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(Alliance News) - Pharmaceutical stocks remain on a hair trigger for any suggestion of a vaccine or treatment for Covid-19, as countries around the world on Friday looked for a way out of economically crippling lockdowns.
In New York, it was the turn for Gilead Sciences, whose stock saw a double-digit jump in after-hours trading Thursday on the report of a treatment, while back in London earlier in the day, NetScientific shares doubled after saying one of its investees is working on a vaccine.
Early trial data shows Gilead Sciences's drug remdesivir is producing rapid recoveries in Covid-19 patients, Stat News reported on Thursday.
The University of Chicago Medicine study recruited 125 Covid-19 patients for Gileas's two phase 3 clinical trials, all of whom were treated daily with remdesivir.
Stat obtained a copy of a video discussion among faculty members of the University of Chicago about the studies, for which no other clinical data has been released so far.
Kathleen Mullane, the infectious disease specialist overseeing the remdesivir studies at the university, said in the video: "The best news is that most of our patients have already been discharged, which is great. We've only had two patients perish."
Stat reached out to Mullane, who confirmed the video footage was genuine but did not provide any further comment.
California-headquartered Gilead on Thursday released a statement which read: "What we can say at this stage is that we look forward to data from ongoing studies becoming available". Results for its trial involving severe Covid-19 cases are due in April.
Shares in Gilead ended 2.6% higher at USD76.54 in New York on Thursday, but gained a further 16% in after-hours trading to USD89.10.
Meanwhile, NetScientific said Thursday its portfolio company PDS Biotechnology has initiated a vaccine development program for Covid-19 and universal influenza.
The company owns around a 7% stake in PDS Biotechnology.
The UK-listed healthcare intellectual property commercialisation company also said that PDS Biotechnology has delayed its phase 2 trial for PDS0101 in advanced metastatic head and neck cancer due to the impact on clinical trial operations from the Covid-19 pandemic.
PDS Biotech's products combine its Versamune technology with custom-designed, disease-specific proteins to induce both neutralizing antibody and killer T-cell responses, which when co-induced are more powerful in fighting disease than either alone.
"The potency and versatility of the proprietary Versamune T-cell activating platform makes it possible for PDS Biotech to immediately start development of novel vaccines to protect against infectious disease agents with pandemic potential, starting with COVID-19 and influenza," explained Frank Bedu-Addo, chief executive officer of PDS Biotech.
Shares in NetScientific more than doubled following the news on Thursday and closed at 15.30 pence each in London. They were up another 18% early Friday to 17.65p.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 2.6% at 5,772.03
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Hang Seng: up 1.5% at 24,355.56
Nikkei 225: closed up 3.2% at 19,897.26
DJIA: closed up 33.03 points, 0.1%, at 23,537.68
S&P 500: closed up 0.6% at 2,799.55
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GBP: up at USD1.2490 (USD1.2466)
EUR: down at USD1.0855 (USD1.0868)
Gold: down at USD1,696.20 per ounce (USD1,728.30)
Oil (Brent): up at USD28.44 a barrel (USD27.78)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
1100 CEST EU harmonised consumer price index
1000 EDT US World Bank press conference
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Plans have been drawn up for Covid-19 testing kits to be delivered to UK homes by Amazon, according to a newspaper report. The Times says the company is starting a pilot program "using Amazon logistics" which will deliver throat swabs that are picked up one hour after a sample has been taken. Text messages will deliver the results, with the whole process aiming to wrap in less than 48 hours. The paper said the test was different from attempts to create a home test that shows antibodies to coronavirus. A spokesman for the Department of Health & Social Care did not confirm the report and neither did Amazon's press office when contacted by PA. It comes as Health Secretary Matt Hancock prepares to face questions from MPs on Friday over the government's coronavirus response, a day after lockdown measures were extended for at least another three weeks. Hancock is expected to be quizzed on personal protective equipment and an exit strategy as he appears before a virtual session of the Commons Health Committee.
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The UK urgently needs an exit plan for the coronavirus lockdown, a think-tank has warned as it claimed Britain's fiscal forecaster has "downplayed" the crippling long-lasting effects on the economy. The Adam Smith Institute accused the fiscal watchdog, the Office for Budget Responsibility, of underestimating the long-term hit from the lockdown and closure of a third of the economy. It said the OBR's scenario analysis released earlier this week did not factor in the risk of systemic economic decline if Britain's lockdown is sustained. The OBR predicted the economy could shrink by 35% and unemployment rise by 2 million if the lockdown continues for three months followed by a partial lifting for three months – but its analysis did not assume any lasting economic consequences. The institute warned the UK was falling behind other countries that already have reopening strategies and timelines in place, such as Germany, Italy, Norway, Austria, Spain, Denmark and the Czech Republic.
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Mid-sized and larger businesses with a turnover of more than GBP45 million will be allowed to access funding through a new UK government scheme from Monday, according to the British Business Bank. UK Chancellor of the Exchequer Rishi Sunak said companies can apply for the loans from lenders accredited by the banking group, through the Coronavirus Large Business Interruption Loan Scheme. Bosses with sales between GBP45 million and GBP250 million can apply for the short-term loans and financial support of up to GBP25 million if they have been forced to shut down operations or been impacted by the virus shutdown. Larger businesses with sales of more than GBP250 million can also take the support. However, if they access CLBILS they will be unable to use the Bank of England's Covid Corporate Financing Facility, from which both easyJet and Greggs have borrowed.
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Japan's industrial production data showed both a yearly and monthly decline in February, consensus having predicted a rise from January. Data from Japan's Ministry of Economy, Trade & Industry showed a 0.3% drop in production in February compared to January. Market consensus, according to FXStreet, was for a 0.4% month-on-month rise. On an annual basis, February industrial production was down 5.7% from 2019.
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BROKER RATING CHANGES
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HSBC RESUMES INFORMA WITH 'BUY' - TARGET 550 PENCE
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SOCGEN RAISES J SAINSBURY TO 'BUY' ('HOLD') - TARGET 254 (215) PENCE
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SOCGEN RAISES WM MORRISON SUPERMARKETS TO 'HOLD' ('SELL') - TARGET 190 PENCE
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CREDIT SUISSE RAISES FERGUSON TO 'NEUTRAL' ('UNDERPERFORM') TARGET 6181(4740) PENCE
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COMPANIES - FTSE 100
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Rio Tinto achieved a "robust" production performance in the first quarter, with iron ore output up on a year ago. For the first three months of 2020, Pilbara iron ore production rose 2% on a year before to 77.8 million tonnes, with shipments up 5% at 72.9 million. This was driven by a "strong recovery" across the network in March following tropical cyclone Damien in February, which hit Western Australia. Bauxite production was up 8% at 13.8 million tonnes following the successful ramp-up of Amrun in Queensland, Australia in 2019. However, aluminium production fell 2% to 783,000 tonnes and mined copper was down 8% at 133,000 tonnes in the quarter. Titanium dioxide slag output was down 1% to 293,000 tonnes, while the production of pellets and concentrate at the Iron Ore Co of Canada rose 3% to 2.6 million tonnes. For 2020, Rio Tinto now expects capital expenditure to be around USD5 billion to USD6 billion, down from previous guidance of USD7 billion, due to Covid-19 restraints. The miner largely held its production guidance for the year, though copper was nudged down to between 475,000 tonnes to 520,000 tonnes, from a range of 530,000 tonnes to 570,000 tonnes previously. Titanium dioxide slag is now guided to be at the lower end of the firm's previous 1.2 million to 1.4 million tonne range.
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Gambling firm Flutter Entertainment said group revenue rose 16% year on year in the three months to March 31, before the Covid-19 lockdowns, rising to GBP547 million versus GBP478 million. Sports revenue was up 13% to GBP407 million, and Gaming revenue was 25% higher at GBP140 million. Flutter Chief Executive Peter Jackson said: "The group performed very well in the period prior to the disruption to sporting events in mid-March. We delivered strong customer growth across each of our brands and benefited from favourable sports results across our sportsbooks. "Following the widespread cancellation of sporting events, group revenues have been more resilient than we initially expected, helped by the continuation of horse racing in Australia and the US. Gaming continues to perform well across the group."
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Following the UK government extending the country's lockdown for a further three weeks, Auto Trader said the automotive market will continue to face "unprecedented levels of disruption". Car dealers will remain closed, Auto Trader said. Adding: "We will advise our customers today that, while they are required to remain closed during May, our advertising packages will continue to be free."
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COMPANIES - FTSE 250
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Asset manager Man Group saw assets under management contract amid the market decline caused by the virus pandemic. At March 31, Man Group's FuM stood at USD104.2 billion, down from USD117.7 billion at the end of 2019. While Man Group was able to record USD500 million in net inflows in the quarter, market movements shaved USD10.7 billion off funds. Chief Executive Luke Ellis commented: "Given the extreme volatility in all markets, we are pleased to have outperformed peers on an asset weighted basis across the firm by 2.5% in the first quarter, and to see our absolute return strategies make gains for clients despite the large sell off seen. We saw net inflows in the quarter and continue to win mandates but we have seen a recent increase in redemptions as clients adjust their allocations in response to the market moves and heightened economic uncertainty."
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At peer Brewin Dolphin, March 31 funds under management were GBP41.1 billion, down from GBP48.5 billion three months earlier and GBP45.0 billion six months prior. Brewin saw GBP400 million in net inflows, but market movements took GBP7.5 billion off total funds in the company's second quarter. Brewin Chief Executive David Nicol said he was "encouraged" by the company's performance in the period. "Not surprisingly, the rapid spread of Covid-19 and the unprecedented reaction of the global markets, has negatively impacted the value of our clients' funds and consequently our second quarter total income. We have a strong balance sheet with good cash generation, and a robust regulatory capital position, which will support us as markets recover and enable us to service the growing demand for financial advice in the UK and Ireland," he added.
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Mediclinic International said trading for its recently-ended financial year was in line with expectations, though it has suspended its dividend in order to support liquidity in the face of Covid-19. On a reported basis, revenue for the financial year ended March is expected to grow 5.5%, while pre-IFRS 16 Ebitda is set to fall 2.5%. At constant currency, revenue was up 4.0% and Ebitda down 3.5%. As at the end of March, Mediclinic had "material" headroom to covenants in its existing debt facilities as well as a strong liquidity position. Cash and available facilities at the year-end stood around GBP515 million. To further support the group's liquidity position, all non-urgent and non-committed capital programmes have been postponed - including suspending its dividend.
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Publisher Future PLC said its acquisition of TI Media will complete shortly, following the announcement by the UK competition watchdog that it has accepted Future's undertakings and will end its investigation of the merger. Future had announced the GBP140 million purchase of fellow magazine publisher TI Media last October. The UK Competition & Markets Authority, however, raised concerns in January but later said it would pass the acquisition if Future agreed to sell three competing titles. In late March, Future confirmed it has agreed to sell WorldSoccer, Amateur Photographer, and Trustedreviews.com. All are in an advanced stage of talks with potential buyers. After which, the CMA said those remedies meant the regulator now believes there are reasonable grounds to approve the acquisition.
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COMPANIES - OTHER MAIN MARKET AND AIM
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Estate agent Foxtons will place 55.0 million shares at 40 pence, which it noted is a premium to the Thursday close of 38.70p. Foxtons said it had a cash balance of GBP21.9 million on March 31, but some of this represents creditor payments that now are subject to discussions.
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Friday's Shareholder Meetings
Herald Investment Trust
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By Tom Waite; thomaslwaite@alliancenews.com
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