The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Monday related to the national and global response, the work place and the spread of the virus.
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FRONT LINE VIRUS COMPANIES:
- Two vaccine candidates from Pfizer and BioNTech being developed to help protect against the virus that causes COVID-19 have received fast track designation from the U.S. Food and Drug Administration. The designation was granted based on preliminary data from early-state studies that are currently ongoing in the U.S. and Germany as well as animal immunogenicity studies. The vaccine candidates are not currently approved for distribution anywhere in the world.
The companies may begin later-stage trials, which would put the treatments closer to launch, as soon as this month, subject to regulatory approval. They anticipate enrolling up to 30,000 subjects. If the ongoing studies are successful, and the vaccine candidate receives regulatory approval, Pfizer and BioNTech currently expect to make up to 100 million doses by year-end and potentially more than 1.2 billion doses by the end of 2021.
- Quest Diagnostics is seeing growing demand for its COVID-19 testing services, though at a cost. The company said Monday that second-quarter testing volumes in its base business (excluding COVID-19 molecular and antibody testing) declined approximately 34% from a year ago, according to preliminary results.
- PerkinElmer anticipates its second-quarter revenue will climb approximately 12%. The company said Monday that the increase was driven by better-than-expected demand for its solutions aimed at helping support customers’ COVID-19 testing needs.
PerkinElmer experienced strong demand for its RT-PCR and serology tests, RNA extraction systems and kits, and automated liquid handling instrumentation. COVID-19 related solutions contributed about $190 million of second-quarter revenue.
SNACK ATTACK: The munchies are real in quarantine, with PepsiCo reporting its snack sales rose in the second quarter while beverage sales declined. Sales for the Frito Lay division climbed 7% in the period, while Quaker Foods revenue increased 23%. The North American beverage unit experienced a 7% decline in revenue.
RETAIL PAIN: Another retailer, the owner of the New York & Co. chain, is filing for bankruptcy protection.
RTW Retailwinds Inc. expects to close a significant number, if not all, of its stores. In the near term, it will continue to reopen stores under Chapter 11 bankruptcy protection.
The company has 378 retail and outlet locations in 32 states. In addition to New York & Co., it owns Fashion to Figure, and Happy x Nature.
RTW is evaluating all options including the potential sale of its online business and related intellectual property.
TRAVEL: JetBlue Airways will continue to block middle seats through Sept. 8, long enough to cover Labor Day weekend and extending a policy that was due to end July 31. JetBlue, Delta and Southwest say they are blocking some seats, while United and American do not. A management and statistics professor at MIT estimates that leaving middle seats empty on planes reduces passengers’ chance of coronavirus infection by about half, to one in 4,300. The paper has not been peer-reviewed.
Southwest Airlines claims to have never furloughed employees, even after 9/11, but the CEO says that streak is in jeopardy unless air travel triples. The virus pandemic caused U.S. air travel to plunge 95% by mid-April. Even with a slow recovery since, the number of people passing through airport checkpoints on Sunday was down 72% from a year ago.
“Although furloughs and layoffs remain our very last resort, we can’t rule them out as a possibility obviously in this very bad environment,” Southwest CEO Gary Kelly said in a memo to employees Monday.
Like other carriers, Southwest is encouraging employees to take buyouts and early retirement to reduce furloughs in October, when $25 billion in federal payroll aid runs out. Southwest employees have until Wednesday to apply for early-out severance benefits, and Kelly said the Dallas-based airline is still overstaffed.
GOVERNMENTS & CENTRAL BANKS:
- The Czech Republic is reimposing restrictions for travel to Serbia and Montenegro after a spike of new coronavirus cases in the Balkan countries.
Starting Monday, the Czechs moved Serbia and Montenegro from an EU green list of safe countries to a red list of high risk countries. The move means that anyone coming to the Czech Republic from Serbia and Montenegro has to present a negative COVID-19 test or get quarantined.
- Germany’s health minister says his country is willing to help other governments develop their own coronavirus tracing app, but stopped short of naming specific countries that have sought assistance from Berlin.
Jens Spahn told reporters in Berlin on Monday that the German app’s code is open source, meaning others can see how it works, and “of course there are inquiries from various countries.”
The German Corona-Warn-App has been downloaded more than 15.5 million times since its launch last month. Officials say that so far about 500 people in Germany who tested positive for the new coronavirus have received the code required to warn others who might have been exposed to them.
The app uses Bluetooth signals to register which other smartphone are nearby for at least 15 minutes. Strict privacy guards mean the German government doesn’t know how many warnings have been issued or to whom.
MARKETS: Stocks gave up an early gain and turned broadly lower on Wall Street Monday as California rolled back its reopening as virus cases surge.
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