospect that interest rates could stay higher — will provide a net positive for the bank industry, since banks may be able to lend out more risk-based capital, said David Rea, president of Salem Investment Counselors in Winston-Salem, North Carolina, which is No. 8 on the 2024 CNBC FA 100 list.

One issue that emerged this year that could resurface is concern about regional banks’ exposure to commercial real estate, Spinelli said.

“It wasn’t that long ago, and I don’t think those problems disappeared,” Spinelli said. “So you question, is that still looming out there?”

— Lorie Konish

housing market has been “frozen” in recent years by high mortgage rates, said Cox, of Ritholtz.

Lower rates would likely be a “catalyst” for housing and associated companies, she said.

However, that may not materialize — quickly, at least — under Trump, she said. If policies such as tariffs, tax cuts and mass deportations stoke inflation, the Federal Reserve may have to keep interest rates higher for longer than anticipated, which would likely prop up mortgage rates and weigh on housing and related sectors, she said.

The whims of the housing market affect retailers, too: Home goods stores may not fare well if people aren’t buying, renovating and decorating new homes, Cox said.

That said, deregulation could be “absolutely huge” for the sector if it accelerates building timelines and reduces costs for developers, Goldberg said.

Trump has called for opening public land to builders and creating tax incentives for homebuyers, without providing much detail.

Housing policy will be “one of the most-watched initiatives coming out of the next administration,” Cox said. “We haven’t gotten a lot of clarity on that front.”

“If we see realistic and well-thought-out policies, you could see real estate stocks and related stocks” such as real estate investment trusts, home improvement retailers and home builders respond well, Cox said.

— Greg Iacurci

$100,000 benchmark before its recent runup ended.

As president, Trump is expected to embrace crypto more than any of his predecessors.

Notably, he has already launched a crypto platform, World Liberty Financial, that will encourage the use of digital coins.

Those developments come as new ways of investing in crypto have emerged this year, with the January launch of spot bitcoin ETFs, and more recently, the addition of bitcoin ETF options.

Yet financial advisors are hesitant, with only about 2.6% recommending crypto to their clients, an April survey from Cerulli Associates found. Roughly 12.1% said they would be willing to use it or discuss it based on the client’s preference. Still, 58.9% of advisors said they do not expect to ever use cryptocurrency with clients.

“The No. 1 reason why advisors aren’t investing in cryptocurrency on behalf of their clients is they don’t believe it’s suitable for client portfolios,” said Matt Apkarian, associate director in Cerulli’s product development practice.

Even for advisors who do expect they may use crypto at some point, it’s “wait and see,” particularly regarding how the regulatory environment plays out, Apkarian said.

However, investors are showing interest in cryptocurrency, with 90% of advisors receiving questions on the subject, according to research from Christina Lynn, a certified financial planner and practice management consultant at Mariner Wealth Advisors.

For those investors, exchange-traded funds are a good starting place, Lynn said, since there’s less chance of falling victim to one of crypto’s pitfalls such as scams or losing the keys, the unique alphanumeric codes attached to the investments. Because crypto can be more volatile, it’s best not to invest any money you expect you’ll need to pay for near-term goals, she said.

Investors would also be wise to think of cryptocurrency like an alternative investment and limit the allocation to 1% to 5% of their overall portfolio, Lynn said.

“You don’t need to have a lot of this to have it go a long way,” Lynn said.

— Lorie Konish

repeal the Inflation Reduction Act, a law enacted under Biden that includes clean energy incentives.

If Trump continues to make it easier to create more oil supply, that might not be a great thing for oil companies, according to Adam, of Raymond James.

“Because there’s more supply, it may tamp down on the price of oil, and that’s one of the biggest drivers of that sector,” Adam said.

Eagle Global Advisors, a Houston-based investment management firm that specializes in energy infrastructure, is “cautiously optimistic” about Trump’s impact on the sector, according to portfolio manager Mike Cerasoli. Eagle Global Advisors is No. 35 on the 2024 CNBC FA 100 list.

“We would say we’re probably more on the optimistic side than the cautious side,” Cerasoli said. “But if we know anything about Trump it’s that he’s a wild card.”

A lot of the Inflation Reduction Act may stay intact, since the top states that benefited financially from the law also handed Trump a victory in the election, according to Cerasoli.

When Biden won in 2020, there was a lot of panic about the outlook for energy, oil and gas. Cerasoli recalls writing in a third-quarter letter that year, “I don’t think it’s going to be as bad as you think.”

Four years later, he has the same message for investors on the outlook for renewables. In the days following Trump’s inauguration, Cerasoli expects there may be a deluge of executive orders.

“Once you get past that, you’ll get a sense of exactly how he’s going to treat energy,” Cerasoli said. “I think people will realize that it’s not the end of the world for renewables.”

— Lorie Konish

big vaccine makers such as Merck, Pfizer and Moderna, said David Weinstein, a portfolio manager and senior vice president at Dana Investment Advisors, No. 4 on CNBC’s annual FA 100 ranking.

Cuts to Medicaid and the Affordable Care Act, also known as Obamacare, are also likely on the table to reduce government spending and raise money for a tax-cut package, experts said.

Publicly traded health companies such as Centene, HCA Healthcare and UnitedHealth might be affected by lower volumes of Medicaid patients or consumers who face higher health-care premiums after losing ACA subsidies, for example, Weinstein said.

Robert F. Kennedy Jr. during the UFC 309 event at Madison Square Garden in New York City, Nov. 16, 2024.

Chris Unger | Ufc | Getty Images

Medical tech providers — especially those that supply electronics with semiconductors sourced from China — could be burdened by tariffs, he added.

Conversely, deregulation might help certain pharmaceutical companies such as Thermo Fisher Scientific and Charles River Laboratories, which may benefit from faster approvals from the Food and Drug Administration, Goldberg said.

Vivek Ramaswamy, a former biotech executive whom Trump appointed as co-head of a new advisory panel called the “Department of Government Efficiency,” has called for streamlined drug approvals. But Kennedy has advocated for more oversight.

“There’s a real dichotomy here,” Weinstein said.

“Where do we end up? Maybe where we are right now,” he added.

— Greg Iacurci

how the policies are structured.

Home Depot, Lowe’s and Walmart, for example, source a relatively big chunk of their goods from abroad, Weinstein said.

Home Depot CEO and President Ted Decker said Nov. 12 during the firm’s third-quarter earnings call that the company sources more than half its goods from the U.S. and North America, but “there certainly will be an impact.”

“Whatever happens in tariffs will be an industrywide impact,” Decker said. “It won’t discriminate against different retailers and distributors who are importing goods.”

It’s a good idea for investors to own “high quality” retailers without a lot of debt and with diversified inventory sources, Goldberg said. He cited TJX Companies, which owns stores including TJ Maxx, Marshalls and HomeGoods, as an example.

“Direct imports are a small portion of [its] business and TJX sources from a variety of countries outside of China,” Lorraine Hutchinson, a Bank of America Securities research analyst, wrote in a Nov. 21 note.

Deregulation may be positive for smaller retailers and franchises, which tend to be more sensitive to labor laws and environmental and compliance costs, Goldberg said.

— Greg Iacurci

Amazon, Apple, Alphabet, Meta, Microsoft, Nvidia and Tesla.

Even broadly diversified investors may find it difficult to escape those names, as they are among the top weighted companies in the S&P 500 index.

Information technology — which includes all those stocks except Amazon and Google parent Alphabet — comprises the largest sector in the S&P 500 index, with more than 31%.

Trump is poised to have an influence on looming antitrust issues, amid considerations as to whether Google’s influence on online search should be limited.

Any tariffs put in place may also prompt some sales to decline or the cost of raw materials to go up, said Rea of Salem Investment Counselors.

Nevertheless, Rea said his firm continues to have a “pretty heavy” tech allocation, with strong expectations for generative artificial intelligence. However, the firm does not own Tesla, due to its expensive valuation, and has recently been selling software company Palantir, a winning stock that may have gotten ahead of itself, he said.

Technology valuations are trading well into the high double digits on a price-to-earnings basis, which often signals forward returns will decline, according to Halbert Hargrove’s Spinelli.

Consequently, prospective investors who come in now would basically be buying high, he said.

“If you think you’re going to get the same double-digit returns in the next five years, sure, it could happen on a one-year basis,” Spinelli said. “But your chances historically have been that your returns come down.”

— Lorie Konish

How we're thinking about Eli Lilly after Trump picked obesity-drug critic RFK Jr. to run HHS

Harsh — Fri, 15 Nov 2024 18:14:49 +0000

Enthusiasm for Club holding Eli Lilly needs to be tempered — at least for now — as Wall Street grapples with the possibility of a major shakeup to health policy in Washington. The news Republican President-elect Donald Trump on Thursday nominated prominent vaccine skeptic and obesity-drug critic Robert F. Kennedy Jr. to lead the Department of Health and Human Services . HHS, for short, is the sprawling agency that sits atop the Food and Drug Administration, Centers for Disease Control and Prevention, and Centers for Medicare & Medicaid Services, among other divisions. The cabinet-level position of HHS secretary requires confirmation by the Senate, where the Republicans will have a 53-seat majority, while the Democratic caucus will be 47. Some members of the GOP, such as Kentucky Sen. Rand Paul, congratulated Kennedy on his nomination. But at this point, it’s unclear whether Kennedy will be able to reach the 50-vote threshold for confirmation. Shares of obesity drugmaker Eli Lilly fell more than 4% on Friday, extending a roughly 3% slide in Thursday’s session. Media reports of Kennedy’s nomination surfaced in the late afternoon Thursday, and Trump confirmed the decision in a social media post after the closing bell. Eli Lilly’s main competitor in the obesity market, Danish firm Novo Nordisk , also saw its stock drop more than 4% on Friday. Shares of Covid-19 vaccine makers including Moderna and Pfizer sold off late Thursday and again in Friday’s session. A popular exchange-traded fund that tracks biotech stocks is on pace for its worst week since March 2023. Meanwhile, analysts at Deutsche Bank downgraded British vaccine maker GSK due to Kennedy’s selection. Big picture During his campaign, Trump had pledged to let Kennedy “go wild” on health-care issues if he were given the chance to return to the White House, but selecting him to run HHS was generally seen on Wall Street as an unlikely outcome. It now shrouds the pharmaceutical industry in uncertainty until there’s more clarity on his support in the Senate. The 70-year-old Kennedy — the son of the late U.S. senator and presidential candidate Robert F. Kennedy and nephew of the late President John F. Kennedy — began his career as an environmental lawyer. In recent decades, he gained traction for his controversial views on health matters, most notably vaccines. Kennedy has pushed unfounded claims that child vaccines are linked to autism, despite numerous studies that debunk such assertions. “Vaccines do not cause autism,” the CDC website reads. Kennedy has more recently taken aim at what he describes as a chronic-disease crisis in the U.S., particularly diabetes and obesity among children. It was a focus of his unsuccessful 2024 presidential campaign, initially in the Democratic primary and then as an independent candidate. Kennedy endorsed Trump in August. LLY YTD mountain Eli Lilly’s year-to-date stock performance. Kennedy has been critical of the pharmaceutical industry on a number of topics. In an op-ed in The Wall Street Journal in September, Kennedy wrote that the U.S. should consider preventing companies from advertising directly to the public and argued lawmakers in Washington “should cap drug prices so that companies can’t charge Americans substantially more than Europeans pay.” Kennedy specifically mentioned Novo Nordisk’s diabetes treatment Ozempic when making the case for drug-price caps. Ozempic is the posterchild of the fast-growing GLP-1 class, in which Novo Nordisk and Eli Lilly are currently the two dominant players. Some on Wall Street expect the market for GLP-1 drugs to be worth $100 billion by 2030. GLP-1s drugs mimic a gut hormone to help regulate blood sugar and suppress appetite, leading to weight loss. Eli Lilly’s GLP-1 called tirzepatide, sold as Mounjaro for diabetes and Zepbound for obesity, is at the heart of our investment thesis in the company. Jim Cramer has said it could become the best-selling drug of all time , thanks in large part to its weight-loss adoption. Kennedy contends the way to combat the high rates of obesity in the U.S. is through dietary and food-systems changes. Weight-loss drugs, Kennedy has argued on social media , do not get to the “root” of the obesity problem and instead merely “gladden the wallets of distant Big Pharma execs.” Eli Lilly CEO David Ricks and other GLP-1 proponents argue that obesity is a disease and should be treated as such by doctors and health insurers alike. In that way, they argue, GLP-1s should be seen as a valuable tool, along with diet and exercise, in the treatment of obesity. Lilly and Novo Nordisk also have sought to show that GLP-1s improve health outcomes for patients in ways far beyond just shedding pounds. Earlier this year, the FDA said Novo Nordisk’s obesity drug Wegovy can also be prescribed to lower the risk of serious heart problems, such as heart attacks and strokes, in overweight patients with cardiovascular disease. Eli Lilly has demonstrated similar heart-health benefits for tirzepatide. It’s also shown promise in treating sleep apnea , among others. Bottom line Eli Lilly has been our favorite drug stock for years thanks to its stellar pipeline led by GLP-1s. And the share-price performance since we took a stake in October 2021 — more than tripling even with the recent declines — speaks for itself. The S & P 500 is up a little more than 30% in the same stretch. But, at this point, Kennedy’s nomination requires us to be more cautious on Eli Lilly in the near term. The stock could remain soft while the market digests the implications and probabilities of Kennedy leading HHS. From the perspective of a drug-stock investor, Jim said it’s hard to imagine a more troubling pick for HHS secretary than Kennedy. “We don’t touch Eli Lilly yet. There’s no need to,” Jim said during Friday’s Morning Meeting. He noted that our profit-taking in early September, at nearly $961 a share , enables us to be patient and prudent while Kennedy’s nomination process unfolds. Eli Lilly’s most-recent quarterly results were noisy in some areas, but the underlying prescription growth for its key GLP-1 drugs was encouraging. (Jim Cramer’s Charitable Trust is long LLY. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Eli Lilly and Company, Pharmaceutical company headquarters in Alcobendas, Madrid, Spain.

Cristina Arias | Cover | Getty Images

Enthusiasm for Club holding Eli Lilly needs to be tempered — at least for now — as Wall Street grapples with the possibility of a major shakeup to health policy in Washington.

Vaccine maker stocks fall as Trump chooses RFK Jr. to lead HHS

Harsh — Fri, 15 Nov 2024 01:08:57 +0000

Robert F. Kennedy Jr. in Phoenix on Aug. 23, 2024.

Thomas Machowicz | Reuters

Shares of vaccine makers fell Thursday as President-elect Donald Trump nominated Robert F. Kennedy Jr., a prominent vaccine skeptic, to lead the Department of Health and Human Services.

The stocks fell in the final hour of trading as reports emerged about Trump’s expected pick. Moderna‘s stock closed more than 5% lower on Thursday, shares of Novavax fell more than 7% and Pfizer‘s stock ended more than 2% lower.

Shares of BioNTech, the German drugmaker that helped develop a Covid vaccine with Pfizer, closed more than 6% lower. British drugmaker GSK, which makes flu shots and several other vaccines, closed roughly 2% lower.

Shares of those companies dipped further in extended trading as Trump confirmed his pick in a post on his platform Truth Social.

Health policy experts have said a second Trump term could allow Kennedy to elevate anti-vaccine rhetoric, which could deter more Americans from receiving Covid shots and routine immunizations that have for decades saved millions of lives and prevented debilitating illnesses.

Pfizer, Moderna and Novavax are still recovering from falling Covid vaccination rates in the U.S., which have dented their profits over the past two years.

Kennedy’s track record as a vaccine skeptic is extensive. He has long made misleading and false statements about the safety of shots, such as claiming they are linked to autism despite numerous studies going back decades that debunk the association.

Kennedy is the founder of the nonprofit Children’s Health Defense, the most well-funded anti-vaccine organization in the country.

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Moderna posts surprise profit as Covid vaccine sales impress, cost cuts take hold

suimt — Thu, 07 Nov 2024 11:34:31 +0000

Moderna on Thursday posted a surprise profit for the third quarter, smashing Wall Street estimates, as its cost-cutting efforts took hold and sales of its Covid vaccine came in higher than expected.

The biotech company posted a net income of $13 million, or 3 cents per share, for the third quarter. That compares with a net loss of $3.63 billion, or $9.53 cents per share, reported for the year-ago period.

Moderna is slashing expenses, with a recently announced goal of achieving $1.1 billion in savings by 2027, as it tries to recover from the rapid decline of its Covid business. It is the first quarter that includes sales of Moderna’s vaccine against respiratory syncytial virus, or RSV, its second-ever commercially available product.

Before year end, the company plans to file for approval of its experimental “next-generation” Covid vaccine and combination shot targeting Covid and the flu. Moderna this year also expects to apply for expanded approval of its RSV vaccine, targeting high-risk adults ages 18 to 59.

Moderna said Thursday its newest Covid vaccine saw benefits after winning approval in the U.S. three weeks earlier than the last iteration of the shot did in 2023, which allowed the biotech company to “meet demand more effectively.” The company was able to ship out doses to pharmacies and healthcare providers and reach the arms of more patients sooner.

“I think the earlier launch and a steeper ramp drove a much higher sales number” for the Covid vaccine, Moderna CEO Stéphane Bancel said in an interview. During the first week of the vaccine’s launch, the company shipped twice as many products globally than it did in 2023, Bancel noted.

He added that “this was a big cost reduction quarter, and we’re going to continue to do that.”

Here’s what Moderna reported for the third quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: 3 cents vs. an expected loss of $1.90
Revenue: $1.86 billion vs. $1.25 billion expected

Moderna booked third-quarter sales of $1.86 billion, only slightly higher than the $1.83 billion in revenue it recorded during the same period a year ago. The vast majority of that total came from its Covid shot, including $1.2 billion in U.S. sales and roughly $600 million from international markets.

The company’s third-quarter revenue also included $10 million in U.S. sales of its RSV shot, which won approval in May. Moderna said that sales of that shot were lower than expected since it was approved and recommended by regulators later in the contracting season, when many vaccine distributors had already completed their orders.

Analysts had expected sales of $132 million for the RSV vaccine, according to estimates compiled by StreetAccount. Moderna’s RSV shot is so far approved in the U.S., European Union, Norway, Iceland and Qatar.

The company reiterated its full-year 2024 product sales guidance of roughly $3 billion to $3.5 billion. Last quarter, Moderna slashed its outlook on lower expected sales in Europe, a “competitive environment” for respiratory vaccines in the U.S. and the potential for deferred international revenue into 2025.

Shares of Moderna are down almost 50% this year as investors mull over its path forward after Covid. The company is betting on a pipeline built around its messenger RNA platform, which is the technology used in its Covid vaccine and RSV shot.

The biotech company currently has 45 products in development, and expects to bring 10 of them to the market over the next three years.

Moderna is developing a standalone flu shot, a personalized cancer vaccine with Merck and shots for latent viruses, among other products.

Cost of sales for the third quarter was $514 million, down 77% from the same period a year ago. That includes $214 million in write-downs of unused doses of the Covid vaccine and $27 million in charges related to the company’s efforts to scale back its manufacturing footprint, among other costs.

Research and development expenses decreased by 2% to $1.1 billion compared with the same period in 2023. Moderna said that decline was primarily due to lower clinical development and manufacturing expenses, citing decreased spending on clinical trials, among other factors.

Meanwhile, selling, general and administrative expenses for the period fell by 36% to $281 million compared with the third quarter of 2023. SG&A expenses usually include the costs of promoting, selling and delivering a company’s products and services.

Trump says he will give RFK Jr. a major health role if he wins the White House. Here's what that means for patients, drugmakers

Harsh — Tue, 05 Nov 2024 20:43:43 +0000

Republican presidential nominee, former U.S. President Donald Trump welcomes Robert F. Kennedy Jr. to the stage at a Turning Point Action campaign rally at the Gas South Arena on October 23, 2024 in Duluth, Georgia.

Anna Moneymaker | Getty Images News | Getty Images

Donald Trump has made one clear promise about who could help take up the government’s health reins if he wins the presidency: notorious vaccine skeptic and conspiracy theorist Robert F. Kennedy Jr.

The former president said last week that Kennedy, who ended his own independent White House campaign earlier this year and endorsed Trump, will have a “big role” in health care in his administration. Last month, Trump said he would let Kennedy “go wild” on health, food and drug regulation.

Follow: Election 2024 live updates: Trump and Harris await Presidential election results

It’s unclear what exactly Kennedy’s role would look like, but the possibility is already raising alarm bells in the broader health community. Some health experts said elevating Kennedy, even in an informal Trump administration position, could potentially lead to severe consequences for patients, drugmakers and the nation’s public health overall.

“I think it would be a world turned upside down,” Dr. Paul Offit, a vaccine expert at Children’s Hospital of Philadelphia who has been an open critic of Kennedy, told CNBC. “Things would not be grounded in scientific truth, just grounded in whatever he or his acolytes believe. It would be a free-for-all. It would be uncertainty and instability. It would be chaos.”

He said “chaos” could potentially look like lower vaccination rates, increases in preventable disease and greater distrust in federal health agencies, such as the Food and Drug Administration and the Centers for Disease Control and Prevention.

That could exacerbate the nation’s existing public health challenges, such as declining childhood vaccination rates for several preventable diseases, some experts say. The U.S. also has the lowest life expectancy at birth, the highest rate of people with multiple chronic diseases, and the highest maternal and infant death rate among other high-income nations, according to a 2023 report by the Commonwealth Fund, an independent research group.

Kennedy, who does not have any medical or scientific credentials, believes drug companies and the federal health agencies that regulate them are making Americans less healthy. He has suggested that some vaccines should be taken off the market — a stance that Trump did not rule out Monday.

The former environmental lawyer may also bring uncertainty to the pharmaceutical industry, which relies on federal health agencies to greenlight new products, keep old ones on the market, and, in some cases, fund research and development. It will likely be difficult for Kennedy to change the drug approval process, but experts said he could gain a new platform to politicize certain treatments he opposes and tout others that aren’t proven to be safe and effective.

Top leadership roles, such as the FDA commissioner, require confirmation by the Senate, which some experts noted could pose a hurdle for Kennedy. But Kennedy has met with Trump transition officials and could take a broad White House “health czar” position that would not need Senate confirmation, The Washington Post reported Saturday.

Regardless of what the position looks like, Kennedy will likely gain a “new podium to spread his views,” said Drew Altman, president and CEO of health policy organization KFF.

“It’s giving one of the chief architects for health misinformation a national podium backed by the president,” Altman told CNBC. “Many more people will hear what he has to say, believe it and act on it. That could pose a risk to their health.”

Kennedy’s team did not immediately respond to CNBC’s request for comment.

Real-world data from the CDC indicates that routine vaccination rates for kindergarten children ticked down during the pandemic and have yet to rebound. If Kennedy manages to push those rates even lower, vaccine-preventable diseases like polio and measles could potentially make a comeback, experts noted.

For the companies that manufacture shots, an increase in anti-vaccine rhetoric could potentially translate to lower revenue. Drugmakers such as Pfizer and Moderna are still recovering from falling Covid vaccination rates in the U.S., which have dented their profits over the last two years.

Kennedy may also affect the pharmaceutical industry’s ability to respond to another pandemic if given the power to determine how much federal funding should go toward vaccine development, some experts say. He told NBC News last year that he wouldn’t prioritize the research, manufacturing or distribution of shots if faced with another pandemic, falsely adding that “vaccines have probably caused more deaths than they’ve averted.”

Kennedy’s track record as a vaccine skeptic is extensive: He has long made misleading and false statements about the safety of shots, such as claiming that they are linked to autism despite numerous studies going back decades that debunk the association. Kennedy is the founder of the nonprofit Children’s Health Defense, the most well-funded anti-vaccine organization in the country.

“He misinforms to the point that children suffer or die, and also stands back and doesn’t take any responsibility for it,” Offit said.

He pointed to Kennedy’s misinformation about the safety of the measles, mumps and rubella vaccine, which was linked to a severe measles outbreak in Samoa in 2019 that left dozens of children dead.

a post on X that the “FDA’s war on public health is about to end” and hinted at plans to gut the agency of workers who don’t agree with his views.

He accused the agency of its “aggressive suppression of psychedelics, peptides, stem cells, raw milk, hyperbaric therapies, chelating compounds, ivermectin, hydroxychloroquine, vitamins, clean foods, sunshine, exercise, nutraceuticals and anything else that advances human health and can’t be patented by Pharma.”

Kennedy has previously claimed that hydroxychloroquine and ivermectin work against Covid, even though several studies say they do not. Hydroxychloroquine is an immunosuppressive drug, while ivermectin is used to treat infections caused by parasites.

“He has embraced a lot of therapies that have been unproven for certain uses and some have been discredited,” Kanter said.

CDC. More than 40% of school-aged children and adolescents have at least one. Chronic diseases such as heart disease, cancer, diabetes and obesity are also a major driver of health-care costs in the U.S., accounting for about 90% of the $4.1 trillion annual health-care expenditure, the CDC said.

Kennedy could spearhead “Operation Warp Speed for childhood chronic disease” under a Trump administration, sources close to the former president’s campaign told NBC News last week. That refers to the title of the Covid vaccine development and distribution project during Trump’s first term.

It’s unclear what the new program or Kennedy’s role would look like, but the focus on chronic illnesses aligns with his so-called Make America Healthy Again platform.

The initiative — a riff on Trump’s Make America Great Again slogan — aims to remove chemicals from food production, combat the “root” causes of chronic diseases and eliminate conflicts of interest in medical research, among other priorities that largely have bipartisan support. Environmental factors such as air pollution and diet contribute to chronic health conditions, but Kennedy has pushed unfounded claims around certain food ingredients and minerals.

Last week, Kennedy also proposed advising all U.S. water systems to remove fluoride from drinking water, falsely claiming that it is “an industrial waste” linked to several medical conditions, such as thyroid disease and and neurodevelopmental disorders. Trump has since said that idea sounds “OK to me.”

But fluoride is a naturally occurring mineral found in soil, water and plants. Adding low levels of fluoride to drinking water is widely considered one of the greatest public health achievements of the 20th century for its role in preventing tooth decay.

USC’s Kanter also said “there is a danger of oversimplifying complicated health problems” and attributing them to a few “root causes,” especially when they aren’t backed by science. Chronic diseases are complex conditions that can be caused by multiple factors, such as a patient’s genetics and socioeconomic status, according to Kanter.

Kennedy’s nonprofit falsely links vaccines to chronic diseases, citing misleading articles and studies that show unvaccinated populations have fewer chronic conditions than their vaccinated peers.

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Novavax says FDA put hold on combination Covid-flu shot and influenza vaccine; shares plunge

Harsh — Wed, 16 Oct 2024 14:21:51 +0000

A health worker prepares a dose of the Novavax vaccine as the Dutch Health Service Organization starts with the Novavax vaccination program on March 21, 2022 in The Hague, Netherlands.

Patrick Van Katwijk | Getty Images

Novavax on Wednesday said the Food and Drug Administration has put a hold on its application for a combination shot targeting Covid and influenza and a standalone flu vaccine, sending the company’s shares down sharply.

The biotech company’s stock fell nearly 20% on Wednesday. The so-called clinical hold is due to a single report of nerve damage in a patient who received the combination shot in a phase two trial that finished in July last year.

A clinical hold is an order issued by the FDA to a manufacturer to delay or suspend a proposed clinical investigation on a drug.

It is unclear if the pause will impact Novavax’s ability to start and release data on phase three trials on those vaccines. Still, it appears to be a setback for the biotech company, which is scrambling to bring new products to market as demand for its Covid vaccine plummets worldwide.

Novavax said it was working with the FDA to resolve the clinical hold on its combination shot and standalone flu vaccine. The company said other trials of its Covid and flu shots had not shown any safety concerns related to the type of nerve damage reported in the patient.

Novavax said it does not believe there’s an established connection that the vaccine had caused the nerve damage in the patient but said it is working to provide more information to the FDA.

“Our goal is to successfully resolve this matter and to start our Phase 3 trial as soon as possible,” Dr. Robert Walker, Novavax’s chief medical officer, said in a release.

Public health officials see Novavax’s protein-based Covid vaccine as a valuable alternative for people who don’t want to take mRNA shots from Pfizer and Moderna, which use a newer vaccine method to teach cells how to make proteins that trigger an immune response against Covid.

Novavax’s shot, meanwhile, fends off the virus with protein-based technology, a decades-old method used in routine vaccinations against hepatitis B and shingles.