Weekend Update #213
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In the first week of earnings season, strong results from banks and a cooler-than-expected CPI report helped power major indices higher. The market is gearing up for President-elect Trump’s inauguration on Monday, January 20th, and the market got new insights into potential fiscal policy measures. In a bid to avoid inflationary impacts of tariffs, the Trump team is discussing a gradual tariff increase of 2% to 5% per month. This is welcome news to markets at a time when the Federal Reserve is still focused on achieving the last leg of progress toward its 2% goal and perceived risks have tilted back toward inflation. This week, oil also rose to a five-month high as sanctions on Russia added more strains to supply.
In economic data for the week, NFIB’s Small Business Optimism Index rose to a new high since October 2018 as expectations for business conditions in 2025 improved. Inflation and securing sufficient labor quality are still top issues for small businesses, but hiring trends were at their highest point since November 2023. On Tuesday, the PPI report showed producer prices rising at a lower-than-expected pace at 0.2% month-over-month and 3.3% year-over-year. Wednesday’s CPI report confirmed this trend, coming in line with expectations on a headline basis at 0.4% month-over-month and 2.9% year-over-year in December. Core CPI (excluding food and energy) saw a cooler-than-expected surprise, rising 0.2% month-over-month and 3.2% year-over-year. On the back of this data, the market-implied interest rate at year-end 2025 is now 3.951% compared to the 4.042% expectation to end last week. Thursday’s retail sales report showed spending rose slightly less than expected in December at 0.4% month-over-month. Initial jobless claims for the week ended January 11th increased less than expected at 210,000.
Internationally, Israel and Hamas reached a ceasefire agreement this week to pause the war in Gaza, which boosted stability and confidence after 15 months of fighting. Separately, the market-implied probability that the Bank of Japan will raise interest rates again at the January 24th meeting increased to 99%.
In stock-specific news, the U.S. Supreme Court upheld a law that will ban TikTok on Sunday, January 19th. Soon after the announcement, additional uncertainty around a ban taking effect came with Donald Trump’s support for an executive order that would give an additional 90 days for ByteDance to make progress toward finding a buyer for the U.S. TikTok operations. On Friday, LVMH reclaimed its title as the largest European company after Novo Nordisk fell on weak high-dose semaglutide data in obesity. Weak data was compounded by semaglutide’s addition to a list of drugs the government plans to negotiate a cheaper price for next year as part of the Inflation Reduction Act.
Friday’s Close (Weekly Performance)
S&P 500 5,996.66 (+2.91%)
Nasdaq 19,630.20 (+2.45%)
Dow Jones 43,487.83 (+3.69%)
Thank you Blue Room Analyst JARED FENLEY.
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DTIL
Precision Biosciences, Inc.
302 East Pettigrew Street, Suite A-100, Durham, North Carolina
Shares Outstanding: 7.7 million
by
Minyoung Sohn
BLUE ROOM founder and CIO
Precision BioSciences is an advanced gene editing company utilizing their novel proprietary ARCUS platform to develop in vivo gene editing therapies for sophisticated edits, including gene elimination, insertion and excision. ARCUS is the only gene editor derived purely from a protein, called a homing endonuclease, that evolved in nature to safely edit a genome and add function. ARCUS is particularly efficient at generating defined outcomes due to predominant repair using homology directed repair (HDR) as opposed to non-homologous endjoining (NHEJ).
Precision BioSciences held its initial public offering on March 27, 2019 at $16.00 per share. Adjusted for the 1:30 reverse split on February 16, 2024, shares have lost 99% of their value based on the $4.50 closing price on January 8, 2025. Currently, at $4.50 per share, the company has a market capitalization of $35 million, compared to the cash on the balance sheet of $137 million, or $17.80 per share.
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Disclosure: "The information contained in this newsletter is provided for informational purposes only and should not be construed as a recommendation or investment advice by Blue Room. We may rely on information gathered from third parties that we believe is reliable, but we cannot guarantee its accuracy. Past performance does not guarantee future results. Blue Room Investment Advisors is a current investor in Precision BioSciences."
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ARCUS: Single Cell Algae and I – Cre I , the perfect homing endonuclease.
In 2020, the Nobel Prize in Chemistry to Jennifer Doudna and Emmanuelle Charpentier in 2020 for their groundbreaking work on CRISPR, discovering how to create genetic scissors which could unlock novel human therapeutics using CRISPR-Cas based gene editing technology. Today, there are three publicly traded companies using CRISPR to develop therapeutics, and they are worth billions of dollars in market capitalization.
In the near future, the scientific community, as well as the financial markets, may shine their light on Jeff Smith, Ph.D., Co-Founder and Chief Research Officer for Precision BioSciences, and the inventor of ARCUS, the company’s novel and proprietary gene editing technology. The key to ARCUS was found in the chloroplast genome of a single cell algae called Chlamydomonas reinhardtii , the perfect homing endonuclease, called I – Cre I . Over billions of years, I-CreI has evolved to recognize a specific 22 nucleotide sequence, whose high specificity made it an attractive choice to build customizable gene targeting technology called ARCUS.
On January 9, 2025, Precision BioSciences reported positive news released by partner iECURE, a clinical stage gene editing company born out of University of Pennsylvania’s Gene Therapy Program, which is led by gene editing industry pioneer Dr. Jim Wilson. iECURE reported a complete clinical response in their first patient, a 6.5 month old male with OTC Deficiency, a rare genetic disease where the liver lacks the enzyme to remove ammonia from the body. In the neo-natal onset, OTC Deficiency is often fatal, and the current standard of care is a highly risky liver transplantation in infancy.
Hyperammonemic crisis (HAC) occurs when ammonia levels in the blood rise to toxic levels. In severe forms of neo-natal onset OTC Deficiency, the infant is born asymptomatic but can experience an HAC in the first week of life, as was the case with the first patient. He was immediately administered ammonia scavenging compounds intravenously and placed on a protein restricted diet. Molecular diagnostics confirmed OTC Deficiency. At age 3.5 months, he experienced a second HAC despite the preventative regimen. Normally, he would proceed to liver transplantation. Instead, he qualified for the OTC-HOPE Phase 1 clinical trial of t he study drug, ECUR-506, an investigational gene editing therapy.
Photo taken by Blue Room, November 15, 2024
Pictured above from left to right: Two members of Precision’s Scientific Advisory Board for Hepatitis Dr. Mark Sulkowski, MD, Professor of Medicine, Johns Hopkins Bayview Medical Center Dr. Jordan Feld, MD, MPH, Head of Hepatology, Toronto Centre for Liver Disease (not pictured, Dr. Ray Shinazi, Professor, Emory University School of Medicine) Leading the discussion is Dr. Murray Abramson, MD, MPH, Head of Clinical Development at Precision BioSciences
At age 6.5 months, the patient received a single dose of ECUR-506 through intravenous injection. iECURE’s approach to gene editing relies on the delivery of two adeno-associated virus (AAV) vectors comprised of the same capsid, but each carrying different payloads. The patient experienced mild inflammation, which resolved quickly. After three months, the patient was removed from ammonia scavenger treatment, and began a diet with protein levels appropriate for his age. His blood levels tested normal. He has been moved to long term follow up study.
Gabriel Cohn, the Chief Medical Officer of iECURE said, “to our knowledge, this is the very first infant to have ever received an in vivo, liver directed, gene insertion product. While still early days, and follow up is limited to the first six months post exposure, the elimination of this baby’s need for the current standard of care observed after a few months of receiving ECUR-506 may represent a historic milestone for children with neonatal OTC deficiency, their families and their care teams.”
In the news release, iECURE stated that full study data of the first patient would be presented in March 2025 at the American College of Medical Genetics and Genomics Annual Meeting in Los Angeles.
Photo taken by Blue Room, November 15, 2024
Pictured above from left to right: Dr. Alina Jucov, MD, PhD, Principal Investigator, ARENSIA Research Clinic, Moldova Dr. Ed Gane, Prof. of Medicine, University of Auckland, Dep. Director New Zealand Liver Transplant Dr. MF Yuen, Chair Professor of Gastroenterology and Hepatology, The University of Hong Kong Dr. Kosh Agarwal, MD, Hepatologist and Transplant Physician Institute of Liver Studies, King’s College
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