Aurelia Butler

New York-based Bristol has been under pressure to expand its drug pipeline amid declining demand for two of its top drugs, blood cancer treatment Revlimid and blood thinner Eliquis, which face generic competition.”We expect KarXT to enhance our growth through the late 2020s and into the next decade,” CEO Christopher Boerner said in a statement. The drugmaker is also expected to face revenue losses for two of its other top sellers, cancer immunotherapy Opdivo and blood thinner Eliquis, as they lose patent protection later this decade. Eliquis is also among the ten drugs expected to be subject to drug price negotiations by the U.S. Medicare health program in 2026. Under the terms of the deal, Bristol would pay $330 a share in cash for Karuna, which represents a 53.4% premium to its last closing price. Karuna’s shares rose to $317 in premarket trading. Bristol shares fell 3% before the bell as it expects to finance the deal mainly through new debt. Its shares have so far this year lost 30% of their value. The deal is expected to hit the company’s earnings per share by roughly 30 cents in 2024 due to the financing costs. The acquisition comes roughly two months after Bristol’s deal to buy cancer drugmaker Mirati Therapeutics (NASDAQ:MRTX) for as much as $5.8 billion. Analysts have forecast multi-billion dollars in sales of the drug, called KarXT. A decision on its use in adults is due by September next year, and the company is also testing it to treat patients with psychosis tied to Alzheimer’s disease.While there are several drugs for schizophrenia, KarXT belongs to a new class of drug that are likely to cause lesser side effects like weight gain.The deal highlights growing interest in neuroscience treatments, which has seen a spurt in research in recent years. AbbVie (NYSE:ABBV) earlier this month agreed to buy Karuna’s rival Cerevel Therapeutics for $8.7 billion. “Our gut here is that this process was somewhat competitive and the acquisition price seems to reflect this. There shouldn’t be any FTC (antitrust) issues,” said Stifel analyst Paul Matteis in a note to clients. Gordon Dyal & Co and Citi were the financial advisers to Bristol, while Goldman Sachs was the exclusive financial advisor to Karuna. More

LONDON (Reuters) – A long awaited shift in the U.S. Federal Reserve’s monetary policy arrived in December with major developed central banks delivering just one increase and the number of cuts accelerating further in emerging markets.December saw eight of the central banks overseeing the 10 most heavily traded currencies hold rate setting meetings, with only Norway hiking rates by 25 bps. In December, the ECB as well as policy makers in Britain, Japan, Australia, Canada and Switzerland opted to keep benchmarks unchanged at meetings – as did the U.S. Federal Reserve. But the eye-catching dovish pivot at the world’s top central bank took markets by surprise and increased bets that interest rates would come down faster and sooner than previously anticipated. Policy makers in Europe and elsewhere did not echo those expectations, and markets seem at odds with policy makers on the timing.”A slowing global economy, easing inflation pressures, and cooling labour markets would open the door for rate cuts from major central banks next year,” said Dean Turner, chief eurozone and UK Economist at USB Global Wealth Management, adding that keeping rates at current levels would tighten conditions in real terms.”Few, if any, central bankers think this is likely to be needed, so rates are more than likely to be lowered in 2024.”The year-to-date tally for G10 central banks stands at +1,200 bps across 38 hikes, less than half the 2,700 bps of tightening seen in 2022 when 54 moves were recorded, Reuters calculations showed.Meanwhile, in emerging economies – which have been frontrunning both the tightening and the easing cycle – rate cuts gathered steam. Five of the Reuters sample of 18 central banks in developing economies cut interest rates – the highest number in at least three years. Policy makers in the Czech Republic kickstarted their easing cycle, while Brazil, Hungary, Colombia and Chile doubled down on their easing efforts. Across the Reuters markets sample, 13 central banks held rate setting meetings in December. The latest moves take the total annual tally of rate cuts to 945 bps through 18 moves, and compares to 1,765 bps of rate cuts in 2022 across 11 moves. And there was more to come, said analysts. “The Fed’s dovish pivot has boosted EM risk sentiment and provides EM central banks with more space for easing,” said Christian Keller, head of economics research at Barclays. However, both Russia and Turkey who face continued pressure on their currencies and stubbornly high inflation, were still in hiking mode, tightening by 350 bps between them. In total since the start of the year, emerging market central banks have tightened by 5,075 bps – which compares to rate hikes to the tune of 7,425 bps in the full year of 2022. More

In the immediate aftermath of the UN climate summit talks that went through the night, Teresa Ribera, Spain’s deputy prime minister and co-leader of the EU delegation, spoke to select reporters on December 13 about the final throes leading to a global agreement that recognised the role of fossil fuels in climate change.Acknowledging that there were “things we would like to have seen developed in the text”, she nevertheless judged the outcome a “very good deal” for placing emphasis on “accelerating action in this critical decade.”The last 36 hours of negotiations involved the overhaul of a draft text which had “displeased” not only the EU but also the majority of nations as being inadequate after obstruction by Saudi Arabia and Opec nations. “Even if all the words were there, they were not introduced with the verbs, with the implications, that were needed,” Ribera noted. The final text agreeing to transition away from fossil fuels, but not going as far as to “phase out” their use, was negotiated by COP28 president Sultan al-Jaber, who had received Ribera’s vote of confidence as someone who could bring onboard oil and gas-reliant economies.In this edited extract of the question and answer session with FT climate correspondent Attracta Mooney, Ribera talks through the controversial finale when Jaber brought down the gavel without the group of 39 island nations vulnerable to climate change present for the UN closing session.The closing plenary session of COP28, where countries reached a deal to transition away from fossil fuels More

The S&P 500 dropped 1.47% on Wednesday, facing resistance near its Jan. 4, 2022, record high of 4,818.62. Despite the recent decline, the index has still gained approximately 15.7% since bottoming out at a five-month low of 4,103.78 on Oct. 27.U.S. personal consumption data for November is due at 1330 GMT. It could potentially shape expectations for how quickly interest rates might fall in 2024. U.S. equity value funds saw their first weekly outflow in four weeks, worth about $5.88 billion. Investors also sold roughly $11.31 billion worth of growth funds on a net basis.Among sector funds, the tech sector saw $1.08 billion worth of net selling, the second weekly outflow in seven weeks. Financials and gold & precious metal funds also lost about $200 million each in outflows. Industrials, meanwhile, received $336 million worth of inflows, the most in nine weeks.U.S. investors also liquidated $7.55 billion worth bond funds, extending outflows into a fourth successive week. U.S. short/intermediate government & treasury funds logged about $5.1 billion worth of net selling, their seventh weekly outflow in a row. Investors also pulled a net $4.91 billion out of general domestic taxable fixed income funds but poured $1.42 billion into short/intermediate investment-grade funds.U.S. money market funds, meanwhile, suffered $25.54 billion worth of net selling, the biggest outflow in a week since Oct. 18. More

TOKYO (Reuters) -Japan’s finance minister on Friday said he would strive to contain the risk of runaway debt after unveiling an annual budget as speculation mounts the central bank will shift away from more than two decades of ultra-easy monetary policy.The world’s third-largest economy is under pressure to restore its fiscal health after prolonged stimulus and spending worsened a national debt that is the heaviest in the industrialised world. In calculating borrowing costs, the government adopted a higher interest rates estimate – 1.9% from the current 1.1% – in the budget plan for the coming fiscal year, which would mark the first increase in 17 years.”When we return to life with interest rates, and if interest rates continue to rise to push up interest payments, that could affect fiscal management, squeezing policy outlay,” Shunichi Suzuki told reporters after the government crafted the fiscal 2024/25 budget.”The government needs to minimise such risks. To achieve that, we must limit bond issuance and curb interest payments for the future through efforts such as securing stable funding sources and strike a balance in compiling budgets.”The budget for the fiscal year that starts in April is estimated at 112.07 trillion yen ($787 billion), down 2% from the current year’s initial amount of 114.4 trillion yen.The budget is still above 110 trillion yen for two straight years, inflated by the cost of military outlay to deal with threats from China and North Korea and welfare costs for Japan’s ageing population.The plan shows its debt dependence at 31.2%, meaning new bond sales account for one third of the budget.More than two decades of super-low interest rates have loosened fiscal discipline in a country whose public debt is more than double the size of the economy as a result of rounds of fiscal stimulus.”The bulk of spending cuts comes from reduction of COVID-led emergency reserves. Excluding such factors, spending reform made little headway,” Takahide Kiuchi, economist at Nomura Research Institute, said.”Policymakers must have a sense of crisis and guide responsible fiscal policy as the Bank of Japan normalises monetary policy. Unexpected rate rises would further aggravate public finances.”The higher assumed rates would push up debt-servicing costs to 27 trillion yen in fiscal 2024/25, up 7% from this year.Analysts say it is unlikely Japan will meet its aim of getting the primary budget balance, excluding new bond sales and debt servicing costs, into the black by the fiscal year-end in March 2026. “What’s important is to present a credible plan to restore public finances even if it causes a delay in achieving the target,” Takuya Hoshino, senior economist at Dai-ichi Life Research Institute, said.”I think they are going to review the target sooner or later,” Hoshino said. “They would likely delay the PB target.” ($1 = 142.4400 yen) More

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HONG KONG (Reuters) -Chinese regulators announced on Friday a wide range of rules aimed at curbing spending and rewards that encourage video games, dealing a blow to the world’s biggest games market, which returned to growth this year.The new rules, which will effectively set spending limits for online games, sparked panic among investors, wiping off nearly $80 billion in market value from China’s two biggest gaming companies, as investors sought to gauge the potential impact on earnings and more restrictions in the offing. Online games will now be banned from giving players rewards if they log in every day, if they spend on the game for the first time or if they spend several times on the game consecutively. All are common incentive mechanisms in online games.Shares in Tencent Holdings (OTC:TCEHY), the world’s biggest gaming company, tumbled as much as 16% at one point, while those of its closest rival, NetEase (NASDAQ:NTES), plunged as much as 25% after the National Press and Publication Administrations published the new draft rules.Shares of tech investor Prosus (OTC:PROSF) followed Tencent lower, losing 14.2% in early trade on Friday and were among the biggest fallers on the pan-European stock index. Prosus owns a 26% stake in Tencent.”It’s not necessarily the regulation itself – it’s the policy risk that’s too high,” said Steven Leung, executive director of institutional sales at broker UOB Kay Hian in Hong Kong. “People had thought this kind of risk should have been over and had started to look at fundamentals again. It hurts confidence a lot.”When asked about the draft rules’ impact, Tencent Games’ vice president Vigo Zhang said Tencent has been strictly implementing regulation requirements. The new draft rules have not veered from regulators’ ongoing focus on ensuring companies have “reasonable business models and operating cadence”, he said. Zhang added that minors had been spending a historically low level of money and time on Tencent’s games since 2021 when minor protection became a focus for Beijing. NetEase declined to comment. Beijing has become increasingly tough on video games over the years. In 2021, China set strict playtime limits for under 18s and suspended approvals of new video games for about eight months, citing gaming addiction concerns. Although the crackdown formally ended last year with the resumption of new game approvals, regulators have continued to impose restrictions to curb “in-game” spending. The new rules revealed on Friday are the most explicit yet aimed at curbing in-game spending. Besides banning reward features, games are also required to set limits on how much players can top up their digital wallets for in-game spending.”The removal of these incentives is likely to reduce daily active users and in-app revenue, and could eventually force publishers to fundamentally overhaul their game design and monetisation strategies,” said Ivan Su, an analyst at Morningstar.Games are also banned from offering probability-based lucky draw features to minors, and from enabling the speculation and auction of virtual gaming items.But the new rules included a proposal that is widely expected to be welcomed by the industry, requiring regulators to process game approvals within 60 days. Meanwhile, Chinese regulators announced on the same day licences for 40 new imported games for domestic releases, seen as a signal of Beijing’s willingness to allow more games in the country, despite the draft rules on game spending. The new rules also reflect Beijing’s concerns over user data, requiring game publishers to store their servers within China.The administration is seeking public comment on the rules through Jan. 22, 2024. As a result of Beijing’s crackdown on gaming in 2021, 2022 was the Chinese gaming industry’s most difficult year on record as total revenue shrank for the first time. China’s video game market returned to growth this year as domestic revenue rose 13% to 303 billion yuan ($42.6 billion), according to Industry association CGIGC. More