Tag Archives: Merck

Business

Amgen in Advanced Talks to Buy Horizon Therapeutics

Leave a comment

Amgen Inc.

AMGN -2.42%

is in advanced talks to buy drug company

Horizon Therapeutics

HZNP 0.39%

PLC, according to people familiar with the matter, in a takeover likely to be valued at well over $20 billion and mark the largest healthcare merger of the year.

The U.S. biotechnology company was the last of three suitors standing in an auction for Horizon, the people said, after French drugmaker

Sanofi SA

said Sunday it was out of the running.

A deal could be finalized by Monday assuming the talks with Amgen don’t fall apart, the people said.

Horizon develops medicines to treat rare autoimmune and severe inflammatory diseases that are currently sold mostly in the U.S. Its biggest drug, Tepezza, is used to treat thyroid eye disease, an affliction characterized by progressive inflammation and damage to tissues around the eyes.

The company is Nasdaq-listed, but based in Ireland and has operations in Dublin, Deerfield, Ill., and a new facility in Rockville, Md.

Horizon said last month it was fielding takeover interest from Amgen, Sanofi and

Johnson & Johnson,

a disclosure prompted by a Wall Street Journal report.

Johnson & Johnson later said it had dropped out.

Last year, revenue from Tepezza more than doubled, driving Horizon’s overall net sales 47% higher to $3.23 billion. Horizon has said that annual global net sales of the drug are targeted to eventually peak at more than $4 billion as the company aims to win approval to sell it in Europe and Japan.

That type of growth is attractive to big drug companies—with many sitting on big piles of cash—that rely on acquisitions as a key strategy to expand sales. Many big drugmakers are looking for new sources of revenue to offset losses when some of their main products lose patent protection.

Analysts expect Amgen will lose sales when patents begin expiring on its big-selling osteoporosis drugs Prolia and Xgeva later this decade. The pair of drugs accounted for nearly $5.3 billion of Amgen’s $26 billion in revenue last year.

In October, Amgen completed a $3.7 billion deal for ChemoCentryx and its drug to treat a rare immune-system disease.

Adding Horizon would provide more rare immune-disease drugs to Amgen’s lineup, which also includes the biotech’s Enbrel and Otezla immune-disease therapies. Amgen could help sell more of Horizon’s products overseas, according to analysts.

Acquiring Horizon could add about $4 billion in new revenue for Amgen by 2024, according to Jefferies & Co.

Other big life-sciences companies have been inking deals in recent months.

Johnson & Johnson recently struck a $16.6 billion deal to acquire heart device maker Abiomed Inc. to bolster sales of its medical-gear division, which had been lagging behind those of its pharmaceutical unit.

Merck

& Co. followed with a deal of its own, agreeing to buy blood-cancer biotech

Imago BioSciences Inc.

for $1.35 billion, ahead of the patent expiration of its cancer immunotherapy Keytruda.

Pfizer Inc.,

meanwhile, agreed in August to buy Global Blood Therapeutics Inc. for $5.4 billion, in a deal that would give the big drugmaker a foothold in the treatment of sickle-cell disease.

A deal for Horizon would likely rank as the largest healthcare acquisition globally in 2022, ahead of the Johnson & Johnson-Abiomed tie-up. The selloff in stocks this year amid rising interest rates, while putting a damper on deal activity, has also made some companies more attractive targets. At the stock’s peak about a year ago, Horizon was valued at roughly $27 billion.

The shares, which fell sharply earlier this year, have surged since the possibility of a takeover surfaced, and the company now has a market value of about $22 billion.

Horizon’s other drugs include Krystexxa for treating gout, a form of inflammatory arthritis, and Ravicti for a rare, potentially life-threatening genetic disease known as urea cycle disorder that raises ammonia levels in the blood.

Drugs treating rare diseases have emerged as a large source of pharmaceutical sales because they can command high prices that health insurers have been willing to pay.

Write to Ben Dummett at ben.dummett@wsj.com, Dana Cimilluca at dana.cimilluca@wsj.com and Laura Cooper at laura.cooper@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Business

Texas runs out of monoclonal antibody treatment effective against omicron

Leave a comment

Texas has run out of its supply of monoclonal antibodies, and infusion centers in the state will be unable to offer the treatment until more shipments are sent out in January.

Infusion centers in Austin, El Paso, Fort Worth, San Antonio and The Woodlands have all gone through their supply of sotrovimab, the only antibody treatment believed to be effective against the omicron variant, the Texas Health and Human Services Commission said on Monday.

The agency said infusion centers in Texas will be unable to offer the treatment until “federal authorities ship additional courses of sotrovimab to Texas in January.”

“Other monoclonal antibodies have not shown to be effective against the Omicron variant, which now accounts for more than 90 percent of new cases. The infusion centers will continue to offer those antibodies as prescribed by health care providers for people diagnosed with a non-Omicron case of COVID-19,” the Texas commission said.

A “limited supply” of the recently approved oral antiviral drugs — one from Merck and Ridgeback Biotherapeutics and the other from Pfizer — will soon be available in Texas, the agency added, noting that the supply of these drugs is also regulated by the federal government.

Health officials began stockpiling doses of sotrovimab this month after studies showed that it was effective against the highly transmissible omicron variant.

On Dec. 17, the U.S. Department of Health and Human Services (HHS) released distribution determinations for sotrovimab, allocating 2,694 doses for Texas. The department said at the time that the government’s supply of the antibody treatment was “extremely limited” and additional units would not be available until the week of Jan. 3.

HHS recommended reserving sotrovimab for use in the highest risk outpatients, including patients over the age of 65 and those who are immunocompromised.



Read original article here

Business

FDA authorizes Merck antiviral pill to treat COVID at home: Updates

Leave a comment

A day after authorizing the first antiviral pill to treat COVID-19, the Food and Drug Administration on Thursday authorized a second: Merck’s molnupiravir.

The prescription medication, which can be taken at home, is designed to stop the progression of COVID-19 from mild to severe symptoms in people at high risk. In data presented to an FDA advisory panel in late November, the drug was shown to prevent 30% of infections from progressing – far fewer than Pfizer’s antiviral Paxlovid, which the FDA authorized on Wednesday.

Molnupiravir, produced also by Ridgeback Biotherapeutics should be given within five days of COVID-19 symptoms beginning and should only be given to adults because it may affect bone and cartilage growth, the FDA noted. The drug is not recommended for use during pregnancy because animal studies suggest it may damage the fetus.

Several doctors told USA TODAY that they would only prescribe molnupiravir if they had no other alternative, and the FDA seemed to echo that by noting in its authorization announcement that the drug is to be used by people at high risk for severe disease “for whom alternative COVID-19 treatment options authorized by the FDA are not accessible or clinically appropriate.”

“There are a lot of question marks still to answer, however, If I had nothing else to provide to a patient that was at high risk, that’s a risk-reward discussion with a patient,” said Michael Ganio, senior director of Pharmacy Practice and Quality at the American Society of Health-System Pharmacists. “That decision may lean in favor of molnupiravir if it was available.”

The U.S. government has pre-purchased 3.1 million courses of molnupiravir, for about $2.2 billion. Merck said it was ready to ship hundreds of thousands of courses within days of authorization and 1 million courses over the next few weeks in the U.S. Ten million courses of treatment are ready to be packaged and distributed worldwide. Paxlovid is also expected to be in short supply at first because it is difficult and time-consuming to manufacture.

– Karen Weintraub, USA TODAY

Also in the news:

► The United States has almost surpassed the case levels it saw during the worst of the delta surge of the virus. The worst seven-day period of the delta wave ending Sept. 13 saw 1,197,846 new cases. In a seven-day period ending Wednesday, the U.S. recorded 1,152,497 new cases.

► President Joe Biden tested negative for COVID-19 on Wednesday after coming into contact last week with a White House aide who has since tested positive for the virus.

► Sen. Chris Coons, D-Del., tested positive for COVID-19, he said in a statement Thursday.

► The head of the World Health Organization, Tedros Adhanom Ghebreyesus, said Wednesday that “blanket booster programs are likely to prolong the pandemic rather than ending it.” Tedros has long been critical of wealthier countries’ booster campaigns while many poorer countries still have large shares of their population unvaccinated.

► Students at campuses in both the California State University and University of California systems will be required to get booster shots, the schools’ leaders announced this week.

► A federal judge on Wednesday refused to block a mask mandate imposed by schools in Las Vegas and dismissed a lawsuit filed by two students’ parents.

► Public health officials in the U.K. said Thursday that they wouldn’t add any additional restrictions on gatherings before the Christmas holiday after a pair of studies showed omicron was less likely to cause hospitalization.

► A North Carolina police chief has been placed on unpaid leave after he allegedly told officers to get fraudulent COVID-19 vaccine cards at a “clinic” without having been vaccinated, WMBF-TV reported.

📈Today’s numbers: The U.S. has recorded more than 51.5 million confirmed COVID-19 cases and more than 812,000 deaths, according to Johns Hopkins University data. Global totals: More than 277.3 million cases and 5.3 million deaths. More than 204.8 million Americans – 61.7% –  are fully vaccinated, according to the CDC. 

📘 What we’re reading: Omicron has dealt yet another blow to schools that have already weathered COVID-19 disruptions, student misbehavior and staffing shortages this fall. “The overall feeling is one of exhaustion,” says one superintendent. Read the full story.

Keep refreshing this page for the latest news. Want more? Sign up for USA TODAY’s free Coronavirus Watch newsletter to receive updates directly to your inbox and join our Facebook group.

Worried that a new COVID-19 wave could overwhelm understaffed U.S. hospitals, federal officials on Thursday loosened rules that call on health care workers to stay out of work for 10 days if they test positive.

Those workers now will be allowed to come back to work after seven days if they test negative and don’t have symptoms. Isolation time can be cut if there are severe staffing shortages, according to the new Centers for Disease Control and Prevention guidance.

“As the health care community prepares for an anticipated surge in patients due to omicron, CDC is updating our recommendations to reflect what we know about infection and exposure in the context of vaccination and booster doses,” CDC Director Rochelle Walensky said in a statement.

“Our goal is to keep health care personnel and patients safe, and to address and prevent undue burden on our healthcare facilities,” she added.

Isolation is designed to keep infected people away from uninfected people, to prevent further spread of the virus.

— Mike Stobbe, The Associated Press

New York City Mayor Bill de Blasio announced Thursday that Manhattan’s annual celebration will require additional COVID-19 protections including vaccination and mask requirements. The event is completely outdoors. 

Attendees who are age 5 or over must present proof of COVID-19 vaccination to enter the event.

To allow for social distancing, certain areas will allow fewer viewers than usual.

“There is a lot to celebrate and these additional safety measures will keep the fully vaccinated crowd safe and healthy as we ring in the New Year,” Mayor de Blasio said in a press release.

The annual Times Square New Year’s event usually hosts about 58,000 people in viewing areas. This year’s celebration will only host around 15,000 and visitors won’t be allowed to enter areas until 3 pm ET.

“The mayor has made the right move to take precautionary measures as we learn to live with COVID and fight the Omicron variant,” Mayor-elect Eric Adams said.

Positive COVID test? Here’s what to do.

Testing positive for COVID-19 starts a confusing, disruptive and at times frightening process — one that millions of Americans will likely go through in coming weeks as the omicron variant rapidly spreads this holiday season.

First, you need to isolate. That’s a more intense version of quarantining — it means cutting off contact with other people as much as possible, so that you reduce your chances of infecting them. It also means forgoing travel, not going to work and even limiting contact with people in your own household who aren’t infected.

The CDC says it’s a necessary step whether you’re vaccinated or unvaccinated; showing symptoms or feeling fine.

Everyone who tests positive for COVID-19 should also monitor their symptoms. And people who are unvaccinated or at high risk for severe disease should be extra vigilant for symptoms that might require emergency care. Call your doctor for early treatment options.

How long should you isolate? How long will I be contagious? What if you are a close contact with someone who tested positive? Here’s what you should know about omicron and COVID this holiday season.

Just when it seemed like life could approach some semblance of normalcy, COVID has come roaring back, casting a shadow over Christmas services for millions. 

The rapid surge of the highly contagious omicron variant had local health experts offering blunt advice Wednesday: Stay away from crowded Christmas Masses and holiday parties this weekend. 

“If people are going to gather in places of worship, they should be prepared for the fact that they will be exposed to the variant,” said Perry Halkitis, dean of the Rutgers School of Public Health. Read more here.

– Deena Yellin, NorthJersey.com

A disorienting torrent of new information about the omicron coronavirus variant continues to flow as Americans finalize their holiday plans – traditions that once again will have profound public health consequences.

Some news appears ominous, including a new projection suggesting about half of the nation can expect to become infected with the variant in the next few months. That’s an unprecedented number of cases, a number that once would have been expected to result in untold suffering.

But the projection can also be grouped in with a growing scientific consensus that an omicron infection appears to be less risky than previous variants. Scientists are still sorting out the role of vaccines, prior infection, demographics and the virus’ many mutations in this trend. Meanwhile, two British studies added more evidence to the theory that omicron is milder than delta, showing a lower risk of hospitalization.

But on Wednesday, Dr. Anthony Fauci cautioned that celebrating the spread of a likely less-severe version of COVID-19 is premature: “You can’t count on anything when you’re dealing with a virus that has fooled us so many times before,” Fauci said.

COVID-19 cases in the United States have increased about 36% in just the last week, a USA TODAY analysis of Johns Hopkins University data shows. The U.S. went from reporting about 120,000 cases a day to more than 160,000.

Maryland has joined New York, New Jersey, Puerto Rico and Washington, D.C., in reporting a record number of cases, while Maine again reported a record number of deaths.

Across the United States, about 88 communities reported a record number of cases, the analysis shows. Those include heavily populated counties around Boston, Chicago, New York City, New Haven and Providence, as well as about 30 municipalities in Puerto Rico.

– Mike Stucka, USA TODAY

The Supreme Court announced Wednesday it will hear oral arguments in a number of challenges to President Joe Biden’s COVID-19 vaccine-or-testing requirements for large employers and health care facilities. 

The high court was already considering several appeals about those requirements on an emergency basis – which rarely involve oral arguments – but the court announced it would take a more formal approach to the cases and scheduled arguments for Jan. 7.

The justices deferred action on the challenges until after then. 

While largely a procedural move, the development signaled the nation’s highest court may be prepared to wade into the thorny issue of vaccine mandates for the first time during the coronavirus pandemic. The court has turned away challenges to other such regulations in Indiana, Maine and New York, allowing state or local vaccine mandates to remain in effect.

– John Fritze, USA TODAY

Ohio laid out more details Wednesday about its strategy to combat the surge of COVID-19 patients that understaffed hospitals are facing after reporting a record daily high in the number of new COVID-19 cases Tuesday: 12,502. The state broke it again Wednesday reporting 12,864 new cases. 

Hospitalizations are also reaching levels not seen since last winter’s surge when vaccines were just becoming available. As of Tuesday, there were 4,797 Ohioans in the hospital for the virus – one in four patients at Ohio hospitals.

The situation has gotten to the point that Gov. Mike DeWine announced he would send 1,050 Ohio National Guard members to assist hospitals to handle the influx of patients. Facilities are understaffed as workers leave the profession, many of whom are worn out by the pandemic. DeWine also said Ohio was working with a company to bring in nurses from out of state.

– Titus Wu, Akron Beacon Journal

Contributing: The Associated Press

Read original article here

Business

Stock Market Today: Stocks Rise on Encouraging Virus Studies

Leave a comment

Text size

Stock markets will be closed Friday because the Christmas Day holiday falls on a Saturday.


Spencer Platt/Getty Images

Stocks traded higher Thursday, as studies on the Omicron coronavirus variant revealed infected people were at less risk of being hospitalized. Stronger U.S. economic data also buoyed markets ahead of the Christmas holiday, and set major stock indexes on track to erase Monday’s steep drop and close the holiday-shortened week in the green.

The


Dow Jones Industrial Average
was up 222 points, or 0.6%, in midday trading Thursday. The


S&P 500
rose 0.7% to 4,729, above the index’s all-time closing high of 4,712, while the


Nasdaq Composite
gained 0.9%.

The latest Omicron headlines were net positive. A study from the University of Edinburgh and another from the Imperial College London found that while the Omicron variant was more infectious, it was less severe. Also, researchers at South Africa’s National Institute for Communicable Diseases found people were 70% to 80% less likely to be hospitalized if infected with Omicron.

Meanwhile, the Food and Drug Administration on Wednesday authorized the Covid-19 antiviral pill from 


Pfizer

(ticker: PFE), adding a new weapon against the pandemic. On Thursday morning, the agency gave a thumbs up to another oral treatment from


Merck

(MRK).

There’s still plenty to keep investors up at night, but a year-end rally has unfolded in the past few days nonetheless.

“If the U.S. was not battling the Omicron variant, U.S. stocks would be dancing higher as the Santa Claus rally would have kept the climb going into uncharted territory,” wrote Edward Moya, senior market analyst, the Americas, at currency brokerage Oanda. “It is too early to say for sure if we will get a Santa Claus rally, but given all the short-term risks of Fed tightening, Chinese weakness, fiscal support uncertainty and Covid, Wall Street is not complaining as the S&P 500 is [at record highs.]”

Thursday morning was a busy one for economic data releases, most of which were collected before the Omicron wave. U.S. jobless claims for the week ended Dec. 18 were 205,000, about equal to the prior week and the average over the past four weeks, according to the Labor Department.

The Bureau of Economic Analysis reported personal income and consumption expenditures for November on Thursday morning. Consumer earnings rose 0.4% and spending climbed 0.6%. Economists’ consensus had been for increases of 0.6% and 0.5%, respectively.

The Federal Reserve’s preferred measure of inflation, the core personal consumption expenditure (PCE) price index, rose 0.5% in November for a year-over-year increase of 4.7%. That compares with a 4.2% annual rise in October and economists’ 4.5% prediction for November.

The central bank’s next policy-making meeting is Jan. 25-26, meaning there will be another round of employment and inflation data for officials to parse through between now and then.

Finally on Thursday morning, the Census Bureau released the durable goods report for November, which helps to provide a window into investment spending in the economy. New orders rose 2.5%, to $268.3 billion last month, versus a 2.1% average forecast.

Oil prices rose on Thursday, reflecting the same economic optimism pushing stocks higher. The price of West Texas Intermediate crude oil ticked up 0.2%, to $72.90 a barrel.

U.S. Treasury yields also climbed on Thursday, with the closely watched 10-year Treasury note yield up to 1.49%. Yields rise when prices decline, signifying more risk appetite from investors.

Stocks rose Wednesday for a second straight session, getting a boost from rising U.S. consumer confidence. Also lifting sentiment were gains in home sales and data that showed the U.S. economy rose at a rate of 2.3% in the third quarter, higher than the previous estimate.

Stock markets will be closed Friday because the Christmas Day holiday falls on a Saturday.

Here are seven stocks on the move Thursday:  


JD.com

(JD) stock dropped 6% after


Tencent

(0700.HK) said it would distribute its stake in the Chinese e-commerce firm to shareholders. That will come in the form of a $16.4 billion dividend. Tencent’s Hong Kong-listed shares rose 4.2% Thursday.

U.S.-listed shares of


AstraZeneca

(AZN) fell 0.7% following a study at the University of Oxford that found a third dose of the company’s Covid-19vaccine was effective against the Omicron variant.


Novavax

(NVAX) fell 3% after early data showed its two-dose vaccine booster produced an immune response to the Omicron variant.

Macau gambling and casino operators rose, as investors expressed optimism about a regulatory review of the city’s gaming sector.


Las Vegas Sands

(LVS) stock climbed 2.8%,


Wynn Resorts

(WYNN) gained 2.6%, and


MGM Resorts International

(MGM) added 1.1%.

Write to Joe Woelfel at joseph.woelfel@barrons.com

Read original article here

Business

How to Find the Healthiest Dividend Stocks for Your Portfolio

Leave a comment

One of the keys to successful dividend investing is separating the wheat from the chaff—finding stocks with secure payouts that can grow consistently and over the long haul.

Some of the highest-yielding shares, though tempting at first blush, can lead to trouble, notably cuts or suspensions and big capital losses.

Picking equity-income stocks got even tougher early in the pandemic last year when stalwart dividend payers like


Southwest Airlines

(ticker: LUV),


Boeing

(BA), and


Walt Disney

(DIS) suspended their payouts to preserve capital.

Though overall dividend health has improved markedly since then and looks good heading into 2022, it’s important to keep quality in mind. However, pinpointing what separates such stocks from the rest of the pack can be tricky, given the subjective nature of defining quality.

Barron’s spoke to three money managers for guidance, and to learn about some of their favorite dividend stocks.

A quality payout “isn’t only sustainable but preferably can grow over time,” says Mike Barclay, a senior portfolio manager at Columbia Threadneedle Investments. “It’s one of the reasons we don’t focus on yield,” he adds. Barclay is a manager of the $39 billion


Columbia Dividend Income
fund (LBSAX). As of Oct. 31, its top holdings included


Microsoft

(MSFT),


JPMorgan Chase

(JPM), and


Johnson & Johnson

(JNJ).

A dividend yield, Barclay says, “is just a formula” and “it really doesn’t tell you about the health of the company or the ability to pay that dividend in the future.”

Steve Goddard, founder and chief investment officer of the London Co., which manages money in separate accounts, prefers companies with high returns on capital and strong balance sheets. “High return-on-capital companies usually by definition will generate a lot more free cash flow than the average company would,” he says. And cash flow is what pays the dividend.

As of this year’s third quarter, the Richmond, Va.-based London Co.’s equity-income strategy’s top 10 holdings included


Apple

(AAPL), which recently yielded 0.5%; chip maker


Texas Instruments

(TXN), 2.4%;


Microsoft

(MSFT), 0.7%; home-improvement retailer


Lowe’s

(LOW), 1.2%; and asset manager


BlackRock

(BLK), 1.8%.

Another potential plus for quality stocks: Besides offering solid and growing dividends, many sport attractive valuations and trade at a discount to the


Russell 1000
index, says Goddard.

Company / Ticker Recent Price Dividend Yield Market Cap (bil) YTD Return Latest Dividend Increase
Coca-Cola / KO $55.00 3.1% $238.5 3.5% 2.0%
JPMorgan Chase / JPM 160.71 2.5 480.4 29.6 11.0
Texas Instruments / TXN 196.39 2.4 183.8 22.5 13.0
Comcast / CMCSA 48.94 2.0 226.5 -4.9 9.0
Microsoft / MSFT 334.97 0.7 2500.0 51.9 11.0

Data as of Dec. 8

Source: FactSet

David Katz, chief investment officer at Matrix Asset Advisors in White Plains, N.Y., cites the


S&P 500 Dividend Aristocrats Index
when asked about quality companies that pay dividends. The 65 firms in the index, all of which have paid a higher dividend for at least 25 straight years, include


Target

(TGT),


Chevron

(CVX), and


Caterpillar

(CAT).

“These are well-financed companies with long operating histories, good balance sheets, and they have consistently maintained and grown their dividends,” says Katz.

He points out that the stock market, with its tilt toward growth companies, hasn’t treated quality companies with much respect this year.

“You have a lot of really good drug companies that have a significant focus on dividends and dividend growth, have good earnings and good earnings growth, but the stocks have just been miserable,” Katz says, pointing to


Merck

(MRK) and


Amgen

(AMGN) as prime examples.

Merck, which yields 3.8%, has returned about minus 4% this year, dividends included, compared with about 26% for the


S&P 500.
Amgen, a biotech firm whose stock yields 3.6%, is also down about 4% this year.

For Barclay and his colleagues, the hunt for quality dividends starts with free cash flow, which is typically calculated as operating cash flow minus capital spending. “At the end of the day, a dividend can’t be sustained, let alone grown, over time, if the underlying cash from operations isn’t growing,” he observes.

He also pays close attention to a company’s balance sheet—the stronger, the better for dividends.

“You don’t always get paid for a strong balance sheet, except when you get into a stressed environment” like that in March 2020, when the pandemic hit the U.S. hard, says Barclay. “If you don’t have a strong balance sheet, you can’t weather that storm.”

Barclay also analyzes a company’s payout ratio, which he defines as the percentage of free cash flow that’s paid out in dividends. Many others define it as the percentage of earnings that get paid out in dividends.

“When the payout ratio is low, we know they’ve got a lot of room to run for dividend growth,” he says. “The ability [to pay it] is there. It’s our job to really press management whether or not the willingness is there to grow the dividend over time.”

One stock whose dividend Barclay likes is Microsoft, which has boosted its disbursement at an annual rate of about 10% a year. It yields only 0.7%, well below the S&P 500’s average of about 1.3%. However, Barclay says that his cost basis for the stock—the average of what he paid for the shares—is under $30, meaning his yield is effectively above 8%.

Two other dividend stocks he favors are analog chip maker Texas Instruments and banking powerhouse JPMorgan Chase, which yields 2.5%.

The market for analog chips is growing—a boon for TI—and the industry is consolidating, he says. As for JPMorgan Chase, Barclay says, it has “a very diversified business model that allows it to ride the economic cycles with some consistency.” That allows it to pay and increase its dividend.

Katz likes


Coca-Cola

(KO), which was recently yielding 3.1% but had only returned about 4% this year. He likes the beverage company’s prospects and adds that it “actually has been pretty good in terms of dividends.”

Coke’s chief financial officer, John Murphy, said during its third-quarter earnings call in late October that improving cash flow will help continue “our track record to grow our dividend.”

Write to Lawrence C. Strauss at lawrence.strauss@barrons.com

Read original article here

Business

The Big Pivot: Merck Falters on Covid-19 Vaccine, Then Makes One for Rival J&J

Leave a comment

Weeks after

Merck

MRK -0.33%

& Co. scrapped development of its Covid-19 vaccines in January, one of its senior manufacturing officials began phoning his deputies, telling them their work on a pandemic shot wasn’t actually over.

“We’re doing it,” John McGrath told his workers at Merck. “And we’re doing it with J&J.”

The

Johnson & Johnson

-Merck partnership, which the companies announced in March, is now bearing fruit to expand the world’s vaccine supply. After a frantic ramp-up that involved scouting for raw materials, buying equipment and upgrading plants all at the same time, the first Merck-made shots shipped Friday.

SHARE YOUR THOUGHTS

How will cooperation in the Covid-19-vaccine race change the future for Merck and J&J? Join the conversation below.

Merck is churning out more than 500,000 doses daily for use outside the U.S., including countries desperate for shots.

J&J’s unusual collaboration with a rival, and Merck’s speedy manufacturing run-up, reflect one of the biggest challenges of the pandemic: making enough Covid-19 vaccines to meet the high demand.

Even in the U.S., early supplies were limited as drugmakers ramped up production lines. To this day, many countries are struggling with short supply.

J&J vials at the Merck plant in West Point, Pa; the first Merck-made shots shipped Friday.

At a sprawling plant in West Point, Pa., Merck is helping J&J with the final stages of its vaccine production, known as fill-finish, which involves thawing frozen doses made by J&J, adding a stabilizer to maintain their potency during storage, then putting them into vials for shipment.

Merck, one of the world’s biggest drugmakers by sales, said it retrofitted its manufacturing facilities in about three months, shaving almost a year off the time it normally takes to ready a plant.

“We broke all sorts of records on construction, on tech transfers, on just getting product ready,” Mr. McGrath said. The federal government, which gave at least $105 million to Merck to retrofit plants, also contributed by moving needed supplies quickly through customs.

Johnson & Johnson’s Covid-19 vaccine hasn’t been embraced by people and health authorities as much as initially expected, partly because of concerns about a rare blood-clotting condition. Manufacturing issues have also played a role in limiting its use.

Yet if enough doses are made, the vaccine still can play an important role in the pandemic because many poor countries lack access to other shots and J&J’s vaccine is easier to handle and store, public-health advocates and Wall Street analysts say.

Workers checking vaccines at the Merck plant in West Point, Pa., which scrambled to get special equipment to manufacture the J&J Covid-19 vaccine.

The J&J vaccine doesn’t require a special freezer to keep it cold, unlike messenger-RNA vaccines, and the primary series is one dose, not two.

“Our vaccine is uniquely positioned to be used in the world,” said Remo Colarusso, J&J’s global pharmaceuticals manufacturing chief. “The world is not completely vaccinated by a long shot.”

J&J and Merck, their headquarters separated by about 18 miles in New Jersey, are normally competitors in areas such as cancer and cardiovascular disease. Last December, at the urging of the federal government, the rivals began discussing whether Merck could help make J&J’s Covid-19 vaccine.

J&J Chief Scientific Officer

Paul Stoffels

was initially reluctant to work with another company, people familiar with the matter said. He was concerned it would stretch his staff too thin because of existing manufacturing partnerships, but agreed after an appeal by National Institutes of Health Director Francis Collins, the people said.

During a Jan. 4 call between U.S. officials, Dr. Stoffels and then-Merck Chief Executive

Ken Frazier,

the companies agreed to assess whether Merck’s plants could adapt to make J&J’s shot, the people said.

At the time, Merck was searching for a role in the pandemic response. It had begun clinical trials of two Covid-19 vaccines, but they ultimately failed, with Merck halting the programs in late January. Its Covid-19 antiviral, molnupiravir, was still being tested.

Merck fit as a partner because of its decades of manufacturing vaccines, Mr. Colarusso said.

Another key: Merck’s production line in West Point was sitting idle after the Covid-19 vaccines flopped. Merck also wasn’t using a freshly built 4,000-square-foot cold-storage room with 18 specialized freezers that the company had built for its Covid-19 shots. Each freezer could hold 5.5 million J&J doses.

The freezer room at the Merck plant in West Point, Pa.

The West Point plants sit on a leafy campus 30 miles outside Philadelphia. It is Merck’s largest workplace—in terms of space and number of workers—and has its own ZIP Code. Despite the available rooms and equipment, Merck needed to upgrade its facilities, because J&J’s vaccine uses vials smaller than Merck’s failed Covid-19 shots, as well as a newer vaccine technology.

“Our issue then became what equipment do we need, where can we get it, how quickly can we get it, is it available, and if not, then what’s our alternatives?” said Mr. McGrath, an industry veteran who joined Merck in 2019.

Merck found that it needed to quickly secure equipment and raw materials even as other drugmakers required them for their own products. Merck needed about 200 chemicals and devices such as filters. Such items typically take between two and three months to get, but Merck needed them in weeks.

Merck leaned on its relationships with suppliers, such as

Thermo Fisher Scientific Inc.,

which provided specialized plastic bags used to purify and filter the vaccine. Merck also paused production of some non-Covid-19 products, which might have yielded sales to competitors but freed up equipment and materials, Mr. McGrath said.

In April, workers discovered that a screw used to keep vials steady as they moved down the production line wasn’t working. The vials wobbled, and some fell down, jamming the production line. Merck worked with a vendor in Japan to redesign the screws.

In May, Merck workers discovered another issue with the vials while doing test-runs of the production line using water. They became top-heavy with water when filled. To resolve the issue, a Merck machinist designed a plate that held the containers securely, said Kim Dezura, the West Point plant manager.

“Those are the types of little things that you encounter,” she said. “We want to solve those early so that they don’t create bigger issues later.”

Once filled, vials must be transferred from trays to cardboard boxes for shipment without sustaining damage and before they get too warm. J&J didn’t specify how to do this, so its rival honed its own system.

Initially, Merck tried moving vials one by one, but that took too long and was too physically hard for workers. Using 3-D printers, Merck built workstations for workers to release vials from a tray, sort them into rows, scoop out the containers and transfer them 39 at a time.

In August, Merck began manufacturing commercial doses, Ms. Dezura said. It took the companies until recently to receive regulatory approvals clearing shipments. J&J then got the doses at its distribution center in the Netherlands, and released the doses Friday for global distribution.

Merck plans to make doses with J&J at its plant in North Carolina, a more difficult process that is taking longer to finish.

The Merck site in West Point, Pa., is the company’s largest facility.

Write to Jared S. Hopkins at jared.hopkins@wsj.com

Corrections & Amplifications
Remo Colarusso is Johnson & Johnson’s global pharmaceuticals manufacturing chief. An earlier version of this article misspelled his surname as Remo Colaruso. (Corrected on Dec. 11)

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Business

Merck’s Covid Pill Gets an FDA Hearing. What’s at Stake for the Stock.

Leave a comment


Merck

is making the case on Tuesday that it still has a role to play in the Covid-19 treatment landscape.

The FDA is convening an advisory committee to consider the company’s antiviral pill, molnupiravir. But the discussion will highlight the drug’s limitations, including safety risks and limited efficacy, which could cut expectations for the drug’s long-term sales even more.

Analysts widely expect the agency to authorize molnupiravir, though authorization probably would be limited.

Shares of Merck (ticker: MRK) have fallen even as shares of Covid-19 vaccine makers soared Friday and Monday against the backdrop of the emergence of a worrying new Covid variant, Omicron.

Merck’s stock fell 3.8% Friday, and was down another 5.8% Monday, while the S&P 500 rose 1.5%. Merck was the S&P 500’s worst performer Monday.

The drop came as hopes dim for molnupiravir. Shares jumped 8.4% on Oct. 1, when Merck announced that early data showed the drug had cut the risk of hospitalization or death by around 50%; Covid-19 vaccine stocks had fallen. Since then, the shine has come off the antiviral pill.

First,


Pfizer

(PFE) announced what appears to be more positive data on its Covid-19 antiviral, known as Paxlovid. Then, on Friday, Merck said updated results on its Phase 3 study of molnupiravir are far less promising than the initial data had shown. The study, according to the company, showed that molnupiravir cut the risk of hospitalization or death by 30%—not the initial result of around 50%.

Early Monday, Citigroup analyst Andrew Baum downgraded his rating of Merck to Neutral from Buy, in part citing new risks to sales estimates for molnupiravir.

“The clinical profile of Lagevrio continues to deteriorate,” Baum wrote, referring to molnupiravir by the name under which it is being marketed in the U.K., where it already has regulatory approval.

A Merck spokesperson said the company doesn’t comment on analyst reports or recommendations.

In early October, Barron’s reported on concerns raised by some scientists that molnupiravir could increase the risk of cancer or birth defects. Those concerns persist, though Merck maintains that its preclinical studies show that the drug is safe.

The worries stem from the way molnupiravir inhibits the replication of the virus that causes Covid-19: First by incorporating itself into the virus’s genetic code, and then causing errors as the virus replicates. The worry is that it could also cause mutations if it inserts itself into the genetic code of a human who takes the pill. This mechanism of action is specific to molnupiravir; Pfizer’s Covid-19 pill works differently.

The FDA, for its part, dismissed those worries in documents posted Friday in advance of Tuesday’s advisory committee meeting on molnupiravir, writing that the “risk of genotoxicity following treatment” with molnupiravir “is low.”

The scientists who initially raised the concerns remain unconvinced. In public comments submitted to the advisory committee, Dr. Ronald Swanstrom, a professor of biochemistry and biophysics at the University of North Carolina at Chapel Hill, whose laboratory published a paper this past spring arguing that molnupiravir could cause mutations in mammalian cell cultures, wrote: “Molnupiravir is about to be sent around the world carrying a big genotoxic question mark with it, one that most people who are given the drug will not have the background to fully understand.”

Merck scientists have taken issue with the Swanstrom lab’s study, though Swanstrom stands by his lab’s methods.

The key questions for the advisory committee will be how broad an authorization for molnupiravir should be. The FDA will ask the advisors to discuss whether the drug should be allowed to be used during pregnancy. It will also ask advisors about the risk that the use of molnupiravir could effectively create new strains of the virus.

In its own briefing document, the agency wrote: “It remains unclear if the potential for [molnupiravir]-associated changes in the SARSCoV-2 spike protein presents a public health risk, considering anticipated widespread use of MOV.”

Finally, the agency will ask the committee members if the benefits of molnupiravir generally outweigh its risks for adult patients at high risk of severe Covid-19, and which risk factors should qualify a patient.

Importantly, the FDA’s briefing documents were written on the basis of the initial data from Merck, not the updated results announced Friday that cut its efficacy. In an addendum to its briefing document noting the new data, the FDA noted that the benefit/risk assessments that will be presented on Tuesday may differ from those in the original briefing documents.

Analysts widely expect the drug to receive an emergency use authorization, though possibly for a narrow population.

“After reading the briefing documents, and considering the macro-pandemic situation, we expect molnupiravir authorization for all patients with one or greater risk factor …and regardless of vaccination / previous infection status,” SVB Leerink analyst Daina Graybosch wrote in a note out Monday.

Graybosch wrote, however, that the discussion will highlight ways in which molnpuiravir appears to be inferior to Pfizer’s Covid-19 pill. “This includes risk of harm to fetuses and accelerated viral mutation rate that may drive emergence of new SARS-CoV-2 variants, in addition to relatively weaker efficacy,” Graybosch wrote.

The FDA’s advisers are scheduled to convene at 9 a.m. and adjourn at 5 p.m.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

Read original article here

World

Stock Market Today: Dow Bounces Back as Covid Variant Fears Ease

Leave a comment

Text size

The Omicron variant has prompted new travel restrictions around the world.


Joe Raedle/Getty Images

Stocks were rebounding Monday following Friday’s rout as vaccine makers said that they can adjust their Covid-19 vaccines to adequately immunize against the Omicron variant. 

In afternoon trading, the


Dow Jones Industrial Average
was up 320 points, or 0.9%, after the blue-chip benchmark plunged 905 points Friday. The


S&P 500
was up 1.6%, and the


Nasdaq Composite
advanced 2.1%. All three indexes notched their worst Black Friday on record at the end of last week, with the Dow suffering its worst day of the year. The last time the Nasdaq moved at least 2% on back-to-back days was March 8 and March 9 of this year.

“Keep in mind, while COVID continues to be a serious threat, we’re in a very different place than we were at the start of the pandemic in terms of medical advances and the strength of our economy,” wrote Chris Larkin, managing director of trading at ETrade. 


Pfizer

(ticker: PFE) said over the weekend it can adapt its vaccine to address the new variant within 6 weeks.


Moderna

(MRNA) said it could potentially roll out a reformulated vaccine by early 2022. Moderna stock was up 11% Monday, while Pfizer was down 1.2%.

It wasn’t just stocks that were signaling investor optimism. The 10-year Treasury yield rose to 1.53% from 1.48% at Friday’s close, a sign that that investors are moving out of safer assets and into risky ones. The price of WTI crude oil rose more than 4% to above $70 a barrel after having dropped more than 10% Friday. 

These are all good signs, but markets are still monitoring the Covid-19 situation. Just this month, new lockdowns in Europe were announced and the Omicron variant seems to be spreading globally. 

“Expect markets to remain choppy near term as we wait for further details on the new variant,” wrote Keith Lerner, co-chief investment officer at Truist. 

Overseas, London’s


FTSE 100
climbed 0.9%, rebounding from its largest one-day drop of 2021. In Asia, where markets closed before Friday’s selloff steepened, Hong Kong’s


Hang Seng Index
was 1% lower.

Here are five stocks on the move Monday:

Sectors that were slammed Friday—like travel—were generally higher, but most remained below levels seen before news of Omicron broke. Cruise operator


Carnival

(CCL) rose 1.5% initially, before that gain moderated to 0.4%. “I also would be buying travel/leisure stocks as if there is a mega trend that keeps bouncing back in the face of Covid,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group. 


Hyatt Hotels

(H) gained 4.2% after getting upgraded to Overweight from Neutral at JPMorgan.


TJX Cos.

(TJX) stock advanced 1.8% after getting upgraded to Buy from Neutral at Citigroup. 


Bumble

(BMBL) stock rose 3.5% after getting upgraded to Outperform from Market Perform at Raymond James. 


United Parcel Service

(UPS) stock dropped 0.4% after getting downgraded to Hold from Buy at Deutsche Bank. 

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com and Jack Denton at jack.denton@dowjones.com

Read original article here

Health

Lab tests reveal no trace of smallpox inside questionable vials at Merck’s Pennsylvania facility

Leave a comment

PHILADELPHIA (WPVI) — The US Centers for Disease Control and Prevention says several questionable virals found at a Merck facility in Montgomery County, Pennsylvania did not contain variola virus, the cause of smallpox.

Officials say lab tests revealed that five vials labeled “smallpox” actually contained vaccinia, the virus used in the smallpox vaccine.

The virals were found earlier this week when a lab worker cleaned out a freezer at the Merck facility located in North Wales, Pa.

The Pennsylvania Health Department said there were 15 questionable vials: five were labeled “smallpox” and 10 were labeled “vaccinia.”

“The freezer facility was immediately secured and staff followed standard protocols for notifying CDC of such a potential discovery. The vials were sent securely to CDC for testing on November 18 to determine what they contained. No one was exposed to contents of the vials,” said federal officials.

The CDC is in close contact with state and local health officials, law enforcement, and the World Health Organization about these findings.

Smallpox, also known as variola, was declared eradicated in 1980 by the World Health Organization after a concerted global vaccination effort. Before that, the virus, which passes easily from person to person, infected 15 million people a year and killed about 30% of them. The last known outbreak in the US was in 1947.

Currently, there are only two places in the world where the virus is stored: at the CDC in Atlanta and in Russia at their version of the CDC.

In 2014, employees of the National Institutes of Health found six vials of smallpox in an unused storage room as they packed up a lab at the NIH’s Bethesda, Maryland, campus to move it. Two of the vials contained viable virus. The CDC said at the time there was no evidence anyone had been exposed to the contents of any of the vials.

Governments have argued about whether to keep samples of the virus or to destroy all known copies. Most routine vaccination stopped in 1972 but military personnel and some researchers are still vaccinated.

CNN contributed to this report.

Copyright © 2021 WPVI-TV. All Rights Reserved.



Read original article here

Health

‘Smallpox’ Vials Found at Merck Lab in Suburban Philadelphia Facility – NBC10 Philadelphia

Leave a comment

Lee la historia en español aquí.

Vials labeled with “smallpox” were found at a Merck facility in Montgomery County, Pennsylvania, where vaccine research is conducted, but it is unclear why the vials were there, according to the Centers for Disease Control.

Smallpox is caused by a virus that was eradicated from human transmission in the late 1970s after centuries of epidemics across the globe. It is so deadly that only two laboratories in the world are allowed to have doses of the virus: the CDC main lab in Atlanta and a facility in Russia.

The CDC said the frozen vials were “incidentally discovered” by a lab worker. The discovery occurred at the Merck Upper Gwenydd facility in North Wales, about 30 miles northwest of Philadelphia, according to a source with knowledge of the ongoing situation. It is not clear exactly when the vials were discovered.

“Merck is in the process of figuring out why it was there,” the source told NBC10 on Wednesday.

The CDC said an investigation is underway. Yahoo! News first reported the discovery. Merck did not respond to requests for comment Wednesday morning.

“The frozen vials labeled “Smallpox” were incidentally discovered by a laboratory worker while cleaning out a freezer in a facility that conducts vaccine research in Pennsylvania. CDC, its Administration partners, and law enforcement are investigating the matter and the vials’ contents appear intact,” a CDC spokeswoman said in a statement to NBC10. “The laboratory worker who discovered the vials was wearing gloves and a face mask. There is no indication that anyone has been exposed to the small number of frozen vials. We will provide further details as they are available.”

Smallpox dates back as early as the 6th century, and for centuries spread uncontrolled throughout the world. About 3 in 10 people who contracted the disease died, according to the CDC. It was spread as a virus called variola. A vaccine was invented in 1796, but it wasn’t for nearly another 200 years before the last known cases in the late 1970s.

“Following the eradication of smallpox, scientists and public health officials determined there was still a need to perform research using the variola virus. They agreed to reduce the number of laboratories holding stocks of variola virus to only four locations,” the CDC says on its website. “By 1984, England and South Africa had either destroyed their stocks or transferred them to other approved labs. There are now only two locations that officially store and handle variola virus under WHO supervision: the Centers for Disease Control and Prevention in Atlanta, Georgia, and the State Research Center of Virology and Biotechnology (VECTOR Institute) in Koltsovo, Russia.”

Read original article here