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Bristol Myers Squibb, which sells leading treatments for lung cancer and multiple myeloma, agrees to buy biotech MyoKardia to bolster heart-drug offerings

Bristol Myers Squibb Co. said it will buy biotech MyoKardia Inc. MYOK -0.36% in a $13.1 billion deal aimed at expanding the cancer-drug powerhouse’s lineup of heart drugs.

The all-cash deal would snag MyoKardia’s promising experimental heart drug, which if approved would allow Bristol to lessen its reliance on cancer therapies—heavier since the company’s $74 billion acquisition of multiple-myeloma drug leader Celgene Corp. last year.

Under the terms, Bristol will pay $225 a share for MyoKardia, a premium of 61% to the stock’s closing price of $139.60 on Friday.

MyoKardia’s lead pipeline drug, code-named mavacamten, treats a chronic heart condition that can cause irregular heart rhythms in some patients and even death.

“We really think we are the ideal company to launch that new medication into the marketplace,” Mr. Caforio said in an interview, because treating heart conditions is “one of the key areas for us.”

Mavacamten could fetch more than $1.5 billion in world-wide sales by 2025, BMO Capital Markets analysts forecast.

The more-than $150 billion global market for cancer drugs has been a focus of the pharmaceutical industry. Many companies, including Pfizer, Gilead Sciences Inc. and GlaxoSmithKline PLC, have sought to build beachheads in the fast-growing space.

New York-based Bristol, which pioneered a relatively new kind of cancer treatment known as immunotherapy, has long been a market leader. Yet many on Wall Street had grown concerned Bristol had become too dependent on oncology drugs after buying Celgene.

More than $16 billion of Bristol’s approximately $20 billion in sales during the first half of this year were from cancer therapies.

Fueling investor concerns is the expected loss of patent protection in 2022 for one of Celgene’s top-selling products, multiple-myeloma therapy Revlimid. Also, another of Bristol’s big-selling cancer products, an immunotherapy called Opdivo that treats lung, skin and other tumors, has faced heavy competition from Merck & Co.’s rival drug Keytruda.

If MyoKardia’s drug is approved, Bristol would have strong positions in the different markets for drugs treating heart conditions and immunological diseases, as well as blood cancers and solid tumors like lung cancer, Dr. Caforio said.

“The company is diversifying very well into four very healthy franchises,” he said.

The acquisition would add to Bristol’s debt, however. Since buying Celgene, Bristol has been working to trim its debt, which the company reported was $46.7 billion at the end of the second quarter. Bristol says it remains focused on improving its leverage metrics and is committed to strong investment-grade credit ratings.

Dr. Caforio wouldn’t give specifics, but said he expects the acquisition to become accretive in 2023 and mavacamten to turn into a multibillion-dollar seller.

The condition targeted by MyoKardia’s drug, known as hypertrophic cardiomyopathy, develops when heart muscle thickens and the organ has a hard time pumping blood. It is often inherited and occurs in about one in every 500 people, though most don’t show symptoms or suffer serious consequences, according to the American Heart Association.

Yet it can lead to abnormal heart rhythms or even sudden death in some patients. Bristol estimates 80,000 to 100,000 people in the U.S. have been diagnosed with the form of the disease mavacamten aims to treat. Doctors have been treating patients with drugs including Eliquis that were approved for other heart conditions.

Earlier this year, MyoKardia, of Brisbane, Calif., reported pivotal-stage data indicating mavacamten significantly improved heart function and oxygen consumption in hypertrophic cardiomyopathy patients after 30 weeks. The data was published in medical journal The Lancet.

Bristol expects the deal to close in the fourth quarter, the company said.

A flood of cash has pushed U.S. bank balance sheets to some important size limits, so more stimulus could have a mixed effect on bank stocks

Stimulus measures from the Federal Reserve and the U.S. Treasury may be necessary to keep the economy afloat. But it is increasingly clear that they also carry some downside for big banks.

One effect of government action has been to swell the balance sheets of top U.S. lenders with deposits, which isn’t necessarily favorable to them. Take the special capital requirements imposed on the biggest U.S. banks—known as global systemically important banks, or G-SIBs. The size of a bank’s G-SIB buffer, or the amount of additional capital it must hold, is determined by a score, and one of the most important inputs in the score is a bank’s total exposure, or size. As a consequence of things like the Fed’s asset buying, Paycheck Protection Program lending, and a corporate dash for cash, many banks have grown in size, even as they have pulled back on some activities like card lending.

Accordingly, G-SIB scores rose by 0.27 percentage point on average for eight top U.S. banks from the end of last year through the second quarter. That is more than double the typical increase in recent years, according to Goldman Sachs Group GS 0.68% analysts’ figures. At these levels, four banks— Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase —are currently at risk of increasing their future capital requirement percentages by 0.5 point.

Usually banks are able to manage down these scores by year-end, when the buffer requirement is actually set. But what’s notable this year is that banks in the second quarter had already done some of that management, including pulling in derivatives exposure, according to a review of the second-quarter scores by Barclays money-market strategists. So while scores were mostly flat from the first to second quarter, that masked a 5% jump in banks’ aggregate exposure measure—far more than the typical 0.5% quarterly jump, according to Barclays.

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Managing down a bank’s size can be a harder lever to pull, since it could involve sacrificing client relationships. And it may get even harder should the Fed expand asset purchasing, which brings more cash to banks, or if there were expanded bank-intermediated government lending.

“The Fed’s efforts to restart the economy could bias banks’ G-SIB scores higher,” Barclays’ strategists wrote. More stimulus from the U.S. Treasury could also start to shift its cash at the Fed into the banking system, according to Barclays.

The Fed and other regulators have made moves to ease the pressure on banks’ size, such as excluding Treasurys and Fed deposits from key calculations of a bank’s leverage. But those rules don’t apply to the buffer scores. What’s more, taking advantage of them may not be costless. Banks can use these exclusions at the level of their bank subsidiaries, but then they must limit payouts from those units to the parent, which ultimately can affect dividends paid out to shareholders, according to analysts at Goldman Sachs.

The Fed has just extended restrictions on banks’ dividend and buyback payouts for another quarter. But if their balance sheets swell and capital requirements rise, banks may not be able to boost payouts as much as they’d like anyway—especially if more stimulus is being pumped into the economy. An upside to the Fed’s maintaining the restriction may be that it allows banks more time to build capital through earnings and could prime them for bigger payouts once the restrictions end.

Stimulus can of course help banks’ credit-loss picture if millions of borrowers are given a financial lifeline, and could also boost earnings if loan demand is sparked. In the long term, a better economy is what’s most important for bank stocks. But recovery-by-stimulus can still put more strain on banks’ returns in the near term. What’s more, bank actions to manage their systemic-risk scores are often a big factor in late-year funding-market dynamics.

For the biggest banks, things are rarely straightforward.

President briefly left quarantine to greet supporters despite taking a steroid that has been recommended for serious cases of Covid-19

WASHINGTON—President Trump remained hospitalized with Covid-19 on Monday after seeking to project confidence and vigor over the weekend, as his doctors offered conflicting signals about how he is faring with the unpredictable illness.

The president’s physicians are expected to deliver another update on his condition on Monday. Doctors said Sunday that the president’s vital signs were stable, he wasn’t experiencing shortness of breath, and he has been fever-free since Friday.

Doctors haven’t said when they plan to discharge Mr. Trump, after raising the possibility that he could return to the White House as soon as Monday. But there were signals that Mr. Trump’s condition remained serious. His blood-oxygen levels dropped as recently as Saturday and he was being treated with dexamethasone, a steroid that has been given to Covid-19 patients who are seriously ill.

Experts have said some patients experience worsening symptoms in the second week of having the virus.

Doctors on Sunday also sought to clarify past statements about his condition that were incomplete or contradictory. Dr. Sean Conley, the president’s physician, said at a news conference on Sunday at Walter Reed National Military Medical Center that Mr. Trump’s condition “continues to improve.” But he also said Mr. Trump’s symptoms had been serious, adding that he tried to provide an “upbeat” assessment in a Saturday briefing in which he played down the president’s condition.

Mr. Trump, for his part, tried to show the public that he hasn’t been incapacitated by the virus. In a video posted to his Twitter account on Sunday, he said his illness had given him an education in the risks of the coronavirus, adding, “I get it and I understand it.”

Shortly after posting the video, the president left Walter Reed in a black SUV to greet supporters gathered outside the hospital grounds. While the White House said the excursion was approved by the president’s medical team, it wasn’t in line with government Covid guidelines for quarantining, designed to avoid infecting other people.

The president’s diagnosis and hospitalization have thrust his White House into turmoil, complicated plans for his Supreme Court nominee and created fresh uncertainty for his presidential campaign just weeks before Election Day.

Vice President Mike Pence was scheduled to depart for Salt Lake City on Monday ahead of the vice presidential debate set for Wednesday. The debate has taken on new importance after Mr. Trump’s hospitalization elevated the vice president’s role in the campaign.

Some in the Trump administration have privately expressed frustration over senior officials’ handling of the coronavirus outbreak, directing some of their anger at White House chief of staff Mark Meadows, according to people familiar with the matter. Aides said they felt left in the dark about the risks and the positive cases at the White House.

Mr. Meadows has also come under fire from Mr. Trump, who faulted his chief of staff for what the president viewed as a botched communications effort about his condition, some of the people said.

The president and others in the White House initially sought to shield the public from the extent of the outbreak. Mr. Trump asked one adviser not to disclose results of the person’s own positive test, according to a person familiar with the conversation. And the president didn’t disclose a positive result from a rapid test for Covid-19 on Thursday while awaiting the findings from a more thorough coronavirus screening, according to people familiar with the matter.

Mr. Trump has told aides that he is eager to return to the White House, one of the people said. Asked what the president’s treatment might look like at the White House, communications director Alyssa Farah said Sunday that there was a “fully operating medical team” at the White House. “There’s a lot we can do from the White House, the residence,” she said.

Offering additional details about the president’s condition Sunday, Dr. Conley said the president had experienced two drops in oxygen saturation levels. Late Friday morning, before he was admitted to the hospital, it dropped below 94%, and he was given supplemental oxygen for about an hour. He experienced a high fever at the time, Dr. Conley said, without specifying his temperature. The 74-year-old president’s oxygen level also dropped on Saturday, this time to about 93%, his physicians said.

A mildly obese patient of Mr. Trump’s age with oxygen saturation below 94% would typically be given supplemental oxygen for a half or full day and would be monitored to see if levels return to normal, said Peter Chin-Hong, an infectious-disease specialist and professor of medicine at the University of California San Francisco. Normal blood-oxygen saturation levels range between 95% and 100%.

Dr. Conley didn’t offer a clear answer when pressed about whether Mr. Trump required supplemental oxygen on Saturday, saying: “I’d have to check with the nursing staff. I don’t think—if he did, it was very limited.” He also declined to elaborate on what the doctors’ examinations of the president’s lungs had found. The White House didn’t respond to follow-up inquiries.

The president’s doctors also said he had been treated with dexamethasone. The generic drug is a commonly used steroid that has been shown to help severely ill Covid-19 patients. The World Health Organization issued updated guidelines last month recommending steroid treatment in patients with severe or critical Covid-19, including patients with difficulty breathing and those requiring oxygen support with a ventilator or face mask. The WHO recommended not to use steroids in treating patients with nonsevere Covid-19.

Mr. Trump also has also taken Regeneron Pharmaceuticals Inc.’s experimental antibody drug cocktail, and he is currently on a five-day course of the antiviral drug remdesivir, which has been authorized for treatment of hospitalized Covid-19 patients.

FT : Why the world’s richest countries are not all rich

In March, just as the world was reeling from the onset of the pandemic, the International Comparison Programme completed its most recent computations. This dry-sounding statistical exercise collected prices in 176 countries, using them to calculate purchasing power parity exchange rates. The lack of media attention on the results is a reminder that measures of economic activity come second — unless they relate directly to threats to health.

Yet even in a time of plague, comparable international accounts are required for essential measurements, including cross-country comparisons of gross domestic product, living standards and global measures of poverty and inequality. And here the latest computations have important things to say.

The new accounts bring good news and not so good news. The good news is that the new 2017 data are not particularly newsworthy. For example, the economies of China and the US were of similar size in 2017, as they were in 2011. (The former is only two-thirds the size of the latter measured at current exchange rates.)

The not so good news is that globalisation and transfers of intellectual property have driven GDP even further from the common (mis) understanding that GDP measures people’s material wellbeing, adding to its many shortcomings aired in recent years.

Good news first. The 2017 results are a recognisable update of the 2011 update, and not a radical remapping of the world’s economic geography.

This is important because previous updates sometimes changed the relative size of countries and continents. The 2005 estimates, for example, made the world look much more unequal than previously believed; they also sharply increased some measures of poverty.

These apparent increases were reversed in 2011, a reversal maintained for 2017. This stability increases the statistics’ credibility, helps their usefulness and will be especially important when, post Covid-19, the ICP moves to higher frequency measurement.

The not so good news comes from the list of the world’s richest countries, as measured by per capita GDP: Luxembourg, Qatar, Singapore, Ireland, Bermuda, Cayman Islands, Switzerland, UAE, Norway, Brunei, the US and Hong Kong. Whatever this list tells us, it is hardly an exact list of countries where people enjoy the world’s highest material living standards.

Ireland is a good example. Attracted by low corporation tax rates, several large multinationals relocated their intellectual property assets to Ireland, so that income generated from that property now contributes to Irish GDP. In 2015, such transfers caused Irish GDP to grow by 26 per cent in one year.

By contrast, per capita disposable income of Irish households grew at “only” 4.6 per cent in real terms. The latter is clearly a better estimate of the change in Irish living standards.

Why the discrepancy? Eleven of the 12 countries in the list are either investment hubs or resource-based countries. In both cases, consumption is a relatively low share of total GDP, often because profits account for a larger part of national income than wages and salaries.

Over time, profits will contribute to the income of at least some households and, in turn, their consumption. But at any given moment, GDP per capita includes amounts that are not part of people’s current wellbeing, or their own income.

Furthermore, the income from foreign-owned capital is part of GDP, because it originates within the country, but not part of gross national income, because it is not owned by nationals.

This is a reminder that, absent strong redistributive channels, rich resource-based economies are often internally unequal, because the ownership of resources — especially mineral resources — is confined to a few. That GDP tells us nothing about who gets what is another of GDP’s most familiar criticisms. Nor does GDP speak to the sustainability of natural resources or the use of the environment. The problem is not the accounting, but the definition of GDP.

These arguments call not for the abolition of the GDP numbers, which are essential, but for a more intelligent use of the accounts and for measuring what it does not include.

Continuing efforts to integrate environment-economy accounts or to make GDP less oblivious to distributional questions need support. For policymakers, an exclusive focus on GDP per capita or its growth rate makes little sense. To put it bluntly, the top 12 list is not always where a country would want to be.

Deal involving ecommerce giant and duty-free titan looks timely

A tie-in between Alibaba, the world’s largest ecommerce platform and Dufry, the biggest duty-free operator, could not have come at a better time.

The Switzerland-based airport retailer has been knocked sideways by the slump in air travel. The deal with the Chinese ecommerce giant offers Dufry a new channel to a large segment of missing demand.

Alibaba has agreed to buy a stake of up to 10 per cent in Dufry. That should increase target proceeds from a share offering from SFr500m to SFr700m ($763m). That will provide handy extra finance after Dufry has bought out and delisted $311m US subsidiary Hudson.

A joint venture with Alibaba is the other reason Dufry shares jumped 17 per cent on Monday. This could help Dufry reach a customer base of 720m.

Chinese travellers have been avid purchasers of duty-free goods. It is the best way of avoiding local taxes of up to 56 per cent on products deemed to be luxury goods. Watches and perfumes, for example, are taxed at more than 30 per cent.

But the pandemic has curbed travel — and airport shopping sprees. China, meanwhile, wants shoppers to go on spending. The retail sector accounts for more than a tenth of gross domestic product.

Helpfully, China allows foreign companies to sell goods online to Chinese consumers at lower tax rates even when they are staying at home. Demand has been strong since the pandemic started.

Recently, regulations in the Chinese duty-free market have been relaxed at an unprecedented scale, including the tripling of purchase quotas in some provinces. The government expects the market to quadruple to $29bn in the next three years.

But online luxury goods platforms, which include Alibaba’s Tmall Global and Kaola, have long struggled with unreliable goods and vendors. Alibaba aims to remedy that through a joint venture with Dufry. Access to Alibaba’s payment services should also help Dufry’s physical stores, as air travel slowly recovers. This looks like a great deal for both businesses.