Good morning.
Last year, when Gallup pollsters asked Americans what industry they liked least, the pharmaceutical industry took top prize. The reason wasn’t hard to fathom. Persistent publicity over pricing scandals— Martin Shkreli and Valeant took top honors there—as well as the pill-pushing behind the opioid scandal, had poisoned the industry in the public mind.
The coronavirus pandemic now gives that industry a chance to redeem itself. There are fervent efforts underway at virtually every pharma company to address two key issues that will determine the course of the disease. The first is the need for drugs or therapies to help those being killed at an alarming rate. For all the focus on ventilators, New York Governor Andrew Cuomo revealed this week that they only prevent death for 20% of the people using them. We need better treatments in the field soon. The second is the race to develop a vaccine, which ultimately will be necessary to allow society to return to some sense of normalcy.
I’ve written in this space about the impressive work going on at Johnson & Johnson and Regeneron. (You can find podcast interviews with leaders of both, here.) My colleague Susie Gharib also recently interviewed Paul Hudson, who took over the top job at Sanofi last year. Hudson collaborates with Regeneron on a drug called Kevzara, originally used to treat rheumatoid arthritis, which is now in testing with more than 200 COVID-19 patients. Hudson said the effort to find therapies and vaccines has enlivened Sanofi. “I can feel the purpose-driven nature, the camaraderie and coming together of the company. It is really something like we have never seen before.” Susie also had an interview yesterday with the CEO of Bayer, Werner Baumann, who is ramping up production of its drug Resochin to treat the disease.
I also spoke yesterday with Bob Kramer, CEO of Emergent Bio Solutions Inc., which just announced a partnership with the U.S. government to expedite development of a therapy that involves taking plasma from people who have already been infected and developed antibodies to the disease. He hopes to bring it to trial for critically ill COVID-19 sufferers by early summer. I asked Kramer what the economic model for this therapy was. He said he hadn’t thought about it.
“This is in our sweet spot. This is what we do,” Kramer said. “Our company has a history of making short term investments when we think we can leverage our technology and knowhow to help public health. Most likely in the longer term there will be a payout, but right now we are not worried about it.”
It’s these efforts that ultimately will stem the tide of death brought on by COVID-19. And in doing so, they also may change our view of a besmirched industry.
More news below. And apologies for referring this week to the spotlight the pandemic is shining on the trials of “working mothers.” Numerous readers rightly corrected me. I should have referred to “working parents.”
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
One Million
One million people have officially contracted COVID-19 across the world—just four months after the virus first appeared in Wuhan. But the real number is likely much higher: very few countries are able or willing to conduct widespread testing, and as a result, the true number of cases are likely to be many times higher. The U.S. now has the most official cases, followed by Italy, and Spain. Only 20 countries in the world officially have no cases. Bloomberg
Oil prices whipsaw
Oil slid back towards $25/barrel, then jumped past $30 on Friday. The bouncing prices come after oil surged almost 25% in New York yesterday on the back of a tweet by President Trump touting that a deal between Saudi Arabia and Russia was in the works. Russian officials denied such a deal, and Saudi Arabia called an OPEC meeting, but said it would only cut production if others do. Equity markets were also down this morning in Asia and Europe. Bloomberg
10 million jobs—and more
After a record number of job losses last week, which add up to 10 million people filing for unemployment in just two weeks, the worst part is that the real tally may be even higher. States are reportedly overwhelmed by the number of jobless claims flooding in, and unable to process them all. Some of the states that already have the highest jobless rates seem to simply be the ones with better functioning websites and systems for filing for unemployment. Fortune
The loan rush
It's just hours before small businesses can apply for relief loans as part of the U.S. government's $2 trillion relief package—but many banks say they're not ready. Those loans total $350 billion to help businesses cover eight weeks of expenses and payroll, but several banks are restricting offering the loans to existing customers, or saying the applications simply won't be ready for Friday. Meanwhile, banks say many details of the loan program still remain unclear. WSJ
AROUND THE WATER COOLER
Building a diagnostics industry
Faced with a spiraling scandal over low testing rates—particularly of frontline healthcare workers—the U.K.'s health secretary, who has just emerged from self-isolation after having coronavirus himself, said the country has struggled because of its small diagnostics industry, and would now build one—at scale. But research labs, and even other government agencies, say they'd already been offering their diagnostic help, and getting nowhere—sometimes for months. Fortune
Dividends are the new bonuses
In the U.K., four out of the five major banks resisted pressure by the Bank of England to voluntarily cut their dividends—until the Bank forced them too. In the case of HSBC, that reportedly renewed long-running discussions about moving the bank's headquarters from London to Asia, where the bank has most of its business. In the new crisis, the FT argues, dividends are sharping up to be the target that bankers' bonus pay was the last time around. FT
It's not just ventilators
While the lack of ventilators for the sheer scale of patients has garnered a lot of attention, it's far from the only problem: a lack of trained people to operate them, and a lack of oxygen, are just as serious—if not more. For oxygen, at least in theory, industrial supplies can be redirected away from the sectors that no longer need them, like oil and gas (read that story here). But in the case of ventilators, “You’re going to run out of personnel before you run out of ventilators." Fortune
Emissions fall
The coronavirus lockdown could produce the largest fall in worldwide carbon emissions since World War II, according to the chair of the Global Carbon Project, a tracking initiative. He forecasts emissions could fall by 5% year-on-year, a dip far surpassing the one during the financial crisis, as lockdowns halt regular flows of car, truck, and air traffic and suppress global economies. Reuters
This edition of CEO Daily was edited by Katherine Dunn
