Aurelia Butler

(Reuters) -Lykos Therapeutics will lay off 75% of its workforce, or about 100 employees, and founder Rick Doblin will leave the board, the company said on Thursday, days after the U.S. FDA declined approval for its MDMA-based PTSD treatment.Lykos, formerly known as MAPS Public Benefit Corp, said it was bringing in David Hough, former vice president for research and development at Johnson & Johnson (NYSE:JNJ), to lead and oversee clinical development of the MDMA capsules. Hough spearheaded the development of J&J’s nasal spray, Spravato, used to treat depression in combination with an oral drug. He joins Lykos days after the U.S. Food and Drug Administration declined to approve its midomafetamine-, or MDMA-based treatment for post-traumatic stress disorder, citing limited data.Commonly known as ecstasy or molly, MDMA has long been seen by advocates as a potential treatment for mental health disorders.The regulator’s decision was in line with the recommendations of its advisers, who flagged problems with the trial design and a lack of documentation around whether participants had abused the experimental drug. The company said it planned to ask the FDA to reconsider its decision and would attempt a resubmission to seek approval for the MDMA capsules.Jeff George, chairman of the Lykos board, said Hough was “the right person” to lead the crucial work of engaging with the FDA for the resubmission.Doblin said he would continue to advocate for global access to MDMA, adding that resigning from the company’s board allowed him to speak freely.”This change allows Rick Doblin to focus on the broader work of MAPS and Lykos to keep a narrow focus on doing the clinical and regulatory work,” Lykos told Reuters.The company said the remaining 25% of its workforce would focus on developing the MDMA-based capsules and engaging with the FDA about next steps in the resubmission process. More

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Investing.com — Fed Chairman Jerome Powell is likely lay out the case for rate cuts starting September when he takes to the stage at the annual central bank symposium in Jackson Hole, Wy., slated for next week but the Fed chief is expected to stress that cuts would be “orderly,” downplaying the prospect of a 50 basis point cut next month. 
“We expect Chair Powell will lay out a case for an orderly withdrawal of monetary policy restrictiveness in a speech at Jackson Hole the morning of Friday, August 23, and by orderly, we mean 25 bp rate cuts, rather than 50 bp,” economists’ at UBS said in a recent after updating their rate cut call.
“We expect three 25 bp rate cuts this year, one at each of the September, November and December FOMC meetings,” they added, expecting that the Fed’s September meeting will reflect consensus among voting members that fed policy was now restrictive amid slowing growth. 
Powell is expected “to make the case to take out a little more restrictiveness in the next few meetings than previously signaled, to better position policy, something of a recalibration,” UBS said, but remain data dependent. 
But the Fed chief is unlikely to signal that rate cuts will be ongoing as he is expected to “remain data dependent and caution that ongoing rate cuts after any recalibration should depend upon ongoing progress on inflation toward 2%, weighed against the risks to the labor market expansion,”  the economists said. 
Many on Wall Street have called for aggressive cuts in the wake of the weaker July nonfarm payrolls report that triggered the Sahm Rule — a measure suggesting a recession is underway when the three-month average U.S. unemployment rate rises by 0.50% or more from its 12-month low — but against the backdrop of slowing but real GDP growth … “would not seem that ominous,” they added. 
Others agree, with Morgan Stanley downplaying the recession signal from the rise in unemployment rate isn’t as worry as in previous cycles because labor demand is holding up relatively well. 
“The recessionary signal from the unemployment rate should come primarily from the fall in labor demand, and so the current rise in the unemployment rate, though seemingly as large as the beginning of other downturns, is actually only about half the signal as in the past,” Morgan Stanley added.
While the Fed may pause rate cuts to reassess, UBS says it is “comfortable” with its projection that headline PCE  inflation touches 2.0% and core 2.1% in the second quarter of next year, encouraging the Fed to continue with rate cuts next year. 
“While successive three 25 bp rate cuts this year would reposition policy more in line with a policy rule, the FOMC may want to just keep going in 2025 since our forecast expects further slowing from here, if not recession,” it added. More

BRASILIA (Reuters) – Brazil’s President Luiz Inacio Lula da Silva is looking at submitting all four of his upcoming nominations for the board of the central bank at once, including Gabriel Galipolo for the bank’s presidency, people familiar with the matter told Reuters.The nominations are expected in the coming weeks, according to Finance Minister Fernando Haddad. If approved by the Senate, Lula’s choices will take office in 2025, giving the leftist president seven picks on the central bank’s nine-member interest rate-setting committee, known as Copom.The presidential palace did not reply to a request for comment. The Finance Ministry and central bank declined to comment. Galipolo, the central bank’s monetary policy director, has long been seen as a strong contender to replace governor Roberto Campos Neto, whose term ends in December, said seven sources, who requested anonymity to discuss the confidential deliberations.Fernando Honorato, chief economist at Banco Bradesco, is being considered for Galipolo’s current role, as he has good relations with the Finance Ministry and other government officials, said three sources. One of the sources noted that other candidates are still in the running.Bradesco said it was “unaware of the matter.”Another source said that Marcelo Kayath, a partner at QMS Capital and former managing director at Credit Suisse in Brazil, had been approached for the position but declined.Kayath declined to comment on the matter.Two sources said that Gilneu Vivan, the current head of the department regulating the financial system, is one of the names being considered for the director of regulation, a seat now held by Otavio Damaso. The same two sources said Juliana Mozachi, head of the conduct supervision department, is a strong candidate to become director of institutional relations, replacing Carolina Barros. Her appointment would also ensure at least one woman on the rate-setting board, one of the sources noted.Traditionally, the directors of regulation and institutional relations are career central bank officials, unlike the monetary policy director, who runs the foreign exchange desk and often comes from a background in the financial markets. More

The Fed has held its policy rate in the 5.25% to 5.50% range for more than a year now to slow economic growth and keep downward pressure on inflation. Weak job-market data at the start of this month fueled concern among investors that the Fed had left policy restrictive for too long, and that it would need to chop rates an aggressive half a percentage point in September, if not before, to counter a looming recession. Recent data, including a strong retail sales report earlier Thursday, has been more encouraging, suggesting inflation is indeed receding but the economy is far from collapsing. Investors now expect the Fed to start reducing borrowing costs by a more-usual quarter of a percentage point next month. More

(Reuters) – Bayer (OTC:BAYRY) won a legal victory in its fight to limit liability from claims that its Roundup weed killer causes cancer, as a U.S. appeals court on Thursday said federal law shields the German company from a lawsuit by a Pennsylvania landscaper.The 3rd U.S. Circuit Court of Appeals in Philadelphia rejected plaintiff David Schaffner’s claim that Bayer’s Monsanto (NYSE:MON) unit violated state law by failing to put a cancer warning on the label for Roundup.Schaffner was diagnosed in 2006 with a kind of cancer called non-Hodgkins lymphoma, a common claim for Roundup plaintiffs.He and his wife Theresa sued Bayer in 2019, in part over how his illness affected their relationship.Chief Judge Michael Chagares wrote for a unanimous three-judge panel that the Federal Insecticide, Fungicide, and Rodenticide Act requires nationwide uniformity in pesticide labels, and prevented Pennsylvania from adding a cancer warning.Bayer said the decision conflicts with rulings from federal appeals courts in San Francisco and Atlanta in similar cases.That may increase the prospect that the U.S. Supreme Court could step in to resolve the split, and potentially reduce Bayer’s liabilities.Chip Becker, a lawyer for the Schaffners, said he was disappointed with the decision, and that federal law should not preempt his clients’ failure-to-warn claim. He said the Schaffners are reviewing their legal options.Bayer said it was pleased with the decision, and the Supreme Court should “settle this important issue of law.”It has maintained that Roundup and its active ingredient glyphosate are safe, and said it “continues to stand fully behind” the brand.Bayer has faced extensive litigation over Roundup, and has seen its share price fall more than 73% since buying Monsanto for $63 billion in June 2018.The company settled much of the Roundup litigation for $10.9 billion in 2020, but still faces about 58,000 claims. Another 114,000 claims have been settled or deemed ineligible.Though Bayer won 14 of 23 Roundup trials through July 23, one victory was overturned on appeal, and the losses saddled it with billions of dollars of damages awards.The Schaffners settled with Bayer in September 2022, conditioned on Bayer being unable to convince courts that federal law preempted Pennsylvania from requiring a cancer warning.Chagares said it did, and that this approach “best achieves Congress’s stated aim of uniformity in pesticide labeling.”Roundup is among the most widely used weed killers in the United States. Bayer phased out sales for home use last year.The case is Schaffner et al v Monsanto Corp, 3rd U.S. Circuit Court of Appeals, No. 22-3075. More