U.S. and European equity futures retreated with most Asian shares Thursday as investors looked past stimulus packages to the mounting human impact of the coronavirus outbreak. Government bonds and the yen pushed higher.
Contracts on the S&P 500 slipped as the U.S. death toll topped 1,000 and Japanese shares sank as much as 3% amid further efforts to contain the movement of people. Shares in South Korea and Australia gained, bucking the trend. The Australian and New Zealand dollars declined. Meanwhile, the U.S. Senate passed the $2 trillion virus rescue plan, sending the bill to the House.
US After Hours SCVL +9.9%, MU+5.7%, FUL +0.3%, NBLX +5.9%, GRFS +3.8%, HPQ +1.9%
Nikkei -4.51% Hang Seng -0.71% CSI -0.47% Shanghai -0.44% Shenzen -0.62%
Eur$ 1.0910 CNH 7.1275 CNY 7.1130 JPY 110.58 GBP 1.1840 CHF 0.9739 TRY 6.4570 RUB 78.37 WTI$ 24.06 -1.76%
S&P -1.48% EuroStoxx -2.28% FTSE-2.05% Dqx -2.51% SMI -1.59%
Macro :
- German April GfK Consumer Confidence +2.7; Est. +7.5 (Table)
- Senate Passes $2 Trillion Virus Rescue Plan; Sends Bill to House
- Brevan Howard Hedge Fund on Track for Record Month With 17% Gain
- U.S. Investor Bull-Bear Spread -19.2: AAII
- JPMorgan’s Equity Derivatives Haul Said to Soar to $1.5 Billion
Keep an eye on :
- ACCEL NA : Accell Pulls Dividend Proposal, Draws EU50 Mln Under Facility
- ADP FP : France’s Orly Airport to Close Temporarily From March 31: Echos
- AIR FP : Airbus Cuts Production at Wing Plants in Germany, U.K.
- AIR FP : Germany to Split Replacement Order Between Boeing, Airbus: DPA
- AKERBP NO : Aker BP Total Net Proven Reserves Estimated 666Mln BOE End 2019
- ALT FP : Altran Board Scraps Dividend for 2019 Due to Coronavirus
- AAPL US : Apple Weighs Delaying 5G iPhone by Months: Nikkei
- AAPL US : With Cash Above $200 Billion, Apple Liquidity Is Best in Class
- BYW6 GY : BayWa: 2020 Ebit Likely to Improve Moderately
- BZU IM : Buzzi Unicem FY Dividend Per Share EU0.15 Vs. EU0.125 Y/y
- CAI AV : CA Immo Full Year Dividend Per Share Beats Estimates
- CWC GY : Cewe Says 2020 Targets May Be Unachievable on Coronavirus
- CFN PL : Cofina Asks Regulator to Consider Bid for Media Capital Extinct
- COFB BB : Cofinimmo Offering by Care-Ion Prices 433k Shares (1)
- DEZ GY : Deutz to Ramp Down Production in April, Retracts Guidance
- DMGT LN : Daily Mail Sees Earnings in Line With Expectations
- DNB NO : Norway Won’t Force Banks to Retain 2019 Dividends Amid Crisis
- DRI GY : 1&1 Drillisch Full Year Ebitda Meets Estimates
- DWNI GY : Berlin Freeze Drags Deutsche Wohnen, Not Virus: Earnings Outlook
- EDEN FP : Edenred Suspends 2020 Targets Due to Coronavirus
- ENI IM : Eni to Cut 2020 Capex by About EU2B, Go Deeper in 2021
- EL FP : Essilor Says Computer Systems Suffered Cyber Attack March 21
- EVT GY : Evotec SE Sees ‘20 Adj. Ebitda at Similar Level as ‘19
- EXO IM : Exor Full Year Net Assets $26.16 Bln, +33% Y/y
- FER SM : Ferrovial Says Main Toll Roads Have Required Liquidity for 2020
- F US : *FORD FALLS 2% POST-MARKET AFTER BEING CUT TO JUNK BY S&P
- FRA GY : Fraport to Carry Forward 2019 Net Profit Onto Revenue Reserves
- GRF SM : *GRIFOLS ADRS RISE 4% ON PLAN TO PROCESS PLASMA FOR COVID-19
- GRF SM : Grifols to Work With FDA, Collect Plasma From Covid-19 Patients --> +4% in after Hours
- HAB GY : Hamborner REIT Withdraws Earnings Forecast for Fiscal Year 2020
- HSP LN : Hargreaves Says Performance is in Line With Expectations
- INTRUM SS : Intrum Says No Longer Possible to Meet Targets for This Year
- INTU LN : Intu to Reveal It Received Barely One Third of Rent Owed: Sky
- IPN FP : Ipsen to Reinitiate Palovarotene in Patients From 14 Years Old
- IBAB BB : Ion Beam Full Year Adjusted Ebit Misses Lowest Estimate
- DEC FP : JCDecaux Cancels 2019 Dividend, Cuts Guidance on Coronavirus
- MMB FP : FT : Amber Capital makes move to oust Lagardère board - https://on.ft.com/2WFfwq6
- LAND SW : Landis+Gyr Meter Deployment May Slow Amid Virus: Company Outlook
- LR FP : Legrand Suspends 2020 Targets Due to Coronavirus Outbreak
- MRL SM : Spanish Billionaire Builds Up $195 Million Stake in Merlin REIT
- BNB BB : National Bank of Belgium Cuts Dividend to EU122.57 a Share
- ORSTED DC : Unfazed by Virus, Orsted Weighs Almost $13 Billion in Taiwan
- PFV GY : Pfeiffer Vacuum Full Year Dividend Per Share Misses Estimates
- PHM SM : Pharma Mar to Buy Back Up to 3% of Own Shares
- RENE PL : REN Full Year Net Income EU118.9 Mln, +2.8% Y/y
- REP SM : Repsol Scraps Buyback, Slashes Spending on Lower Oil Prices
- RXL FP : Rexel Suspends 2020 Guidance, Draws EU550m of EU850m Credit Line
- SANT GY : S&T Full Year Ebitda EU111.7 Mln, +23% Y/y
- G24 GY : Scout24 Suspends Forecast for FY 2020, Extends Share Buybacks
- SIX2 GY : Hertz, Avis Downgraded at Consumer Edge on Demand, Supply Shocks
- AM3D GY : SLM Solutions Full Year Adj Ebitda Loss EU26.0 Mln
- S92 GY : SMA Solar Full Year Ebitda EU34 Mln Vs. Loss EU69.1 Mln Y/y
- SOON SW : Sonova Cuts Full Year Sales Forecast
- TTR1 GY : Bafin Fines Technotrans EU210,000 on Declaration Violation
- TMO US : Thermo Fisher Gets CE Mark for Coronavirus Diagnostic Test
- UTDI GY : United Internet Ebitda Meets Estimates, Sees Stable Profit
- VALN SW : Valora Sees ‘Pronounced Negative Effect’ on 1H, FY20 Net Profit
- VLA FP : Valneva Completes End-of-Phase 2 Meeting With FDA on VLA1553
- VOW3 GY : VW Says China Sales Could Reach Pre-Crisis Level in Summer: FAZ
- ROSE SW : Zur Rose to Offer CHF150m Convertible Bonds Due 2025
>>> Up
* Aena Raised to Buy at HSBC; PT 140 euros
* AUTO TRADER RAISED TO BUY VS ADD AT PEEL HUNT, PT 545P
* Brenntag Raised to Buy at Nord/LB; PT 40 euros
* Coats Raised to Buy at Berenberg
* Demant Raised to Buy at Berenberg; PT 195 kroner
* DSV Panalpina Raised to Buy at Handelsbanken; PT 600 kroner
* DSV Panalpina Raised to Market Perform at Bernstein
* DSV Panalpina Raised to Buy at Sydbank
* GB Group Raised to Buy at Panmure Gordon; PT 690 pence
* HelloFresh Raised to Outperform at Exane; PT 32.50 euros
* Hera Raised to Outperform at Mediobanca SpA
* Jungheinrich Raised to Buy at HSBC; PT 20 euros
* Jyske Raised to Buy at ABG; PT 210 kroner
* Kainos Raised to Buy at Panmure Gordon; PT 750 pence
* MIPS AB Raised to Buy at Handelsbanken; PT 260 kronor
* Rentokil Raised to Buy at Goldman; PT 500 pence
* Sage Raised to Hold at Panmure Gordon; PT 620 pence
* Sartorius Raised to Hold at Berenberg; PT 208 euros
* Straumann Raised to Hold at Berenberg; PT 660 Swiss francs
* Subsea 7 Raised to Buy at Berenberg; PT 80 kroner
* TechnipFMC Raised to Buy at Berenberg; PT $12.50
* Temenos Raised to Hold at Jefferies; PT 111 Swiss francs
* Terveystalo Raised to Buy at Danske Bank Markets
* VIB Vermoegen Raised to Buy at SRC Research; PT 29 euros
* Vicat Raised to Buy at Citi
>>> Down
* Alstria Office PT Cut to 11 euros at Bankhaus Metzler
* Auto Trader Cut to Hold at HSBC; PT 410 pence
* Credit Agricole PT Cut to 5.70 euros from 10 euros at Berenberg
* EDF Cut to Hold at HSBC; PT 8.70 euros
* Engie Cut to Equal-Weight at Morgan Stanley; PT 13.80 euros
* Mowi Cut to Sell at Berenberg; PT 140 kroner
* SocGen PT Cut to 12 euros from 23 euros at Berenberg
* Spirax Cut to Hold at Berenberg
* SSP PT Cut to 420 pence from 760 pence at Morgan Stanley
* SThree Cut to Hold at HSBC; PT 245 pence
>>> Initiation
* EPROB SS Rated New Equal-Weight at Morgan Stanley; PT 36 kronor
>>> Call
* Berenberg Upgrades TechnipFMC, Subsea7 on Balance Sheet, Backlog
* Electrolux Professional Has Upside, More Visibility Needed: MS
* Engie Unlikely to Lead a Market Rebound, Morgan Stanley Says
* Medtech Sector’s Fundamentals Remain Robust, Berenberg Says
Trump Says Parts of U.S. Could Go Back to Work in a Few Weeks
White House weighs proposing workplace coronavirus testing, but capacity remains limited; governors suggest they will go their own way
WASHINGTON—President Trump said restrictions on economic activity could be lifted in some parts of the country but not others as his administration works to develop a plan for how Americans could return to work in a few weeks without exacerbating the spread of the new coronavirus in the U.S.
“It’s time. People want to get back to work,” Mr. Trump said in a briefing Wednesday. He said that “large sections” of the country could return to work far sooner than others, but that New York has a ‘number of very tough weeks ahead.” The president added that “I’m not going to do anything rash or hastily.”
Mr. Trump in recent days has repeatedly signaled his interest in reviving the economy within the coming weeks, saying Tuesday that he hoped to do so by Easter, which falls on April 12—just under a month after the White House issued guidelines advising Americans to practice social distancing and avoid gathering in groups of 10 or more.
But the federal government’s ability to force the reopening of the economy is limited, as much of that power rests with state governors and mayors.
Mr. Trump’s timeline also is considerably shorter than what many health experts, including some in his own administration, have said will be necessary to blunt the spread of coronavirus across the U.S. and keep the nation’s health care system from being overwhelmed.
The president claimed in a tweet Wednesday that the news media was pressuring him to keep much of the economy closed to hurt his re-election chances in November.
White House advisers and public health experts are developing proposals that could include workplace testing of employees and intensified contact tracing to curb the spread of the infection, according to people familiar with the planning. Their goal is to release a plan before Easter. Officials are also considering implementing more widespread and targeted testing in areas of the country where there are fewer cases.
But it isn’t clear the U.S. currently has the testing capacity to implement such measures. State and local health labs would need more federal help to establish specific reporting sites that act as sentinels to know how fast or far the virus is spreading.
Even if Mr. Trump moves to relax the federal government’s social distancing guidelines next month, his actions may have a limited effect.
While the Trump administration has issued guidelines urging Americans to stay home, the most severe restrictions nationwide have come from governors, who have ordered nonessential businesses to close in at least 24 states and have imposed restrictions on those businesses in a dozen more. Nineteen states plan to or already require residents to stay home. Federal guidelines don’t trump state restrictions.
The result could be an even further decentralized patchwork of guidelines across the nation, which public-health experts say will make it harder to combat the virus’s spread. The U.S., because of its decentralized structure of government and health care systems, has faced greater hurdles than some Asian countries in implementing rigorous measures to test and quarantine citizens.
“A patchwork approach is functionally a least-common-denominator approach, which is a huge problem,” said Jeremy Konyndyk, who led the U.S. government’s response to international disasters under the Obama administration. “In the absence of uniform standards and robust surveillance, we are vulnerable to governors taking risks in their states that end up endangering other states as well.”
White House spokesman Judd Deere said the administration is “evaluating critical data to determine next steps” and that the president remains in close contact with governors. “The goal is for America to be healthy, prosperous, and again open for business, and we remain committed to reaching that goal in partnership with state and local leaders,” he said.
Mr. Trump has faced pressure from business leaders and some of his own advisers to reopen the economy soon, as uncertainty about the pandemic has sent the stock market reeling in recent weeks, and business closures have caused millions to lose their jobs. “We can’t have the cure be worse than the problem,” Mr. Trump said this week.
Health experts in the administration have urged more caution. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, has said it will be at least several weeks before the country can reopen and on Tuesday described the Easter timeline as “flexible.”
Governors in both parties rejected the Easter timeline the president offered and said they planned to chart their own course. Democratic New York Gov. Andrew Cuomo, whose state has been by far the hardest hit by the virus, stressed that the federal government was offering suggestions, not decrees. “They call them guidelines because they are guidelines,” he said at a briefing Wednesday. “We’ll come up with a plan that works for New York.”
Democratic California Gov. Gavin Newsom, who last week ordered the state’s 40 million residents to stay at home except for essential activities, said it would be “misleading to represent” that California would reopen by Easter.
Ohio Gov. Mike DeWine, a Republican, tweeted that he was looking forward to the day when the economy could reopen, but “it’s not yet here.”
Some states have also imposed penalties for violating state guidelines aimed at slowing the virus’s spread. In Virginia, companies can lose operating licenses or face misdemeanor charges if they violate state guidelines. Oregon Gov. Kate Brown, a Democrat, made it a misdemeanor to open or shop at certain retail businesses such as hair salons, gyms and fitness studios and theaters.
Public health experts say it could take months, if not years, before life returns to normal. They say the U.S. is woefully behind on the type of widespread testing and quarantine measures adopted in Singapore and South Korea that were successful at reducing spread of the virus. They also say that reopening too soon could overwhelm hospitals, endanger health-care workers and fuel the virus’s spread in states where it isn’t prevalent now.
Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, warned in a briefing Wednesday that in the absence of necessary preparations, the virus could resurge once restrictions are eased. “The last thing any country needs is to open schools and businesses, only to be forced to close them again because of a resurgence,” he said.
Another question is the level of control the president can exert over the Centers for Disease Control and Prevention’s guidelines. Mr. Trump has stressed that he will listen to advice from his administration’s health experts on when to reopen the economy, but that he will render the final decision on the timeline.
Ned Price, who was an adviser to former President Barack Obama, said that while Mr. Trump has authority over CDC guidelines, the agency has traditionally been granted a level of independence by previous presidents. That practice, however, is dictated “not by laws but by norms,” which Mr. Trump has made a habit of shattering, he said.
Americans around the country in recent days received a postcard from the federal government outlining the CDC’s guidelines for social distancing. The front of the postcard reads: “President Trump’s coronavirus guidelines for America.” His first piece of advice: “Listen and follow the directions of your STATE AND LOCAL AUTHORITIES.”
The global hunt for a coronavirus drug
With a vaccine up to 18 months away, drug companies are testing existing virus treatments
It was Friday March 13 when doctors at the largest healthcare provider in New York City decided to take the search for a coronavirus drug into their own hands. Many of their Covid-19 patients were not getting better — and some were getting worse.
Two of the hospitals’ scientists each called their contacts at US biotech companies Gilead Sciences and Regeneron to offer to test their potential treatments: an antiviral called remdesivir and an anti-inflammatory called Kevzara, developed for Ebola and rheumatoid arthritis respectively. Clinicians, researchers and regulators rushed to set up the clinical trials, which usually take months, and just four days later two patients took their first doses of the experimental drugs.
“The patients were very, very sick,” says Kevin Tracey, president of the Feinstein Institute, the research arm of Northwell Health. “Everybody just rolled up their sleeves and said we’re facing a crisis and the patients need this. After 30 years of doing research, it was one of the proudest days of my life to know patients were getting treated with these drugs that may help them.”
The hospital hopes the drugs will stop the replication of the virus and reduce the inflammation in the lungs of the patients.
As the pandemic spreads — recorded cases have more than doubled over the past week to over 460,000 on Wednesday, with more than 20,000 deaths — no one can afford to wait the 18 months it might take to find a vaccine. Northwell is one of many hospitals across the globe running clinical trials on drugs that were developed for other diseases, from Ebola to malaria to arthritis, but that early studies suggest could offer some hope to Covid-19 patients.
Doctors are desperate for evidence of what works. In the next month, they will learn more as some important trials in China are due to publish preliminary results.
Yet the desire from politicians and investors for a miracle cure has led to a maelstrom of misinformation about drugs to treat the virus. Just as Northwell was dosing its first patients, President Donald Trump said the US Food and Drug Administration had approved the antimalarials chloroquine and hydroxychloroquine for use against Covid-19. This turned out to be not true, with fatal consequences for some. The FDA was actually just collecting evidence on whether it worked.
Christos Kyratsous, vice-president of research in infectious diseases at Regeneron, says anecdotal evidence from China provides a reason to be “optimistic” that Kevzara, developed with Sanofi, will help Covid-19 patients suffering from acute respiratory distress syndrome.
“The challenge now is finding the best and quickest way to see if it is effective in the clinic,” he adds. “That’s very, very important, because if you can get meaningful data, and if the data is positive, we can expand access to something like this, which is going to be life saving.”
Scientists are investigating three main types of drugs. The first are antivirals to stop the virus from replicating. Treatment guidelines compiled by the Chinese government during the outbreak include HIV drug combination Kaletra, which US biotech AbbVie recently waived its patents on so it can be made available as a generic; antimalarials such as chloroquine, which generic drugmakers are gearing up to manufacture at scale; and favipiravir, an anti-flu drug from Japan’s Fujifilm.
The second category is anti-inflammatories that treat the lungs after the immune system is overwhelmed. Regeneron and Sanofi have partnered on Kevzara, while Roche has started a trial on Actemra, approved for use on rheumatoid arthritis in 100 countries.
The third group are antibody-based treatments, derived either from recovered Covid-19 patients or developed in labs, to be given to the seriously ill or as a temporary prophylactic for healthcare workers. Eli Lilly has paired up with Canadian start-up AbCellera to work on antibodies developed from one of the first US Covid-19 patients, while Japan’s Takeda is developing a new drug derived from the blood plasma of others who have survived the virus.
Analysts are eagerly awaiting data from early trials into remdesivir, an antiviral drug that the California-based biotech group developed for Ebola. It has also been shown to work against other coronaviruses in animal studies. Umer Raffat, a biotech analyst at US bank advisory firm Evercore, says evidence could be published in the next couple of weeks.
“It has by far the best prospects,” Mr Raffat says. His optimism stems from the drug’s ability to disable the machinery that helps the virus replicate, which is similar to that found in Ebola. But he believes the early data may not be “spectacular”, if too many of the patients took it too late in the progression of their disease.
Andre Kalil, an investigator in a large remdesivir trial, which plans to recruit 400 patients and is sponsored by the US National Institutes of Health, says they are making patients take the drug within 72 hours of diagnosis. Dr Kalil ran a clinical trial during the 2014 Ebola outbreak. He believes they moved too slowly to set up a trial then.
“This is a fight against time. We need to move as fast as possible,” he says. “We have no idea what works or does not at this point. There are zero therapies specifically against coronavirus.”
Timing will be crucial. A study published last week of the HIV drug combination was dismissed as disappointing, but survival rates were better when patients had taken the antiviral drug earlier in the disease.
The antimalarial chloroquine does have two clear advantages over remdesivir: it is a generic, so is likely to be far cheaper; and it is a pill, when remdesivir is delivered by an intravenous infusion, so would probably need to be given in hospital. But studies in France and China, hailed by Mr Trump, are small and did not follow the recommended protocols of a randomised control trial, designed to prevent bias. A study in China released on Tuesday found the drug had no impact.
Early results from clinical trials in China fuelled enthusiasm for a second antiviral — favipiravir — after reports of faster recovery times for patients that took the drug. Junji Okada, president of Fujifilm Toyama Chemical, the unit that produces the branded version Avigan, says the company is responding to a flood of inquiries from across the world.
“Our sense of mission became bigger and bigger as it became clear that Avigan may be effective,” Mr Okada says. “We have made the preparations so that we can increase production if needed.”
Kimiyasu Shiraki, an emeritus professor at the University of Toyama who was involved in Avigan’s early development, says studies show that the drug does not generate an Avigan-resistant virus that could make it less effective in the long term: “This suggests Avigan could treat the first to the last patient with the same efficacy during the epidemic.”
Antibody-based treatments could be important for helping the hardest hit and those key workers that need to stay healthy. New York — now the centre of the crisis in the US, with almost 200 deaths — is set to start testing plasma from recovered patients in a trial with the seriously ill. But most drugmakers are looking at refining the process to create a concentrated and purified product, or creating artificial antibodies, often developed in mice. Their products will have to go through clinical trials, likely to take many months.
AbCellera was working on a test project on influenza with the US Defense Advanced Research Projects Agency when Covid-19 emerged — so it rapidly switched to preparing their antibody-finding platform for the new virus. They took blood samples from one patient and generated almost 6m immune cells for antibodies, using an AI-based platform that can screen down to the individual cell and allows them to find more antibody-secreting cells. Researchers have narrowed it down to the 500 most potent against Covid-19 and partnered with Eli Lilly for the first human trials of the drug by July.
“Every day between now and the first human testing is mapped out and precious,” says Daniel Skovronsky, chief medical officer of Eli Lilly.
Takeda began looking at plasma-derived therapies after they proved effective in reducing mortality during the outbreaks of both severe acute respiratory syndrome (Sars) in 2002-03 and Middle East respiratory syndrome (Mers) in 2009. But the treatment will not be widely available — the plasma will need to be donated by recovered patients. It is not yet known how many patients could be treated with the plasma from a single recovered patient.
Another obstacle is that all the drugs being tested have potentially serious side effects: remdesivir may cause liver damage, Avigan can cause birth defects, and Regeneron and Sanofi’s Kevzara works by suppressing the immune system — but it could potentially go too far.
Rajeev Venkayya, president of Takeda’s vaccine business, says the industry is facing a new challenge. “It is unprecedented,” he says. “[But] what is very different is the opportunity we have with the tools and technologies that can help us to address this in ways that we didn’t have in the past.”
Drugmakers face similar challenges to vaccine developers: by the time they have the evidence they need, the new virus may have disappeared. But at least it is now clear that Covid-19 is likely to be a longer-term problem.
“When it becomes a global health crisis, it is easy for companies like us to make decisions to invest . . . There is a concern for wellbeing, patients, society,” says Dr Skovronsky. “But when it first emerges and there are five or 10 patients, is it worth spinning out incredible resources and financial costs when you’ll never get repaid if the virus is successfully contained?”
Even if a drug succeeds, there will be political pressure to price it affordably. Rising Pharmaceuticals, a generic maker of chloroquine, almost doubled the price to $7.66 per 250mg pill in the US in January, as the coronavirus outbreak raged in China. This month, as the crisis hit the US, it cut the price to its previous level.
AbbVie, maker of the HIV drug combination, will allow generics makers to manufacture the drug, relinquishing its intellectual property claims, in a move that should make it cheaper.
But Gilead initially took a different approach: it won the right to extend its intellectual property rights for remdesivir by using an “orphan drug designation” in the US. The rule was designed to encourage drugmakers to make treatments for rare diseases, further fuelling criticism of the industry’s pricing policies. Ellen ’t Hoen, director at non-governmental organisation Medicines Law & Policy, called it “the most blatant abuse” of the act. But on Wednesday Gilead asked the FDA to rescind the application citing the “urgent public health needs posed by the Covid-19 pandemic.”
Drugmakers will need to make large investments to increase production fast. Kenneth Kaixin, director of the Tufts Center for the study of drug development, says: “You don’t want to invest a lot in manufacturing before you know you are going to have a drug on the market. [Yet] you want to make sure you can manufacture as much as needed, perhaps hundreds of thousands of doses at the end of the day.”
Once a drug is ready to sell, governments are likely to compete to put their citizens first. Already, there are reports that the White House tried to buy German vaccine maker CureVac, with Berlin trying to find ways to keep it at home. The UK has banned the “parallel export” of three drugs: Kaletra, chloroquine and hydroxychloroquine.
Some believe the pharmaceutical business model simply does not work for pandemics, because the diseases will always compete for resources with blockbuster drugs that people take for years. Emergent Biosolutions takes a different approach: it specialises in making “rescue therapies” for unlikely events, selling the only antidotes to smallpox, anthrax and botulism to US and allied governments to stockpile in case of bioterrorism. It is now working on an antibody treatment for Covid-19.
“What differentiates us from just about any other pharma company is that they want an immediate return, very quickly within six to 12 months, and we take a little bit of a longer view,” says Robert Kramer, chief executive of the Maryland-based speciality pharmaceuticals company.
Despite the obstacles, finding drugs that can be repurposed to help coronavirus patients’ recovery is one of the only hopes for their health, their families — and ultimately, the economy.
Dennis DeBusschere, who leads Evercore’s portfolio strategy team, is closely watching when medications might be ready because he believes they are crucial to getting those people in lockdowns outside to spend again. Even if the virus continues to spread, having medications available would take some of the fear out of infection.
“You may want to go on vacation again, actually go to a restaurant, to the movies,” he says.
Amber Capital makes move to oust Lagardère board
Activist presses for reforms at underperforming French media group
Activist investor Amber Capital is seeking to oust the board of Lagardère at its forthcoming annual shareholder meeting, the latest stage in its long-running campaign for change at the underperforming family-controlled media group.
Amber, which has been increasing its position in Lagardère and is now the group’s largest shareholder with a 16.4 per cent stake, unveiled its board proposal as part of a 49-page presentation. It argued that poor governance had allowed heir and managing partner Arnaud Lagardère to destroy shareholder value for years with no consequences for his position.
“The current board has failed its shareholders,” said Amber’s founder Joseph Oughourlian. “We will start by changing the board and implement change from there.”
To that end, the activist fund has proposed 16 resolutions to put forward a slate of eight new board members at the AGM in May. It will not oppose the appointment of two new members that Lagardère has proposed. They are former French president Nicolas Sarkozy, a family friend of Mr Lagardère and of his late father Jean-Luc Lagardère, and Guillaume Pepy, who used to run SNCF, France’s state-owned rail company.
Amber has selected Patrick Sayer, the well-respected former CEO of listed private equity company Eurazeo, as its candidate for board chairman.
The move represents an escalation in the conflict that has raged between Lagardère and Amber since it first took a stake in 2016. It also comes as the group’s businesses, which include publisher Hachette, the Relay chain of travel retail stores and Paris Match magazine, are being hit by the economic shock of the coronavirus pandemic. This prompted Lagardère to suspend its annual profit guidance on Wednesday and cut its dividend by 30 per cent.
Lagardère shares are down 61 per cent in the past year, compared with a 19 per cent decline in France’s blue-chip CAC 40 index.
A spokesman for Lagardère declined to comment on Amber’s board proposals. In the past, Lagardère has accused Amber of seeking to destabilise the company and its leadership, and has sued the hedge fund for defamation in the French courts.
Whether Amber’s campaign will be successful at the May 5 annual meeting will depend on whether other large shareholders, including the Qatar Investment Authority, can be rallied to the cause. Other activists have taken aim at Lagardère in the past but their efforts failed in large part because of the grip that the company’s structure gives to Mr Lagardère.
Although he owns only 7.5 per cent of the company, Mr Lagardère controls the group though an unconventional structure known as a société en commandite par actions, which is a hybrid between a partnership and a limited liability company. In practice this means that the shareholders — or limited partners — cannot remove the general partner — Mr Lagardère — as they could in a normal company.
Amber Capital has argued that the structure has meant that there are few outside checks on Mr Lagardere’s power and no consequences for strategic mis-steps and poor capital allocation.
Amber is hoping to change that by replacing the board and then enacting a far-reaching turnround plan that would eliminate the commandite structure and get rid of Mr Lagardère and his longstanding lieutenants. Amber also wants to cut management costs so as to invest more in publishing and travel retail.
Two years ago Amber tried unsuccessfully to nominate two members to
Lagardère's board at its shareholder meeting, but QIA and other investors voted against its proposals.
So far the fund has lost money on its investment in Lagardère. It bought most of its shares when the price was around €18 to €20 per share, compared to the current price of €9.50.
After Hours Summary: SCVL +9.9%, MU +5.7% up on earnings; RDFN -5.3% as it says home-buying demand has slowed notably
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: SCVL +9.9%, MU +5.7%, FUL +0.3%
Companies trading higher in after hours in reaction to news: NBLX +5.9% (approves a 73% reduction of the quarterly distribution), GRFS +3.8% (to collaborate with US govt to produce COVID-19 treatments), VIR +3.2% (enters into license agreement with XNCR for use of Xtend in treatment of COVID-19), AVB +3.1% ( withdraws 2020 outlook), AAL +3.1% (has borrowed $1 bln in term loans), HBI +2.2% (withdraws Q1 and FY20 guidance), HPQ +1.9% (shares letter to shareholders regarding pandemic and XRX offer), SBRA +0.2% (cuts dividend by 33%)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: YRD -1.1%
Companies trading lower in after hours in reaction to news: RDFN -5.3% (home-buying demand has slowed notably since March 18 update), CIO -5.3% (cuts dividend), MCFT -5% (suspends manufacturing operations; withdraws FY20 guidance), BYD -2.8% (suspends dividend, withdraws FY20 adj. EBITDAR guidance), TWO -2.3% (sells substantially all of its portfolio of non-Agency securities), F -2% (S&P lowers ratings to 'BB+' (junk)), LTC -1.4% (terminates share repurchase plan), SPWR -0.6% (withdraws FY20 guidance, implements initiatives to manage its cost structure), WYND -0.4% (withdraws 2020 guidance, suspends share buybacks)