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Johnson & Johnson topped quarterly earnings and revenue estimates.
The company also lifted its full-year guidance as sales in the company’s pharmaceutical and medical devices businesses surged.
It marks J&J’s first quarterly results since the company completed the separation from its consumer health spinoff Kenvue in August.  

Johnson & Johnson on Tuesday reported adjusted earnings and revenue that topped Wall Street’s expectations, and lifted its full-year guidance as sales in the company’s pharmaceutical and medical devices businesses surged.
It marks J&J’s first quarterly results since it completed the separation from its consumer health spinoff Kenvue in August, the company’s biggest shake-up in its 137-year history.

Upon that separation in August, J&J also lowered its full-year sales and profit guidance. 
The drugmaker raised that revised outlook on Tuesday: J&J expects 2023 sales of $83.6 billion to $84 billion, compared to a previous guidance of $83.2 billion to $84 billion in August. J&J also expects adjusted earnings per share of $10.07 to $10.13, up from a previous forecast of $10.00 to $10.10.
J&J also said it recorded a one-time, non-cash gain of $21 billion as part of the split of Kenvue.
Here’s what J&J reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

Earnings per share: $2.66 adjusted vs. $2.52 expected
Revenue: $21.35 billion vs. $21.04 billion expected

J&J’s stock rose more than 1% in premarket trading Tuesday. Shares of J&J have dropped nearly 11% for the year, putting the company’s market value at roughly $379 billion.

The company, whose financial results are considered a bellwether for the broader health sector, said its sales during the quarter grew 6.8% over the same period last year. 
The pharmaceutical giant reported net income of $4.31 billion, or $1.69 per share. That was flat compared with net income of $4.31 billion, or $1.62 per share, for the same period a year ago.
Excluding certain items, adjusted earnings per share were $2.66 for the period.

An entry sign to the Johnson & Johnson campus shows their logo in Irvine, California on August 28, 2019.
Mark Ralston | AFP | Getty Images

J&J reported $13.89 billion in pharmaceutical sales, which grew more than 5% year over year. Excluding sales of its unpopular Covid vaccine, the pharmaceutical division raked in $13.85 billion. 
Wall Street was expecting sales of $13.34 billion for the entire business segment, according to StreetAccount. The business, also known as “Innovative Medicine,” is focused on developing drugs across different disease areas.
The company said the growth was driven by sales of Darzalex, a biologic for the treatment of multiple myeloma, along with Erleada, a prostate cancer treatment, and other oncology treatments. 
J&J’s blockbuster drug Stelara, which is used to treat a number of immune-mediated inflammatory diseases, also contributed to that growth. J&J will lose patent protection on Stelara later this year. 
The company said growth was partially offset by a decline in sales of its prostate cancer drug Zytiga and blood cancer drug Imbruvica, which is co-marketed by AbbVie and will be subject to the first round of Medicare drug price negotiations. 
J&J’s Covid vaccine also weighed on pharmaceutical sales growth. This quarter was the second without any U.S. sales from J&J’s Covid vaccine, which brought in $41 million in international revenue.
“Our success was never dependent on the Covid vaccine,” J&J CFO Joseph Wolk said Tuesday on CNBC’s “Squawk Box.”
Meanwhile, sales for the company’s medical devices business rose to nearly $7.46 billion, up 10% from the third quarter of 2022. That came in under Wall Street’s expectations of $7.58 billion, according to Street Account.
J&J said its acquisition of Abiomed, a cardiovascular medical technology company, in December fueled the year over year rise.
J&J said growth came from electrophysiological products, which evaluate the heart’s electrical system and help doctors understand the cause of abnormal heart rhythms.
Wound closure products and devices for orthopedic trauma, or serious injuries of the skeletal or muscular system, contributed, along with contact lenses.
The third-quarter results come amid investor anxiety over the thousands of lawsuits claiming that J&J’s talc-based products were contaminated with the carcinogen asbestos, which caused ovarian cancer and several deaths.
Those products, including J&J’s namesake baby powder, now fall under Kenvue. But J&J will assume all talc-related liabilities that arise in the U.S. and Canada.
In 2021, J&J offloaded its talc liabilities into a new subsidiary, LTL Management, and immediately filed for Chapter 11 bankruptcy protections. But a federal bankruptcy judge in July rejected J&J’s second attempt to resolve those lawsuits in bankruptcy.
J&J previously said LTL Management intends to appeal the decision.
The quarterly results also come as J&J begins price talks with the federal Medicare program over its drug Xarelto, which is used to prevent blood clotting to reduce the risk of stroke.
President Joe Biden’s Inflation Reduction Act, which passed in 2022, empowered Medicare to negotiate drug prices for the first time in the program’s six-decade history. J&J signed an agreement to participate in the price talks last month, even after it sued the Biden administration to halt the process in July.
Wolk said during an earnings call on Tuesday that J&J submitted all requested information in compliance with the federal government’s negotiation process.
But Wolk also reiterated the company’s opposition to the negotiations: “We continue to believe the IRA’s price-setting provisions are damaging to innovation and will prevent the delivery of transformative therapies and cures to patients as we await adjudication of legal proceedings initiated by us and others.” More

StubHub’s annual NBA preview sees ticket sales up nearly 60% for this upcoming season compared to last season.
Fans from 92 countries will flock to North America for games in a 120% increase in international ticket sales, the company said.
LeBron James’ Los Angeles Lakers top the list as the most in-demand team. The defending champion Denver Nuggets didn’t crack the top 10.

Anthony Davis, #3 of the Los Angeles Lakers, drives to the basket during the game against the Milwaukee Bucks at Crypto.com Arena in Los Angeles on Oct. 15, 2023.
Adam Pantozzi | National Basketball Association | Getty Images

With the National Basketball Association season tipping off next week, StubHub sees ticket sales up nearly 60% compared to last year, with the Los Angeles Lakers returning to the top of the list as the most in-demand team.
The ticket exchange’s annual NBA preview breaks down the company’s projections for the upcoming basketball season based on years of data, according to spokesperson Adam Budelli. The season kicks off Oct. 24.

Across the board, Budelli told CNBC that all teams are seeing an encouraging rise in demand this season, with international interest surging. Fans from 92 countries — up 24 from last season — are flocking to North American games, he said. Those international sales will be up 120% from last season, StubHub predicted, with the most popular countries attending NBA games including Australia, the United Kingdom and Brazil.
“It’s hard to pinpoint one specific factor, but I would say across live events as a whole, we certainly have seen cross-border travel for live events increased and rebound to a higher point than when it was pre-pandemic,” Budelli said.
The NBA has been increasingly dominated by international stars such as the Denver Nuggets’ Nikola Jokić, the Milwaukee Bucks’ Giannis Antetokounmpo and San Antonio Spurs rookie Victor Wembanyama. The league’s international reach, likewise, will likely factor into its upcoming media rights negotiations.

StubHub’s top 10 most in-demand NBA teams

Los Angeles Lakers
New York Knicks
Boston Celtics
Toronto Raptors
Golden State Warriors
Milwaukee Bucks
Miami Heat
Phoenix Suns
Los Angeles Clippers
Chicago Bulls

Budelli said the Lakers, which features superstars LeBron James and Anthony Davis, have been the top team in StubHub’s projections four times since 2017. One notable absence in the list, however, is last season’s NBA champion the Denver Nuggets, which Budelli said the company is monitoring and expects to rise in popularity as the season progresses.
He also noted that ticket sales more than doubled after Damian Lillard was traded to the already-potent Milwaukee Bucks on Sept. 27, with the team’s home opener expected to be the highest selling game of the season. Budelli said Lillard’s trade is likely “the biggest mover” of the season, pushing the team up six spots on the list compared to last year.

On the road, the Golden State Warriors, who added star guard Chris Paul to their high-scoring lineup, have the highest average ticket price for their away game schedule, StubHub said.

StubHub’s top 10 most in-demand NBA games

Denver Nuggets at Los Angeles Lakers, Feb. 8
Boston Celtics at New York Knicks, Oct. 25
Boston Celtics at Los Angeles Lakers, Dec. 25
Phoenix Suns at Los Angeles Lakers, Oct. 26
Milwaukee Bucks at New York Knicks, Dec. 25
Cleveland Cavaliers at New York Knicks, Nov. 1
Miami Heat at Boston Celtics, Oct. 27
In-Season Tournament: Miami Heat at New York Knicks, Nov. 24
Milwaukee Bucks at New York Knicks, Dec. 23
Milwaukee Bucks at Boston Celtics, Nov. 22

Budelli said the Knicks host five of the projected top 10 most popular games, more than any other team, as they just barely inch behind the Lakers as the top team. The Knicks have outpaced their sales from last season by 80%, according to StubHub.
Still, Budelli said the projections are subject to change, and StubHub is excited to monitor how the teams — and players — shake out as the season progresses.
“It definitely has the usual suspects on top, but as it goes, that can fluctuate and move throughout the season,” Budelli said. “And there’s star players that break out and rookies and things like that, but it’s all there, and I think those trends speak for themselves.” More

Ford Executive Chair Bill Ford warned that an ongoing strike by the United Auto Workers threatens the future livelihood of the company as well as the American automotive industry.
Ford pleaded with union members and leaders to work with the company, instead of against it, to reach a tentative deal to “end to this acrimonious round of talks.”
Such comments by Ford, who has been a part of UAW negotiations since 1982, are uncharacteristic during contract talks with the UAW.

Bill Ford, executive chair of Ford Motor Company, speaks at their Rouge Visitor Center in Dearborn, Michigan, October 16, 2023.
Jeff Kowalsky | Ford Motor Co. | Handout | via Reuters

DEARBORN, Mich. – Ford Motor Executive Chair Bill Ford on Monday warned that an ongoing strike by the United Auto Workers threatens the future livelihood of the company as well as the American automotive industry.
Ford, who has been a part of UAW negotiations since 1982, pleaded with union members and leaders to work with the company, instead of against it, to reach a tentative deal to “end to this acrimonious round of talks.”

Such comments by the great-grandson of company founder Henry Ford are uncharacteristic during contract talks with the UAW.
“We are at a crossroads,” Ford said during a news conference at the company’s massive Rouge Complex in metro Detroit. “Choosing the right path is not just about Ford’s future and our ability to compete. This is about the future of the American automobile industry.”
Ford, ahead of speaking on stage, told reporters he wanted to “elevate” the conversation about the contract negotiations. Ford said he didn’t want to get personal in his remarks because “it doesn’t matter” at this point.
“The UAW’s leaders have called us the enemy in these negotiations. But I will never consider our employees as enemies. This should not be Ford versus the UAW,” Ford said. “It should be Ford and the UAW vs. Toyota and Honda, Tesla, and all the Chinese companies that want to enter our home.”
UAW President Shawn Fain countered Ford’s plea by ratcheting up the pressure.

“Bill Ford knows exactly how to settle this strike. Instead of threatening to close the Rouge, he should call up [Ford CEO] Jim Farley, tell him to stop playing games and get a deal done, or we’ll close the Rouge for him,” he said in a statement. “It’s not the UAW and Ford against foreign automakers. It’s autoworkers everywhere against corporate greed. If Ford wants to be the all-American auto company, they can pay all-American wages and benefits. Workers at Tesla, Toyota, Honda, and others are not the enemy — they’re the UAW members of the future.”
Ford did not threaten to close the Rouge Complex in his remarks. He did mention if American carmakers such as Ford lose to the competition, then jobs, future investments and “factories like the one we are in today” will be lost.

Breaking with the long-standing tradition of the “handshake ceremony” with the auto executives of the Big Three auto makers to open contract talks, United Auto Workers president Shawn Fain instead speaks with and does “members’ handshakes” with Stellantis workers at the Stellantis Sterling Heights Assembly Plant on July 12, 2023 in Sterling Heights, Michigan. The UAW opens auto contract negotiations with Stellantis today, Ford on July 14, and General Motors on July 18. (Photo by Bill Pugliano/Getty Images)
Bill Pugliano | Getty Images News | Getty Images

Ford’s remarks come after a week of contentious talks between the company and the UAW, including the union unexpectedly announcing a strike Wednesday night at the company’s highly profitable Kentucky Truck Plant.
More than 19,000 of Ford’s 57,000 UAW members are currently impacted by the strike, including more than 16,600 striking workers. Another roughly 2,480 employees have been laid off as a result of the work stoppage.
Ford last week said it was “at the limit” of what it can offer the UAW in terms of economic concessions.
The company’s most recent proposal included 23% to 26% wage increases depending on classification; retention of platinum health-care benefits; ratification bonuses; reinstatement of cost-of-living adjustments; and other benefits.
Overall, only about 34,000 U.S. autoworkers with the companies – or roughly 23% of UAW members covered by the expired contracts with the Detroit automakers – are currently on strike.
The UAW has been gradually increasing the strikes since the work stoppages began after the sides failed to reach tentative agreements by Sept 14.
Fain last week said the union has entered a “new phase” of the targeted strikes in which it would no longer pre-announce the work stoppages, as it had been.
Fain has said it’s ultimately up to the members to decide when the strike ends, not UAW leadership.

How are workers responding?

UAW member Tamika Genus (center) holds up a picket sign on Oct. 16, 2023 outside of Ford’s Michigan Assembly Plant with other autoworkers, including Latosha Smith (center). Employees at the plant have been on strike since Sept. 15.
Michael Wayland / CNBC

Opinions of the strike and current contract proposals varied on picket lines Monday outside Ford’s nearby Michigan Assembly Plant, which was the first of three facilities to go on strike last month.
“I trust Shawn Fain,” said Latosha Smith, a four-year worker at the plant. “All the steps he’s taken, it’s for the cause.”
Tamika Genus, a worker at the plant for roughly five years, said of course she’d like it to come to a resolution, but “it’s worth it.” She later added, “We’re doing what we’ve got to do.”
Jeff Nichol, a body shop worker at the plant who was laid off due to the strike, said he wishes that the sides “would come to a conclusion a lot sooner than later.” He also would like union leaders to be more transparent regarding exact details of the company’s proposals.
Nichol, who’s been autoworker for over 11 years, said he knows it’s an “unpopular opinion,” but he’d support Ford’s current proposal, including a 23% wage increase.

UAW members Jeff Nichol and Cedric Binns (far right) picketing Oct. 16, 2023 outside of Ford’s Michigan Assembly Plant with other autoworkers. Employees at the plant have been on strike since Sept. 15.
Michael Wayland / CNBC

“What I’ve been getting is good enough, so any little bit of extra does help, especially with the current economy,” he said. “The way I look at it, too, is the amount of time that we’re off, that also plays into how long it’s going to take for us to make a difference for the amount of money that we lose every single week.”
Ford said Friday employees who have been on strike since Sept. 15 have on average lost about $4,000 in pretax income through four weeks of the strike.
Correction: Only about 34,000 U.S. autoworkers with the companies are currently on strike. An earlier version mischaracterized the figure. More

Taylor Swift’s Eras Tour concert film tallied $92.8 million during its debut, making it the second-highest domestic opening in October.
The tally falls shy of AMC’s expectations of a $95 million to $97 million haul and box office analysts’ calls for a $100 million-plus opening.
Yet the Swift film opened on fewer screens than record holder “Joker,” and didn’t have Friday screenings before 6 p.m.

Taylor Swift performs onstage during at Ford Field on June 9, 2023 in Detroit, Michigan.
Scott Legato | TAS23 | Getty

Taylor Swift and AMC have collected the receipts and results are in: the Eras Tour concert film is the second-highest domestic opener of October ever.
The film tallied $92.8 million during its first three days in theaters, falling shy of AMC’s expectations, which forecasted a $95 million to $97 million haul, and box office analysts’ calls for a $100 million-plus opening.

Still, Swift’s theatrical debut is an enormous success, given its genre and the limits of its release. The Eras Tour concert film has already shattered records and is likely to break a few more before its run is done.
Box office analysts admitted that their predictions were lofty, but told CNBC that the film was a “unicorn” in the theatrical world. No concert film had ever elicited such fervor so quickly for ticket sales or drummed up so much demand with theater chains. There was also the base price for tickets, which were 40% higher than traditional movie releases. Experts suggested the film could see a bigger bump in overall box office.
But, the film also had some headwinds to contend with. Thursday previews weren’t announced until less than a day before tickets would be made available, and Friday showings didn’t start until 6 p.m. local time. This meant that many audience members had likely already secured tickets to see the film later in the weekend, and the film missed out on the business that early showings Friday could have generated.
So, the Eras Tour film snared just $2.8 million in last-minute Thursday night previews for a total of $37.5 million on its opening day. Meanwhile, the highest October opening, Warner Bros.’ “Joker” from 2019, secured $13.3 million from Thursday previews, feeding a $39.3 million opening day. For the whole weekend, “Joker” scored $96.2 million domestically.
The third-highest October opening was Sony’s “Venom: Let There Be Carnage” from 2021, which snared $11.6 million from Thursday night previews leading to a $37.4 million opening Friday.

Additionally, while Swift’s film arrived in 3,855 theaters, the most for any concert film, “Joker” opened in nearly 4,400 locations, according to data from Comscore. “Venom: Let There Be Carnage” opened in 4,225 locations.
Going forward, comparisons between Swift’s film and other releases will be difficult, since the Eras Tour is doing weekend-only engagements. This also makes predicting the film’s second week drop difficult, as there are no close concert film comparisons and it’s unclear how the lack of mid-week showings could impact foot traffic on the next weekend. Typically, blockbuster-style releases drop between 50% and 70% in their second weekend.
The Eras Tour’s theatrical run is scheduled to end Nov. 5.
AMC reported that the Eras Tour concert film tallied $123.5 million globally, putting it on pace to top the $262.5 million international haul of 2009’s “Michael Jackson’s This Is It.” More

AMERICA MAKES no bones about wanting to stop China, its autocratic rival for geopolitical supremacy, from getting hold of advanced technology. Any day now the White House is expected to extend restrictions on sales to the country of advanced microchips used in training artificial-intelligence (AI) models. This is the latest set of export controls designed to prevent cutting-edge tech that America helped create, meaning most of it these days, from making its way to the Chinese mainland. It is also meant to close a loophole, which allowed Chinese firms’ foreign subsidiaries to procure chips that their parents were barred from purchasing.The loophole is almost certainly not the last one that will need closing. Just this month America itself created room for a few more. Last year it imposed sweeping restrictions that cut off people and firms in China from many advanced technologies of American origin, including types of cutting-edge chips, software to design them and tools to manufacture them. On October 9th it granted two South Korean chipmakers, Samsung and SK Hynix, indefinite waivers to install chipmaking equipment that falls under these restrictions in their factories in China. Four days later TSMC, Taiwan’s chipmaking champion, also received a dispensation. The carve-outs were secured (and announced) by governments in Seoul and Taipei, which are keen to protect their domestic firms’ vast commercial interests in China. They also shine a light on the knotty nature of the American-led global export-control regime.American sanctions’ global pretensions depend on the co-operation of allies. In principle, democratic governments in Asia and Europe are similarly wary of China, and devising their own export controls. In practice, their policies are not always aligned with Uncle Sam’s. The result could be a mesh of rules that, once in place, would impose costs on technology companies without doing much to bolster national security in the way that the regimes’ architects envisioned.This is not the first time that the democratic world has attempted to stem the flow of technology to undemocratic adversaries. After the second world war 17 countries, led by America, established the Co-ordinating Committee for Multilateral Export Controls to limit exports of strategic resources and technologies to the Communist bloc. The body was disbanded in 1994, once the Soviet threat was no more.America’s efforts to co-ordinate some of its anti-Chinese restrictions have so far been much more piecemeal. The closest President Joe Biden’s administration has come to co-ordination is an opaque agreement sealed in January with Japan and the Netherlands. This was important to America because Dutch and Japanese firms such as ASML and Tokyo Electron, respectively, are the sole manufacturers of sophisticated chipmaking tools without which it is almost impossible to make the most advanced semiconductors. In July Japan’s government introduced rules limiting the exports of advanced chip technology. The Dutch followed suit in September.Look closer, though, and the nuts and bolts of the three countries’ export controls vary considerably. The Bureau of Industry and Security (BIS), America’s export-control agency, publishes an “entity list” of thousands of companies, including plenty of Chinese ones, that are barred from being sold certain types of technology. Japan has no such public entity list. Instead, it has announced a list of 23 specific types of product which require an export licence. The Japanese government has assiduously avoided mentioning China specifically, for fear of sparking the ire of a big trading partner. The Netherlands’ controls, too, are “country-neutral” and applied to a handful of products.Various national regimes diverge in other meaningful ways. American allies in Europe and Asia have not tried to copy the long, extraterritorial reach of American sanctions. As a result, Asian and European companies that wish to continue selling technology to Chinese customers can in theory establish subsidiaries in places without strict export controls (at least as long as the firms do not rely on American inputs).The situation in Europe is complicated further by the division of responsibilities between national governments and the European Union. For now individual EU members retain discretion over export controls related to their national security. But given the bloc’s single market in goods, which lets technology flow across borders unimpeded, Eurocrats in Brussels want a greater say. On October 3rd the European Commission presented a list of areas deemed critical to the bloc’s economic security. It would like the ability to impose EU-wide export controls in these areas, which include advanced chips, quantum computing and artificial intelligence. It is unclear how long it will take the 27 EU members to reach the consensus required to grant the commission such powers—if it can be reached at all.Things get blurrier still when it comes to enforcing the rules. In most countries the bureaucratic capacity to police export-control regimes is limited. America’s BIS, widely considered to be better endowed than similar agencies in other countries, has fewer than 600 employees and an annual budget of just over $200m—a modest figure given the outfit’s global remit. Its Asian and European counterparts must make do with far less.The relevant agencies often lack the expertise to assess exporters’ requests for a licence to sell products abroad. That requires an understanding of how a particular piece of equipment could be used. It is almost impossible to tell how such equipment will actually be used once it arrives in China. This year the BIS set aside a relatively piddling sum of $6m for inspections to be conducted abroad—and little if any is likely to be spent in China, which does not exactly welcome American inspectors with open arms. Many of the BIS’s poorer cousins in other countries rely entirely on the exporting companies themselves to determine the actual end-use of their products—something the firms cannot know for sure either.The result is a mishmash of opaque rules and fitful enforcement actions. Manufacturers of sensitive technologies are left guessing about what business they can and cannot do with Chinese firms. Four Taiwanese firms—Cica-Huntek Chemical Technology Taiwan, L&K Engineering, Topco Scientific and United Integrated Services—recently found themselves under investigation by Taiwan’s government after reports surfaced that they were involved in building a new network of chip factories in China. The four companies all deny that they have broken any sanctions.Lack of co-ordination may also explain why the system is not keeping high tech out of China as intended. In South Korea, SK Hynix is looking into how some of its older memory chips ended up in the latest smartphone made by Huawei. SK Hynix denies doing business with the Chinese telecoms giant. The Huawei smartphone in question, the Mate 60 Pro, also sported advanced microprocessors furnished by SMIC, China’s biggest chip-manufacturer. Both Huawei and SMIC feature on BIS’s entity list and were thought incapable of such chipmaking feats. Export comptrollers in America and its allies are still trying to work out how exactly the two companies pulled them off. This is unlikely to be the last China-related surprise they have to deal with. ■ More

Coca-Cola and Pernod Ricard are teaming up to launch a new ready-to-drink premixed cocktail beginning in select European countries next year.
The drink contains a mix of Absolut Vodka and Sprite, two of the most popular ingredients in mixed drinks.

Absolut Vodka and Sprite.

Coca-Cola is teaming up with Pernod Ricard to launch a new ready-to-drink and premixed cocktail beginning 2024, the companies announced Monday.
The new cocktail will contain a mix of Absolut Vodka and Sprite, the companies said. The drink will be available in two versions with Sprite and Sprite Zero Sugar. The debut is planned for early next year in select European countries including the United Kingdom, the Netherlands, Spain and Germany.

The canned cocktail industry has been growing in popularity in the past couple of years, with a 2022 report from the Distilled Spirits Council of the U.S. finding ready-to-drink beverages to be the fastest-growing spirits category in both revenue and volume. The announcement didn’t say when the Absolut and Sprite drinks would hit the U.S. market.
The new drinks join a host of expanding alcoholic beverages in Coke’s portfolio in the past few years, including last year’s Jack-and-Coke cocktail in a can.
“We are expanding in the alcohol ready-to-drink space, including products that use select brands from our core portfolio,” said James Quincey, CEO and chair of Coca-Cola, in a statement. “We are excited about our new relationship with Pernod Ricard and look forward to the introduction of Absolut & Sprite.”
Vodka is already one of the most popular bases for alcoholic ready-to-drink beverages, and lemon-lime soft drinks such as Sprite are one of the most popular mixers in premixed cocktails. More

Investment in the space sector is consistently flowing to companies that are pursuing and winning government contracts, according to a report by Space Capital.
The firm’s third quarter report found that space infrastructure companies have brought in $8.4 billion in investment year-to-date, surpassing the total $8.3 billion invested in 2022.
“In this market – 21 months into this liquidity crunch – people are chasing government dollars,” Space Capital managing partner Chad Anderson told CNBC.

SpaceX’s Crew Dragon capsule, named Freedom, is seen docked with the International Space Station in May 2023 during the Axiom Ax-2 mission.

Investment in the space sector, especially from venture capital, is consistently flowing into companies that are pursuing and winning government contracts, according to a report Monday by New York-based Space Capital.
“In this market – 21 months into this liquidity crunch – people are chasing government dollars. They’re more willing to chase government dollars and infrastructure companies have line of sight to a lot of that,” Space Capital managing partner Chad Anderson told CNBC.

The firm’s third quarter report found that space infrastructure companies brought in $1.6 billion of private investment during the third quarter. That brings the sector to $8.4 billion in investment year-to-date, surpassing the total $8.3 billion invested in 2022.
The quarterly Space Capital report divides investment in the industry into three technology categories: infrastructure, distribution and application. Infrastructure includes what would be commonly considered as space companies, such as firms that build rockets and satellites.

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Anderson noted that “the infrastructure companies have been pretty resilient through market cycles,” a factor he attributed to “higher competitive moats” such as higher capital needs, longer development timelines and significant intellectual property advantages.
Venture capital accounted for 50% of the third quarter’s investment in space infrastructure, tracking with the historical trend of VCs representing the primary contributors to space investment. 
Space Capital highlighted the trend of companies and investors chasing government funds as apparent in sub-sectors within space infrastructure, particularly in emerging markets such as space stations and the moon.

“You look at emerging industries – these are all government-led markets. So it’s actually quite easy to size up the market – you know how many dollars are available, how big the market is currently and how big it’s going to be over the next few years – because you already know what the government budgets are,” Anderson said.
Space Capital found that “the majority of private investment has preferred” space stations among the sector’s emerging markets “when, in actuality, Lunar and Logistics are significantly larger markets.”
“The amount of money that’s going to space stations is chasing a very small amount of government dollars, and the amount of money going into lunar is very small, and it’s chasing a whole lot more government dollars,” Anderson said. More

Drugstore chain Rite Aid filed for Chapter 11 bankruptcy protection in New Jersey.
It also appointed Jeffrey Stein as its new CEO to steer the company through its restructuring plan.
The company has been grappling with slowing sales, mounting debt and lawsuits alleging it contributed to the nation’s opioid epidemic.
Rite Aid faces steep competition from its rivals, which have leaned into health-care models to offset losses from their retail businesses.

A Rite Aid store stands in Brooklyn on August 28, 2023 in New York City.
Spencer Platt | Getty Images

Rite Aid filed for Chapter 11 bankruptcy protection in New Jersey on Sunday and said it would begin restructuring to significantly reduce its debt.
The company said it reached a deal with creditors on a restructuring plan that includes evaluating its retail footprint and closing underperforming locations.

Rite Aid also said lenders agreed to extend $3.45 billion in new funding to “provide sufficient liquidity” as it embarks on its restructuring plan.
The beleaguered drugstore chain has been grappling with slowing sales, mounting debt and a slew of lawsuits that allege the company helped fuel the nation’s opioid epidemic by oversupplying painkillers. 
During its most recent quarter ended June 3, revenue fell to $5.65 billion, down from $6.01 billion in the year-ago period. Its net loss widened to $306.7 million, or $5.56 per share, compared with a net loss of $110.2 million, or $2.03 per share, in the same period a year earlier. 
As a result of the rough quarter, Rite Aid lowered its fiscal 2024 outlook and warned investors it expects to lose between $650 million and $680 million for the full year, which is slated to end in late February.
Rite Aid’s retail pharmacy segment has long been a key growth driver for the company, but that hasn’t been enough to offset its mounting losses.

Plummeting demand for Covid vaccines and testing, a membership reduction in the company’s prescription drug plan, and a loss of customers from its Elixir pharmacy benefits business have contributed to a slowdown in revenue at the struggling drug chain.
On Sunday, the company appointed Jeffrey Stein as its new chief executive officer and chief restructuring officer as well as a member of its board. Elizabeth Burr had been serving as interim CEO since January and will remain on the company’s board.
Rite Aid Chairman Bruce Bodaken said in a statement: “Jeff is a proven leader with a strong track record of guiding companies through financial restructurings. We look forward to benefitting from his contributions and leveraging his expertise as we strengthen Rite Aid’s foundation and position the business for long-term success.”
Stein said he has “tremendous confidence in this business and the turnaround strategy that has been developed in recent months.”

An existential crisis for drugstores 

Drugstores like Rite Aid have faced an existential crisis as shoppers increasingly turn to retailers like Amazon, Target, Walmart and others for toothpaste, shampoo and other staples — often at a cheaper price and with the convenience of delivery to customers’ doors.
Rite Aid has also struggled to keep up with its bigger rivals, CVS and Walgreens, as those companies have pivoted to a health-care focus and made sizable investments to match.
CVS has opened in-store Minute Clinics, which resemble walk-in urgent-care facilities, and turned more of its stores into HealthHubs, or locations with a longer list of medical services. 
It has expanded its reach in health care by acquiring Caremark, one of the largest pharmacy benefits managers, health insurer Aetna and, most recently, primary-care company Oak Street Health.
Walgreens has also struck pricey deals to expand its reach in health care. It’s become the majority owner of primary-care company VillageMD and plans to open up doctor offices next to many of its drugstores. 
Newer — and well-capitalized — health-care entrants have also intensified the competitive threat. Amazon closed its acquisition of primary-care provider One Medical in a $3.9 billion deal earlier this year and acquired online pharmacy PillPack in 2018. Walmart, which has pharmacies in its thousands of stores, has opened a growing network of medical clinics in parts of the country.

The opioid crisis 

Rite Aid’s financial position and competitive disadvantages are compounded by the many lawsuits it’s facing that allege the company contributed to the nation’s opioid epidemic by knowingly filling prescriptions for painkillers that did not meet legal requirements.
The Department of Justice filed a suit against Rite Aid earlier this year, claiming that it violated the Controlled Substances Act by filling thousands of unlawful prescriptions for controlled substances such as fentanyl and oxycodone.
Rite Aid has asked a court to dismiss the department’s lawsuit and denied allegations it filled unlawful opioid prescriptions.
— CNBC’s Christine Wang contributed to this report. More