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Good morning.
The key to surviving the pandemic lies in the hands, not of governments, but of biopharma companies. Their ability to find and manufacture tests, therapies and vaccines will determine whether and when we can return to anything like normal life.
I spoke Friday with Albert Bourla, CEO of Pfizer, and asked him how much of his time he is spending on that effort. “Most of my time. The vast majority of my time,” he said. “In a sense, it’s the vast majority of everyone’s time” at Pfizer.
In our discussion of the company’s search for solutions, three things stood out.
First, Bourla—like other pharmaceutical executives I have talked with—says there has been an unusual degree of cooperation in the industry. “I always say to my people, the other pharmaceutical companies are not the competition. The competition is the disease. This is even more relevant today. We are collaborating like never before.”
Second, and related, the main focus is on finding science that works, not on generating profits, and not on protecting intellectual property that has driven those profits in the past. “This is not business as usual. ROI should not drive our decisions at all. The question is: Can we do it? And when can we do it?”
Third, the pandemic has dramatically enlivened the company’s work force. “The word is proud. It’s as if this were a World War. They feel very proud of what we are doing.”
That’s a big change for an industry that earned a reputation for pushing its product regardless of consequences (think opioids), for pricing that product to achieve maximum short-term profits (think Shkreli and Valeant), and for deprioritizing science and research in pursuit of profit. “Pfizer was already transforming before COVID” hit , Bourla says, from a commercial machine to a scientific powerhouse. As a result, he believes, the company after the crisis “will be at the forefront of leading the way in demonstrating contribution to society.” He was one of the CEOs last year who signed onto the Business Roundtable’s statement calling for a greater focus on companies’ contribution to stakeholders beyond just shareholders. “It was clear for us that our business model was not sustainable if we don’t create value for patients and value for society.”
As for the critical effort to develop a vaccine, Bourla was optimistic. “Vaccines normally take years to build. They presented me with a plan that would take 18 months. I said, ‘How about 6 months?’ They all stepped up to the challenge. If things go according to plan, if we don’t face technical issues, we hope to have millions of doses by the end of the year, and hundreds of millions by next year.”
A success like that could go a long way toward changing the industry’s battered public image. “It is an opportunity to reposition in the minds of everyone the value proposition of our industry.”
More news below. And be sure and read Fortune’s new list of the World’s 25 Greatest Leaders who are addressing the pandemic. You can find the list here.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Oil price
Oil has hit a new 21-year low, with soaring inventories and a storage crunch causing a plunge to below $15 a barrel in New York. There is a possibility now that American producers will soon have to pay customers to take their crude—already, buyers in Texas are offering as little as $2 a barrel for some streams. This crash is specifically a West Texas Intermediate (WTI) affair, and may be contributing to the fact that DJIA futures point to an opening drop of around 1% this morning, while some European and Asian markets have been in mildly positive territory today. Bloomberg
Small businesses
The White House and Democrats hope the Senate will this week consider a deal they've almost reached, regarding the replenishment of a crisis fund for small businesses. The $349 billion set aside for small businesses in last month's economic rescue fund has already run out. The new deal may include extra funds for hospitals ($75 billion) and an expansion of coronavirus testing ($25 billion). Wall Street Journal
Hang on…
About that $349 billion: it seems a bunch of that cash went to over a dozen publicly traded firms with revenue north of $100 million, rather than small businesses. Step forward, Potbelly Corp (where at least some stores are franchises, making the "small business" classification a little more debatable) and Shake Shack (which says it does not franchise). Shake Shack has since said it will return its entire $10 million loan. Fortune
Alibaba cloud
Alibaba is preparing to invest $28 billion in cloud infrastructure over the next few years. How big an outlay is that? It's about half of all the revenue Alibaba pulled in during fiscal 2019. So look out, Microsoft and Amazon. Fortune
AROUND THE WATER COOLER
European unemployment
McKinsey has predicted a near-doubling of unemployment across Europe in the coming months. The consultancy says as many as 59 million jobs are at risk of either being lost or being cut back in terms of pay or hours. McKinsey reckons the unemployment rate will peak at 7.6% this year, though in the worst case it could peak next year at 11.2%—and take several years to recover to pre-pandemic levels. New York Times
Second wave
Citi Private Bank is warning that U.S. markets have not priced in the possibility of a significant second wave of COVID-19 in that country. David Bailin, Citi's chief investment officer, also said the markets are not pricing in the fact that it could take up to two years for the virus to "really cycle through the globe" and for a vaccine to become widespread reality. CNBC
Uber deliveries
Uber is making a fresh push into logistics as a way of utilizing the drivers and couriers who are sitting idle due to the coronavirus lockdowns. Uber Direct will start testing its on-demand delivery booking platform with partners such as New York drug provider Cabinet, Australian pet food supplier Pet Barn, and Portuguese postal service CTT. Financial Times
Drug pricing
Small Business & Entrepreneurship Council CEO Karen Kerrigan writes for Fortune that a bipartisan proposal for reducing high drug prices—made by Senators Ron Wyden and Chuck Grassley—"embraces heavy-handed government price setting, which would cripple biotech businesses and their vendors across the country." She favors a rival proposal from Idaho Republican Mike Crapo. Fortune
This edition of CEO Daily was edited by David Meyer.
