Hey Snackers,
“Where Is My Mind?” becomes “where is my alarm?” The famous Pixies song has been accused of deactivating alarms on Google Pixel phones. Very believable excuse for missing a meeting.
Stocks dipped and regional-bank shares tumbled yesterday on concerns over PacWest, which has similarities to the failed Silicon Valley Bank (think: tech ties and lots of uninsured deposits).
The first RSV vaccine gets approved as pharma bigshots race into the $10B market
Medical milestone… 60+ years after it was discovered, respiratory syncytial virus, or RSV, finally has a vaccine. The FDA approved GlaxoSmithKline's Arexvy (named to sound like “RSV”) vaccine on Wednesday, and the shot could go on sale within weeks.
- Life-saver: RSV is a potentially life-threatening respiratory infection that affects mostly young kids and older adults. It’s the leading reason young children are hospitalized in the US, and 160K+ people die from RSV globally each year.
Pharma frenzy… Four other RSV vaccines are on track to land on pharmacy shelves this year. Analysts predict that the shot’s market could be worth $10B by 2032, and GSK expects to earn as much as $3.7B in Arexvy sales. The London-based company may’ve crossed the RSV finish line first, but other Big Pharma titans are close behind.
Jabbing competition: Pfizer's RSV vaccine is up next, with FDA approval expected this month. And AstraZeneca, Sanofi, and Moderna all have shots in the works.
Audience overlap: Pfizer’s first RSV vax and GSK’s are both tailored to people over 60, as is Moderna’s (whenever it’s ready), which could lead to a marketing showdown.
Covid accelerated the vax race… Pharma companies are racing to be first to the next big vaccine. Since no one was “Team GSK” for Covid (it made a booster only late last year), GSK has ground to cover. But since it already makes a leading shingles vaccine, nabbing the RSV market could give it greater vax dominance. Meanwhile, Moderna and Pfizer are exploring new products to offset slipping demand for Covid vaccines. Moderna reported its first quarterly profit yesterday, but its sales were down by more than $4B, since the Covid vax is the only product it sells.
J&J’s consumer spinoff was the biggest IPO since 2021, showing the value of a breakup
And the biggest IPO of the year is… Tylenol? This week, Johnson & Johnson's spun-off consumer arm, Kenvue, became the largest IPO in the US in nearly 18 months. Kenvue, which makes bathroom-cabinet staples like Listerine, Neutrogena, and Benadryl, was valued at $41B on Wednesday. Shares surged 20% yesterday after it started trading on the NYSE, suggesting there’s an appetite for the already profitable, dividend-paying biz (aka: not your typical IPO).
New name, same boss: Initially, J&J will own more than 90% of Kenvue shares, with plans to reduce its stake.
Old problems: J&J’s consumer biz has faced ~40K lawsuits alleging its talc products contained cancer-causing substances. Last month J&J offered $9B to settle.
Like swallowing Tylenol without water… The IPO market is dry. Kenvue's blockbuster listing stands out in an otherwise anemic environment, as rising rates and recession fears spook companies from entering US markets. So far this year, US-listed companies have raised only $4.1B (not including Kenvue). That's a far cry from the IPO-palooza of 2021, which saw companies raise $155B. Elsewhere, Asian listings have picked up recently.
Smaller can be stronger… J&J is just the latest biz to hop on the #simplify trend. Last year, cereal star Kellogg said it planned to break into three pure-play companies (Snap, Crackle, and Pop?) and GE announced a similar move in 2021. Splitting up massive conglomerates allows the newly formed businesses to focus on narrower priorities and streamline operations, with the goal of boosting profits.
The Crypto Catch-Up…
🤖 Techy… The bitcoin blockchain saw a record 682K+ transactions on Monday, and over half of those were ordinals. Since their introduction earlier this year, the bitcoin NFTs have surged in popularity.
📜 Policy… The Biden admin proposed a tax on crypto miners equal to 30% of their electricity costs. Mining giant Riot suggested the tax could drive companies overseas, and have negative environmental effects.
🪙 Coins… Pepecoin, a crypto inspired by a controversial frog cartoon, saw $250M in 24-hour trading volume this week, passing fellow memecoins doge and shiba inu. Meanwhile, pepe whales sold off huge amounts of the token.
What else we’re Snackin’
Core: Apple unloaded better-than-feared earnings, surprising investors with growing iPhone sales, though total revenue fell for a second straight quarter. Sagging hardware demand is an industry-wide trend.
Bag: Shopify stock soared 27% after it surprised Wall Street with a quarterly profit. Investors also seemed to like cost cuts: the ecomm platform plans to slash 20% of its staff and offload its logistics biz.
Jitters: PacWest shares plunged more than 40% after the struggling LA bank said it was exploring a potential sale, showing the regional-bank crisis didn’t end with JPMorgan's takeover of failed First Republic.
Vroom: Ferrari's quarterly profit roared up 24% as shipments popped. Rolls Royce and Mercedes also reported high-gear demand for ultra-luxe models, defying expectations of a “rich-cession.”
Vitakid: Michelle Obama launched Plezi, a food company billed as health-focused and aimed at kids (think: juices with 75% less sugar). Lower-sugar beverages have gained market share as consumers keep ditching soda.
Friday
- Earnings expected from AMC, Warner Bros. Discovery, Dominion Energy, and Cinemark
Authors of this Snacks own bitcoin, dogecoin and shares of: Apple, Google, Moderna, and Shopify