- New Data from Biogen’s Investigational Antisense Oligonucleotide (ASO) Targeting Tau Shows Promise for Potential New Generation of Treatments in Early Alzheimer’s Disease | Biogen Biogen
- More convenient form of breakthrough Alzheimer’s drug Leqembi shows promising results in study CNBC
- Biogen’s Alzheimer’s drug slows cognitive decline in early study STAT
- Biogen, Eli Lilly present new clinical data in race to field Alzheimer’s treatments The Boston Globe
- Alzheimer’s drug Leqembi could be given as shots rather than IV infusion, study suggests CNN
- View Full Coverage on Google News
Tag Archives: Biogen
Eisai, Biogen receives U.S. FDA approval for Alzheimer’s drug, applies for full approval
Jan 7 (Reuters) – The U.S. Food and Drug Administration on Friday approved the Alzheimer’s drug lecanemab developed by Eisai Co Ltd (4523.T) and Biogen Inc (BIIB.O) for patients in the earliest stages of the mind-wasting disease.
Eisai and Biogen said on Saturday the Japanese drugmaker had applied for full FDA approval of the drug.
The drug, to be sold under the brand Leqembi, belongs to a class of treatments that aims to slow the advance of the neurodegenerative disease by removing sticky clumps of the toxic protein beta amyloid from the brain.
Nearly all previous experimental drugs using the same approach had failed.
“Today’s news is incredibly important,” said Dr. Howard Fillit, chief science officer of the Alzheimer’s Drug Discovery Foundation. “Our years of research into what is arguably the most complex disease humans face is paying off and it gives us hope that we can make Alzheimer’s not just treatable, but preventable.”
Eisai said the drug would launch at an annual price of $26,500. Biogen shares, which had been halted, were up 3% at $279.40.
The Japanese company said it also plans to apply for marketing authorization for Leqembi in Japan and the European Union by the end of its business year on March 31.
Eisai estimated the number of U.S. patients eligible for the drug would reach around 100,000 within three years, increasing gradually from there over the medium to long term.
Dr. Erik Musiek, A Washington University neurologist at Barnes-Jewish Hospital, said he was “pleasantly surprised” by the drug’s price.
“Considering the marketplace and the fact that we have no other good disease-modifying treatments, I think it’s in the ballpark of what I would expect,” he said.
Initial patient access will be limited by a number of factors including reimbursement restrictions by Medicare, the U.S. government insurance program for Americans aged 65 and older who represent some 90% of individuals likely to be eligible for Leqembi.
“Without Centers for Medicare & Medicaid Services (CMS) and insurance coverage … access for those who could benefit from the newly-approved treatment will only be available to those who can pay out-of-pocket,” the Alzheimer’s Association said in a statement.
Leqembi was approved under the FDA’s accelerated review process, an expedited pathway that speeds access to a drug based on its impact on underlying disease-related biomarkers believed to predict a clinical benefit.
“This treatment option is the latest therapy to target and affect the underlying disease process of Alzheimer’s instead of only treating the symptoms of the disease,” FDA neuroscience official Billy Dunn said in a statement.
CMS said on Friday that current coverage restrictions for drugs approved under the accelerated pathway could be reconsidered based on its ongoing review of available information.
If the drug receives traditional FDA approval, CMS said it would provide broader coverage. Eisai officials have said the company plans to submit data from a recent successful clinical trial in 1,800 patients as the basis for a full standard review of Leqembi.
The CMS decision was largely in response to a previous Alzheimer’s treatment from Eisai and Biogen. Aducanumab, sold under the brand name Aduhelm, won accelerated approval in 2021 with little evidence that the drug slowed cognitive decline and despite objections by the FDA’s outside experts.
Biogen initially priced Aduhelm at $56,000 per year before cutting the price in half. With limited acceptance and insurance coverage, sales were only $4.5 million in the first nine months of 2022.
Lecanemab is intended for patients with mild cognitive impairment or early Alzheimer’s dementia, a population that doctors believe represents a small segment of the estimated 6 million Americans currently living with the memory-robbing illness.
To receive the treatment, patients will need to undergo testing to show they have amyloid deposits in their brain – either through brain imaging or a spinal tap. They will also need to undergo periodic MRI scans to monitor for brain swelling, a potentially serious side effect associated with this type of drug.
The medicine’s label says doctors should exercise caution if lecanemab patients are given blood clot preventers. This could be a safety risk, according to an autopsy analysis published this week of a lecanemab patient who had a stroke and later died.
In the large trial of lecanemab, which is given by infusion, the drug slowed the rate of cognitive decline in patients with early Alzheimer’s by 27% compared to a placebo. Nearly 13% of patients treated with Leqembi in the trial had brain swelling.
Dr. Babak Tousi, a neuro-geriatrician at the Cleveland Clinic, said the approval will make a “big difference” in the field because it is based on biomarkers rather than just symptoms.
“It’s going to change how we make a diagnosis for Alzheimer’s disease, with more accuracy,” he said.
Tousi acknowledged that the benefit of the drug will likely be modest. “Still, it is a benefit that we were not able to achieve” before this approval.
Reporting by Deena Beasley in Los Angeles and Bhanvi Satija in Bengaluru, additional reporting Jaiveer Shekhawat; Editing by Bill Berkrot, David Gregorio and William Mallard
Our Standards: The Thomson Reuters Trust Principles.
Congressional report: U.S. FDA broke own protocols in approving Biogen Alzheimer’s drug
WASHINGTON, Dec 29 (Reuters) – The U.S. Food and Drug Administration failed to adhere to its own guidance and internal practices during the approval process for Biogen’s (BIIB.O) Alzheimer’s drug Aduhelm, which was “rife with irregularities,” a congressional report showed on Thursday.
The FDA’s interactions with Biogen were “atypical” and did not follow the agency’s documentation protocol, according to a staff report on the findings of an 18-month investigation conducted by two House of Representatives committees into the drug’s regulatory review, approval, pricing, and marketing.
The FDA approved Aduhelm in June 2021 under an accelerated approval pathway over the objections of its panel of outside advisers, who did not believe data definitively proved the drug’s benefit to patients.
It was authorized based on evidence that it could reduce brain plaques, a likely contributor to Alzheimer’s, rather than proof that it slowed progression of the lethal mind-wasting disease.
The Medicare program restricted its coverage, which has led to severely limited use of the Biogen drug.
Biogen set an “unjustifiably high” price by initially setting Aduhelm’s price at $56,000 per year despite a lack of demonstrated clinical benefit in a broad patient population, the report said, adding that the company’s own internal projections showed it expected the drug to be a burden to Medicare and costly to patients.
“The findings in this report raise serious concerns about FDA’s lapses in protocol and Biogen’s disregard of efficacy and access in the approval process for Aduhelm,” the report, prepared by the staffs of the House Committee on Oversight and Reform and House Committee on Energy and Commerce, concluded.
The agency should ensure that all substantive interactions with drug sponsors are properly memorialized, establish a protocol for joint briefing documents with drug sponsors, and update its industry guidance on the developments and review of new Alzheimer’s Drugs, the report recommended.
Biogen and other drugmakers should communicate to the FDA any concerns over safety and efficacy to the FDA as well as take value and patient access into consideration when setting prices, the report said.
An FDA spokesperson said the FDA’s decision to approve Aduhelm was based on scientific evaluation of the data contained in the application.
He pointed to the FDA’s internal review finding its staff’s interactions with Biogen appropriate.
“It is the agency’s job to frequently interact with companies in order to ensure that we have adequate information to inform our regulatory decision-making. We will continue to do so, as it is in the best interest of patients,” he said, adding that the agency will continue to use the accelerated approval pathway whenever appropriate.
The FDA has already begun implementing some of the report’s recommendations, the spokesperson said.
“Biogen stands by the integrity of the actions we have taken,” the Cambridge, Mass.-based biotech company said in an emailed statement.
“As stated in the congressional report, an (FDA) review concluded that, ‘There is no evidence that these interactions with the sponsor in advance of filing were anything but appropriate in this situation,'” Biogen said.
Documents obtained by the committees show that FDA staff and Biogen held at least 115 meetings, calls, and email exchanges over a 12-month period starting July 2019.
The total number of meetings is unknown because the FDA failed to keep a clear record of informal meetings and interactions between its staff and Biogen representatives. The investigation identified an additional 66 calls and email exchanges that were not memorialized.
The FDA inappropriately collaborated with Biogen on a joint briefing document for the Peripheral and Central Nervous System (PCNS) Advisory Committee, the report said, with FDA and Biogen staff working closely for months ahead of the Nov. 6, 2020 meeting to prepare the document, which failed to adequately represent differing views within the agency.
“Using a joint briefing document afforded Biogen advance insight into FDA’s responses and direct guidance from the agency in drafting the company’s own sections. For example, in an exchange of the draft briefing document on October 9, 2020, FDA staff asked Biogen to move a paragraph drafted by the agency into Biogen’s section of the memorandum—a change reflected when the document was finalized,” the report made public to media organizations said.
When none of the advisory panel members voted to approve Aduhelm, the FDA pivoted to using its accelerated approval pathway – typically used for rare diseases or small patient populations that lack access to effective treatments – despite having considered the drug under the traditional approval pathway for nine months, the report said.
It did so on a substantially abbreviated timeline, approving it after three weeks of review, and for a broad label indication of “people with Alzheimer’s disease” that was unsupported by clinical data, the report said.
Internal documents obtained by the investigation showed that Biogen accepted the indication despite its own reservations over the lack of evidence Aduhelm could help patients at disease stages outside of its clinical trials.
Reporting by Ahmed Aboulenein; editing by Diane Craft
Our Standards: The Thomson Reuters Trust Principles.
House investigation faults FDA, Biogen for Alzheimer’s drug approval
The “unusual” collaboration, which resurrected Aduhelm three months after Biogen had canceled clinical trials, unfolded through at least 115 meetings, calls and email exchanges between the company and the FDA in a year, said the report by the Committees on Oversight and Reform, and Energy and Commerce.
The joint effort climaxed with staff from the agency helping Biogen draft a document used to brief the FDA’s advisory committee before it met to discuss Aduhelm on Nov. 6, 2020. Although the FDA often follows an advisory committee’s recommendation, it did not this time. After no member of the advisory committee recommended Aduhelm, the FDA changed course, allowing Biogen to move its drug to an accelerated approval process.
At the FDA’s suggestion, the drug was labeled for use by the nation’s more than 6 million Alzheimer’s patients, even though it had been tested only on people with early Alzheimer’s and mild symptoms, the report said.
“It’s the worst decision the FDA has ever made” in the past half-century, said Sidney Wolfe, founder of the advocacy group Public Citizen’s Health Research Group. “It was an unprecedented alliance between the company and the FDA.”
“We fully cooperated with the Committees’ evaluation and we continue to review their findings and recommendations,” the FDA said in a statement responding to the report. “It is the agency’s job to frequently interact with companies in order to ensure that we have adequate information to inform our regulatory decision-making. We will continue to do so, as it is in the best interest of patients. That said, the agency has already started implementing changes consistent with the Committee’s recommendations.”
The agency had previously conducted an internal investigation of its handling of Aduhelm, concluding more than a year ago that although the collaboration “exceeded the norm in some respects,” there was “no evidence” that dealings between the company and regulator “were anything but appropriate.”
The internal report said the decision to work “proactively” with Biogen “is consistent with FDA policy” in light of both “the large unmet medical need” for Alzheimer’s treatment, and an FDA official’s view that one of the Aduhelm studies could represent “a home run” as far as safety and effectiveness.
The report by the two House committees faulted the company, too, saying that Biogen knew the initial $56,000-per-year price ― reduced to $28,000 in January 2022 ― would put a heavy burden on patients. But the Cambridge, Mass.-based company estimated the treatment could earn Biogen as much as $18 billion per year and exulted in a slide presentation to its board: “Our ambition is to make history” and “establish [the drug] as one of the top pharmaceutical launches of all time.”
In fact, Aduhelm proved to be a financial dud, generating $3 million in revenue for all of 2021.
In a statement responding to the report, Biogen said it had cooperated with the committees and “stands by the integrity of the actions we have taken.” Biogen’s statement also cited the FDA’s internal investigation, which concluded that there was no evidence of impropriety in the dealings between the agency and company.
Biogen stuck with the initial $56,000-per-year price tag despite projections that the drug could wind up costing Medicare up to $12 billion in a single year. Other Alzheimer’s treatments sell for much less. A year’s supply of Aricept costs less than $8,000; Exelon, a drug in the same family, costs about $8,800 for a year’s supply; and Namenda costs less than $3,000 per year.
The report lays out recommendations that the FDA should follow to “help restore the American people’s trust,” as well as measures that Biogen and other drug companies should take to “fulfill their responsibility to the patients and families.” Since the recommendations leave it to the FDA and company to change their policies, it is unclear whether they will actually prevent future episodes like this from occurring.
The committees recommended that the FDA document all its communications with drug sponsors, establish a system for partnering with companies to produce the reports used to brief its own advisory committees, and update its formal guidance for developing and reviewing new Alzheimer’s drugs.
Drug sponsors, the committees recommended, should be open and clear in spelling out to the FDA any concerns about the safety and effectiveness of treatments, as well as consider opinions from outside experts when setting prices for new medications.
Aduhelm, a lab-made protein administered directly into a patient’s vein, was said to work by reducing a sticky substance in the brain called amyloid beta, which clumps between neurons and disrupts their function. Some scientists have theorized that buildup of amyloid beta in the brain causes Alzheimer’s disease.
In September 2015, Biogen began enrolling patients in two Phase 3 clinical trials, which test the safety and effectiveness of a drug and compare it with standard treatment. Three and a half years later, in March 2019, the company announced it was ending both trials after receiving an independent report concluding that the treatment was not likely to slow the memory loss, confusion and other symptoms of brain impairment caused by Alzheimer’s disease.
But the drug’s death was short-lived.
The report shows that two months after the trials ceased, representatives from Biogen and the FDA met at a neurology conference in Philadelphia and discussed findings from the studies. The FDA official suggested the agency and company schedule a special meeting to discuss data from the trials.
FDA documents reviewed in the new report show that Biogen began informal talks with the agency to review whether data from the unfinished trials revealed some benefit to patients. A meeting between the FDA and Biogen in mid-June 2019 led to both agreeing to form a joint “working group.”
The collaboration would lead to the FDA and Biogen moving forward on the drug, even though staff at both the agency and the company expressed reservations about some of the decisions that were made.
For example, the FDA issued accelerated approval for Aduhelm despite failing to gain the support of a single member of its own advisory committee, and without putting the idea up for discussion by any internal or external body.
In addition, the FDA’s approval ran counter to its own guidelines on early Alzheimer’s disease treatments, which said that “there is no sufficiently reliable evidence” that a drug’s effect on amyloid beta by itself would be enough to benefit patients. Scientists have expressed conflicting opinions as to whether amyloid beta is a cause of Alzheimer’s or simply a consequence of the disease.
The report also found that a team of Biogen staff examined the financial impact the initial price of Aduhelm would have on patients and concluded that the country’s “over 65 population will face challenges with [their] ability to pay.” The team estimated that two-thirds of Medicare patients at risk of developing Alzheimer’s would have to pay some of the cost themselves, even though more than half have incomes of less than $50,000 a year and more than one-third have assets worth less than $5,000.
Although the report found that the company “appears to have developed financial assistance programs for eligible patients,” investigators wrote that “these programs would leave significant gaps in coverage.”
Despite the expected hardship the price would impose on patients, Biogen expected to spend “between $500 million and $600 million to build out its sales force” to market the drug, the report said.
Five months after the drug entered the market, the Centers for Medicare and Medicaid Services announced that the monthly premium for Medicare Part B would rise by 14.5 percent in 2022, half of that in anticipation of higher costs due to the new Alzheimer’s treatment.
The report said the percentage increase translated to a $21.60 jump in monthly premiums for Medicare Part B beneficiaries, “reportedly the largest dollar increase in the program’s history.”
For its part, Biogen went ahead with a broad label that Aduhelm was for “people with Alzheimer’s disease,” despite the reservations from staff about the lack of evidence of clinical benefit for patients in more advanced stages of the disease than those involved in the clinical trials. Some inside the company even expressed concern that pushing ahead with the labeling plan “could damage the company’s credibility,” the report said.
Congressional Investigation into Alzheimer’s Drug Aduhelm Faults the F.D.A. and Biogen – The New York Times
- Congressional Investigation into Alzheimer’s Drug Aduhelm Faults the F.D.A. and Biogen The New York Times
- House investigation says FDA approval process of Alzheimer’s drug was ‘rife with irregularities’ CNN
- House investigation faults FDA, Biogen for Alzheimer’s drug approval The Washington Post
- Seeking maximum profits, Biogen set an ‘unjustifiably high price’ for Alzheimer’s treatment, investigation finds STAT
- FDA Faulted for Working Improperly With Biogen Before Clearing Alzheimer’s Drug The Wall Street Journal
- View Full Coverage on Google News
What increasing hope for Biogen Alzheimer’s drug means for Eli Lilly
A pedestrian walks past Biogen Inc. headquarters in Cambridge, Massachusetts, on Monday, June 7, 2021.
Adam Glanzman | Bloomberg | Getty Images
Wall Street increasingly believes U.S. drug regulators will approve Biogen’s (BIIB) latest experimental Alzheimer’s treatment following the release of detailed late-stage clinical trial data. It’s a development that may carry positive implications for Eli Lilly (LLY) because the Club holding is investigating a similar drug targeting the disease.
Eisai, Biogen say Alzheimer’s drug succeeds in slowing cognitive decline
Sept 27 (Reuters) – Eisai Co Ltd (4523.T) and Biogen Inc (BIIB.O) on Tuesday said their experimental Alzheimer’s drug significantly slowed cognitive and functional decline in a large trial of patients in the early stages of the disease, marking a rare win in a field littered with failed drugs.
The drug, lecanemab, slowed progress of the brain-wasting disease by 27% compared with a placebo, meeting the study’s main goal, and potentially offering hope for patients and their families desperate for an effective treatment.
“It’s not a huge effect, but it’s a positive effect,” said Ronald Petersen, director of the Mayo Clinic Alzheimer’s Disease Research Center in Rochester, Minnesota.
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Eisai, leader of the 50-50 partnership’s lecanemab program, is seeking FDA approval under an accelerated pathway, with a decision expected in early January. On Tuesday the Japanese drugmaker said it will use the new efficacy results to submit lecanemab for traditional FDA review as well.
The company said it will also seek authorization in Japan and Europe during its current fiscal year, ending March 31.
Eisai said results from the 1,800-patient trial prove the longstanding theory that removal of sticky deposits of a protein called amyloid beta from the brains of people with early Alzheimer’s can delay advance of the debilitating disease.
“This means that treating amyloid is a step in the right direction,” Petersen said.
Shares of Biogen and Eisai were halted, but shares of Eli Lilly & Co , which is also developing an Alzheimer’s drug, rose as much as 6.7% in after hours trade.
The lecanemab data suggest “a potentially new multi-billion dollar franchise,” Jefferies analyst Michael Yee said in a research note.
Lecanemab, like the partners’ previous drug Aduhelm, is an intravenous antibody designed to remove amyloid deposits. Unlike Aduhelm, lecanemab targets forms of amyloid that have not yet clumped together.
“If you can slow a disease by almost 30% that’s fantastic. This is what we have been looking for,” said Dr. Jeff Cummings, director of the Chambers-Grundy Center for Transformative Neuroscience at the University of Nevada Las Vegas.
The so-called amyloid hypothesis has been challenged by some scientists, particularly after the U.S. Food and Drug Administration’s controversial approval of Aduhelm in 2021 based on its plaque-clearing ability rather than proof that it helped slow cognitive decline. The decision came after the FDA’s own panel of outside experts had advised against approval.
Aduhelm was the first new Alzheimer’s drug approved in 20 years after a long list of high-profile failures for the industry. read more
Patient advocacy groups hailed the news of positive lecanemab trial results.
“This is important because it demonstrates that each of these drugs is different … I would hope that the FDA approves the drug in January,” USAgainstAlzheimer’s Chairman George Vradenburg told Reuters.
The Phase III trial evaluated the drug’s ability to reduce cognitive and functional decline based on the Clinical Dementia Rating-Sum of Boxes (CDR-SB), a numerical scale used to quantify the severity of dementia in patients in areas such as memory, orientation, judgment and problem solving and personal care.
BRAIN SWELLING
The rate of a brain swelling side effect associated with anti-amyloid treatments was 12.5% in the lecanemab group, versus 1.7% in the placebo group. But many cases did not cause symptoms, with symptomatic brain swelling seen in 2.8% of those in the lecanemab group, the companies said.
Micro hemorrhages in the brain occurred at a rate of 17% in the lecanemab group, and 8.7% in the placebo group.
Petersen said the side effect rate was much less than with Aduhelm and “certainly tolerable.”
Aduhelm’s approval was a rare bright spot for Alzheimer’s patients, but critics have called for more evidence that amyloid-targeting drugs are worth the cost.
The controversy and reluctance by some payers to cover Aduhelm led Biogen to slash the drug’s price to $28,000 per year from an initial $56,000.
But Medicare, the U.S. government health plan for people 65 and older, this year said it would only pay for Aduhelm and other similar drugs if patients were enrolled in a valid clinical trial, which sharply curtailed the medication’s use. Since Alzheimer’s is a disease of aging, an estimated 85% of patients eligible for the drug are covered by the government plan.
Michael Irizarry, Eisai’s deputy chief clinical officer, said on a conference call that the company will have discussions with the Medicare agency regarding coverage of lecanemab.
The number of Americans living with Alzheimer’s is expected to rise to around 13 million by 2050 from more than 6 million currently, according to the Alzheimer’s Association. Globally, that figure could rise to 139 million by 2050 without an effective treatment, according to Alzheimer’s Disease International.
Other plaque-targeting antibodies in late-stage development for Alzheimer’s patients include Roche Holding AG’s (ROG.S) gantenerumab and Eli Lilly’s donanemab.
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Reporting by Deena Beasley in Los Angeles and Julie Steenhuysen in Chicago; Editing by Bill Berkrot and Richard Pullin
Our Standards: The Thomson Reuters Trust Principles.
FDA offers Biogen, Eisai a shortcut to a possible lecanemab approval – Endpoints News
It’s time for some fun.
Over the past 20 years or so, I’ve made it my mission to hunt down some of the most promising private biotechs in the industry to feature in an annual report I now call the Endpoints 11. And we’re back on track for the next big round of awards.
Every now and then I’m asked what the basic criteria is for inclusion. It’s simple. If you’re out to do big things in drug development, break new ground, go to that proverbial next level with an outstanding team, promising science and marquee backers — or promise to make a colossal noise if you fail — then you should make the short list.
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Biogen, Spirit, Robinhood and more
Check out the companies making headlines before the bell:
Biogen (BIIB) – Biogen fell 1% in premarket trading after the government announced that Medicare will limit coverage for Aduhelm, Biogen’s Alzheimer’s disease treatment. Coverage will only be provided for patients enrolled in clinical trials.
Spirit Airlines (SAVE) – Spirit said it will begin talks with JetBlue (JBLU) about its rival’s $3.6 billion takeover bid. Spirit had agreed earlier this year to be taken over by Frontier Airlines parent Frontier Group (ULCC) but said the JetBlue offer could lead to a “superior proposal.” Spirit rose 1.4% in premarket trading, while JetBlue added 1% and Frontier jumped 2.5%.
Robinhood Markets (HOOD) – The financial services and stock trading platform operator’s stock slid 4.1% premarket after Goldman Sachs downgraded it to “sell” from “neutral.” Goldman believes consensus estimates for Robinhood are too high and it sees a high bar for the company to achieve profitability in 2023.
WD-40 (WDFC) – WD-40 surged 9.5% in the premarket following better-than-expected quarterly earnings and revenue. The lubricant maker earned $1.41 per share for the quarter, 40 cents above estimates, although it cut its full-year guidance slightly due to inflationary challenges.
Designer Brands (DBI) – The footwear and accessories retailer raised its full-year earnings outlook and reinstated its quarterly dividend after a two-year pause. The upbeat forecast comes ahead of the company’s annual investor day. Designer Brands stock jumped 4.6% in the premarket.
Kroger (KR) – The supermarket operator’s stock added 2.6% in premarket action after Bank of America Securities upgraded it to “buy” from “neutral.” BofA said elevated food inflation will be among several upside earnings drivers.
CrowdStrike (CRWD) – CrowdStrike rallied 3.7% in premarket action after the cloud computing company received authorization to protect critical assets of the U.S. Department of Defense.
Workday (WDAY) – The finance and human resources software company struck a new $1 billion credit agreement with lenders, replacing a prior credit pact.
PriceSmart (PSMT) – PriceSmart beat estimates by 3 cents with a quarterly profit of $1.03 per share and the discount retailer’s revenue was slightly above Wall Street forecasts. Merchandise sales were above $1 billion for the first time ever and membership levels also set a record.
Dow Jones Futures: Market Rallies On Powell Comments; Apple, Nvidia, Tesla In Focus; Biogen Dives Late
Dow Jones futures were little changed Tuesday night, along with S&P 500 futures and Nasdaq futures, ahead of a key inflation report. Biogen (BIIB) dived late as Medicare restricted coverage of its Alzheimer’s drug.
X
The stock market rally extended a rebound Tuesday and crude oil prices jumped as Fed chief Jerome Powell eased fears that the central bank will be overly aggressive on reducing its massive balance sheet.
Advanced Micro Devices (AMD) and Nvidia stock rallied Tuesday, and investors could see the makings of double-bottom bases. But trying to guess the (double) bottom on a stock is fraught with peril. Tesla (TSLA) has a new buy point, while Apple (AAPL) is rebounding bullishly from a key level. Meanwhile, Zim Integrated Shipping (ZIM) broke out.
Tesla stock and Nvidia (NVDA) are on IBD Leaderboard. Tesla and ZIM stock are on the IBD 50. Zim Integrated Shipping was Tuesday’s IBD Stock Of The Day.
Meanwhile, Medicare plans coverage limits on the pricey and controversial Biogen (BIIB) Alzheimer’s drug. It’ll only pay for Aduhelm for Medicare patients in clinical trials. Biogen stock plunged. Eli Lilly (LLY), which is working on a similar Alzheimer’s drug, fell modestly.
Fed Chief Powell
Fed chief Powell testified Tuesday at a Senate Banking confirmation hearing for a second term. He assured lawmakers that the Federal Reserve will bring inflation under control.
Powell said the need for aggressive monetary stimulus is over, adding that the Federal Reserve may see some balance sheet runoff in 2022, after asset purchases go to zero in mid-March. That appeared less hawkish than at least some of his colleagues. As revealed in last week’s release of Fed minutes, several policymakers at the December meeting spoke in favor of cutting the balance sheet soon after the first Fed rate hike, which could happen as early as March. Some also suggested they wanted to pare back the balance sheet aggressively.
Inflation Report
The Labor Department’s December consumer price index is due out at 8:30 a.m. ET on Wednesday. Economists expect the CPI to show a 0.4% gain, or 0.5% excluding food and energy. Overall consumer inflation is seen rising to a fresh long-term high of 7.1% from November’s 6.8%. Core inflation is forecast to hit 5.5%, up from 4.9%.
On Thursday, the Labor Department will release the producer price index.
Dow Jones Futures Today
Dow Jones futures were just above fair value. S&P 500 futures edged higher and Nasdaq 100 futures were little changed.
The 10-year Treasury yield fell 1 basis point to 1.74%.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock Market Rally
The stock market rally had a solid session as investors appeared to appreciate Fed chief Powell’s comments. Growth stocks, among the hardest hit in 2022, led the bounce.
The Dow Jones Industrial Average rose 0.5% in Tuesday’s stock market trading, with gains muted as investors sold some defensive blue-chip names. The S&P 500 index climbed 0.9%. The Nasdaq composite jumped 1.4%. The small-cap Russell 2000 advanced 1%.
The 10-year Treasury yield fell 3 basis points to 1.75%. The yield hit 1.81% intraday Monday. U.S. crude oil futures jumped 3.8% to $81.22 a barrel, a two-month high.
ETFs
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.3%, while the Innovator IBD Breakout Opportunities ETF (BOUT) climbed 1.2%. The iShares Expanded Tech-Software Sector ETF (IGV) gained 1.8%. The VanEck Vectors Semiconductor ETF (SMH) popped 2%. AMD stock and Nvidia are leading SMH components.
SPDR S&P Metals & Mining ETF (XME) advanced 1.75% and Global X U.S. Infrastructure Development ETF (PAVE) added 0.6%. U.S. Global Jets ETF (JETS) ascended 1.6%. SPDR S&P Homebuilders ETF (XHB) rebounded 1.6%. The Energy Select SPDR ETF (XLE) jumped 3.4%. The Financial Select SPDR ETF (XLF) rose 0.9%. The Health Care Select Sector SPDR Fund (XLV) picked up 0.8%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) bounced 2.8% and ARK Genomics ETF (ARKG) 2.6%. Both hit their lowest levels since July 2021 at Monday’s intraday lows. Tesla stock remains the top holding across ARK Invest’s ETFs.
Five Best Chinese Stocks To Watch Now
AMD, Nvidia Stock
AMD stock rose 4% on Tuesday, while Nvidia gained 1.5%, after both erased sharp Monday losses to close slightly higher. Monday’s lows undercut the chip leaders’ December lows, so if you squint, you could see the makings of double-bottom bases. The middle of the potential W was set on Dec. 28 for both AMD and Nvidia stock.
Double-bottom bases are often powerful because of the big shift from fear to greed as the stock goes from hitting new lows to racing past buy points. They often form as the broader market is making similar moves, with the Nasdaq rebounding from new lows Monday.
But AMD and Nvidia are a long way from actually having double-bottom bases, and even further from reaching proper buy points. If the market rally deteriorated again, which is still very plausible, AMD and Nvidia stock would likely sell off again.
Tesla Vs. BYD: Which Booming EV Giant Is The Better Buy?
Tesla Stock
Tesla stock edged up 0.6% to 1,064.30 on Tuesday, still below the 50-day line. The EV giant also has a double-bottom base, but now has a deep but valid handle, giving it a 1,208.10 buy point. The handle formed after Tesla stock spiked higher early last week on blowout Q4 delivery figures, clearing a then-valid 1,119.10 buy point. But shares gave up all those gains and more for the week as highly valued growth stocks plunged.
Tesla also is an example of why investors shouldn’t try to guess the double bottom. In early December, TSLA stock undercut recent lows and found support around its 50-day line. Shares then rebounded for the next two sessions, as investors could start to see a double-bottom base underway. But Tesla stock then sold off hard, falling much lower until hitting a new low on Dec. 21.
Apple Stock
Apple stock rose 1.7% to 175.08, back above its 21-day line. On Monday, AAPL stock found support at its 10-week line. This is the first 10-week line pullback for the Dow Jones tech titan since its November breakout. The relative strength line for Apple stock is just below record levels, holding up extremely well vs. other megacaps or tech stocks in general.
ZIM Stock
ZIM stock jumped 4.7% to 61.44, breaking past a 59.79 buy point from a consolidation going back to September in heavy volume.
On an IBD Digital or MarketSmith chart, ZIM stock cleared a high handle to set a record high. But that’s because IBD adjusts for big dividends, reducing pre-dividend stock prices accordingly. On an unadjusted chart, ZIM stock hit a record 62.20 on Sept. 16, with Tuesday’s move a breakout from a traditional handle.
The RS line for ZIM stock is right at record highs, as the shipping giant has outperformed the S&P 500 index.
The shipping giant’s earnings are expected to fall substantially in 2022 after skyrocketing last year. But EPS is still seen far above pre-2021 levels, with Zim Integrated Shipping committed to big dividends.
Market Rally Analysis
The stock market rally on Tuesday extended the rebound from Monday’s intraday lows, when the Nasdaq undercut its 200-day line for the first time since April 2020. Arguably, the market was due for some positive action, after looking oversold by several indicators.
Advancing stocks easily outpaced decliners on the Nasdaq and NYSE on Tuesday.
But the market rally remains under pressure. The Nasdaq remains between its 200-day line and 50-day. The Russell 2000 is still significantly below its 50- and 200-day lines. The S&P 500, meanwhile, regained its 50-day and 21-day averages. The Dow is also above key levels.
The broader energy sector boomed Tuesday. Financials also continue to do well. Bank earnings are about to get underway, with JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) reporting Friday.
Growth stock charts are still terrible overall, though.
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What To Do Now
The stock market rally is getting a bounce, but it’s too early to tell if Monday marked a bottom. Investors should remain cautious about buying stocks in the current environment.
Very few growth or tech stocks look actionable, with a few possible exceptions such as Apple. Most likely need several weeks to recover, if not longer.
Investors could still add some exposure to energy and financial stocks, which continue to look strong. But most have already flashed early entries and made up a lot of ground in the past couple of weeks. As long as crude oil prices and 10-year Treasury yields stay high or keep rising, those sectors should fare well. But if oil prices and yields pull back substantially, those stocks may give up ground.
Right now, investors should focus on building up their watchlists. Look for stocks with strong relative strength that are finding or reclaiming key support. Pay attention to leading stocks in leading groups.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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