Powerscourt

By Powerscourt on 16/09/2020

Powerscourt Coronavirus Briefing – 16 September 2020

ANALYSIS

Scientists are expressing concern about the lack of rigour in the way some of the front-running vaccine candidates are being tested, as governments throw all their political capital at getting a jab through clinical trials and into widespread use.

UK drugs giant AstraZeneca has now resumed the UK portion of the late-stage trial for the so-called “Oxford Vaccine” which was halted when a patient suffered apparent spinal cord damage. Biotech trade paper Endpoints News reports Wednesday that US regulators continue to have concerns which are currently preventing a restart of the US arm of the trial. “The highest levels of [the National Institutes of Health] are very concerned,” Avindra Nath, a senior NIH research director told Endpoints.

As China says the vaccine being developed by Chinese companies could be ready for public use by as early as November, there are concerns as to whether testing there is robust. China says tens of thousands of people have been tested with three experimental shots as part of a so-called emergency use programme – an accelerated clinical trial – without harm.

But vaccine researchers at Johns Hopkins University in the US have said the top-down trials process is flawed, “problematic” for public health and doesn’t provide sufficient confidence in the safety or efficacy of the vaccines. Nevertheless, foreign buyers have been in discussion with Chinese biotech companies, according to Reuters, which says the United Arab Emirates has authorized the use of a vaccine by Chinese pharma giant Sinopharm just six weeks after human trials began there.

Meanwhile another week, another testing-related fiasco for the increasingly hapless UK government.

The most recent failure of the so-called “world-beating” test and trace system which was trumpeted as the solution to getting Britain back to work is not just an embarrassment for Boris Johnson’s government. It has the potential to introduce what one headteacher described as “lockdown by default” in the UK – making it so difficult for workplaces and schools to remain open due to the difficulty in getting tests that it has the same effect of the hard lockdown imposed in the spring.

The Times reported that at points on Tuesday there were no coronavirus tests available in 85% Britain. The newspaper used post codes from over 700 addresses representing every local authority in Britain to seek test appointments using the government’s online tool for booking tests. There were almost no tests available in England with Scotland doing best.

The latest testing crisis could take several weeks to resolve, health secretary Matt Hancock told the Commons on Tuesday.

“What had been underestimated was the speed at which the second wave would arrive but also the pressure put on the system from children returning to school and the testing demands associated with that,” Sir John Bell, Regius professor of Medicine at Oxford University, told the BBC.

Spain offers a worrying sign of what a European second wave could hold in store. Coronavirus cases on Tuesday surged to over 600,000. According to Spanish media, one in five people in hospital in Madrid are coronavirus sufferers.

Meanwhile, China continues to recover its mojo. From September 25, cinemas in China, which were completely closed from February to late July, can raise their audience capacity to 75 percent, compared with the current level of 50 percent.

Don’t get too envious. The rules are strict: online-ticketing to avoid human contact, temperature checks, masks, no food or drink and a lot of disinfectant.

Major stock indices rose on Tuesday amid robust industrial output and retail data from China and higher US factory production. Asian markets are focused Wednesday on an expected policy statement from the Federal Reserve.

 

WHAT ARE COMPANIES SAYING?

 

Retail & Consumer

Kraft Heinz
Kraft Heinz has laid down plans for another $2bn worth of cost cuts and new financial targets. “Instead of only dropping savings to the bottom line today we are reinvesting those savings in the business to fuel our growth,” chief executive Miguel Patricio said.

Thomas Cook
Thomas Cook, the UK travel company, has relaunched as an online-only holiday brand with fresh investment from Chinese conglomerate Fosun. It will start selling holidays on Wednesday with just 50 staff.  The majority of its senior management team, including chief executive Alan French, are former Thomas Cook employees, reports the Financial Times. “At the heart of Thomas Cook were some fantastic people who really cared about their customers and who went the extra mile . . . even when they weren’t being paid. It’s that DNA we want to bring to life,” Mr French said.

New Look
Fashion retailer New Look has secured landlords’ approval for a restructuring. New Look asked landlords to agree to rents based on shop turnover in order to better align store costs with trading conditions. Nigel Oddy, chief executive, thanked landlords and creditors for supporting the restructuring and stressed that physical stores had “a significant part to play in the overall retail market and our omnichannel strategy”.

Inditex
Fashion retailer Inditex, owner of Zara, Massimo Dutti and Bershka, reported a return to quarterly profit between May and July but sales were down 31% on the year-ago period. It said that 98% of its stores were open again.

 

Industrials 

Carnival
Carnival, the world’s largest cruise operator, expects a $2.9bn loss in the third quarter as a no-sail order remains largely in place for US cruise operators due to the coronavirus. Preliminary net loss included a non-cash impairment charge of $937m. Adjusting for one-time items the group expects to post a loss of $1.7bn in the three months ending in August. “Our business relies solely on leisure travel which we believe has historically proven to be far more resilient than business travel and cannot be easily replaced with video conferencing and other means of technology,” said Arnold Donald, chief executive.

Air New Zealand
Air New Zealand plans to shed another 385 cabin crew by December. Chief operating officer Carrie Hurihanganui said that the recovery of international travel would be slower than first thought. “The recent resurgence of cases in New Zealand is a reminder that this is a highly volatile situation,” she said in a statement.

Lufthansa
German airline Lufthansa could cut its fleet by 130 planes in response to the coronavirus crisis, sources told Reuters. Lufthansa Chief Executive Carsten Spohr informed staff on Monday that the airline’s management would make a decision about the move in the coming week. A Lufthansa spokesman declined to comment, saying there had been no decision on the matter.

Delta Airlines 
Delta will avoid involuntary furloughs for frontline employees on Oct. 1 except for pilots, but will continue to reduce work hours and executive pay through the end of the year, Chief Executive Ed Bastian said in a memo to employees on Tuesday. In addition, Bastian will forego his salary and continue to reduce officers’ salaries by 50% this year. “While we are all grateful for our ability to mitigate furloughs, it’s important to remember that we are still in a grim economic situation,” he said.

 

Financials & Real Estate 

Aquarius International Development
Aquarius International Development, owned by US-based Norcal Venture Capital Group, said it would build resorts, residences, yacht charters, stores and online travel services over the next five years as part of a $250m investment plan for Thailand’s post pandemic tourist sector.m“We firmly believe in the long-term vitality of the Asian travel and tourism industry, especially at the top end, and at the heart of this prosperity is Thailand,” said Nixon Chung, Aquarius’s chief operations officer.

Redrow Plc
British homebuilder Redrow reported an almost 40% fall in annual revenue and completed sales. It promised to renew dividend payouts next year and is halting investments in London. It will be focusing on its Heritage Collection homes. John Tutte, Executive Chairman of Redrow, said “the COVID-19 pandemic had a profound impact upon the Group’s performance in the 2020 financial year but we entered the new financial year in a position of strength. We have a record order book and brought forward very high levels of work in progress.”

 

TMT

Apple
At Tuesday’s keynote event, unveiled new versions of its watch and iPad at a range of price points. Apple noted the focused on selling subscription services to a wider base of customers, such as a new “Apple One” bundle including storage, games, music, movie streaming and more.

Spotify
Music streaming leader, Spotify has struck a deal with Songkick to promote live streaming events on its app. “With most tours postponed until 2021 and online concerts set to continue, Spotify wants to make it easy for fans to learn about virtual events,” the group said in a blog post on Tuesday.

Ocean Outdoor Limited
Ocean Outdoor Limited, a leading operator of premium Digital Out-of-Home advertising, announced that revenue fell by 2.5% to £36.5m and billings decreased to £44.3m. Commenting on the 2020 H1 results, CEO Tim Bleakly said, “…  The fightback has begun and traffic and pedestrian audiences are starting to return, and each week since late May we have seen a gradual improvement in audiences, advertiser demand and revenues… With new contracts won, an expanded network and a strong balance sheet, Ocean is both well poised to take full advantage of the market recovery and in a strong position to withstand any further headwinds.”

 

IN THE NEWS

Chancellor hints at further measures to prevent UK job losses – Financial Times

Five things to watch at the Federal Reserve meeting – Financial Times

Rationing ahead after day with no tests available for millions The Times

UK inflation fell but by less than expected in August – Reuters

NIH ‘very concerned’ about serious side effect in AstraZeneca’s PhIII Covid-19 trial – Endpoints News




DAILY CORONAVIRUS BRIEFING - How business is responding to the crisis MENU