TheChek News Flow

Highly contagious strains already detected in several countries including UK and South Africa

Highly contagious new variants of coronavirus will emerge more frequently and spur further infection waves such as those threatening to overwhelm hospitals in the UK and South Africa, one of the world’s leading infectious disease experts has warned.

Salim Abdool Karim, chairman of South Africa’s Covid-19 ministerial advisory committee, also said it was too early to know the extent to which existing vaccines would provide immunity to the new variants.

Scientists around the world have been alarmed by the rapid spread of the new 501.v2 variant first detected in South Africa and the equally infectious B.1.1.7 variant that has led to a surge in cases in the UK. Other variants have emerged recently in Brazil and Japan.

Prof Abdool Karim, the epidemiologist who led South Africa’s fight against HIV/Aids, explained that viruses evolved as they infected people with partial immunity in order to escape recognition by their antibodies.

“We’re going to see this occur more commonly now than in 2020, as we vaccinate and as more people are infected,” he said in an interview with the Financial Times.

The epidemiological finding of increased transmissibility was supported by “biological evidence showing the 501.v2 variant binds more readily and more strongly to human cells”, added Prof Abdool Karim.

The Sars-Cov-2 virus that causes Covid-19 has mutated once or twice a month on average since appearing in humans in late 2019. But the variants detected in South Africa and the UK carry about 20 mutations, where previous ones had been associated with one or two significant genetic changes.

Greater numbers of mutations can cause the behaviour of the virus to change more extensively. The variants that originated in the UK and South Africa are both about 50 per cent more infectious than previous forms of the virus, although neither is thought to cause more severe symptoms.

Another question is how the variants interact with the human immune system, in particular whether they reduce the effectiveness of Covid-19 vaccines. “We’ll have an answer within the next two weeks or so but we don’t know yet,” Prof Abdool Karim said of the 501.v2 variant.

Antibodies from people who have recovered from Covid-19 were less effective against the new variant, Prof Abdool Karim said, but “the way in which T-cells and the B-cells function is quite different in vaccine immunity. I wouldn’t extrapolate from natural immunity to vaccine immunity.”

Less is known about the new variant of Sars-Cov-2 detected in Brazil after scientists sequenced 180 viral genomes from the state of Rio de Janeiro.

Researchers from Brazil’s national genomic surveillance network identified a “significant increase” in cases of the variant that “raise concerns about public health management” in a country with more than 200,000 Covid-19 deaths, the second-highest number of fatalities after the US.

Carolina Voloch of the Federal University of Rio de Janeiro, lead author of a preprint paper about the variant, said that samples taken from Rio state showed it increased in frequency from zero in September to 20 per cent by November.

“For now we can’t say it’s more contagious. What we can say is there’s an increase in the frequency of this lineage,” said Dr Voloch.

Japanese authorities also detected a new variant in four passengers who arrived from Brazil on January 2. It is related to the B.1.1.248 variant of the virus circulating in Brazil, and shares some of the same mutations as the UK and South African variants, according to Japan’s National Institute of Infectious Diseases.

But Emma Hodcroft, a viral geneticist at the University of Bern who monitors the evolution of Sars-Cov-2, said: “It doesn’t look as though these four cases from Japan are part of the larger Brazilian cluster.”

She agreed that conditions in 2021 were likely to favour the evolution of more variants with multiple mutations, as a larger proportion of people were infected and evolutionary pressure on the virus increased.

A modelling study by scientists at Emory and Penn State, published in Science journal on Tuesday, suggested the evolutionary path for Sars-Cov-2 would eventually lead to a less virulent “endemic” virus, joining the ranks of other mild cold-causing coronaviruses that currently circulate in humans.

“We’re in uncharted territory but . . . immunological indicators suggest that fatality rates and the critical need for broad-scale vaccination may wane in the near term, so maximum effort should be on weathering this pandemic,” said Ottar Bjornstad, a Penn State professor.

Prof Abdool Karim also made the point that the selective pressure for all viruses was to “become more transmissible and less pathogenic over time”.

Telefónica to reduce debt as tower unit owned with KKR is sold to Boston-based group

American Tower has agreed to buy Telxius, the telecom tower unit owned by Spain’s Telefónica and KKR, for €7.7bn as consolidation in Europe’s mast market continues.

The deal will transform the Boston-based group into a key player in European towers, which remains a fragmented sector despite a wave of recent dealmaking. American Tower will gain about 31,000 tower sites in Europe and Latin America after completing the takeover and has agreed to build another 3,300 in Germany and Brazil at a cost of $500m.

Shares in Telefónica, which was one of the worst hit European telecoms companies in the 2020 sell-off of the sector, rose 7 per cent to €3.86 on Wednesday.

The sale of Telxius is the latest deal in the European towers sector that is in the process of consolidating. One large player, Catalan tower specialist Cellnex, has been on a buying spree culminating in the €10bn acquisition of CK Hutchison’s European towers last year while Vodafone is preparing to float its newly independent tower company Vantage.

American Tower, which has a $95bn market capitalisation, has long been expected to expand in Europe. The Telxius deal gives it a strong foothold in countries including Spain and Germany, both markets in which Cellnex has struggled to consolidate. Citigroup said the deal was negative for Cellnex as it introduces a new specialist tower company with similar aspirations for it to compete against in Europe.

American Tower has paid more than 30 times the operating income of Telxius — €240m last year including recent asset acquisitions — to acquire the Spanish business, which is a higher valuation than many recent deals.

Barclays analyst Mathieu Robilliard said: “This is at the high end of the range of deals we have seen in Europe . . . and reflects a high level of competition for this asset.” He added that Cellnex would have been “disappointed” to have missed out on buying its Spanish rival but that the terms would suggest it did not meet its “golden M&A rules”.

The sale will help ease Telefónica’s large debt position, which will reduce by €4.6bn, due to cash proceeds of €3.9bn and the reduction of consolidated Telxius debt.

The Spanish group has restructured its business over the past year, putting its chain of Latin American operations up for sale, agreeing a merger with Virgin Media for its O2 mobile arm in the UK and moving to acquire parts of the Oi mobile business in Brazil.

José María Álvarez-Pallete, chairman and chief executive of Telefónica, said the deal would transform American Tower — already its second-largest tower supplier behind Telxius — into a stronger partner. “This transaction is another relevant milestone in the way the future of the new Telefónica is being written,” he said.

Telefónica tried to float Telxius in 2017 to reduce its debt but pulled back after investors refused to match its valuation of the tower and submarine cable assets held in the unit. It subsequently sold a 40 per cent stake in the division to KKR for €1.3bn and last year transferred thousands of German towers into it in a €1.5bn transaction that doubled the size of Telxius.

As part of the Silicon Valley giant’s secretive push into the automotive space

Apple held meetings with California EV startup Canoo in the first half of 2020 as part of the Silicon Valley giant’s secretive effort to advance its own electric vehicle project, three people familiar with the talks have told The Verge. The two companies discussed options ranging from investment to an acquisition, according to two of the people.

Canoo’s scalable electric vehicle platform, or “skateboard,” is largely what drew Apple’s interest, the people said. The platform is different from ones developed by other startups and larger automakers because it integrates more of the car’s electronics, allowing for greater flexibility in cabin design. It also features steer-by-wire technology, which also increases design flexibility and is not yet widely adopted in the industry.

Canoo was more interested in taking on an investment from Apple, two of the people said. Ultimately, the talks fell apart. Canoo has since become a publicly traded company after merging with a blank check fund that was listed on the NASDAQ in late 2020. Apple has made at least one other acquisition in the mobility space in recent years, buying Drive.ai in 2019.

“Canoo doesn’t openly comment on strategic discussions, relationships or partnerships unless deemed appropriate,” Tony Aquila, Canoo’s executive chairman, said in a statement to The Verge. Apple declined to comment.

News of Apple’s interest in Canoo comes as Reuters reports that the tech company is negotiating with Hyundai to make a self-driving electric vehicle as early as 2024. Apple’s vehicle project, codenamed “Project Titan,” has shapeshifted multiple times over the years. But the company has now reportedly refocused on making an autonomous electric vehicle and has been holding meetings with automakers as small as Canoo and as big as Hyundai as it looks to outsource things like technical design and manufacturing.

Hyundai and Canoo previously announced a plan to co-develop electric vehicles in February 2020, though that project appears to be unrelated to the startup’s talks with Apple. Canoo refers to its partnership with Hyundai in recent filings with the Securities and Exchange Commission as an “engineering services agreement” that will see the companies co-develop a platform to power a “small segment electric vehicle.” But Canoo has not disclosed whether it has been paid for the Hyundai deal, or whether any work has begun.

Canoo was founded in late 2017 by a small group that split out from struggling EV startup Faraday Future, including multiple former BMW executives. As The Verge first reported, the effort was funded by a Chinese investor who is the son-in-law of a former CCP leader, and the family in charge of Taiwanese tech company TPK, which supplies touchscreen technology to Apple. Canoo plans to make commercial electric vehicles, like delivery vans or food trucks, as well as a consumer-focused van that will be sold on a subscription basis. All of Canoo’s vehicles are powered by that same scalable skateboard technology.

The talks with Apple came at a crucial time for Canoo, which lost $182.3 million in 2019 while working on its first prototype vehicle and entered 2020 with just $29 million in the bank, according to a recent filing with the Securities and Exchange Commission.

Canoo took meetings with a variety of companies from Silicon Valley, China, and elsewhere in 2019 and 2020, the people said. But as deals failed to materialize, the startup needed short-term money. It took a $7 million loan from the government’s pandemic Paycheck Protection Program and, as talks with Apple dragged on, another $15 million total from Pak Tam Li (the Chinese investor) and the Chiang family (the owners of TPK) in March 2020, according to the SEC filing.

Canoo eventually started negotiations with the blank check fund, Hennessy Capital Acquisition Corp. IV, later in the year. It was one of the first startups to jump on this trend of using a so-called “special purpose acquisition company” to shortcut the traditional path to becoming publicly traded. As that deal was worked out, the Chiang family put another $80 million into the startup, and the soon-to-be executive chairman invested $35 million, according to the SEC filing. Canoo raised some $600 million when the deal closed near the end of 2020.

While Canoo now has the money it sought at the beginning of 2020, that hasn’t softened its ambitions to work with big companies like Apple. The startup said in that same SEC filing that it is “currently in discussions with multiple other blue-chip industry participants interested in leveraging Canoo’s technologies and engineering expertise for their own commercial products.”

DAX:

MDAX:

SDAX: