By Jonathon Davidson
Welcome to Things Investors Should Know (TISK) for the end of Week 7, 2024. My view of this past week?: Much ado about nothing, just, minus the witty dialogue and love triangles. US inflation is hotter than thought, the ASX went down, blah blah blah, who cares. What actually interested me this week was a very bad and awful day for one of Australia's biggest public healthcare companies, Neuren. In 2018, Neuren sold the rights for a drug called Daybue (trofinetide) to a NASDAQ-listed entity called Acadia (not to be confused with another called Arcadia.)
Neuren was pretty sure it had a miracle drug to treat Retts Syndrome, a degenerative neurological condition typically affecting children. Acadia got excited, over the in the US, ran with Neuren's wonder drug, got FDA greenlight, and parents didn't cry themselves to sleep each night after adding numbers up on a calculator.
Well, the tears might have resumed. Because Culper Research — a short selling firm in the US — released a report claiming Daybue actually sends children to hospital, due to the drug actually being quite dangerous. That's how bad the side affects are, according to Culper. Shares in Neuren tanked 20% — and we're talking about a billion dollar market cap company here. Did Neuren sell Acadia a lemon? We'll probably find out in the coming months. Let's hope a smart lawyer wrote the contract. Overall, some pretty dodgy behaviour from Acadia — assuming Culper have it right.
ASX lithium stocks also went up again for some reason because people aren't ready to let the dream die. Wesfarmers even said it's losing money on its lithium assets, and yet, lithium stocks went up. Read that again: lithium stocks are going up despite mining it being unprofitable for a vast majority. It's fucking mind boggling, but hey, that's markets. Also in Australia, the unemployment rate hit 4% but given that we're looking at Christmas period data, we need something better.
And so what else happened this week? Much the same. We got another all time high on the S&P 500 — thanks Mag7 stocks, or, just Nvidia really — but the NASDAQ had a more subdued week, which is interesting. Given that only 7 companies on the S&P 500 are doing particularly well, is the entire US stock market overvalued?
When you look at the performance of the other 493 constituents, I mean, yeah, it kind of looks that way. But hey. That's markets.
Also: BHP flagged an A$5B writedown in nickel assets (due to tanking nickel prices) which even spread to Woodside, given the latter's acquisition of BHP a few years back. Not much of an issue for Woodside though. BHP will also be fine — just look at its share price this week — but a number of towns in regional WA are probably going to die. Hey, at least it's not the wheatbelt.
Oh, and former lithium microcap Chariot has pivoted into uranium because, lol, of course it has.
ASX-listed Neuren's wonder drug for kids appears to send them to hospital
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US inflation hotter than expected, pushing down the ASX
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Former microcap Chariot pivots into uranium because, lol, why wouldn't they
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BHP looking set to get rid of its nickel operations until things improve
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Australian leaders don't really care about the whole decarbonisation thing
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