Powerscourt

By Powerscourt on 09/12/2020

Powerscourt Coronavirus Briefing – 09 December 2020

ANALYSIS

There is something cheery in the fact that the second person inoculated on Tuesday against the Covid-19 virus, by staff at University Hospital Coventry, was one William Shakespeare, from Warwickshire. Cue a pandemic of bad puns.

As the UK pioneers mass vaccination against the virus, the US could soon follow. The Food and Drug Administration has taken a first look at the vaccine developed by Pfizer and BioNTech – the one being administered in British hospitals. Data suggests the vaccine is highly effective across age, race and weight. The FDA’s vaccine advisory panel meets on Thursday, and if it is approved – the Trump administration is piling on the pressure – doses could be shipped immediately.

A peer review in the Lancet medical journal gave the thumbs-up to the vaccine developed by AstraZeneca and Oxford University. The review confirmed the effectiveness rates announced late in November. Pascal Soriot, chief executive of AstraZeneca, said the company was seeking early approval around the world, adding that “our global supply chains are up and running, ready to begin quickly delivering hundreds of millions of doses on a global scale at no profit.”

Yet controversy over AstraZeneca’s handling of the vaccine persists. The New York Times reports that executives from the company and Oxford held a conference call with the FDA on 8 September to discuss the vaccine, but did not tell the regulators that field trials for the dose had been suspended two days earlier because a participant had fallen ill.

When that news broke a few hours after the call, FDA officials were furious. As the NYT writes, it was a moment when relations between both sides began to sour, and “was part of a pattern of communication blunders by AstraZeneca that have damaged the company’s relationship with regulators, raised doubts about whether its vaccine will stand up to intense public and scientific scrutiny and, in at least one instance, slowed the vaccine’s development.”

According to the Washington Post, fewer than half of black Americans are willing to take a vaccine even though they are three times more likely to die of Covid-19 than white people. The Post says the finding are due to “decades of mistreatment and mistrust” between African-Americans and the medical establishment.

In the Atlantic magazine, Zeynep Tufekci, an associate professor at the University of North Carolina who studies the intersection of technology, artificial intelligence and society, considers why some places, especially cities, are affected worse than others by the virus. The answer is complicated, but has to do with how it is dispersed.

Tufekci says that while scientists and doctors are focused on the R number = how infectious the virus is – the key variable is K, which is a measure of how it is spread. “After nine months of collecting epidemiological data, we know that this is an over-dispersed pathogen, meaning that it tends to spread in clusters, but this knowledge has not yet fully entered our way of thinking about the pandemic – or our preventive practices,” she writes.

 

WHAT ARE COMPANIES SAYING?

Industrials

Balfour Beatty
Infrastructure firm Balfour Beatty expects a 20% jump in its year-end order book as the Government allowed construction work to begin on the new high-speed rail line, while other project wins also supported the company during the COVID-19 crisis. The company, which is one of the contractors on the HS2 high-speed rail link, also forecasts a year-end order book of around £17 billion, adding annual results will be in line with its expectations. Leo Quinn, chief executive, said: “We look towards 2021 with a strong order book and robust balance sheet and having maintained our expert capability.”

Stagecoach
Bus operator Stagecoach has taken a significant hit to its first-half profits as the pandemic continues to restrict its regional bus services. The company’s profits fell to £5.4m in the six months to 31 October compared to £65.9m in the same period last year. This came after revenue from £800.2m to £454.6m in the first half of this year, in large part due to the essential closure of regional bus and tram services. It also took a hit from the end of the East Midlands Trains franchise. Chief executive Martin Griffiths said: “We anticipate that it will take some time for demand for our regional bus services to return to pre-Covid levels, with lockdowns impacting on the speed of that recovery”. Despite a disappointing set of results there are some encouraging signs of recovery. There has been “significant recovery” in patronage and commercial revenue in its regional bus division since May. Stagecoach is currently operating around 91% of prior year vehicle mileage.

Howden Joinery Group 
The supplier of kitchens and joinery products to the building trade has upgraded its full-year profit expectations after a period of strong trading. The company said profit before tax for the year to end December 2020 is estimated to be around 10% above the top end of current analyst forecasts. Last year, the FTSE 250 group delivered a profit before tax of £260mln. In the period from November 1 to November 28, 2020, the firm said its UK depots saw total revenue jump by 17% on a like-for-like basis, while total UK revenue for the year to date slipped by 5% compared to 2019. Last month, the firm said it experienced a strong autumn peak trading period due to pent up demand since the coronavirus pandemic lockdown and a high level of stock availability.

Consumer & Retail

British American Tobacco
British American Tobacco stubbed out its previous earnings guidance for 2020 despite expecting a smaller hit on sales from the pandemic. Adjusted, diluted earnings per share are now only expected to grow by mid-single figure percentages, compared to guidance for a high single figure given at July’s interims. This is partly from the board’s decision to fire up further spending on new categories such as vaping and nicotine pouches, which is expected to increase by around £200m in the second half, which was said to be “capitalising on investment opportunities and good momentum in the business”. There was also “significant negative impact” from the pandemic on associate income, which is likely to be from a stake in India’s ITC. The FTSE 100 group’s business is “performing strongly”, said chief executive Jack Bowles in a pre-close trading update that was full of well-meaning statements, but he said last year’s strong performance was tough to beat. Revenues at constant currency rates are expected to grow towards the high end of the 1-3% range previously given.

Tesco
Britain’s biggest retailer Tesco has said that all conditions had been satisfied for the $10.6 billion sale of its businesses in Thailand and Malaysia to C.P. Retail Development Company Limited and the deal should be completed this month Tesco agreed the deal in March. It said that CP Group had now reviewed and was satisfied with the formal notice of approval from the OTCC in Thailand. This, combined with the approval received from the Ministry of Domestic Trade and Consumer Affairs in Malaysia on November10, means there are no further conditions outstanding and the disposal is expected to complete on or around December 18.

 

Healthcare 

Sensyne Health
The healthcare technology company is raising up to £27.5m to “industrialise and scale” its data platform. A total of £25m is coming from a placing of new shares at 90p each – a transaction that has now been successfully completed. Existing private investors can participate via an open offer of new stock. In the same announcement, Sensyne also said it had struck an exclusive strategic collaboration with Phesi, a US clinical trials data company. The deal will provide Sensyne, a specialist in the ethical application of clinical artificial intelligence (AI), with access to around 13.5m international patient records from 320,000 clinical trials. It said the tie-up would “enhanced our offering to the pharmaceutical and biotechnology industry”. 

 

IN THE NEWS

UK will break ranks with EU and halt US tariffs over state subsidies – Financial Times

Boris Johnson in last ditch push for Brexit deal – The Times

UK agrees to EU officials permanently stationed in Northern Ireland ahead of PM’s Brussels trip – The Telegraph




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