(Reuters) – Eli Lilly (NYSE:LLY) and Hong Kong-listed Laekna will collaborate to develop an experimental obesity drug that aims to help patients lose weight while preserving muscle, the biotech said on Wednesday.

WHY IT MATTERS

Lilly is aiming to strengthen its position as a leader in the obesity treatment market, which is expected to hit $150 billion in revenue by the next decade. Last year, the company spent about $2 billion to acquire Versanis’ drug that acts directly on fat cells, without prompting lean mass loss.

Several other drugmakers including Regeneron (NASDAQ:REGN) and Scholar Rock are testing treatments that could help preserve muscle, which is often lost when patients lose weight through lifestyle changes, bariatric surgery or the use of GLP-1 treatments such as Lilly’s Zepbound and Novo Nordisk (NYSE:NVO)’s Wegovy.

CONTEXT

The collaboration will accelerate the development of Laekna’s experimental drug, LAE102, which belongs to a class of drugs that play a key role in muscle regeneration as well as the breakdown and storage of fat for energy.

Lilly will fund the development of the drug and share its resources and expertise, but Laekna will retain the global rights for the drug and plans to advance the early-stage trial of the drug in China.

Laekna said the drug has shown to increase lean mass and decrease fat mass in lab studies. In combination with a GLP-1 treatment, it could further reduce fat mass and help patients significantly regain the lean mass lost during weight loss.

By Gram Slattery and Alexandra Ulmer

(Reuters) – President-elect Donald Trump is planning to tap conservative loyalist Russell Vought to be the director of the U.S. Office of Management and Budget, according to two sources close to his transition effort, putting him at the helm of a powerful agency that helps decide a president’s policy priorities and how to pay for them.

Vought was OMB chief in Trump’s first term and would play a key role in rolling back government regulations and setting budget priorities. In this position, he would be in a position to implement a policy known as Schedule F, which would in practice strip thousands of federal employees of some key civil service protections.

Vought helped produce a blueprint called Project 2025 by a coalition of conservative groups for a second Trump White House term. One of its proposals is to dramatically restructure the government so that appointed conservatives have power over key decisions typically relegated to civil servants.

Trump could change his mind, and there were other candidates for the role as recently as earlier this week, according to one of the sources.

The Trump transition team and Vought did not immediately respond to a request for comment.

Trump repeatedly denied when campaigning for president that he had any links to Project 2025, although many of its authors were former officials from his first administration, including Vought.

At OMB, Vought will work with X CEO Elon Musk and former Republican presidential candidate Vivek Ramaswamy to carry out Trump’s campaign pledge to slash government spending and regulations.

Musk and Ramaswamy have been tapped by Trump to co-lead a newly created Department of Government Efficiency, an entity Trump has indicated will operate outside the confines of government.

After-Hours Stock Movers:

NVIDIA (NASDAQ:NVDA) shares declined 2.3% despite reporting third quarter results and guidance that topped consensus estimates. The company’s CEO Jensen Huang said the age of AI is in “full steam,” and demand for Hopper and anticipation for Blackwell are “incredible.”

Snowflake (NYSE:SNOW) rose 18% after it reported strong third quarter results and guidance. Separately, Snowflake and Anthropic sign a multi-year strategic partnership to deliver Anthropic’s industry-leading Claude models to customers in Snowflake Cortex AI.

Palo Alto Networks (NASDAQ:PANW) fell 5% despite beating estimates for first quarter EPS and revenue, after it issued guidance that was lackluster. Palo Alto Networks also announced that its board of directors has approved a two-for-one forward stock split of the company’s outstanding shares of common stock.

Jack in the Box (NASDAQ:JACK) fell 5% after revenue for its final quarter of the year missed consensus. Same-store sales decreased 2.1% in the fourth quarter of 2024, comprised of a decrease in company-operated same-store sales of 2.2% and a decrease in franchise same-store sales of 2.0%.

By Luc Cohen and Jonathan Stempel

NEW YORK (Reuters) -Former billionaire investor Sung Kook “Bill” Hwang was sentenced to 18 years in prison on Wednesday over the collapse of Archegos Capital Management, which cost Wall Street banks more than $10 billion.

Hwang was sentenced by U.S. District Judge Alvin Hellerstein in Manhattan, where a jury convicted Hwang in July on 10 criminal charges including wire fraud, securities fraud and market manipulation.

“The amount of losses that were caused by your conduct are larger than any other losses I have dealt with,” Hellerstein said before announcing the sentence.

Archegos’ March 2021 implosion took less than a week, stunning Wall Street and Hwang’s lenders.

The U.S. Attorney’s office in Manhattan sought a 21-year prison term for Hwang – unusually long for a white-collar case – and for him to forfeit $12.35 billion and make restitution to victims.

“It stands among a rare class of cases that truly could be described as a national calamity,” prosecutor Andrew Thomas said at the sentencing hearing before Hellerstein.

Hellerstein did not reach a decision on Wednesday on whether Hwang must forfeit money or pay restitution. The sentencing hearing is expected to resume on Thursday.

Before sentencing Hwang, Hellerstein asked the defendant’s lawyer, Dani James, how she thought Hwang compared to Sam Bankman-Fried, who was sentenced in March to 25 years in prison for stealing $8 billion from users of the now-bankrupt FTX exchange.

“Mr. Bankman-Fried was literally stealing from his customers,” James said. “I don’t think that’s what’s happened here.”

Hwang had asked for no prison, forfeiture or restitution, and to remain free on bail while he appealed his conviction. James said his low risk of committing more crimes meant a lengthy prison term served no purpose.

“The notion that he would commit a crime in the future, it’s just not so,” James said.

Bankman-Fried denies wrongdoing and is appealing his conviction.

STARTED AS FAMILY OFFICE

Hwang, 60, was a protégé of late hedge-fund billionaire Julian Robertson.

He set up Archegos in New York as a family office in 2013, the year after his former hedge fund Tiger Asia Management pleaded guilty to wire fraud in an insider-trading case.

Prosecutors accused Hwang of lying to banks about Archegos’ portfolio so he could borrow money aggressively and make concentrated bets on media and technology stocks such as ViacomCBS (NASDAQ:PARA), now called Paramount Global.

While Archegos eventually managed $36 billion, Hwang’s borrowing helped him amass $160 billion of exposure to stocks.

His downfall occurred when Hwang was unable to meet margin calls, as the prices of some of his favorite stocks began falling and various banks unloaded stocks that had backed his so-called total return swaps.

More than $100 billion of market value in Hwang’s stocks was wiped out. Several banks suffered losses, including Credit Suisse, which lost $5.5 billion, and Nomura Holdings (NYSE:NMR). Credit Suisse is now part of UBS.

Hwang’s lawyers’ request for no punishment also cited Hwang’s Christian faith and his nonprofit Grace and Mercy Foundation, which has since 2006 donated at least $600 million to combat homelessness, poverty and human trafficking, among other causes.

In a statement to the court before Hellerstein announced the sentence, Hwang said he hoped the punishment would “allow me to serve as much as I can given the circumstances.”

Hwang’s lawyers have said his net worth has fallen to “at most” $55.3 million.

Hwang’s co-defendant, former Archegos Chief Financial Officer Patrick Halligan, was convicted at the same trial on three criminal charges. His sentencing is scheduled for Jan. 27. Both chose not to testify at their two-month trial.

By Max A. Cherney and Arsheeya Bajwa

(Reuters) – Nvidia (NASDAQ:NVDA) forecast fourth-quarter revenue slightly above estimates on Wednesday, but still failed to meet lofty expectations of some investors who have made it the world’s most valuable firm. 

Shares of the Santa Clara, California-based company fell roughly 2% in extended trading. They had closed down 0.8% during the regular trading session.

The company forecast revenue of $37.5 billion, plus or minus 2% for the fourth quarter, compared with analysts’ average estimate of $37.09 billion according to data compiled by LSEG. 

“The age of AI is in full steam, propelling a global shift to NVIDIA computing,” Nvidia CEO Jensen Huang said. “Demand for Hopper and anticipation for Blackwell – in full production – are incredible as foundation model makers scale pretraining, post-training and inference,” he said, referring to two high-performing AI chips.

Expectations ran high ahead of the results, with Nvidia shares up more than 20% over the last two months. The stock has nearly quadrupled so far this year and is up more than nine-fold over the last two years.

“Investors have become accustomed to huge beats from this company, but doing that is getting harder and harder,” said Ryan Detrick, chief market strategist at Carson Group. “This was still a very solid report, but the truth is when the bar is this high it makes things just that much tougher.”

While demand is soaring for the company’s chips that make up the brains of complex generative AI systems, supply-chain snags have made it harder for Nvidia to report the big beats on revenue that have helped make it a Wall Street darling.

One of the bottlenecks for its chip supply has been the limited capacity for advanced manufacturing techniques at the company’s manufacturing partner TSMC. 

The company recorded third-quarter adjusted earnings of 81 cents per share, compared with estimates of 75 cents per share.

Sales in the data-center segment, which accounts for a majority of Nvidia’s revenue, grew 112% to $30.77 billion in the quarter ended Oct. 27. The segment had recorded growth of 154% in the prior quarter. 

Nvidia’s sales are boosted by cloud companies’ continued spending on its chips, as they expand data centers capable of handling generative AI’s complex processing needs.

The company said it had fixed a design flaw with its Blackwell chips by changing the blueprints used by TSMC to manufacture it.

By Jonathan Stempel

(Reuters) – U.S. prosecutors unveiled criminal charges on Wednesday against five alleged members of Scattered Spider, a cybercrime group suspected of hacking into dozens of U.S. companies to steal confidential information and cryptocurrency.

Martin Estrada, the U.S. Attorney in Los Angeles, said the defendants conducted phishing attacks by sending bogus but real-looking mass text messages to employees’ mobile phones warning that their accounts would be deactivated.

The hackers, in their teens or 20s at the time, allegedly directed employees to links for entering log-in information, enabling the hackers to steal from their employers and millions of dollars of cryptocurrency from individuals’ accounts.

Victims allegedly included at least 12 companies in the gaming, outsourcing, telecommunications and cryptocurrency fields, plus hundreds of thousands of individuals. Estrada’s office confirmed that the case concerned Scattered Spider.

The defendants are Tyler Buchanan, 22, of Scotland; Ahmed Elbadawy, 23, of College Station, Texas; Joel Evans, 25, of Jacksonville, North Carolina; Evans Osiebo, 20, of Dallas; and Noah Urban, 20, of Palm Coast, Florida.

Each was charged with two conspiracy counts and aggravated identity theft, and Buchanan was also charged with wire fraud.

Investigators traced Buchanan through domain registration records for phishing websites, registered under an account whose user name included the name of late actor Bob Saget.

Hackers including from Scattered Spider drew notoriety in September 2023, when they broke into and locked up the networks of casino operators Caesars (NASDAQ:CZR) Entertainment and MGM Resorts (NYSE:MGM) International, and demanded hefty ransom payments.

Security experts have tracked the group since at least 2022, viewing it as unusually aggressive among cybercrime gangs. Caesars paid about $15 million to restore its network.

“Phishing and hacking has become increasingly sophisticated and can result in enormous losses,” Estrada said in a statement. “If something about the text or email you received or website you’re viewing seems off, it probably is.”

Evans was arrested on Tuesday in North Carolina. Urban has pleaded not guilty to 14 fraud and conspiracy charges in a separate case in Florida.

A public defender representing Urban did not immediately respond to a request for comment. Lawyers for the other defendants could not immediately be identified.

(Reuters) -Data cloud and analytics provider Snowflake (NYSE:SNOW) on Wednesday raised its annual product revenue forecast and announced a multi-year partnership with AI firm Anthropic, sending its shares surging around 15% in extended trading.

Snowflake’s data cloud has been seeing strong adoption from enterprises looking to use artificial intelligence-powered services to organize swathes of data.

Like other tech firms such as Salesforce (NYSE:CRM) and Microsoft (NASDAQ:MSFT), Snowflake is also pursuing the development of AI agents using its Snowflake Intelligence platform. Autonomous agents are considered to be the evolution of a copilot, which can perform routine tasks on behalf of a person.

The company’s partnership with Anthropic would allow its customers use the AI firm’s large language models to develop and enhance their own AI applications.

With Anthropic’s technology, Snowflake’s AI agents will be able to deeply analyze data and generate visualizations, among other functions.

Snowflake expects product revenue of $3.43 billion for 2025, compared with its previous forecast of $3.36 billion.

The company forecast its fourth-quarter product revenue to be between $906 million and $911 million, the midpoint of which is above analysts’ average estimate of $884.5 million, according to data compiled by LSEG.

Investing.com – Nvidia reported fiscal third-quarter results that topped Wall Street estimates, but its current-quarter guidance underwhelmed lofty investor expectations amid red-hot AI demand.

NVIDIA Corporation (NASDAQ:NVDA) shares fell more than 2% in after-hours trade following the report.

The company announced Q3 earnings per share of $0.81 on revenue of $35.1B. Analysts polled by Investing.com anticipated EPS of $0.75 on revenue of $33.09B

Data center revenue was $30.8B, up 17% from Q2 and up 112% from a year ago. That compared with estimates for $28.84B.

Looking ahead to Q4, revenue is expected to be $37.5B, plus or minus 2%, compared with estimates of $37.09B.

GAAP gross margins were expected to be 73.0%, plus or minus 50 basis points.

Nvidia’s Blackwell AI chips, which some believe represents the next frontier for the company,  is expected to face supply constrains amid red-hot demand.

“Both Hopper and Blackwell systems have certain supply constraints, and the demand for Blackwell is expected to exceed supply for several quarters in fiscal 2026,” Nvidia said on Wednesday.

Investing.com – Morgan Stanley on Wednesday said it was upgrading insurer Lemonade Inc (NYSE:LMND) to “equal-weight” from “underweight” and raised its price target to $42 from $23.

Shares of Lemonade rose 17.2% at $47, with stock more than doubled in value year to date.

Lemonade at its investor day unveiled plan to grow its business from $1 billion in premiums to $10 billion over the next few years.

The insurance technology company plans to achieve these goals by leveraging advanced technology, improving operational efficiency, and focusing on auto insurance growth. Lemonade’s updated guidance also projects a 30% annual growth rate in in-force premiums (IFP), reaching $2 billion by 2027.

Morgan Stanley (NYSE:MS) cited optimism about the company’s profitability timeline, which surpasses market expectations. The bank highlighted Lemonade’s plans for significant expense efficiencies as key to hitting these targets.

For 2025, Lemonade forecasts 50% adjusted gross profit growth, $1.2 billion in IFP, and positive adjusted free cash flow, despite operating in an increasingly competitive auto insurance market.

While Morgan Stanley the most important element of the investor day for it was the goal to achieve net profit exiting 2027, which is significantly better than Wall Street consensus and its expectations.

(Corrects paragraph 9 to remove reference to self-insured plans; paragraph 13 to show it is a specific type of health plan; last paragraph to show survey included employers of 50 people or more)

By Amina Niasse

NEW YORK (Reuters) -About 44% of U.S. employers with 500 or more employees cover drugs for weight loss in 2024, up from 41% in 2023, according to a survey from consulting firm Mercer (NASDAQ:MERC) released on Wednesday.

Mercer also said 64% of U.S. employers with over 20,000 employees covered weight-loss drugs in 2024, compared with 56% last year.

That includes the highly effective newer GLP-1 drugs Wegovy from Novo Nordisk (NYSE:NVO) and Eli Lilly (NYSE:LLY)’s Zepbound that have been shown in trials to reduce weight by 15% to 20%, as well as older drugs in the class that promote less weight loss, such as Novo’s Saxenda.

Obesity drugs have driven costs up for employers this year and contributed to an increase in overall healthcare benefit costs, the survey found, resulting in changes to how patients access the drugs.

“Cost is clearly a concern, and employers are adding authorization requirements to ensure the medications are used by members who will benefit the most,” said Tracy Watts, Mercer’s national leader for U.S. health policy.

Those include clinical coordination, or management of patient care by pharmacy benefit managers and insurers, the report said.

Only about 24.4 million Americans have access to GLP-1 drugs through commercial health plans, Reuters reported on Monday. Mercer’s survey question referred to weight-loss drugs from any class of medicines.

Companies with over 500 employees also increased fertility treatment coverage, with 47% paying for in vitro fertilization, in which an egg is fertilized outside of the uterus, up from 45% in 2023.

For all employer health plans, the annual cost for a single employee rose 5% from 2023 to $16,501.

A Mercer report released in September found that employers had expected a 5.8% increase in health insurance costs, even after implementing cost-reduction measures.

To try to lower costs, employers have expanded health plan options and focused on those that have metrics comparing patient outcomes against costs, the report said.

About 65% of large employers offered three or more health plan choices in 2024. Employers with over 20,000 employees offered an average of five medical plans, Mercer said.

Nearly one-third of large employers offered an Exclusive Provider Organization health plan that limits patients to providers within its network. One-third of those plans do not require a deductible.

About 87% of Americans were enrolled in a health plan with a deductible in 2024, according to a KFF survey.

Mercer’s survey covers 2,194 U.S. employers ranging from those with 50 to over 20,000 employees.