Weekend Update #67

Mar 25

Welcome to Blue Room's Weekend Update. Each week, we're sharing what companies we're researching and the what, the who and the how that we think makes the companies interesting and unique. This roundup is brought to you weekly by a group of interns, creative minds, artists and investors who believe that through best in class investing along with the democratization of financial education we can do great things together. Enjoy, Explore and Share.

Major indices edged slightly higher this week as the war in Ukraine continues—they have recouped losses sustained since the war began on February 24, 2022. The S&P 500, Dow Jones, and NASDAQ are up 1.32%, 0.61%, and 2.21%, settling at 4,519, 34,763 and 14,701, respectively. This after Fed Chair Powell’s comments on Monday stating the central bank was prepared to implement 50-basis-point increases if needed.

Commodities experienced another volatile week, as crude prices bounced back from last week—Brent crude reached $98 per barrel and is now at the $119 level while WTI crude hit $95 and is now at $112. These prices have been impacting the average consumer—US average gasoline prices were $3.60 per gallon at the beginning of the year and are now at $4.71 per gallon—a 30% increase.

Supply constraints have been exacerbated by limited supply and the ongoing Ukraine conflict, and now a new development this morning (Friday, March 25) coming out of Saudi Arabia where Iran-backed Houthi rebels struck an oil depot in the city of Jeddah, which also happens to be the location of this weekend’s Formula 1 race. A photographer covering the Free Practice on Friday evening noticed plumes of smoke rising in the distance which arose from the attack. Formula 1 is gathering information and has not yet made a decision as to whether they will move forward with Sunday’s Saudi Arabian Grand Prix.

Fertilizer prices continued to edge higher as well—the Green Markets North America Fertilizer Price Index is setting new highs, settling at the 1,270 level. The index has shot up 272% from it’s pre-pandemic level of 342.

On the economic news front, a series of data points were released this week. The Chicago Fed National Activity Index showed a decline from 0.59 in January to 0.51 in February, indicating a reverting to the mean for national economic activity (a zero value represents the average).

The Richmond Fed’s Manufacturing survey, which tracks sentiment among manufacturers in the mid-Atlantic region rose to 13.0 in March following a 1.0 reading in February. This was fueled by growth in shipments, new order volume, order backlogs and capacity utilization.

New home sales fell 2.0% month-over month, coming in at 772,000 for February, below an expected 810,000. Pending home sales decreased 4.1% month-over-month and 5.4% year-over-year, a function of the mortgage rate rising to 4.5% from the pandemic-era trough of 2.9%.

Initial jobless claims and continuing claims came in at 187,000 and 1,350,000, below the expected 210,000 and 1,400,000, respectively, further indicating a strong labor market.

The University of Michigan Sentiment Consumer Index read 59.4 versus an expected 59.7. This survey reflects consumers’ willingness to buy and to predict their subsequent discretionary expenditures.

Thank you Blue Room Team Leader OMAR GUZMAN.

Morgan Stanley Technology, Media and Telecom Conference

Ambarella, Inc. March 10, 2022

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Question & Answer Session
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Joseph Lawrence Moore

So maybe if you could just start out, talk through a little bit the transition that you guys have gone through. CV’s getting now to be the meat of your business, 45% of your business this year. But can you just talk to the transition that you've been going through, and the focus -- the strategic focus you guys have?

Fermi Wang

Right. So when we started this company, in fact, our Series A investors here 18 years ago, we were focusing on digital video. And throughout years, on the first 10 years, we did just video cameras for capturing and storing video. But at IPO time, almost 10 years now, we focus -- we realize that we need to focus on analyzing video real time, which we call computer vision or AI for video. But that technology that we spent the last six, seven years to develop invest more than $600 million total on that technology. And the idea is really any camera using our chip in there, not only can capture video, but analyze a video to apply smart functions or analyze the environment to perform higher level functions. For example, for the self-driving, for security camera, they can detect objects like license plate or colors of car or the people passing your house.

So all of that is enabled by our new chip. And like you said, we started seeing material revenue like two years ago, it was 10% and became 25% total revenue last year. This year, we are -- forecast to be 45% of total revenue coming from our computer vision chip. And we are penetrating now in just our existing market like security camera. We think we're going to penetrate the automotive market. And also in the future, we think this similar technology will be used in a new market like any robotic type of applications.

Joseph Lawrence Moore

Can you talk about -- I guess, one of the things that's made computer vision really exciting to me was the breakthrough of machine learning and deep learning in terms of solving some of these vision problems. And that happened really right around the time you guys had the first silicon available. And I know you have a software approach that's very tailored to that. Can you talk about your software first approach to this, and sort of why this is a good development for you guys?

Fermi Wang

Right. So for us, it's -- although we are a semiconductor company, we are trying to solve a real problem. At beginning, a real problem is how to build the best video quality camera. So that means you have to provide better algorithms or software on the video processing and compression. And then for AI, you have to provide the best/highest possible performance of computer vision and lowest power consumption, because that's important for the any edge device.

Our approach is always build algorithm/software first. And that after we reach to the performance level, we think is good, then we'll start optimize. And optimize target to get smaller die size and smaller power consumption without impacting the performance. And this unique approach give us huge advantage in terms of power consumption -- particularly power consumption and sometimes even die size savings. So that has really become our differentiation.

Today, if you look at just edge devices like camera, security camera or any other camera device, power consumption is important. But even for an automotive occasion, that driving a car with a 200-watt chip, it's just not a good value proposition. And if we can deliver a similar performance at 40 watts, that helps our automotive customer not only save battery life, but also much easier to deal with (inaudible) problems at the system level.

CRISPR Therapeutics at Oppenheimer 32nd Annual Healthcare Conference

March 24, 2022 at 11:00 AM EDT

Speaker: Samarth Kulkarni — Chief Executive Officer

Moderator: Jay Olson — Oppenheimer

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Question & Answer Session
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Could you remind us of the CTX001 filing timeline?

Both Vertex and CRISPR want to file by the end of 2022
Data update at EHA showed data for 22 patients
- 15 Beta-Thal and 7 sickle cell patients in data last year
Now they have dosed over 75 patients
Have fully enrolled 45 patients in each trial
Data package for filing will likely not need to be that full amount
- It will be worked out with regulators in the coming months
European filling will follow, not too long afterwards

The last time we saw data on CTX001 was at EHA. Any timeline on when we could see a clinical update or how investors should set their expectations for that?

There will be an update this year
Haven’t said which forum or when that will be
They want everyone in the field to see the data
A number of patient organizations already very excited, just from the first 22 patients’ data

A logistical question about the BLA filing — You said you’d submit the filings for B-Thal and SCD together? If they were separate, how would regulators cross-reference?

CTX001 is the exact same product for both
- The only difference between them is how they mobilize the cells
G-CSF and Plerixafor used in thalassemia
Just Plerixafor mobilization in sickle cell
B Thal endpoint is transfusion independence, or transfusion requirements
SCD endpoint is the VOCs
- They want to completely eliminate VOCs
Endpoints are different clinically, but there’s a lot of commonality
Hope is to submit together, but they need agreement with regulators

When you mention regulators, could you give guidance on EU filing?

Haven’t specifically guided
Would like to file both indications together as well, given nature of EMA reviews
As discussions with EMA continue, they get more insight into all requirements
- It’s not too long after the U.S. filing timeline is the expectation

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MCA DENVER

HOLIDAY THEATER OPENS 4/7

Join MCA DENVER at the Holiday Theater on Tuesday, April 12 for a special performance by the Bill Frisell Trio, made up of guitarist Bill Frisell, bassist Thomas Morgan, and drummer Rudy Royston! Grammy award winning guitarist Bill Frisell is said to be “the most important and innovative exponent of jazz guitar in his generation” by The Atlantic.

MCA Denver at the Holiday is a hub for the arts located in the historic Holiday Theater, hosting lectures, music, performance, and more.

FEATURING:

-Grupo Tlaloc Danza Azteca
-Denver’s Poet Laureate Bobby LeFebre
-North High School Jazz Band
-Cleo Parker Robinson Dance
-Poet Eleanor Perry Smith
and more!

LOCATION:
The Holiday Theater. 2644 W 32nd Ave, Denver, CO 80211

TICKETS