Coronavirus drug study disappoints investors, second wave prospect casts shadow on reopening plans

CORONAVIRUS ALERT 4/24/2020

The Atlantic Council’s Coronavirus Alert is a regular summary of policy, economic, and business events around the emergency. To stay updated, sign up to the Coronavirus Alert here.

In top stories today:

  • A study appeared to show that a drug believed to treat coronavirus proved to be ineffective, disappointing investors. European leaders agreed to an economic stimulus deal of sorts, but thin on detail. The issue of a possible second wave of infections continues to garner attention as leaders worldwide wrestle with how best to reopen their economies.
  • A summary of a Chinese study into Gilead’s drug, remdesivir, appeared to show that the possible treatment for coronavirus was a failure, Bloomberg reported. The World Health Organization accidentally published the results on a website that tracks therapies for the disease, the newswire said. The news about the drug was a disappointment to scientists and investors alike, the Financial Times reported.
  • France and Germany will help to launch a global initiative on April 24 to speed up research into the treatment and diagnosis of coronavirus, the World Health Organization said, describing it as a “landmark collaboration” Reuters reported. The United States will not take part, the newswire said.
  • READ MORE: “A downturn in Western economies could boost a rising China, while a global depression could breed support for protectionism,” write the Atlantic Council’s Mathew J. Burrows and Peter Engelke. “International bodies designed to safeguard public health appear weak and unable to contain the crisis, and alliances with transatlantic partners are fraying as nations turn inward and close borders.” 
  • The European Union’s twenty-seven leaders arrived at a preliminary deal on an economic stimulus deal on April 23. The lack of agreement on the details—described by The New York Times as “gaping blanks”—shows clearly the extent of disagreement about a bolder joint approach by the bloc, the newspaper said. EU leaders gave the European Commission the task of creating a “recovery fund” to help their economies once lockdowns are lifted, the Financial Times reported.
  • QUOTE: “The EU council has kicked the can down the road once again,” said Steen Jakobsen, chief economist at Saxo Bank, the Financial Times reported. “All things EU existential are foremost on our radar today.”
  • As governments worldwide struggle with the thorny issue of how to reopen battered economies without causing a second wave of coronavirus cases, a growing group of economists recommend that age should be used as a factor in deciding who goes back to work first, Bloomberg reported. Economists from Warwick University say that the return of the more than four million UK residents in their twenties who don’t live with their parents could deliver “substantial economic and societal benefits without enormous health costs,” and could be replicated in other countries, the newswire said.

VACCINES, JOHNSON

  • The CEO of Sanofi, one of the world’s biggest vaccine companies, said Europe needs to wake up to the challenge of producing enough coronavirus injections to meet demand, Bloomberg reported. Sanofi has teamed up with rival GlaxoSmithKline to develop a coronavirus vaccine, in a race against time with pharma giants including Johnson & Johnson as well as more agile biotech companies such as Moderna, the newswire said.
  • QUOTE: “There is less concern about finding a successful vaccine than there is about making the volumes needed,” Sanofi Chief Executive Officer Paul Hudson told reporters on April 24, Bloomberg reported. “The biggest untold story in Europe right now is the one about the number of doses.”
  • Contact tracing and privacy concerns: Australia tackles the issue with a plan to make it illegal for non-health officials to access smartphone data collected to control the spread of coronavirus, Reuters reported. The New York Times covers that story too.
  • UK Prime Minister Boris Johnson, convalescing after suffering from coronavirus, might return to work as soon as April 27, the Financial Times reported. He faces the “biggest conundrum of his premiership”—how to lift lockdown restrictions without causing a second wave of coronavirus cases, Reuters said.
  • Bloomberg runs a story, in question and answer format, about “the fear on everyone’s minds [that] can be expressed in two words: second wave.” The newswire addresses issues including the journey to so-called herd immunity, how a virus can return a second time, and the prospects of that happening with the coronavirus pandemic.
  • The Wall Street Journal contrasts the current outbreak with the Hong Kong flu that swept the world in the late 1960s. Leaders from countries including Germany, France, and the UK have said it’s the biggest challenge since World War II, with France’s Emmanuel Macron comparing the pandemic to a war. But the Hong Kong flu is a better comparison, scientists and doctors said, the newspaper reported.

RAMADAN, AFRICA

  • With most mosques closed and gatherings banned because of coronavirus, the holy month of Ramadan starting on April 24 is set to be a more muted and less joyous occasion than usual for the world’s 1.8 billion Muslims, the Financial Times reported. From Nigeria to Indonesia, Egypt to Turkey, it will be a Ramadan like never before, with rituals and festivities taking place at home rather than in community get-togethers in the usually festive month, the newspaper said.  
  • Doctors in Pakistan have voiced alarm at the prime minister’s decision to let mosques hold community prayers during Ramadan, also for many offices and shops to reopen as soon as next week, The Wall Street Journal reported. Developing countries such as Pakistan haven’t yet had the number of coronavirus cases seen in developed economies, tempting some to ease restrictions so that people can make a living, the newspaper said. Experts warn that cases could climb in coming weeks now that the virus, which arrived later in many of these countries, has a foothold, the Journal reported.
  • “How Africa risks reeling from a health crisis to a food crisis” runs the headline to a Reuters story. Millions of people in sub-Saharan Africa risk not getting the food they need because of coronavirus disruptions, according to the United Nations and World Bank, the newswire said.

BANKING, RETAIL

  • JPMorgan, Goldman Sachs, and Bank of America have become more cautious about approving loans to companies in Europe during the coronavirus pandemic, adding to concerns that Wall Street may be quietly sticking to its home market as it did during the financial crisis, the Financial Times reported.
  • Troubled department-store chain J.C. Penney is in advanced talks about bankruptcy funding with a group of lenders, a move that could allow the retailer to fund operations during a court-supervised bankruptcy, The Wall Street Journal reported, citing unidentified people.

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