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Our briefing for Thursday, February 24, 2022:
Feb 24, 2022 4:01:14 PM
- The United States’ Centers for Disease Control and Prevention (CDC) has revised its stance on the time people should wait between vaccine doses. According to the CDC, younger males, and healthy people under the age of 65 should wait around 8 weeks between their first and second doses of an mRNA vaccine. The new guidelines that were posted to agency’s website on Thursday cite increased evidence that a longer wait period between the primary doses of the vaccine can lead to heightened effectiveness and reduce the chance of rare heart conditions found most commonly in boys and younger men. “These additional considerations followed a thorough evaluation of the latest safety and effectiveness data,” CDC spokesperson Kristen Nordlund said. The previous recommendation from the CDC was a wait period of three weeks between first and second doses of the Pfizer-BioNTech and four weeks for the Moderna vaccine. The agency is still recommending that the three-week waiting period for people over age 65 and those who need rapid protection from the virus such as the immunocompromised remain the norm.
- On Thursday, Health Canada officially approved Medicago’s plant-based, two dose Covid-19 vaccine. The Quebec City-based biopharmaceutical company’s vaccine uses plant-derived, virus-like particles, that mimic the coronavirus that causes Covid-19, but without the use of any genetic material. The vaccine also uses an adjuvant – a chemical compound used to increase the immune response – manufactured by GlaxoSmithKline. The Medicago vaccine, now called Covifenz, has been proven to be up to 75 per cent effective at preventing infections of any severity resulting from the Delta variant and the company has said that the vaccine can and will be adapted as needed to fight Omicron. "While additional confirmatory data are needed, preliminary and exploratory data shows that Covifenz produces neutralizing antibodies against the Omicron variant," noted Health Canada in a statement. The company is currently in the process of testing the vaccine against the Omicron variant and “we will, in the next several months, know how well our vaccine did against Omicron,” the company's medical officer, Dr. Brian Ward said.
- The Welsh economy is the first in the United Kingdom to return to pre-pandemic size, according recently released data. Gross value added in Wales was up 0.9 per cent in the fourth quarter, returning to output levels seen at the end of 2019. The figures shine a spotlight on the discrepancies in gross value added (GVA) seen across the U.K., with the West Midlands still 10 per cent below where it was at the start of the pandemic. The area is experiencing the slowest rate of recovery in all of England. As pandemic restrictions eased gradually across the country, the U.K. GDP rose by 7.5 per cent over the last year, the most since 1941. The economy is on an upward trajectory and is expected to exceed pre-pandemic size by the second quarter of this year. The strongest GVA growth for 2021 was recorded in London, while the West Midlands and the North West saw the least.
- Two years after it became the epicenter of the pandemic in Europe, Italy is set to end its state of emergency that was put in place in 2020. The country will not extend its emergency powers that are to expire on March 31 and intends to further ease restrictions said Prime Minister Mario Draghi in Florence on Wednesday. “The health outlook is improving quickly thanks to the success of the vaccination campaign,” he said. “That allows us to lift the remaining restrictions on people and companies.” The three-tiered system allowing the government to heighten restrictions in hard-hit areas will expire in April, with Covid passports to be examined further in the coming months. Italy has seen cases numbers drop dramatically in the last month and recorded just over 49,000 new cases on Wednesday. The country will also ease quarantine restrictions for school children. “Our aim is to re-open everything, as soon as possible,” Draghi said.
- As other countries across the globe are easing Covid-19 restrictions to varying degrees, the government of Singapore has pushed back plans to end its own restrictions among a surge of new cases. The plans to eliminate several Covid-19 mandates, which were scheduled to begin in phases on February 25 and March 4, are now being delayed. The limitations on household gatherings and several other restrictions will now only be removed once the current surge in infections has peaked the Ministry of Health said on Thursday. The city has seen over 20,000 new daily cases in the past two days and the government will release a revised schedule for reopening in the coming weeks. Instead of introducing a phased structure for reopening the government has suggested that restrictions will now be eased all at once. Some of the rules that were to be simplified including the 1-meter social distancing in public places, no close proximity on benches and in washrooms, and a 5-person or single-family bubble in households. Mask mandates, however, will remain commonplace in the city.
Covid-19 – Due Diligence And Asset Management
The Pandemic Created a Health Care Crisis. Can Investors Cure It?
Brief: A world economy that’s still recovering from Covid-19 faces new risks from an energy-priceThe pandemic laid bare gaping holes in the reach and quality of health care services, research, and technology. Even though health care has long been fertile ground for investors, Covid-19 has created even more urgency. Allocators, hedge funds, private equity, and traditional managers are now hiring and investing in new resources to uncover a range of opportunities in the sector. This week alone, UBS O’Connor, the multi-strategy hedge fund manager that is part of UBS Asset Management, and Goldman Sachs Asset Management made big moves. O'Connor expanded its healthcare-focused investment team with the hiring of three medical doctors: Jason Bonodio is joining as a portfolio manager, while Robert Sweeney and Adam Sandler are signing on as research analysts. GSAM has formed a new healthcare advisory council, a group of internal staffers and other resources that will provide expertise and insights for the firm’s private investing strategies.
COVID-19 vaccine sales push Moderna to US$12B profit in 2021
Brief: COVID-19 vaccine sales jumped 44% for Moderna in the final quarter of 2021, and the drugmaker expects demand for booster shots to fuel more growth in 2022. Moderna said Thursday that it has signed purchase agreements for about US$19 billion in sales for 2022 with options for an additional $3 billion that would cover any updated boosters the company is developing. Company leaders told analysts they firmly believe more booster shots will be required next fall, and they expect sales to be greater in the second half of the year. Shares of the Cambridge, Massachusetts, company soared Thursday, even as broader indexes fell after Russia launched a military attack on Ukraine. Moderna booster shots have already been administered to more than 40 million people in the U.S. The company is working to develop several different versions, including one that targets the omicron variant of the virus that started spreading rapidly late last year.
U.S. Utilities Adapt Amid Volatility
Brief: Industry setbacks have pressured credit metrics, but asset de-risking and the favorable regulatory environment provide a constructive outlook. Regulated U.S.-based utilities have faced a number of headwinds in recent years, from the 2017 Tax Cuts and Jobs Act's negative impact on cash flows to COVID-19 and irregular weather events. These are generally viewed as one-time or transitory issues, although weather events have become more frequent. The transition from carbon-heavy coal generation to renewables is positive for earnings growth but puts structural pressure on credit metrics as debt is utilized to fund new projects. Funds from operations (FFO) to debt, a leverage ratio commonly used in the industry, have declined nearly 500 basis points since 2017 to around 15%, partially due to the issues mentioned above.
Stocks fall; oil, wheat prices jump after Ukraine attack
Brief: Stocks fell worldwide on Thursday after Russia’s attack of Ukraine sent fear coursing through markets and upped the pressure on the high inflation already squeezing the global economy. On Wall Street, the S&P 500 sank 1% to continue its dismal start of the year, though it was able to moderate its losses after starting the day down 2.6%. The heaviest losses hit stocks in Europe, after officials called Russia’s nearby moves a “brutal act of war,” with the German DAX down more than 4%. Beyond its human toll, the conflict looks set to send prices rising even higher at gasoline pumps and grocery stores around the world. Russia and Ukraine are major producers not only of energy but also grains and various other commodities. War could upend global supplies, as could sanctions brought by the United States and other allies. Oil prices on both sides of the Atlantic jumped toward or above $100 per barrel to their highest levels since 2014, up more than 5%. As with stocks, prices in Europe swung more sharply than in the U.S. Wholesale prices also shot higher for heating oil, wheat and other commodities. The spot price in Europe for natural gas, for which the continent relies on Russia to supply, jumped as much as 31%.
Business Leaders Warn That Ongoing Supply Chain Disruption Caused By COVID-19 Is Having A Critical Impact On The Ability To Drive Profitability
Brief: A recent study conducted by Forrester Consulting on behalf of intelligent pricing platform, Flintfox reveals that retail, manufacturing and consumers goods companies are facing fundamental challenges in managing their profit margins, due to the ongoing impact of COVID-19, inflation and supply chain issues. 90% of businesses report that COVID is having a critical impact on the ability to manage pricing across their product range, with 39% stating they are unable to keep up with the scale of real-time price fluctuations in the market. This is having a significant effect; with businesses losing on average $1m a year in lost profitability due to their inability to respond quickly enough to market forces. The study of over 900 business leaders has revealed that existing business models prevent them from managing the pace of change, with 41% still relying on manual processes to manage price fluctuations. Over half (53%) state that the pandemic has forced them to need better visibility into business performance on profitability and margins to respond accordingly.
