Small business COVID-19 relief program runs out of money

 The government’s key COVID-19 relief program for small businesses has run out of money.

The Small Business Administration said Wednesday that the Paycheck Protection Program has been exhausted. As of Sunday, the PPP had given out nearly 10.8 million loans worth more than $780 billion since April of last year.

The program, which has run out of cash and refunded by Congress twice before, was scheduled to expire May 31. It’s not yet known if lawmakers will approve another round of funding.

The SBA said in a statement it will still fund applications that have been approved. New applications made through Community Financial Institutions, which are financial lenders that serve underserved communities, would also be funded.

More than half the loans and nearly a third of the loan money were distributed this year. The average loan size was $46,000, less than half the $101,000 average loan in 2020. That is a sign that smaller companies unable to get loans last year were now getting funding. Companies have been drawn to the loans because they promised forgiveness if the money is used for payroll and other essentials.

But, while the PPP helped save many companies devastated by the pandemic, the Biden administration has estimated that more than 400,000 U.S. businesses have permanently closed due to the virus.

More aid is still available to small businesses through SBA Economic Injury Disaster Loans, and restaurants with no more than 20 locations can apply for grants through the Restaurant Revitalization Fund that began accepting applications on Monday. Help is also available to owners of theaters and other entertainment companies under the Shuttered Venues Operator Grants.

The PPP has been criticized because many very small companies, including those owned by minorities, struggled to have their applications accepted by banks. Many of these companies had to wait weeks or months until community banks, credit unions and online lenders were added to the SBA’s roster of financial institutions.

“The program was always fundamentally flawed as it was based on an unequal traditional banking system,” said John Arensmeyer, CEO of Small Business Majority, an advocacy group. Congress should consider more grants to help companies still struggling due to the pandemic, he said.

Karen Kerrigan, president of the Small Business & Entrepreneur Council, said she was “getting a sense from conversations on Capitol Hill that PPP has run its course.” She said private-sector investment and lending is needed to help small businesses recover, and to help new companies launch.

The PPP was also criticized because it imposed restrictions on sole proprietors without employees. For example, they could not apply for loans until a week after the program began on April 4, 2020. Many also found it difficult to meet the paperwork requirements for loans.

Keith Hall, president of the advocacy group National Association for the Self-Employed, said any companies whose applications were delayed because of restrictions should still get their loans, even if it means Congress needs to allocate more funds to the PPP.

https://apnews.com/article/small-business-coronavirus-pandemic-health-government-and-politics-business-b6769f3488745fcf4b82a8e2fbf1665d

WTO head seeks text to advance debate over COVID-19 vaccine IP

 The World Trade Organization chief appealed to member countries on Wednesday to quickly present and negotiate over a text that could temporarily ease trade rules that protect COVID-19 vaccine technology, as a way to ramp access to doses at a time of urgent need.

Director-General Ngozi Okonjo-Iweala spoke to a closed-door meeting of ambassadors from developing and developed countries that have been wrangling over the issue, but agree on the need for wider access to COVID-19 treatments, WTO spokesman Keith Rockwell said.

The WTO’s General Council — made up of ambassadors — was taking up the pivotal issue of a temporary waiver for intellectual property protections on COVID-19 vaccines and other tools that South Africa and India first proposed in October. The idea has gained support in the developing world and among some progressive lawmakers in the West.

“What was striking about today was this very strong declaration by all members on this shared objective — which is ramping up production and distribution of these vaccines and therapeutics and diagnostics in the developing world, where there is a great inequity in terms of of distribution,” Rockwell told reporters, summarizing the debate.

The United States, among other rich countries that have hesitated about or outright opposed the idea, is shaping up as a potential lynchpin — with the Biden administration seemingly on the fence about the matter.

White House press secretary Jen Psaki noted Wednesday that Biden had expressed support for similar waiver ideas during his campaign, but as president is running “a process ... that includes all stakeholders in the administration.”

“And that process will take a series of months, and requires a unanimous point of view to move forward,” she told reporters in Washington. “We take intellectual property incredibly seriously, and we also, though, are in the midst of a historic global pandemic, which requires a range of creative solutions.”

“We’re looking at it through that prism,” Psaki added. “I expect we’ll have more, now that the WTO meetings are underway, we’ll have more to say very soon on this.”

Rockwell said most member states “would say this is the most important issue facing our organization today.”

“I’m not going to put odds on on how likely it is to find an agreement,” he said. “But when people begin to voice very clearly their shared objectives, it makes it easier to get to ‘yes.’”

The pace of efforts at the Geneva-based trade body have been outstripped by the speed of the spread of the pandemic. The World Health Organization across town said earlier Wednesday that weekly case counts have been at record highs in the last two weeks.

Rockwell said a WTO panel on intellectual property was set to take up the waiver proposal again at a “tentative” meeting later this month, before a formal meeting on June 8-9.

No consensus -- which is required under WTO rules -- was expected to emerge from the ambassadors’ two-day meeting on Wednesday and Thursday. But Rockwell pointed to a change in tone after months of wrangling.

“I would say that the discussion was far more constructive, pragmatic. It was less emotive and less finger pointing than it had been in the past,” Rockwell said, citing a surge in cases in places like India. “I think that this feeling of everyone-being-in-it- together was being expressed in a way that I had not heard to this point.”

Authors of the proposal, which has faced resistance from many countries with influential pharmaceutical and biotech industries, have been revising it in hopes of making it more palatable.

Okonjo-Iweala, in her remarks posted on the WTO Web site, said it was “incumbent on us to move quickly to put the revised text on the table, but also to begin and undertake text-based negotiations.”

“I am firmly convinced that once we can sit down with an actual text in front of us, we shall find a pragmatic way forward,” that is “acceptable to all sides,” she said.

Co-sponsors of the idea were shuttling between different diplomatic missions to make their case, according to a Geneva trade official who was not authorized to speak publicly on the matter. A deadlock persists, and opposing sides remain far apart, the official said.

Some proponents saw more hope for the proposal after Biden’s top envoy on trade, Katherine Tai, said last month that gaping inequities in access to COVID-19 vaccines between developed and developing countries were “completely unacceptable,” and that mistakes made in the global response to the HIV pandemic mustn’t be repeated.

The argument, part of a long-running debate about intellectual property protections, centers on lifting patents, copyrights, and protections for industrial design and confidential information to help expand the production and deployment of vaccines during supply shortages. The aim is to suspend the rules for several years, just long enough to beat down the pandemic.

The issue has become more pressing with a surge in cases in India, the world’s second-most populous country and a key producer of vaccines — including one for COVID-19 that relies on technology from Oxford University and British-Swedish pharmaceutical maker AstraZeneca.

Proponents, including WHO Director-General Tedros Adhanom Ghebreyesus, note that such waivers are part of the WTO toolbox and insist there’s no better time to use them than during the once-in-a-century pandemic that has taken 3.2 million lives, infected more than 437 million people and devastated economies.

More than 100 countries have come out in support of the proposal, and a group of 110 members of Congress — all fellow Democrats of Biden — sent him a letter last month that called on him to support the waiver.

Opponents say a waiver would be no panacea. They insist that production of coronavirus vaccines is complex and simply can’t be ramped up by easing intellectual property, and say lifting protections could hurt future innovation.

https://apnews.com/article/europe-technology-intellectual-property-global-trade-health-3390ac3f9e8f5a908243c666a5aaad8c

COVID’s US toll projected to 'drop sharply by the end of July'

 'Teams of experts' are projecting COVID-19′s toll on the U.S. will fall sharply by the end of July, according to research released by the government Wednesday.

But they also warn that a “substantial increase” in hospitalizations and deaths is possible if unvaccinated people do not follow basic precautions such as wearing a mask and keeping their distance from others.

The Centers for Disease Control and Prevention paper included projections from six research groups. Their assignment was to predict the course of the U.S. epidemic between now and September under different scenarios, depending on how the vaccination drive proceeds and how people behave.

Mainly, it’s good news. Even under scenarios involving disappointing vaccination rates, COVID-19 cases, hospitalizations and deaths are expected to drop dramatically by the end of July and continue to fall afterward.

The CDC is now reporting an average of about 350,000 new cases each week, 35,000 hospitalizations and over 4,000 deaths.

Under the most optimistic scenarios considered, by the end of July new weekly national cases could drop below 50,000, hospitalizations to fewer than 1,000, and deaths to between 200 and 300.

“We are not out of the woods yet, but we could be very close,” CDC Director Dr. Rochelle Walensky said, while noting that variants of the coronavirus are a “wild card” that could set back progress.

The projections are probably in line with what many Americans were already expecting for this summer.

With COVID-19 deaths, hospitalizations and cases plummeting since January, many states and cities are already moving to ease or lift restrictions on restaurants, bars, theaters and other businesses and talking about getting back to something close to normal this summer.

New York’s subways will start running all night again this month, Las Vegas is bustling again after casino capacity limits were raised, and Florida Gov. Ron DeSantis this week suspended all restrictions put in place by local governments, though businesses may continue requiring people to wear masks and keep their distance, and many are still doing so.

Many people in Florida have resumed parties, graduations and recitals. Walt Disney World lets guests remove their masks for photographs.

“It does feel like life is returning to normal,” said 67-year-old Vicki Restivo of Miami, who after getting vaccinated resumed outings with her friends at restaurants and traveled to Egypt — and felt “very comfortable” about it.

President Joe Biden on Tuesday set a goal of delivering shots to 70% of U.S. adults by July Fourth. Such a goal, if met, would fit in with the best-case scenarios, said one of the study’s co-authors, CDC biologist Michael Johansson.

Under more pessimistic scenarios, with subpar vaccinations and declining use of masks and social distancing, weekly cases probably would still drop but could number in the hundreds of thousands, with tens of thousands of hospitalizations and thousands of deaths.

“Something I am asked often is when will the pandemic be over and when can we go back to normal. The reality is: It all depends on the actions we take now,” Walensky said.

All the projections trend down, illustrating the powerful effect of the vaccination campaign. But there’s a devastating difference between the more gently sloping declines in some scenarios and the more dramatic drops in others, said Jennifer Kates, director of global health and HIV policy at the Kaiser Family Foundation.

“Each of these differences are people’s lives,” said Kates, who is part of a Kaiser research team that has focused on COVID-19 and was not involved in the CDC study.

The U.S. death toll stands at more than 578,000. The CDC paper gives no overall estimate of how high the number of dead might go. But a closely watched projection from the University of Washington shows the curve largely flattening out in the coming months, with the toll reaching about 599,000 by Aug. 1.

More than 56% of the nation’s adults, or close to 146 million people, have received at one dose of vaccine, and almost 41% are fully vaccinated, according to the CDC.

Johansson said the paper is intended not so much as a prediction of exactly what’s going to happen but as a way to understand how things might unfold if vaccination drives or other efforts stumble.

By September, assuming high vaccination rates and continuing use of prevention measures, the models indicate new cases could fall to just a few hundred per week and just tens of hospitalizations and deaths.

The paper also sketched out a worst-case scenario, in which cases could rise to 900,000 per week, hospitalizations to 50,000, and deaths to 10,000. That most likely would happen sometime this month, the projections said.

However, the paper’s projections are based on data available through late March, when the national picture was somewhat darker.

The CDC paper “is already looking a little outdated, because we’ve seen cases continue to go down, and hospitalizations go down, and deaths go down,” Kates said.

Nevertheless, Johansson warned: “We’re still in a tenuous position.”

There is variation from state to state in how well vaccination campaigns are going and how fast restrictions are being abandoned, and that will probably mean some states will suffer a higher toll from COVID-19 than others in the coming months, Kates said.

“If you take the foot off the gas,” she said, “you can really have some bad outcomes.”

The paper doesn’t look past September, and scientists cannot say for sure what the epidemic will look like next fall and winter because it’s not known how enduring vaccine protection will be or whether variants of the virus will prove to be a greater problem.

Like the flu, COVID-19 could increase as people move indoors in the cold weather.

“My hope is with enough people vaccinated we will be able to get to something that will resemble maybe a bad flu season,” said William Hanage, a Harvard University expert on disease dynamics who was not involved in the research. But “it’s not going to go away. It’s not going to be eradicated.”

https://apnews.com/article/centers-for-disease-control-and-prevention-epidemics-las-vegas-mass-shooting-coronavirus-pandemic-science-10bb5a6b734675fa735986d30ad1e43d

Alexion upped to Outperform from Perform by Oppenheimer

 Target $205

https://finviz.com/quote.ashx?t=ALXN

Humanigen: Phase 3 data shows efficacy, safety of Lenzilumab in Covid

 Humanigen, Inc. (Nasdaq: HGEN) ("Humanigen"), a clinical-stage biopharmaceutical company focused on preventing and treating an immune hyper-response called ‘cytokine storm’ with its lead drug candidate, lenzilumab, announced that results from the lenzilumab Phase 3 study in hospitalized COVID-19 patients (referred to as ‘LIVE-AIR’) were published online at link.

https://finance.yahoo.com/news/humanigen-announces-publication-results-phase-155300197.html

Half Of All VCs Beat The Stock Market

 There has been this narrative about investing in VC funds that you have to get into the top quartile (25%) or possibly the top decile (10%) in order to generate good returns. I have heard that for as long as I have been in VC and probably have written it here a few times.

Well, it turns out that is not right. Half of all venture funds outperform the stock market which is the benchmark most institutions measure VC funds against.

My friend Dan Malven wrote about this on his blog yesterday:

A working paper published by the National Bureau of Economic Research (NBER) in November 2020 contradicts that notion, showing that half of all VC fund managers outperform the public markets, and are therefore worthy of institutional investment.

This study was based on a large sample of VC fund level returns from 2009 to 2017 and does not include the last few years which have been particularly strong for the VC sector.

Manager selection remains an important part of VC investing because the lower half of VC funds do not outperform the stock market. An interesting data point from this study is the VC “fund of funds” mostly outperform the stock market so a portfolio of VC funds will generally give you enough diversification that you can meet your performance objectives.

The best way to know what managers to pick is to be in the startup business in some way. All you need to do is watch how people behave to know who is good and who is not. The Gotham Gal and I have been investing in the VC funds of managers we know well and have worked with closely on boards of startups for about fifteen years now.

These are the gross return multiples of all of the funds that are “mature” meaning the returns are pretty clear now:

Multiple	Year Of Initial Investment
8.66	2006
3.65	2007
5.29	2007
3.31	2010
10.38	2010
7.63	2010
4.71	2010
2.01	2010
2.29	2012
8.58	2012
3.97	2012

I am not going to do the work of calculating performance against the stock market for these funds, but I suspect all buy maybe two of those eleven funds have outperformed the public markets.

As you can see, investing in VC funds can be very profitable. And I suspect it is getting more profitable, not less, as the capital markets and M&A markets are providing robust liquidity options for managers.

Sadly the VC market remains largely out of reach of many “main street” investors as the SEC limits these fund investments to qualified and accredited investors. That has never made sense to me and is yet another example of the “well meaning” rules resulting in the wealthy getting wealthier and everyone else missing out.

https://avc.com/2021/05/half-of-all-vcs-beat-the-stock-market/

Glaxo defends strategy in face of Elliott stake

 

GlaxoSmithKline Plc’s management defended the company’s strategy as the pharmaceutical giant comes under growing pressure to revive its fortunes after activist investor Elliott Management Corp. took a stake.

Speaking at Glaxo’s annual general meeting Wednesday, Chairman Jonathan Symonds said he understood investor skepticism, but said the company was now “doing the right things” and asked shareholders to judge it on the results. Glaxo is preparing to split in two next year, spinning off its consumer unit and leaving the remaining company focused on biopharma and vaccines.

“We recognize there is much still to do,” Symonds said at the virtual AGM. We “understand skepticism given promises made in the past. But be in no doubt that we -- this board and this management team -- are determined to deliver.”

Glaxo is in the middle of a turnaround effort led by Chief Executive Officer Emma Walmsley, who has been in post since 2017. The company has lagged behind competitors, notably fellow British drugmaker AstraZeneca Plc, after it moved away from lucrative areas like oncology, which Walmsley has been trying to rebuild. Pressure on Glaxo to demonstrate successful change stepped up in recent weeks because of Elliott’s move to build a stake.

While the activist hedge fund’s plans are unknown, investors and analysts have speculated it may push Glaxo to execute its split and strategy faster. The company is planning to set out the blueprint for the new business in June. Symonds reiterated Thursday that the dividend for the two new companies will be lower than the longstanding annual payout of 80 pence a share.

The company has also come under fire for its absence on the Covid-19 vaccine effort. Glaxo decided early on to use its adjuvant technology -- substances used to enhance the immune response to vaccines -- to partner with other drugmakers in developing a shot, rather than creating its own. Symonds acknowledged at the meeting that it was “disappointing” its main partnership with Sanofi hasn’t moved as quickly as planned.

Glaxo is still working with a number of companies to develop coronavirus shots that could be available later this year. The company is also awaiting emergency approval from U.S. regulators for its Covid-19 antibody treatment with Vir Biotechnology Inc.

It was “disappointing that the largest of those partnerships -- Sanofi -- was delayed,” Symonds said. “We intend to be competitive across a range of vaccine technologies, including mRNA, and we are well-placed to do this.”

https://www.bloomberg.com/news/articles/2021-05-05/glaxo-defends-strategy-in-face-of-elliott-management-stake