Smartkarma Daily Briefs

• Following the company’s fiscal 2Q sales release, our thesis remains intact.
• We are encouraged by the improving sales trends RCI experienced in March and early April.
• Further, we see several catalysts on the horizon to provide for accelerating growth over the next 12-18 months.

• Acadia Pharmaceuticals (ACAD US) markets CNS drug Nuplazid, which is cash flow positive with increasing profitability since 2019. Acadia has guided for Nuplazid revenue of $520M–550M for 2023.
• On April 17, Acadia has launched in-licensed drug Daybue in the U.S. for the treatment of Rett syndrome in adult and pediatric patients two years of age and older.
• Nuplazid is being evaluated for negative symptoms of schizophrenia with top-line results expected in early 2024. In-house drug candidate ACP-204 is in Phase 1 trial for Alzheimer’s disease psychosis.

Context Therapeutics’ April R&D webinar included takeaways from its poster presentation on CTIM-76 preclinical data at the AACR Annual Meeting in April 2023. The presentation highlighted the development of Context’s CLDN6 program and rationale for selecting CTIM-76 (a CLDN6xCD3 targeting bispecific antibody) as its new lead candidate (following the recent discontinuation of the ONA-XR program). We remind readers that while the therapeutic benefits of targeting CLDN6 (expressed on a variety of malignant tumor cells but rarely in healthy tissue) are well recognized, development hitherto has been hampered by a lack of selectivity and off target toxicities. Preclinical data presented by Context suggest that CTIM-76 selectively binds to CLDN6 with a potentially beneficial safety profile. The latest Phase I data in solid tumors from BioNTech’s CLDN6 CAR-T asset BNT211 (33% overall response rate, ORR; n=21) highlight the potential of a CLDN6-targeting therapy and are an encouraging read-across for this asset class, including CTIM-76.

• Darden Restaurants had a strong quarter and exceeded the market expectations with respect to the top and bottom lines.
• Despite an 8% increase in hourly wages, restaurant labor was 120 basis points better than the previous year due to sales leverage.
• Since Darden used higher revenues to leverage higher inflation on utilities and higher repairs and maintenance costs, restaurant expenses were 40 basis points better than the previous year.

• Datadog had a successful Q4, with a 44% year-on-year increase in revenue, bringing it to $469 million.
• While user growth with existing customers was slower, Datadog made up for it with new logo acquisition and new product cross-sales, having their strongest new logo quarter to date.
• Datadog released their latest product, universal service monitoring, to general availability during the quarter, which greatly expanded their capabilities, bringing their total number of generally available products to 17.

• Lear had a strong quarterly performance and managed an all-around beat.
• Its sales increased by 10% to $5.4 billion, and core operating profitability rose by 67% to $265 million.
• The Lear Forward initiative also improved the company’s cash flow performance.

• Monster Beverages’ last result was a colossal disappointment as the company faced challenges meeting the increased demand for its products due to the rampant supply chain issues.
• Despite these issues, the company reported a 3.1% increase in operating income, driven by increased input costs and selling expenses.
• The company saw positive results from its Java Monster line, with increased sales and increased share in its coffee plus energy category.

• Roku struggled amidst the controversy associated with its huge exposure to SVB (nearly 26% of its total cash reserves).
• The collapse of the bank resulted in a significant level of panic among the company’s investors.
• While Q4 platform revenue exceeded its estimates and platform revenue was up 5% year over year to $731 million, inflation and macroeconomic uncertainties continue to put pressure on consumers and advertisers.

• Block’s stock has been in the news and faced a strong correction after becoming the latest target of Hindenburg.
• The report alleges that Block has overstated its genuine user counts and has understated its customer acquisition costs.
• It was damaging enough to result in a sharp correction in the company’s share price.

• Verizon is scheduled to report its quarterly results next week.
• Verizon’s share price has become oversold, according to analysts.
• The company is set to report quarterly results for the first time in two years next week, and investors should know what to expect.