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Good morning.
The big news yesterday—and possibly the best news since the pandemic began—is that Moderna Therapeutics announced positive Phase I test results from its COVID 19 vaccine candidate. It’s a small test—just 8 people—but all developed antibodies from the vaccine, suggesting a path to success by early next year.
Last week, I interviewed the man who gave birth to Moderna—Noubar Afeyan of Flagship Pioneering—for our podcast, Leadership Next, out this morning here. It was one of the most interesting conversations I’ve had during lockdown, and well worth listening to.
Flagship is a portfolio company, which creates and incubates life sciences companies, and its goal, Afeyan says, is “innovation at the extreme.” An excerpt from the interview:
“Everything we do is to create completely new possible solutions that don’t exist today. When we start these things, they are completely unreasonable, and therefore dismissed…I believe humanity has largely used up all the obvious things to do to have social impact. We have to work on things that are un-obvious and unreasonable, and identify from those the subset that might turn out to be realizable. We have to start with science fiction and take the fiction out.”
The vaccine technology Moderna developed uses messenger RNA, which is a snippet of genetic code, to produce an antibody response. Afeyan says Moderna is aiming for capacity of a billion doses annually by the end of next year. With pressure growing to make any vaccine free, that early effort is unlikely to prove profitable. But a successful vaccine would demonstrate the value of Moderna’s technology—which could explain why the company’s stock price has jumped 4X since the start of the year.
More news below. And if you are struggling with the challenge of how to reopen after lockdown, here’s some collected advice from the CEOs of Ford, Gap, Rite Aid, Hilton, Qualcomm, Duke Energy, Synchrony, Delta, Bristol-Myers Squibb, Starbucks, Kohl’s, Wells Fargo, Macy’s and Cisco.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Recovery fund
France and Germany have jointly proposed a $545 billion EU recovery fund that would issue grants (not loans) to the member states that are hardest hit by COVID-19 (think Italy and Spain). It's a big shift in position for German Chancellor Angela Merkel, who was previously against the idea of EU nations sharing debt. Interestingly, Merkel and her French counterpart, Emmanuel Macron, would like this new fund—described by ECB President Christine Lagarde as "ambitious, targeted and welcome"—to also finance green investments. Fortune
Trump WHO
President Trump is threatening to permanently defund the World Health Organization unless it proves within 30 days that it is not dependent on China. Trump has previously threatened to temporarily remove U.S. funding from the pandemic-fighting body, over the same issue—he says the U.S. agency was too supportive of China and ignored early reports of the coronavirus outbreak in Wuhan. Fortune
Trump pills
President Trump also claims to be taking the anti-malaria drug hydroxychloroquine daily to ward off COVID-19, despite the view of most medical experts that it has no proven efficacy in the context of that disease. Hydroxychloroquine does however have a long list of potential side effects, include heart arrhythmia and psychiatric disorders. Trump has been trying to urge its use for months now. Politico
Uber layoffs
Uber has announced another round of cuts, this time involving 3,000 employees being laid off and nearly 40 offices being closed or consolidated. CEO Dara Khosrowshahi in an email to staff: "We have decided to refocus our efforts on our core. We need to fundamentally change the way we operate." Analysts say the shedding of money-losing markets and business lines was needed anyway, even before the coronavirus struck. Fortune
AROUND THE WATER COOLER
Son of God
In one of history's greatest demonstrations of CEO humility, SoftBank chief Masayoshi Son yesterday compared himself to Jesus Christ. Facing accusations of poor performance after the Japanese conglomerate posted a record $13 billion annual loss, Son reportedly told investors that Jesus, too, had been misunderstood and criticized. Those who recall the outrage John Lennon once sparked with a Jesus comparison may be amused to note that Son also drew an analogy with the Beatles, saying they had not been popular when they first started. Financial Times
German spying
Germany has played a key role in international online espionage, largely thanks to the fact that one of the world's biggest internet exchange points is on its turf. But now the country's highest court has ruled that it's unconstitutional for the BND (Germany's NSA equivalent) to conduct mass surveillance on foreigners—because they too have privacy rights under the German constitution. Score one for the internet exchange point's operators, who have for years been complaining about having to help the spies. Fortune
U.K. tariffs
After the Brexit transition period concludes at the end of this year, the U.K. intends to cut or remove tariffs on products ranging from dishwashers to Christmas trees, while still protecting industries such as automotive and agriculture. In total, 60% of the U.K.'s trade would be tariff-free under the plan announced Tuesday. Bloomberg
TikTok CEO
TikTok will have outgoing Disney+ chief Kevin Mayer as its new CEO, as of June 1. The longtime media exec was passed over for the top job at Disney, so he will now be heading up TikTok and serving as COO for its parent, Bytedance. Given that Bytedance is desperately trying to distance itself from its Chinese roots, Mayer's appointment could also be politically advantageous. New York Times
This edition of CEO Daily was edited by David Meyer.
