FT : GSK buys $250m biotech stake in hunt for Covid-19 treatment

GSK buys $250m biotech stake in hunt for Covid-19 treatment
Investment in Vir Biotechnology accelerates race for an antibody treatment for coronavirus

GlaxoSmithKline is investing $250m in San Francisco-based start-up Vir Biotechnology to develop antibodies that could be used to treat coronavirus.

The UK-based pharmaceutical company is acquiring a 6 per cent stake in Vir Biotechnology by paying 10 per cent more than the smaller group’s closing price on Friday. The announcement sent shares in Vir up almost 20 per cent to $34.75 in mid-morning trading in New York.

Many companies are hoping antibodies — proteins that protect the body by attacking foreign pathogens — could be the quickest way to bolster the immune systems of the sickest patients and even help prevent healthcare workers from becoming ill.

Vir already has two viral antibodies for Covid-19 that were developed from a patient who had Severe Acute Respiratory Syndrome, or Sars, although other antibodies can be produced artificially.

GSK said the Vir proteins had been “highly potent” when targeted at the coronavirus in the lab. 

While antibody treatments represent one hope for combating coronavirus, other pharmaceutical companies are seeking to develop or repurpose antiviral drugs, such as those used to treat HIV/Aids, and anti-inflammatory medicines.

Hal Barron, chief scientific officer at GSK, said the companies will unite to work on Vir’s “very promising antibodies for targeting Covid-19” and many other diseases. 

George Scangos, chief executive of Vir Biotechnology, said multiple therapeutic approaches, either used together or one after another, will be needed to stop the pandemic. “It is likely that the current coronavirus outbreak will not be the last,” he said. 

Bruno Bulic, a pharmaceuticals analyst at Baader Helvea, said the Vir approach was more “promising” than other potential treatments — including some from Gilead and AbbVie — that sought to disrupt the virus using drugs designed for other purposes. “It’s shooting in the dark, really,” he said.

The announcement follows deals between Amgen and Adaptive Biotechnologies, and Eli Lilly and AbCellera, to explore using antibodies to treat Covid-19. Both Takeda, the Japanese pharmaceutical company, and Regeneron, the New York-based biotech, have been trying to identify the most robust antibodies from recovered patients. 

Vir’s antibodies bind to an area of the Sars virus that also exists in new coronavirus, which is known as Sars-CoV-2 and causes Covid-19.

With regulators’ permission, the companies plan to put two antibody candidates into testing in patients within three to five months. They will skip the phase 1 trials to test safety in humans and will go straight to phase 2, where they will examine safety and efficacy. 

Vir’s platform has been used to find antibodies to Ebola, which are being used in the Democratic Republic of Congo, as well as flu, malaria, and hepatitis B. 

The companies will also search for new antibodies for Sars-CoV-2 using Crispr, a technology usually known for gene-editing, and artificial intelligence. Vir has used this screening process to identify candidates for other respiratory conditions, including respiratory syncytial virus, a common, contagious disease that infects infants.

FT : Saudi Arabia’s PIF takes 8.2% stake in cruise operator Carnival

Saudi Arabia’s PIF takes 8.2% stake in cruise operator Carnival
Investment marks a rare sign of investor confidence in industry battered by coronavirus pandemic

Saudi Arabia’s Public Investment Fund has built an 8.2 per cent stake in struggling cruise operator Carnival, marking the Gulf fund’s latest high-profile direct investment after previous bets on companies such as Tesla and Uber.

The PIF’s position amounts to a $430m stake based on the US-traded company’s share price, which rose 23 per cent on Monday, but is still down by almost 80 per cent this year.

The PIF, which is used by Crown Prince Mohammed bin Salman to advance and diversify Saudi Arabia’s economic interests, revealed that it owned 43.5m shares in a regulatory filing signed by its head, Yasir al-Rumayyan, who is a close ally of the prince.

The purchase marks a rare sign of investor confidence in an industry that has been battered by the effects of the coronavirus pandemic, which has killed passengers and left cruise ships pleading with countries to be allowed to dock.

All big cruise operators have suspended operations until at least May and share prices have tumbled in response to their struggles. 

Carnival has said it will burn through $1bn a month even with all its ships in dock, including payouts on customer deposits for cancelled bookings and future committed ship orders.

Last week it raised a total of $6.25bn in debt and equity from investors as it raced to secure funds to meet its cash needs for the next several months. The fundraising included the sale of $500m of new shares at $8 each.

Multiple people with knowledge of that deal confirmed that the PIF did not acquire its stake through the offering. That means the PIF bought the stake in the open market, with an unknown purchase price. It did not own any shares in Carnival before the start of 2020. 

Shares in Carnival have fallen from $51 in January to less than $8 last week before rebounding to $10.44 on Monday afternoon.

The PIF has had a mixed record in direct investing, with a 2016 bet on ride-hailing group Uber still trading well below the $62.5bn valuation it bought in.

The fund’s now exited position in Tesla was revealed by the Financial Times in August 2018 and prompted its founder Elon Musk to make his “funding secured” tweet, which ultimately led Mr Musk and Tesla to face regulatory penalties. 

A person close to the Saudi royal court said: “Any investor should look at global opportunities — the lessons learnt from 2008, buy undervalued assets.”

This person added that the PIF would be active in dealmaking in the coming weeks. “You will see a lot of acquisitions in the next few weeks. This is a good opportunity . . . keeping in mind their main effort right now should be geared to the domestic [economy].”

FT : Frequent flyer: how we fell out of love with the airlines

Frequent flyer: how we fell out of love with the airlines
Once a source of national pride, the industry’s current crisis elicits little sympathy

In 1991, the FT reported on a crowd of youths near a New York subway punching the air and chanting, “Pan Am! Pan Am!” What did this outpouring mean? My then colleague Nikki Tait explained that a court hearing nearby had just given the struggling airline temporary permission to continue operating.

It didn’t help. The airline collapsed later that year. But what the chanting group was expressing was a sense that Pan Am had once represented “all that was modern, prosperous and confident about the US”.

Airlines once soared in nations’ self-perceptions. People were proud of them. When British Airways in the 1990s, newly privatised and spruced up, called itself “the world’s favourite airline”, no one scoffed. Aviation’s buccaneers — Freddie Laker, Herb Kelleher, Richard Branson — were folk heroes.

Today, as the world’s airlines face their biggest crisis since the second world war, it is striking how little sympathy they evoke. Southwest Airlines, which Kelleher co-founded, still prompts some affection, but few US travellers show any love for the other carriers. Any mention of BA in this column elicits raucous customer contempt in the comments section. And when Virgin Atlantic, which Richard Branson founded, begged last month for state aid to survive, the UK government’s response that it should look elsewhere for money first prompted little concern outside the industry.

That is, in a sense, natural. People are having a torrid time during this coronavirus crisis. Many businesses will not survive. But while the disappearance of favourite retailers, restaurants and hotels will prompt fond memories, I doubt the collapse of many airlines will evoke the same response. No one will be chanting their names.

Why did we fall out of love with airlines? The immediate answer is that many people see them as prime climate villains. Although aircraft are responsible for no more than 5 per cent of damaging emissions, they attract greater criticism than SUVs, partly because there is little medium-term prospect of long-haul planes going electric.

But there are other reasons. The deregulation of the industry in the US in 1978 and in Europe in the 1990s saw the founding of new airlines and the privatisation of older ones. Until then, most countries had a national airline. People weren’t always impressed with them and had fun with their names. Belgium’s Sabena stood for “such a bloody experience never again”, Israel’s El Al was “every landing always late”, and BOAC, one of BA’s pre-privatisation predecessors, was “better on a camel”. Still, each nation thought, whatever its faults, it’s our airline.

In many cases, it no longer is. Some national carriers, such as Sabena, have disappeared. The French government has vowed to ensure Air France’s survival, but these days it’s a transnational group called Air France-KLM. BA is part of International Airlines Group, based in Madrid.

Another reason for disenchantment with airlines is disenchantment with flying. Look at the atrocious conditions we fly in now. Economy seats are cramped: the distance between them has been cut by 4-7 inches, according to the Flyers Rights campaign group. At 17-18 inches in width, they are narrower than about half of male passengers.

The final reason no one cares much for airlines any more is that flying, before this shutdown, had become routine. In 1998, according to the International Civil Aviation Organization, just under 1.5bn passengers flew. In 2018, the figure was 4.3bn. It’s hard to be romantic about something so commonplace.

In that difficult-to-imagine future when we’re once again allowed to travel where we wish, will we appreciate airlines more? That depends on how many of them survive. We may be in for a dramatic consolidation of the industry, with fewer carriers, higher prices and a return to the days when flying was something special.

FT : Eurobonds are not the answer

Eurobonds are not the answer
Why the Germans and Dutch are right to resist this way of sharing coronavirus costs

There is just one question: Are we together or are we not? So said Bruno Le Maire, France’s finance minister, as he pleaded with other EU nations, above all Germany, to demonstrate solidarity in the face of the coronavirus pandemic.

For many in southern Europe, solidarity means one thing above all: eurobonds. France, Italy, Spain and six other EU countries have thrown their weight behind the creation of joint financial instruments by the EU, as the best possible response to the pandemic.

The arguments they make are both political and economic. Eurobonds are meant to prevent some of the worst-affected countries, such as Italy and Spain, being sunk by new debts. They are also intended to show Europeans that “we are all in this together” — banishing the early disastrous images of China delivering medical aid to Italy, while the EU sat on its hands. Some Italian and Spanish politicians warn that if the EU does not act, their countries could lose faith in the European project forever.

The urge to demonstrate European solidarity and alleviate suffering is right. But eurobonds are the wrong solution. Rather than saving the EU, they could end up killing it.

Advocates of eurobonds stress the potentially disastrous effects on public opinion in southern Europe if ­northern Europeans fail to respond while the Italians and Spanish live through a tragedy. But northern Europe also has to consider politics and public opinion.

The mutualisation of debt within the EU has always been the reddest of red lines for the Germans, the Dutch, the Austrians, the Finns and others. If it is pushed through now — in an atmosphere of crisis — it could set a time-bomb under the EU.

The danger that southern Europeans will feel abandoned by the north has to be set against the risk that northern Europeans will, at some later date, feel exploited by the south. The Italians and the Spanish rightly resent being caricatured as lazy, spendthrift southerners. But the opposite caricature of the rich, egotistical, arrogant northerners is also unfair — particularly when it is larded with references to Nazism and accusations of immorality.

Voters in the Netherlands and Germany also feel squeezed by long years of austerity. And both countries have also been badly hit by coronavirus. Hospitals in the Netherlands are on the brink of running out of critical care beds.

The longer-term fears of the northern Europeans are also legitimate. As one Dutch friend put it to me with pardonable exaggeration: “We know that the savings are in the north and the debts are in the south.” The northerners are alert to any sign that they are being sucked into permanent, large transfers of cash to heavily indebted EU partners. They are justifiably concerned that the current anguish is being used to push forward ideas that they have already rejected, many times over.

When I pointed out to one particularly passionate supporter of eurobonds that the Germans and Dutch had always been assured by their leaders that the creation of the euro would not lead to a transfer union, he responded, with a mixture of exasperation and amusement: “That was always bullshit.”

But if political leaders renege on longstanding promises because they were “always bullshit”, they should not be particularly surprised if voters then turn to populist, anti-European parties. In Britain’s Brexit debate, two of the most potent arguments made by the Leavers were “we never signed up for this”, and “Brussels is draining us of money”. It would be naive to believe that those arguments can never work in continental Europe. Anti-EU parties have already made strong gains across northern Europe in recent years.

The mistake made by the advocates of eurobonds is to argue that they are the only way — or even the best way — of sharing the financial burden of the pandemic. In reality, setting up the legal structures for eurobonds would probably take several years. By contrast, there is already a European Stability Mechanism up and running that can lend to crisis-hit countries.

The Italians and the Spanish reject the ESM because it makes loans that would add to their debt burdens, and that come with conditions attached. They fear that the anguish of a pandemic could now be supplemented by the horrors of a Greek-style austerity programme. But this is a natural disaster so the ESM could attach very light conditions to the loans, simply specifying that all the money has to be spent on dealing with the direct consequences of Covid-19. The Dutch have also proposed disaster aid — grants not loans — and that, too, should be considered.

Once the pandemic is over, Europe can return to the debate over eurobonds. I have my doubts whether they will ever be politically sustainable. But, if they are tried, they should be backed by giving the European Commission a larger budget, underpinned by a dedicated EU tax. Armed with more capital and its own resources, the commission could then borrow from the markets.

That kind of major step should only be taken once national politicians have made and won the argument with their voters. The alternative method — using a crisis to force through a controversial and irreversible change — is often praised in Brussels. But, for its own future, the EU has to do better than that.

FT : Hospitals face pump and dialysis machine shortages, leaked memo warns

Hospitals face pump and dialysis machine shortages, leaked memo warns
Letter from senior consultant lays bare reality of NHS under pressure from coronavirus

Major London hospitals are running short of equipment in intensive care wards, including pumps and blood dialysis machines, according to a leaked memo to senior hospital doctors.

The shortages, which go beyond concerns about the shortage of ventilators and protective equipment, emerged from a conference call of some 80 senior NHS doctors. The call highlighted the growing pressure from the influx of coronavirus patients on hospitals in the capital, which so far is the hardest hit part of the UK.

The 1,000-word memo, seen by the Financial Times, is written by Professor Daniel Martin, the head of intensive care for serious infectious diseases at the Royal Free Hospital. It paints a picture of doctors and nurses still scrambling to develop treatments for the virus as the shortages bite.

The summary of the call, which was designed to share information about how best to treat coronavirus patients, warned nurse-to-patient ratios are at six-to-one in intensive care wards with hospitals using everyone “from med students to dental hygienists” to absorb the overload.

The note also revealed Covid-19 is not simply a “one organ” disease that attacks the lungs, but is also causing “high rates” of acute kidney failure.

Dr Martin warned “over zealous” use of diuretics such as Frusemide were leading to leading “unnecessary” kidney complications and related blood clotting issues. 

He also flagged the “higher than predicted need” for kidney treatments, while noting that several London hospitals, including King’s College Hospital, are running short of blood filtration machines.

He wrote King’s College was “running out of” the “CVVHF” blood filtration machines and an unnamed centre had “run out of pumps” used to administer some drugs.

The note, designed to share insights and develop best practice among colleagues, painted a picture of the pressure on the NHS as hospitals race to train sufficient doctors and staff wards already facing shortages.

“Most centres now getting towards 1:6 nursing ratio with high level of support workers on ICU [Intensive Care Unit],” Dr Martin wrote. “Training has largely fallen by the wayside as it is too large a task. People are being trained on the job,” he added.

He also chided colleagues that they need to catch up with other hospitals in seconding staff, and noted some “non-medical staff” were refusing to enter intensive care wards — a practice that needed to end.

“We need one support worker per patient. Other centres are using everyone they have. From med students to dental hygienists. We are behind the curve ‘++’ with this,” he wrote.

“Last time I was on a night shift, theatres were full of non-medical staff refusing to help ICU — this is unacceptable,” he added.

The account of the call emerged as the NHS across London braced itself for the “peak” of Covid-19 admissions, around Easter, with government models expecting this in the next seven to 10 days. 

Dr Martin’s note to colleagues also revealed the extent to which doctors are still learning about treatments for the virus, despite all the information being passed back from hotspots hit earlier in the pandemic in Europe, such as Lombardy in northern Italy.

He warned, for example, to avoid ventilation too early in the intensive care process as this “may be harmful”, while noting patients were having to go back on to ventilators if taken off too early.

“Not many patients have reached extubation yet in London,” he wrote, before adding “re-intubation seems to be common” and his doctors should “wait longer than usual before extubating”. “An extubation protocol is needed immediately,” he added. 

Another evolving area of coronavirus care is the question of “fluid balance” among patients, and how far they should be hydrated. “All centres agreed that we are getting this wrong,” he wrote.

Dr Martin concluded with a final note of uncertainty, arguing that colleagues “desperately need to look at our own data to understand whether we are getting this [treatment] right or not”.

A spokesman for the Royal Free Hospital declined to comment on the communication. A request for an interview with Dr Martin was declined, citing his work commitments in managing the response to the virus.

FT : UK government admits Covid-19 antibody tests don’t work

UK government admits Covid-19 antibody tests don’t work
Ministers had hoped tests would pave way for an easing of lockdown restrictions

The UK government has admitted that none of the 17.5m antibody tests it ordered in the fight against the coronavirus pandemic work well enough to be used.

Ministers had high hopes that the arrival of the tests would give a much clearer picture about how many people had been infected by Covid-19, paving the way for an eventual easing of lockdown restrictions.

The failure of the tests is a significant setback and suggests Britain may be further away from being able to launch an effective programme of mass testing. 

The government is working with nine companies that have developed coronavirus antibody tests, which screen for whether someone has recovered from the disease and is likely to be immune. The tests are being assessed by researchers at Oxford university — but each one has so far proven unreliable.

“Sadly, the tests we have looked at to date have not performed well,” wrote Professor John Bell, Regius Professor of Medicine at Oxford university on Monday.

“We see many false negatives (tests where no antibody is detected despite the fact we know it is there) and we also see false positives. None of the tests we have validated would meet the criteria for a good test as agreed with the Medicines and Healthcare products Regulatory Agency. This is not a good result for test suppliers or for us,” he said. 

Last week Matt Hancock, the health secretary, said the government had placed a provisional order for 17.5m antibody tests. “We will only use them if they work,” he said.

Downing Street confirmed on Monday that “no test so far has been proved to be good enough to be used” and said it was working with the companies to improve their quality.

“No government in the world has rolled out a full antibody testing programme,” a spokesperson for the prime minister added.

The government issued guidance about its testing plans at the weekend, saying that if the antibody tests “do not work, no further tests will be purchased and, where possible, orders will be cancelled”.

Ministers had hoped to send out at-home antibody testing kits, though the medical community had said this would not be appropriate.

Many of the Covid-19 antibody tests on the market claim high accuracy rates. However, since they were developed in a matter of only months, the claims for many are based on only a few hundred samples. 

To be considered accurate, devices must be able to distinguish the presence in someone’s blood of antibodies specific to this coronavirus, and also be able to identify antibodies in people who have had relatively mild strains of the disease.

“One of the problems in this sort of work is that you can jump too quickly. When you don’t have enough samples you can be misled: 100 tests might look good, but after 20,000 they might not,” said Paul Hunter, professor in medicine at the University of East Anglia.

Prof Bell said the Oxford researchers would continue to look for a test that works. “The government will be working with suppliers both new and old to try and deliver this result so we can scale up antibody testing for the British public. This will take at least a month,” he said. 

WWD : Could Masks Become a Permanent Lifestyle Accessory?

Could Masks Become a Permanent Lifestyle Accessory?
"It's important to mention that you shouldn't think this is going to save you — you can't start eskimo-kissing your best friends," said Los Angeles Apparel manufacturer Dov Charney of his company's fashion masks.
Vogmask started making particle protective masks in response to the environmental crisis.
Courtesy of Vogmask

Could nonmedical face masks become a new accessory category?
In many Asian countries, donning a mask before going outside is as routine as putting on a pair of shoes, widely considered a civic duty to protect others. And as the coronavirus threat continues, the West is catching up to the custom.
On Friday, the Centers for Disease Control and Prevention revised its guidelines, advising all Americans to wear masks when they leave their homes, to prevent spreading the coronavirus unknowingly. But apparel brands have already been preparing, producing face coverings for essential workers and, eventually, consumer use.
“It’s important to mention that you shouldn’t think this is going to save you — you can’t start eskimo-kissing your best friends,” said controversial L.A. manufacturer Dov Charney, late of American Apparel, who is producing nonmedical masks at his Los Angeles Apparel factory and selling them for $30 for packs of three on his web site, in a range of colors and patterns. “But everybody should be using face barriers, call it a face diaper, and spit guard, a scarf, make one homemade using a T-shirt. I do not go out in public without one. I’m not a doctor or a scientist but these are extreme times.”


Face masks were an extreme fashion statement for some prior to the coronavirus outbreak. In January, pop star Billie Eilish donned a Gucci face mask with a full Gucci ensemble at the Grammy Awards. Future (and his daughter), Rihanna and Cardi B have also had red-carpet face mask moments. They have also been a mainstay for attendees at dusty music festivals.

>>> US Gapping Down


Gapping down
In reaction to disappointing earnings/guidance:

  • TDY -1.3%

Other news:

  • MNLO -42.1% (announces two Phase 3 clinical trials did not meet primary endpoints) VXX -5.9% (lower with US futures up)
  • DAL -5.1% (Berkshire Hathaway (BRK.A) disclosed the sale of ~13 mln shares worth ~$314180K (transaction dates 4/1-4/2))
  • INO -3.1% (entered into $150 mln at-the-market equity offering sales agreement)
  • BCLI -2.6% (new COO)
  • AAT -2.3% (elected to withdraw its 2020 guidance)
  • TZOO -1.4% (Michael Peterson resigned from his position as Chief Technology Officer)

Analyst comments:

  • ZM -8.6% (downgraded to Underperform from Neutral at Credit Suisse)