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Monday, February 17, 2020

China stocks soar, recover from virus losses

Shares in Shanghai closed up 2.3% overnight, recouping all their losses from a record $720B selloff earlier this month as local markets reopened following an extended Lunar New Year break.
Confidence is improving after policymakers acted to ease the economic fallout from the coronavirus outbreak by ramping up the stimulus.
The PBOC cut interest rates on its medium-term lending, paving the way for a reduction in the country’s benchmark loan prime rate, which will be announced on Thursday.
Beijing will also allow local governments to sell another 848B yuan ($121B) of debt before March, and said it will enact “targeted and phased” stimulus measures, including lower corporate taxes and releasing more funds for provincial authorities.
ETFs: FXI, KWEB, CQQQ, ASHR, YINN, MCHI, TDF, EWH, KBA, CAF, YANG, GXC, TAO, CYB, CHIX

Alibaba, Tencent help track coronavirus via QR codes

China’s government has sought help from Alibaba’s (NYSE:BABA) Alipay and Tencent’s (OTCPK:TCEHY) WeChat for tracking individuals affected with the coronavirus after they fill out questionnaires with their ID number.
Users assigned a red code are instructed to remain quarantined for 14 days and provide regular check-ins via DingTalk, a workplace chat app run by Alibaba. Users with a yellow code are instructed to stay inside for 7 days, while users with a green code may travel freely.
State media reports describe the system as a tool to be deployed at travel checkpoints (it’s also being used at the neighborhood level).
While the system is currently in use in Hangzhou and Shenzhen, it will soon be deployed across the greater Guangdong province.

Sunday, February 16, 2020

Japan manufacturers remain pessimistic as coronavirus fears grow

Worries about the spread of the coronavirus and its hit to the global economy kept Japanese manufacturers’ mood gloomy in February, a Reuters poll found, even as firms shook off previous worries about the impact of the Sino-U.S. trade war.

The monthly poll, which tracks the Bank of Japan’s key tankan quarterly survey, found business confidence across the sectors remained weak over the next three months, as the coronavirus added to uncertainty over the global outlook and the October national sales tax hike.
The flu-like virus has killed more than 1,700 people in China, and it has already taken a toll on China’s economy – Japan’s largest trading partner – hampering supply chains for car manufacturers to smartphone makers and causing the number of Chinese shoppers to plunge in Japan.
It has also highlighted the vulnerability of the Japanese economy to external shocks just as worries have somewhat eased over the Sino-U.S. trade war and Britain’s exit from the European Union.
On top of external woes, a sales tax hike in October dealt a blow to the consumer sector, which makes up the bulk of Japan’s economic activity, dashing hopes that solid domestic demand would offset weak exports.
“Just as the domestic economy’s slump following the sales tax hike is becoming evident, the coronavirus spread has made China-bound exports totally unclear,” a manager of a chemicals firm wrote in the Reuters poll of 502 large- and mid-sized companies, in which 245 firms replied on condition of anonymity.
The Reuters Tankan sentiment index for manufacturers stood at minus 5 in February, up a tad from minus 6 in the previous month. However, materials industries such as chemicals, steel, paper and pulp put a drag on the overall sentiment index.
The index has remained in negative territory – meaning pessimism outweighs optimism – for seven straight months.
The service-sector index inched up to plus 15 from plus 14 in January, but sentiment among retailers, information and communications weighed on overall business confidence, according to the survey conducted Jan. 30-Feb. 12.
Both manufacturers’ and non-manufacturers’ indexes are expected to stay unchanged in May.
The BOJ’s December tankan showed big manufacturers’ mood hit a near seven-year low in the fourth quarter as the trade war between the world’s two largest economies lingered.
The world’s third-largest economy shrank at the fastest pace in six years in the December quarter as domestic demand took a hit from the sales tax hike, underscoring the fragile nature of an economy teetering on the brink of a recession.
The Reuters Tankan indexes are calculated by subtracting the percentage of pessimistic respondents from optimistic ones.

Japan ready to take steps vs virus impact on tourism – Economy Minister

Japanese Economy Minister Yasutoshi Nishimura said on Monday the government was ready to take all necessary steps flexibly with an eye on the impact of the coronavirus outbreak on the economy and tourism.

“The government had hoped Japan’s economy would continue a moderate recovery. But we must be vigilant against the impact of the coronavirus on domestic and overseas economies,” Nishimura said in a statement after the release of October-December gross domestic product (GDP) data.

China’s appetite for wildlife likely to survive virus

For the past two weeks China’s police have been raiding houses, restaurants and makeshift markets across the country, arresting nearly 700 people for breaking the temporary ban on catching, selling or eating wild animals.
The scale of the crackdown, which has netted almost 40,000 animals including squirrels, weasels and boars, suggests that China’s taste for eating wildlife and using animal parts for medicinal purposes is not likely to disappear overnight, despite potential links to the new coronavirus.
Traders legally selling donkey, dog, deer, crocodile and other meat told Reuters they plan to get back to business as soon as the markets reopen.
“I’d like to sell once the ban is lifted,” said Gong Jian, who runs a wildlife store online and operates shops in China’s autonomous Inner Mongolia region. “People like buying wildlife. They buy for themselves to eat or give as presents because it is very presentable and gives you face.”
Gong said he was storing crocodile and deer meat in large freezers but would have to kill all the quails he had been breeding as supermarkets were no longer buying his eggs and they cannot be eaten after freezing.
Scientists suspect, but have not proven, that the new coronavirus passed to humans from bats via pangolins, a small ant-eating mammal whose scales are highly prized in traditional Chinese medicine.
Some of the earliest infections were found in people who had exposure to Wuhan’s seafood market, where bats, snakes, civets and other wildlife were sold. China temporarily shut down all such markets in January, warning that eating wild animals posed a threat to public health and safety.
That may not be enough to change tastes or attitudes that are deeply rooted in the country’s culture and history.
“In many people’s eyes, animals are living for man, not sharing the earth with man,” said Wang Song, a retired researcher of Zoology at the Chinese Academy of Sciences.

ONLINE DEBATE

The outbreak of the new coronavirus, which has killed more than 1,600 people in China, revived a debate in the country about the use of wildlife for food and medicine. It previously came to prominence in 2003 during the spread of SARS (Severe Acute Respiratory Syndrome), which scientists believe was passed to humans from bats, via civets.
Many academics, environmentalists and residents in China have joined international conservation groups in calling for a permanent ban on trade in wildlife and closure of the markets where wild animals are sold.
Online debate within China, likely swayed by younger people, has heavily favored a permanent ban.
“One bad habit is that we dare to eat anything,” said one commenter called Sun on a news discussion forum on Chinese website Sina. “We must stop eating wildlife and those who do should be sentenced to jail.”
Nevertheless, a minority of Chinese still like to eat wild animals in the belief it is healthy, providing the demand that sustains wildlife markets like that in Wuhan and a thriving online sales business, much of which is illegal.
One online commenter calling themselves Onlooker Pharaoh said on Chinese news platform Hupu that the risk was worth it: “Giving up wildlife to eat as food is like giving up eating because you might choke.”

GOVERNMENT SUPPORT

The breeding and trading of wild animals in China is supported by the government and is a source of profit for many people.
After the SARS outbreak, the National Forestry and Grassland Administration (NFGA) strengthened oversight of the wildlife business, licensing the legal farming and sale of 54 wild animals including civets, turtles and crocodiles, and approved breeding of endangered species including bears, tigers and pangolins for environmental or conservation purposes.
These officially sanctioned wildlife farming operations produce about $20 billion in annual revenue, according to a 2016 government-backed report.
“The state forestry bureau has long been the main force supporting wildlife use,” said Peter Li, a China Policy Specialist for the Humane Society International. “It insists on China’s right to use wildlife resources for development purposes.”
Much of the farming and sale of wildlife takes place in rural or poorer regions under the blessing of local authorities who see trading as a boost for the local economy. State-backed television programs regularly show people farming animals, including rats, for commercial sale and their own consumption.
FILE PHOTO: Chinese customs officials inspect scales of pangolins they seized on a ship in Shenzhen, Guangdong province, China November 29, 2017. REUTERS/Stringer
However, activists pushing for a ban describe the licensed farms as a cover for illegal wildlife trafficking, where animals are specifically bred to be consumed as food or medicine rather than released into the wild.
“They just use this premise to do illegal trading,” Zhou Jinfeng, head of China’s Biodiversity Conservation and Green Development Foundation, told Reuters. “There are no real pangolin farms in China, they just use the permits to do illegal things.”
The NFGA did not respond to requests for comment.

BLURRED LINES

Animal products, from bear bile to pangolin scales, are still used in some traditional Chinese medicine, an industry China wants to expand as part of its Belt and Road Initiative.
But the distinction between legal and illegal is blurred. The United Nations estimates the global illegal wildlife trade is worth about $23 billion a year. China is by far the largest market, environmental groups say.
The Environmental Investigation Agency (EIA), an independent organization based in London which campaigns against what it sees as environmental abuses, said in a report this week the coronavirus outbreak has in fact boosted some illegal wildlife trafficking as traders in China and Laos are selling rhinoceros horn medicines as a treatment to reduce fever.
China’s top legislature will toughen laws on wildlife trafficking this year, the official Xinhua news agency reported this week.
“We are in a sun-setting business,” said Xiang Chengchuan, a wholesale wildlife store owner in the landlocked eastern Anhui province. “Few people eat dogs now, but it was popular 20 years ago.”
Xiang, who sells gift boxes of deer antlers and dog, donkey and peacock meat to wealthy bank clients and others, said he had frozen his meat as he waits to see if the ban will continue.
“I will resume selling once the policy allows us, but now I have no idea how long it (the ban) will last.”
https://www.reuters.com/article/us-china-health-wildlife/animals-live-for-man-chinas-appetite-for-wildlife-likely-to-survive-virus-idUSKBN20A0RK

China fast-food firms up ‘contactless’ pickup, delivery as coronavirus rages

With the coronavirus outbreak in China continuing to spread, McDonald’s Corp, Starbucks Corp and other fast-food companies are ramping up “contactless” pickup and delivery services to keep their workers and customers safe, the companies said.

McDonald’s has implemented contactless pickup and delivery of Big Macs, fries and other menu items across the China as the outbreak has unfolded.
Customers order remotely ? on mobile phones or by computers in store ? and employees seal the meals in bags and put them in a special spot for pickup without human contact, McDonald’s says on its website.
For delivery orders, drivers drop McDonald’s packages at building entrances, disinfect their delivery bags and wash their hands more frequently. Drivers carry ID cards showing that they – and the people who made and packaged their food – had their body temperature scanned to prove they do not have a fever.
“While we look at how to further improve the process, the stepped-up preventive measures apply to all of our servicing channels,” McDonald’s said in a statement to Reuters.
The flu-like virus has infected more than 68,500 people globally and killed 1,665 as of Sunday, mostly in the central Chinese province of Hubei. Some major Chinese cities still resemble ghost towns as China struggles to get its economy back on track after a prolonged Lunar New Year holiday.
In early February, 83% of all stores on the Meituan-Dianping delivery platform – one of the largest in the country – were closed, according to Beijing-based data firm BigOne Lab.
Earlier this month, China’s National Health Commission recommended that deliveries limit contact.
Starbucks suggests customers order coffee via its app and then wait outside its cafés until they get a pick-up notice. Orders are placed on tables just inside café entrances.
If they do enter Starbucks locations, customers have their temperature taken at the door, as fever is one of the main symptoms of infection, and baristas wear masks.
For delivery, Starbucks said it regularly sterilizes containers and that its delivery people have their temperature taken daily. Indoors staff must wash hands every 30 minutes, and public areas are sterilized every 2 hours.
Starbucks delivery is provided by ele.me, owned by ecommerce giant Alibaba Group Holding Ltd.
The measures illustrate how companies are quickly adapting in order to sell prepared food while keeping people safe.
Yum China Holdings Inc rolled out contactless delivery on Jan. 30, with contactless pickup coming two days later at its KFC and Pizza Hut locations, the company said.
CHANGING HUMAN TRANSACTIONS
There had been contactless delivery in China prior to the crisis, when couriers would drop packages at a consumer’s door or lobby or place parcels in lockers for later pickup.
But since the outbreak, many residential compounds are limiting access for drivers and asking customers to pick up their own packages.
In transactions that previously would have involved one person handing a package to the other, the driver now puts the food down ? on the back of a moped, for instance ? and then steps back and waits for the customer to take it and leave.
One customer, for example, asked a delivery person to put a parcel in the elevator and press the button for the designated floor. The customer grabbed the package when the doors opened – unaccompanied by the courier, according to a post on CCTV News’ social media account on Weibo, said Allison Malmsten, a marketing strategy analyst at Daxue Consulting in Shanghai.
The outbreak “redefines contactless food delivery,” Malmsten said via email.
Since the start of the outbreak, Yum China has closed more than 30% of its locations. There have been “significant interruptions,” with sales off as much as 50% in those that remained open since the Lunar New Year holiday, versus the same time last year, Chief Financial Officer Ka Wai Yeung said in a Feb. 5 earnings call.
The crisis has accelerated the rollout of Yum China’s contactless services in China, it said in a statement.
“These services have been well-received by customers and are playing an important role in ensuring that our delivery business continues to hold up during this period of significantly reduced dine-in traffic,” it said.
Early during the epidemic, meal delivery took a hit because customers feared contact with drivers would put them at risk of infection, according to news reports.
Cases of couriers being diagnosed with the virus after working for days arose in Shenzhen and Qingdao cities.
The companies’ reliance on pickup and delivery to offset some losses does, however, have limitations.
Malmsten said many drivers cannot return to work due to travel restrictions, and those who can return face long hours and physical and mental fatigue. As a result, SF Express, the second-largest courier in China, has ramped up hiring, she said.
https://www.marketscreener.com/STARBUCKS-CORPORATION-4905/news/Fast-food-companies-in-China-step-up-contactless-pickup-delivery-as-coronavirus-rages-30005448/

Biotech week ahead, Feb. 17

Biotech stocks were quiet in the week ending Feb. 14 amid some data readouts at a couple of conferences and earnings news flow from smid-cap companies.
The following are key biotech catalysts to look forward to for the unfolding week:

Conferences

34th German Cancer Conference: Feb 19-22 in Berlin, Germany
International Association For The Study of Lung Cancer, or IASLC, 2020 Targeted Therapies of Lung Cancer Meeting: Feb. 19-22 in Santa Monica, California

PDUFA Dates

The FDA will rule on Agile Therapeutics Inc’s AGR 0.64% hormonal contraceptive patch Twirla by the PDUFA action date of Sunday. After two rejections in the past, Twirla managed to snag a positive Adcom verdict in October 2019. Late Monday, the company said it has negotiated a $35-million loan facility that has increased expectations concerning a positive verdict.
The FDA is scheduled to issue its verdict on Merck & Co., Inc.’s MRK 0.87% sBLAs for Keytruda dosing schedule updates. The verdict is expected Tuesday.
Baudax Bio Inc BXRX 3.74%, which has faced two prior rejections for its meloxicam intravenous formulation, is awaiting an FDA decision on its investigational pain drug on Thursday.
The FDA will also rule on Esperion Therapeutics Inc’s ESPR 4.52% bempedoic acid as a treatment option for elevated LDL cholesterol. The decision is expected Friday.

Clinical Readouts

IMMUTEP LTD/S ADR IMMP 1.91% is due to present at the German Cancer Congress Phase 2 mature data for its eftilagimod alpha in combination with Merck’s Keytruda in non-small cell lung cancer and head & neck cancer (Wednesday).
Cellectar Biosciences Inc CLRB 1.38% will release updated Phase 2 data on CLR 131, which is being evaluated for various lymphomas (Wednesday). The company will also issue an update on the Phase 1 data for the same asset in multiple myeloma.
Agenus Inc AGEN is scheduled to present on its Investor Day interim analysis of Phase 1 data for balstilimab, or AGEN2034, in cervical cancer (Thursday). The company will also present Phase 1 data for AGEN1181 in advanced cancer.
Advaxis, Inc. ADXS 2.88% will present at the IASLC Congress Phase 1 data for ADXS-503 monotherapy as well as combo therapy along with Keytruda in metastatic non-small cell lung cancer (Saturday).

Earnings

Tuesday
  • Medtronic PLC MDT 0.38% (before the market open)
  • 10X Genomics Inc TXG 6.68% (after the market close)
  • AtriCure Inc. ATRC 1.86% (after the market close)
  • ImmuCell Corporation ICCC 1.36% (after the market close)
Wednesday
  • Elanco Animal Health Inc ELAN 0.42% (before the market open)
  • Integra Lifesciences Holdings Corp IART 0.2% (before the market open)
  • Endologix, Inc. ELGX 0.57% (after the market close)
  • Anika Therapeutics Inc (NASDAQ: ANIK (after the market close)
  • Masimo Corporation MASI 0.21% (after the market close)
  • InVitae Corp NYSE: (NVTA (after the market close)
  • OraSure Technologies, Inc. (NASDAQ: OSUR) (after the market close)
Thursday
  • Repligen Corporation (NASDAQ: RGEN) (before the market open)
  • Syneos Health Inc (NASDAQ: SYNH) (before the market open)
  • TherapeuticsMD Inc (NASDAQ: TXMD) (before the market open)
  • Puma Biotechnology Inc (NASDAQ: PBYI) (after the market close)
  • Emergent Biosolutions Inc (NYSE: EBS) (after the market close)
  • Cerus Corporation (NASDAQ: CERS) (after the market close)
  • Globus Medical Inc (NYSE: GMED) (after the market close)
  • PRA Health Sciences Inc (NASDAQ: PRAH) (after the market close)
  • NuVasive, Inc. (NASDAQ: NUVA) (after the market close)
https://www.benzinga.com/general/biotech/20/02/15315400/the-week-ahead-in-biotech-agile-baudax-bio-merck-and-esperion-await-fda-decisions