Brexit – Can the never Ending List of Demands Bring the Curtain Down?

The Head Scratcher

Back in 2016, Britain voted to leave the EU. Few could have imagined that talks would still be ongoing more than 4-years later.

Not too dissimilar to the U.S Presidential Election of 2016 and even 2020, voters were less than open about their choices.

Violence and more left the electorate delivering their votes in greater secrecy than just the ballot box.

Fast forward 4 and a half years and the EU is still demanding to have all its cake and to eat it.

Well, that just doesn’t work and tantrums by the likes of Macron really don’t help.

In fact, the past four and a half years have highlighted more of the EU’s flaws than at any other time during the EU project.

Nationalism has left talks on the brink of collapse, which would leave Britain without a deal.

For the French President, it would be the end of his political career. French fishermen would lose all access to UK fisheries. International maritime law does not treat piracy with kindness. We could see some quite dire scenes across La Manche and the North Sea.

President Macron

Just earlier today, France has threatened to veto any Brexit deal. Any deal requires all member states to support a final deal.

With France more than likely to lose out on its demands to retain access to UK fisheries, it may be time to rip off the plaster.

This perhaps should have been done in the summer. Other EU member states would have had time to bring the French President in line.

Sadly for many member states, there is no option to oust a head of state or to veto a member. This leaves the EU at the mercy of the cavaliers and the numbers are rising across the region.

Since Macron’s election victory, the fear has always been that the French President has had an eye on a bigger prize.

Chancellor Merkel is on her way out and she will undoubtedly leave a void. When considering Merkel’s more pragmatic stance on Brexit, however, Macron doesn’t seem to fit the bill.

From an economic perspective, fishing contribution to GDP is negligible on both sides of La Manche. It is, in fact, so negligible that it is a head-scratcher for many…

For the UK, this is a sovereignty issue. For Macron, there is more at hand and it can only be a political one.

There could be a simple solution to all of this, however.

With Britain leaving the EU, perhaps requiring visas to enter UK waters would solve the problem.

Trump would probably have gone further and built a wall.

Deal or No Deal?

Looking at the appetite for the Pound this week, there is certainly a belief that a deal will be reached.

Some caution is needed, however, when considering the fact that a single member state can bring the whole thing crashing down.

No member state should have such powers to dictate the future path of the EU. Yet, the “all for one and one for all” philosophy exists and it is not a democratic one.

A rethink in Brussels perhaps of how to resolve the flaws rather than simply expecting everyone to do things the EU way…

So, deal or no deal? It wouldn’t be the greatest shock if Britain jumped ship and returned to the table next year.

Macron would be out by then and the EU may be able to take a more balanced view. Both sides would also get a taste of how things are without an agreement.

It would probably be wishful thinking, however. It’s must be now or never. Too many British politicians have fallen on their swords and many would follow if the narrative doesn’t change.

The Pound

At the time of writing, the Pound was up by 0.68% to $1.34504. The upside this week comes from the expectation of a deal. Surely it is not possible for Macron to bring the house down…

Whatever happens, the two sides have until the EU Summit next week to wrap things up.

We’ve been here before and we could be here again but that would need an extension. It’s hard to fathom pushing for an extension, however. There have been many…

If four years is not enough then how long is enough?

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COVID-19 Vaccine Update – The UK Wastes No Time as MHRA Approves Vaccine

The Latest

BioNTech and Pfizer Inc. became the first pharma to have their mRNA COVID-19 vaccine approved on Wednesday.

The UK’s Medical & Healthcare Products Regulatory Agency (“MHRA”) became the first agency to approve a COVID-19 vaccine.

With the UK suffering at the hands of the COVID-19 pandemic, the independent regulator wasted little time.

The UK Government has pre-ordered 145 million doses of COVID-19 vaccines from Pfizer Inc., Moderna Inc., and AstraZeneca. Of the 145 million doses, the government has pre-ordered 40 million from BioNTech/Pfizer Inc.

With an efficacy rate of 95% and effective across all age groups, the first doses of the vaccine are due to arrive in days.

The UK Government announced that a first batch of 800,000 doses forms part of an expected 10 million doses by the end of the year.

With the vaccine coming in 2 doses, 5 million patients will receive inoculation if BioNTech/Pfizer Inc. delivers the full quota.

The Government’s Joint Committee on Vaccination and Immunisation (“JCVI”) affirmed on Wednesday that the first priorities should be the prevention of COVID-19 mortality and the protection of health and social care staff and systems.

The JVIC has given older adult residents in care homes the highest priority for vaccination, followed by care home workers.

Secondary priorities could include vaccination of those at increased risk of hospitalization and at an increased risk of exposure.

Logistics will now need to be in place to transport the vaccine, at -70C, for administration across the UK.

How the Markets Reacted

The FTSE100 rose by 1.23% on Wednesday, with the upside coming off the back of the MHRA announcement.

For the European majors, while it was a mixed day, the DAX30 and CAC40 came off lows in response to the news.

BioNTech SE share price rose by 6.21% in response to the news. Pfizer Inc. ended the day up by a more modest 3.51%.

While trailing Pfizer Inc. in the race to deliver a global vaccine, there was also support for AstraZeneca and Moderna Inc., which rose by 1.26% and by 1.41% respectively.

What’s next?

With UK regulators beating the FDA and the EU’s European Medicines Agency (“EMA”) to the punch, BioNTech/Pfizer Inc. will now need to deliver the doses.

There’s no trial run for BioNTech/Pfizer Inc. in terms of delivering the doses in a timely manner.

Both BioNTech/Pfizer Inc. and the government will likely face logistical challenges and the markets and governments from overseas will likely watch closely.

Successful distribution and administration of the first batch are now key. For the FDA and the EMA, both will have the benefit of the UK government’s experiences in distribution and vaccination.

The FDA is set to review the BioNTech/Pfizer Inc. vaccine on 10th December. In the New Year, the EMA review is due on 12th January.

Key areas of focus in the coming weeks will be production and distribution and geographical allocation.

The EU has pre-ordered 300 million doses of the BioNTech/Pfizer Inc. vaccine, with the U.S pre-ordering 100 million and an option for an additional 500 million doses.

BioNTech/Pfizer Inc. has projected between 5 million to 50 million doses to be available by the end of the year.

The UK is due to receive 10 million doses, which leaves 40 million assuming that 50 million doses are produced.

With the EU review of the vaccine not due until mid-January, that leaves the U.S and Japan in focus. While the U.S has pre-ordered 100 million, Japan has pre-ordered 120 million of the BioNTech/Pfizer Inc. vaccine.

Pressure may mount on the likes of the EMA to bring forward vaccine reviews. BioNTech/Pfizer Inc. may also feel increased pressure to deliver on the higher side of production forecasts…

Brexit Update – Talks Continue as EU Member States Keep an Eye on Barnier

The Latest

Brexit talks are continuing in London, after EU chief negotiator Barnier’s arrival at the start of the week.

The hot topics of debate remain the same in spite of talks having extended for months, if not years…

UK fisheries and a level playing field remain key sticking points for Britain and the EU.

As far as UK fisheries are concerned, French President Macron continues to take an uncompromising stance. With the presidential elections next year, a loss of access to UK fisheries would be a blow to Macron’s chances.

Losing complete access, in the event of a no-deal Brexit, would be a bigger blow to French fishermen, however.

For the Brexiteers and for Britain, continuing to give the EU access to UK waters makes no sense. Leaving the EU should translate into independence and control over its waters and borders.

Interestingly, the fishing industry contributes very little to the UK economy. In fact, when compared with contribution from trade and services, UK fisheries barely feature in economic reports. The fishing industry comes under agriculture which contributes less than 1% to the UK GDP.

By contrast, the manufacturing sector contributes closer to 20%, with Services more than 70% to GDP.

Therefore, standing firm on UK fisheries at the expense of an EU-Britain trade agreement will have a material economic impact. It’s hardly surprising that Bank of England Governor Bailey viewed Brexit as the greatest threat to the UK economy…

Ceding on UK fisheries, however, is not an option Boris Johnson.

UK Sovereignty in the Spotlight

A British government compromise on UK fisheries will question the entire concept of Brexit.

Back in 2016, those in favor of leaving the EU voted in order for Britain to recapture its independence and sovereignty.

The EU continues to miss the point on this front and continues to push to keep Britain tied to as many EU laws as possible.

With Brexiteer Boris Johnson at the helm, it remains unlikely for the British PM to give up too much ground.

While French President Macron is eyeing next year’s election, Boris Johnson also needs to keep the Tories united.

The British Pound

At the time of writing, the Pound was up by 0.03% to $1.34155 against the Dollar.

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The minor gain comes off the back of a 0.82% rally back to $1.34 levels for the 1st time since June 2018. That’s quite an achievement when considering the fact that the Pound was languishing at sub-$1.20 levels in March of this year.

It’s an even greater achievement when considering the hurdles that remain for negotiators to overcome in order to reach an agreement.

With Barnier in London, the EU is reportedly set to request updates and line of sight on negotiations before any actual agreement is made.

In recent weeks, we have heard Barnier talk of a willingness to compromise. Since then, however, EU President Ursula von der Leyen and a number of heads of stats have voiced concern.

The EU President’s message was clear that Brexit should not jeopardize the integrity of the EU Single Market. Macron and a number of others would likely argue that any EU compromise on access to UK fisheries would be just that.

In reality, however, more EU member states are likely to be worse off in the event of a no-deal Brexit than those which would benefit from unaltered access to UK fisheries.

From an economic perspective, therefore, the EU should be more than willing to give up the fight on UK fisheries.

The imbalances of power across the EU continue to be highlighted and remains the Achilles Heel of the EU Project.

Brussels is desperate to keep the EU Project afloat. But whether this at any cost remains to be seen. After all, Macron could be out next year. A populist government would find it hard to argue for unaltered access. It wouldn’t be very populist.

Looking Ahead

With the markets having made taken its position on the Brexit front, it now comes down to updates from the respective negotiating teams.

In recent months, the Pound has grown resilient to the strong-arming of the EU and negative chatter across the news wires.

It is crunch time, however. Following yesterday’s move through to $1.34 levels, a deal will need to be forthcoming to support further upside and a move through to $1.40 levels.

Support from the hope of an agreement does leave the Pound exposed to material downside risks, however.

A no-deal and this year’s current low of $1.14098 would have to be a starting point.

COVID-19 Vaccine Update – Moderna Inc. Requests Approval from the FDA and the EMA

Moderna Inc.

Moderna Inc. has submitted its request to the FDA for a EUA approval. With the FDA reviewing the Pfizer Inc. vaccine on 10th December, the Moderna Inc. review will take place on 17th December.

With the race to deliver a COVID-19 vaccine to the U.S and beyond continuing, it has become a two-horse race.

Both pharmas have gone down the same road on the virology front, delivering an mRNA vaccine. Until now, no regulator has reportedly approved such a vaccine.

With COVID-19 efficacy rates of between 94% and 95%, the FDA and other regulators will likely have little choice but to approve the vaccines.

Following impressive results from Pfizer Inc. and BioNTech, Moderna Inc.’s final results were as impressive. An efficacy rate of 94.1% and 100% effectiveness in preventing severe cases of COVID-19 were well received.

Assuming that the FDA approves both vaccines, Pfizer Inc. and Moderna Inc. are likely to deliver vaccines days after the approvals.

According to the European Medicines Agency (“EMA”), it has also received applications for COVID-19 vaccines from Pfizer Inc. /BioNTech and Moderna Inc.

The Agency’s human medicines committee has scheduled extraordinary meetings to conclude the evaluations. In terms of timelines, the scientific committee for human medicines (“CHMP”) will conclude its assessment during an extraordinary meeting scheduled for 12th January at the latest.

Production Projections

Since lodging EUA requests, both have provided details on vaccine production numbers for this year and the next.

Moderna Inc. expects to have 20 million doses of the vaccine available to the U.S by the end of this year. For next year, the target is to manufacture between 500 million and 1 billion doses globally.

BioNTech/Pfizer Inc. is aiming to deliver between 5 million and 50 million doses by year-end.

Both vaccines require two doses. This means that Moderna Inc. and BioNTech/Pfizer Inc. could inoculate as many as 30 million people by year-end.

The Centers for Disease Control and Prevention

On Tuesday, the CDC is due to meet in order to deliver prioritization advice to the U.S states.

Expectations are for the CDC to prioritize health-care workers and residents of long-term care facilities.

The recommendations will come ahead of a Friday deadline for U.S states to submit vaccine distribution plans to the Federal Government.

Once phase 1a of the prioritization is complete, the CDC will then deliver further priority recommendations.

COVID-19 Vaccine Update – Focus Shifts to Pre-orders and Distribution

Government Pre-Orders

Following the positive COVID-19 vaccine news in recent weeks, the focus has now shifted to vaccine distribution.

The Pfizer Inc. and BioNTech partnership continue to lead the way. They have made progress towards the required emergency approval and distribution.

Unsurprisingly, the wealthier countries have made pre-orders of COVID-19 vaccines that could leave 3rd world countries waiting on a vaccine for some time.

According to recent reports, the U.S, the UK, Japan, and Canada have over-ordered enough vaccine doses.

The Duke Global Health Innovation Center has released a breakdown of pre-ordered vaccines by country.  It doesn’t bode well for many nations.

Pre-Orders

Focussing purely on the 3 front runners, Pfizer Inc., Moderna Inc., and AstraZeneca, pre-orders are as follows:

  • The EU – 700 million doses: Pfizer Inc. (300 million) and AstraZeneca (400 million).
  • The US – 700 million doses: Pfizer Inc. (100 million); Moderna Inc., (100 million); and AstraZeneca (500 million). The U.S Government also has the option to order an additional 500 million doses from Pfizer Inc.
  • India – 500 million: AstraZeneca (500 million)
  • Japan – 290 million: Pfizer Inc. (120 million); Moderna Inc. (50 million); and AstraZeneca (120 million).
  • The UK – 145 million: Pfizer Inc. (40 million); Moderna Inc. (5 million); and AstraZeneca (100 million).
  • Indonesia – 100 million: AstraZeneca (100 million).
  • Brazil – 100 million: AstraZeneca (100 million).
  • Canada – 96 million: Pfizer Inc. (20 million); Moderna Inc. (56 million); and AstraZeneca (20 million).
  • Australia – 43.8 million: Pfizer Inc. (10 million) and AstraZeneca (33.8 million).
  • Egypt – 30 million: AstraZeneca (30 million).
  • Chile – 24.4 million: Pfizer Inc. (10 million) and AstraZeneca (14.4 million).
  • Argentina – 22 million: AstraZeneca (22 million).
  • Peru – 9.9 million: Pfizer Inc. (9.9 million).

Population Coverage

Based on these figures and assuming that all three vaccines receive approvals by the respective countries, Canada would have 127.7% population coverage. As previously mentioned, Japan (114.6%), the UK (108.7%), and the U.S (106.6%) have also ordered doses in excess of population numbers.

Other countries, however, fall short of the 100% mark. While Australia (87.6%) and the EU (78.2%) aren’t far off, other nations come woefully short.

Badly affected Brazil has only pre-ordered enough to inoculate 23.9% of the population. India, which has the 2nd highest number of cases, has pre-ordered equivalent to just 18.5% of the population.

Possible Outcomes

Governments of poorer nations are unable to pre-order in sizeable numbers. Additionally, poorer nations have looked to take advantage of AstraZeneca’s no profit pledge.

Many nations, therefore, have only pre-ordered from a single pharma. This could leave them without an effective vaccine should emergency approvals not be forthcoming.

The U.S, the UK, Japan, and Canada have spread their pre-orders across the 3 pharmas to avoid such an eventuality.

Other nations have not, with a number of highly populated, but poorer nations, placing orders only with AstraZeneca.

Last week’s concerns over AstraZeneca’s clinical trial results was all the more alarming when considering the demand for AstraZeneca’s vaccine.

In the wake of last week’s bad press, however, news has hit the wires that AstraZeneca is addressing issues raised.

AstraZeneca has announced that the vaccine will undergo a new global trial to address the concerns raised. That means, however, that any FDA approval will likely be delayed.

By contrast, the UK government has submitted a request to the MHRA to being the approval process. The AstraZeneca and University of Oxford partnership is a British bid to deliver a vaccine. A significantly lower price per dose and the ability to transport the vaccine at higher temperatures has driven demand from countries around the world. Failure to deliver will leave many nations without, which could lead to quite dire consequences.

It goes without saying that not all agencies responsible for approving vaccines are as strict as the likes of the FDA. That will be of some comfort for poorer nations.

Without the AstraZeneca Vaccine

For Britain and the U.S, removing AstraZeneca’s pre-orders would leave both short of inoculating their entire populations. The same is the case for Japan. In fact, only Canada would still have pre-orders that exceed the total population if AstraZeneca’s vaccine does not receive approval.

Things are far worse for countries such as Indonesia, India, and Brazil, however. These nations have only placed pre-orders with AstraZeneca.

The cost of both Pfizer Inc. and Moderna Inc.’s vaccines are significantly higher than that of AstraZeneca. This would likely lead to far lower vaccine coverage and leave the respective countries at the mercy of COVID-19. Only the wealthier population of these countries will be in a position to pay for the Pfizer Inc. vaccine for example.

As previously stated, Brazil has only pre-ordered doses to inoculate 23.9% of the population. India, which has the 2nd highest number of cases has pre-ordered equivalent to just 18.5% of the population. Indonesia has an 18.7% coverage, with pre-orders also only placed with AstraZeneca.

The Latest COVID-19 Numbers

Looking at the latest COVID-19 numbers, it begins to paint quite a grim picture.

At the time of writing, the total number of COVID-19 cases worldwide stood at 61,988,655. The U.S alone accounted for 13,454,346 cases, with cases in Brazil and India standing at 6,238,350 and 9,351,224 respectively.

Looking at the most affected EU member states, France, Spain, Italy, and Germany had a combined 6,407,853 cases.

When you include the UK’s 1,589,301, the total cases the total number of cases get much closer to 10 million.

Containment measures across the EU member states and the UK, however, have seen the number of new cases slow.

For the U.S, however, new cases continue to surge as is the case in other parts of the world.

Looking Ahead

As the markets continue to look ahead to the FDA meeting on 10th December, the AstraZeneca situation does also need consideration.

A delayed distribution of AstraZeneca’s vaccine to countries that have placed pre-orders will extend the lifespan of COVID-19.

New cases continue to surge. This had resulted in governments maintaining or reintroducing containment measures.

An extended containment period, due to the unavailability of an effective vaccine, will have even more catastrophic effects on the economies of nations awaiting the AstraZeneca vaccine.

The damage would not just be an economic one. The social impact could also be dire and may lead to more social and civil unrest.

It is, therefore, in the interest of all nations to support AstraZeneca’s global trial so that the pandemic does not continue to wreak havoc across the globe.

Stocks Look Ready To Test New Highs Amid Vaccine Optimism And Stimulus Hopes

S&P 500 Settled Close To All-Time Highs

Yesterday, S&P 500 pulled back a bit but still closed near all-time highs despite the alarming U.S. economic data.

The recent Initial Jobless Claims report indicated that 778,000 Americans filed for unemployment benefits in a week, up from 748,000 in the previous week. In addition, Personal Income declined by 0.7% month-over-month in October.

The economic data points to the necessity of another round of economic stimulus. There are no active stimulus negotiations at this point, and the market will have to wait until Joe Biden gets into the office in late January.

However, the stock market is usually focused on future developments rather than on near-term challenges, and the current consensus is that U.S. will be ready to deliver a big stimulus package soon after Biden is inaugurated.

In combination with positive vaccine news, stimulus hopes continue to push stocks higher. I’d note that there is some rotation from high-flying tech stocks to more cyclical stocks but there are no signs of any material sell-off in tech which is very promising for market’s chances to test new highs in the remaining weeks of this year.

Gold May Have A Good Chance To Rebound After Recent Sell-Off

The main victim of the recent market optimism was the precious metal segment. Gold and silver were under significant pressure as traders sold safe haven assets.

However, more stimulus means more money-printing which is bullish for gold. In addition, Janet Yellen as the next Treasury Secretary will likely implement a very dovish strategy while the Fed may keep rates at the bottom until 2024. This is a setup for a weaker U.S. dollar and strong gold.

It will be interesting to see whether traders will rush to buy gold near the $1800 level or wait until it gets closer to the stronger support at $1750. Shares of gold miners have already received some support in the previous trading session which indicates that there’s some interest in gold-related instuments at current levels.

Oil Rally Will Get Tested By Reality

Bad news are coming from Europe – while lockdowns are set to end, European countries will keep many anti-virus measures in place until mid-January to contain the spread of the virus. Germany’s Merkel is even thinking about closing ski resorts all over Europe.

The continued problems on the coronavirus front in Europe will lead to weak demand for oil. It remains to be seen whether growth in Asia will be able to offset this weakness and push oil prices to higher levels.

Oil-related stocks enjoyed a very strong rebound in November and pullback risks are high unless oil manages to continue its rally. Today, oil is moving lower in a thin market, but the real test is due next week when all traders return to their desks after holidays.

For a look at all of today’s economic events, check out our economic calendar.

COVID-19 Vaccine Update – AstraZeneca Leaves the Door Ajar for Other Pharmas

AstraZeneca and the University of Oxford

At the start of the week, yet more good news greeted the markets on the COVID-19 vaccine front.

AstraZeneca, teamed with the University of Oxford, announced an efficacy rate of 90% from phase 3 trials.

The devil was in the details, however. Efficacy rates varied depending upon the dosage regimen chosen. The average efficacy rate from the combined regimens was actually 70%.

While this was a particularly weak result, one dosage regiment did deliver a 90% efficacy rate. The dosage regimen would require a half does and then a full dose at least one month apart.

Of greater significance was the reported cost of production of the vaccine. Having already stated that there would be no profits derived from the vaccine, the vaccine is reportedly cheaper than a British cup of coffee.

By comparison, AstraZeneca’s dose is reported to cost around $2.50. Pfizer Inc.’s vaccine is expected to cost around $20 per dose and Moderna Inc.’s between $15 and $25.

Perhaps of even greater significance is the fact the vaccine can be stored at between 36F and 46F.

For Pfizer Inc. and Moderna Inc., the vaccine needs to be stored at particularly low temperatures that increase storage and transportation costs. Storage temperatures of as low as -90F for Pfizer Inc.’s vaccine also raise questions over global delivery.

Back in the Press but for the Wrong Reasons

Following the positive results from earlier in the week, AstraZeneca and the University of Oxford are back in the press. This time around, however, it’s for all the wrong reasons.

Questions have been raised over the vaccine trial methodology. Reports have surfaced that the dosage regimen delivering an efficacy rate of 90% excluding trial participants over the age of 55.

This means that AstraZeneca only included the “most at risk” in the 2nd dosage regiment that resulted in an efficacy rate of just 62%.

Also of concern is the fact that the efficacy rates varied by such a large degree depending upon dosage regimen. A half dose followed by a full dose delivered better results that raised further question markets over clinical trial parameters.

In terms of credibility, things couldn’t get much worse for the partnership. The more effective half dose/full dose regimen was actually in error.

The loss of credibility and lack of trial data for the over 55s in the 90% efficacy rate dose regimen raises too many unknowns for government agencies such as the FDA to approve a EUA.

It’s therefore unsurprising that AstraZeneca has seen its share price fall from a Monday high £83.24 to a Wednesday low £78.00. That’s a 6.3% slide peak to trough in response to the negative news. On Wednesday, AstraZeneca ended the day at £78.08.

The Latest COVID-19 Numbers

At the time of writing, the total number of COVID-19 cases worldwide stood at 60,719,957. The U.S alone accounted for 13,137,692 cases, with India accounting for 9,266,705.

Looking at the most affected EU member states, France, Spain, Italy, and Germany had a combined 6,257,334 total number of cases. Back in mid-September, the 4 member states had a combined total of less than 1 million.

When you include the UK’s 1,557,007 total cases the total number of cases gets much closer to the 10 million mark.

Containment measures across the EU member states and the UK, however, should see the number begin to plateau.

For now, it is a different story for the U.S, which has yet to reintroduce nationwide containment measures.

When considering the U.S numbers, both Pfizer Inc. and Moderna Inc. will likely be inoculating the U.S before many other nations.

Looking Ahead

The markets are now in wait-and-see mode, as the FDA prepares to review clinical trial results on 10th December.

Between now and then, updates on production capacity and logistics will be watched closely.

There is one other factor for the markets to consider, however.

Governments have preordered from Pfizer Inc. and Moderna Inc. and other pharmas. When considering the size of orders from both the U.S and from the EU and Japan, it may take some time for vaccines to reach other countries.

This could lead to a global economic decoupling, which would raise questions over the market optimism of a 1st quarter economic rebound.

The Department of Health and Human Services and the Department of Defense have reportedly ordered 100 million doses of the Pfizer Inc. and BioNTech SE vaccine. An option for an additional 500 million doses is also available.

The EU has reportedly pre-ordered 200 million doses of Pfizer Inc.’s vaccine.

Pfizer Inc. has reportedly announced plans to produce 50 million doses by the end of this year. The company then has a target of producing 1.3 billion doses for next year.

Pre-orders for Pfizer Inc. alone, alongside manufacturing targets, certainly suggest the need for 2 or even 3 other vaccines.

With AstraZeneca and the University of Oxford vaccine trial results now in question, the door is now ajar for the likes of Johnson & Johnson and Novavax to play catch up.

As mentioned earlier, once the emergency approvals are in place, vaccine production will be the next area of focus.

Brexit – A New President Who Just Doesn’t Think Like Donald

The Lay of the Land

As the end of the Brexit transition period nears it is hardly surprising that Brexit news coverage has seen a sharp increase.

Through October and early November, U.S politics had been center stage. But, with Boris Johnson’s close ally, Donald Trump making way for President-Elect Joe Biden, the British PM may be feeling somewhat isolated…

Since prior to the Presidential Election, Biden had made his position clear vis-à-vis trade with Britain.

Placing the Good Friday Agreement in jeopardy would put any trade talks with the U.S on hold. This was perhaps not the early Biden message that Johnson was looking for. There was always a risk in introducing the Internal Market Bill, particularly with Joe Biden ahead in the polls.

The greater risk, however, was waiting for the U.S Presidential Election to take place before looking to conclude talks.

From an EU perspective, there was nothing to lose by waiting. Trump remaining in office would have been status quo. A Biden victory, however, would have shifted the pressure onto Britain.

As Britain and the EU enter what could be the last round of talks, Biden has already reportedly spoken to Johnson. Biden stance was unchanged. There should be no north and south hard border in Ireland.

The EU and Biden vs Boris and the Brexiteers

To be frank, however, this is the least of Boris Johnson’s worries. Demands from the EU of continued access to UK fisheries and agreeing to EU rules to ensure a level playing field are two major headaches.

Britain has left the EU, yet the EU is clearly making demands that would undermine a clean break for Britain.

Throw in the EU’s demand to review any Brexit deal in 10 to 15 years and it just gets worse. The British negotiating team was perhaps taking enough risk by counter offering a 3 to 5-year review.

It’s hardly surprising that a number of MPs, including Michael Gove, were up in arms over the EU’s latest demand.

Compromise or Stand firm?

Over the last few weeks, there had been the talk of the EU being willing to compromise to close out a deal.

Following EU President Ursula von der Leyen’s comments this week, however, the willingness may have waned.

As EU Chief Negotiator Barnier prepares to come out of self-isolation, there was a warning for the Brits. If the UK fails to change its stance on the outstanding issues, there’s no point for talks to resume.

The EU President had spoken this week, saying that a deal should not compromise the EU single market.

When considering the fact that the EU would lose all access to UK fisheries in a no-deal scenario, a no Brexit outcome would also compromise the EU single market. So, while the EU is pressing for Britain to change its stance, it is still hard to imagine that Johnson would yield on this issue.

Reduced access would be a must as optically anything status quo post-Brexit makes Brexit a pointless exercise…

The British Pound

At the time of writing, the Pound was up by 0.10% to $1.33897 against the Dollar. Recovering from losses from earlier in the day, yesterday, the Pound is eying $1.34 levels and a 5th consecutive daily gain.

When considering the level of uncertainty over Brexit, hope has certainly come at the right time.

Perhaps Joe Biden’s pressure on Johnson to reach an agreement with the EU has been instrumental in the Pound’s revival.

After all, a trade agreement with the U.S has always been the carrot to lure voters into siding with the Brexiteers. Failure to win over Joe Biden and the Democrats would be a disaster for Johnson, the Tories, and the UK economy.

So, when considering the Pound’s current move back towards September’s current year high of $1.3483, we could see a breakout from $1.35 levels if all goes well.

Failure to reach an agreement not only leaves Britain without a trade agreement with the EU but also with the U.S.

Political uncertainty will undoubtedly return to sit alongside economic uncertainty near-term. It just isn’t the right time to have so much uncertainty with the UK economy plagued by the COVID-19 pandemic.

A return to sub-$1.20 levels, last visited in March of this year, would certainly be a reasonable starting point. We may then begin to hear of Dollar parity with the Pound. In 1985, the Pound had slumped to $1.05 against the Dollar.

Britain out in the cold and a new low will be on the cards…

Looking Ahead

The markets will need to receive some good news over the remainder of this week to support the Pound’s current levels.

Both sides will need to show a willingness to compromise on UK fisheries, EU rules to ensure a post-Brexit level playing field, and a 10-year Brexit review.

For Boris Johnson, however, there may need to be a greater willingness if he wants a U.S trade agreement to follow. Sadly for the British government, the EU is all too aware of Biden’s stance. So, the ball may well be back in Britain’s court to deliver.

What a catastrophe it would be for the Brexiteers if a compromise on all of the above is the only way forward.

Brexit – Mixed Signals and Anger on the British Side of the Channel

The Latest

Over the last few days, the news wires have delivered plenty of updates on the Brexit front. Brexit messages have been mixed, however, delivering yet more uncertainty despite the Brexit clock running down.

Today, EU President Ursula von der Leyen delivered a less than rosy view of Brexit negotiations. The EU President was clear that a deal should not compromise the EU single market.

Ursula von der Leyen added that there will be a clear difference between being a member of the EU and being just a valued partner.

A deal not only needs to be reached and signed but also needs to be ratified before the end of the transition period. That means that lawmakers will need to be aligned on both sides of the Chanel to ensure Britain doesn’t leave the EU without a trade agreement.

The lack of optimism was certainly in contrast to chatter from earlier in the week that led the Pound to a current week high of $1.3398.

The British Pound

At the time of writing, the Pound was down by 0.30% to $1.33169 against the Dollar. Yesterday, we noted that both the EU President and the British Prime Minister would need to affirm progress to support the upward trend in the Pound.

Today’s comments delivered the contrasting message that has led to a reversal of yesterday’s gains.

With EU Chief Negotiator Barnier due to come out of self-isolation tomorrow, it’s Brexit crunch time once more.

This time around, however, the two sides are no longer facing self-imposed deadlines but the end of the transition period.

Assuming that common ground can’t be reached on fisheries and rules to ensure a post-Brexit level playing field, two options remain.

The first is for Britain to leave the EU without a trade agreement. This would put Britain and the EU on WTO terms. An alternative could be yet another Brexit extension.

For the Pound, much will depend upon Boris Johnson’s stance on seeking an extension if negotiators fail to make progress.

GBPUSD 251120 Daily Chart

Looking Ahead

Until now, the British PM has been clear of his unwillingness to seek an extension. A lack of progress and an unwillingness to extend will likely weigh heavily on a hopeful Pound.

So, progress would require the EU to soften its stance on access to UK fisheries at a minimum. It would be highly unlikely for British negotiators to yield on UK fisheries. To make matters more complicated, the EU has also demanded that any Brexit deal be reviewed in 10-years. Britain countered with a 3-5 year post-Brexit review, which EU negotiators declined.

Yet another example of the EU’s unwillingness to compromise. It could be a tough time ahead for Britain and the Pound. Brussels may also face some uncertainty of its own, however. It is not just Britain that has faced the rigidity of Brussels. EU member states have also had similar experiences.

For the EU project to survive Britain’s departure and possibly the departure of one or two others, Brussels may need to rethink what steps need to be taken to protect the EU single market…

COVID-19 Vaccine Update – AstraZeneca Releases Trial Results

AstraZeneca and the University of Oxford

Following impressive phase 3 clinical trial results from Pfizer Inc. and Moderna Inc., AstraZeneca was in the spotlight today.

AstraZeneca and the University of Oxford released phase 3 clinical trial results today.

According to today’s press release:

  • Two dosing regimens were used in clinical trials carried out in the UK and Brazil.
  • One dosing regimen (n=2,741) showed vaccine efficacy of 90% when AZD1222 was given as a half dose and then followed by a full dose at least one month apart.
  • The second dosing regimen (n=8,895) showed 62% efficacy when given as two full doses at least one month apart.
  • Combining both dosing regimens, the trials delivered an efficacy rate of 70%.
  • Importantly, there were no reported hospitalizations or severe cases of the disease.

While the clinical trial results were less impressive than those of Pfizer Inc. and Moderna Inc., AstraZeneca does have an edge.

The vaccine does not require similar refrigerated temperatures as those of Pfizer Inc. and Moderna Inc.

Combined with the group’s non-profit pledge, lower transportation costs will likely make the vaccine more accessible to developing economies.

As we had previously reported, AstraZeneca has already commenced the manufacturing of the vaccine in Australia. The decision to begin manufacturing before any clinical trials came in response to Pfizer Inc.’s first set of results.

The Latest COVID-19 Numbers

At the time of writing, the total number of COVID-19 cases worldwide stood at 59,078,540. The U.S alone accounted for 12,589,088 cases, with India accounting for 9,140,312.

Looking at the most affected EU member states, France, Spain, Italy, and Germany had a combined total of 6,070,406 cases. Back in mid-September, the 4 member states had a combined total of just 829,289 COVID-19 cases.

When you include the UK’s 1,512,045 total cases and consider the rest of the EU, the numbers aren’t too dissimilar to that of the U.S.

Both have faced similar issues as a result of allowing freedom of movement inter-state and across borders.

Containment measures are back in effect, however. Even the U.S administration has handed the reins to each state to manage the COVID-19 pandemic.

With winter now upon both the U.S and Europe, a vaccine cannot come fast enough.

Looking Ahead

For now, Pfizer Inc. and BioNTech look to remain ahead in the race to deliver a vaccine. The FDA is reportedly scheduled to review Pfizer Inc.’s EUA submission next month. By that time, Moderna Inc. will have also likely made its submission.

From the weekend, there were reports that Pfizer Inc. would be able to begin delivering the vaccine just days later.

While that is certainly positive news, a more worldwide inoculation would likely take longer, however.

That would mean that border restrictions globally would not come to an end as soon as the vaccine is available in the U.S.

While governments have placed their orders with the front runners, the rate of production will become a key consideration.

This may give AstraZeneca an edge going into the New Year. Much will depend on output numbers, however, and whether there are any manufacturing issues faced by the leading pharmas.

The race has, therefore, heated up and the likes of Johnson & Johnson, Medicago, Novavax, and Sanofi are facing a widening gap… Failure to deliver phase 3 clinical trials by the end of the year could leave the task of a global inoculation in the hands of the 3 front runners.

The Market Reaction

At the time of writing, AstraZeneca’s share price was down by 1.56% to £8,187.00. By contrast, however, riskier assets found support on expectations of an available vaccine by mid-December.

The weaker efficacy rates than those of Pfizer Inc. and Moderna Inc. contributed to the pullback.

While the efficacy rates are lower, AstraZeneca could enjoy a wider distribution network. As previously mentioned, the vaccine can be transported at higher temperatures that reduce transportation costs.

For investors, however, the non-profit pledge does offset the effect of the likely lower transportation costs on the bottom line.

With a number of major players trailing the front runners at present, any positive reports from the likes of Novavax would be well received.

Novavax is developing a vaccine that can be transported at temperatures of between 35F and 46F. This could become a deciding factor once the winter has passed. Phase 3 clinical trials are due out in the 1st quarter of next year.

COVID-19 Vaccine Update – Pfizer Inc. Submits an EUA

Pfizer Inc. Goes to the FDA

Pfizer Inc. made its application for emergency use of it’s clinically trialed COVID-19 vaccine.

Running ahead of the rest of the pharmas, a 95% efficacy rate from 3rd phase trials and safety data-enabled Pfizer Inc. to make its submission today.

The emergency user authorization (“EUA”) submission means that a viable vaccine could be distributable before the end of the year.

Pfizer Inc. and BioNTech expect the FDA to deliver on a EUA request before the end of this year. Prior to last week’s phase 3 clinical trial results, experts had anticipated a viable vaccine by late Q1 of next year.

According to Reuters, the FDA Advisory Committee has made tentative plans to meet on 8-10th December to deliberate on the vaccine. That means that Moderna Inc.’s vaccine could form part of the discussion and approval process.

The Market Response

Riskier assets found support in response to today’s news.

At the time of writing, BioNTech was up by 7.92%. Coming out ahead in the race to an effective and mass-producible vaccine is a huge win.

Pfizer Inc. will likely see more muted gains with Moderna Inc. in the wings, however. From a European perspective, BioNTech now sits in the best position to bring an end to the COVID-19 pandemic across Europe.

In spite of the positive vaccine news, however, the EUR remained in the red. At the time of writing, the EUR was down by 0.02% to $1.18727.

With the EU in the grips of a 2nd wave pandemic, the next piece of the jigsaw is production capacity and logistics.

It remains a 2-horse race for now and, while Pfizer Inc. has submitted its EUA first, Moderna Inc.’s vaccine is far more transport friendly.

All this means that the markets will still need to take a side on who will be able to support a worldwide inoculation.

EURUSD 201120 Daily Chart

Brexit – Talks Hit Pause, with Calls for an Extension Beginning to Surface

The Latest

Brexit talks hit pause in response to members of the EU negotiating team testing positive for COVID-19.

Both sides agreed to suspend talks, as Barnier and other negotiators self-isolate.

It’s yet another delay ahead of what many had hoped would be an end to Brexit negotiations.

Thursday’s EU Summit had been touted as the final deadline going into this week. In the early part of the week, however, the talk of extending trade talks into next month left the deadline in doubt.

For the EU and Britain, time is rapidly running out, however. The Brexit transition period comes to an end at the end of this year. With COVID-19 hitting both the EU and Britain, an extension to the transition period could be a palatable outcome.

This week the news wires have already reported calls by Northern Ireland to extend the transition period.

It would be another game of cat and mouse, however, and extending the transition period will not be an easy process.

Until now, UK fisheries remain a major hurdle in getting over the line. The question will be whether France, in particular, would agree to an extension without a British promise of a compromise.

Such a play could look unfavorably for the French President, particularly with France depilated by the COVID-19 pandemic.

The British Pound

On Thursday, the Pound showed little reaction to the news of talks being suspended. Falling by just 0.09% on the day, the Pound was still up by 0.55% for the current week.

At the time of writing, the Pound continued to hold steady, up by 0.04% to $1.32608.

An extension to the transition period should provide the Pound with further support. That is assuming that the EU does not fall back into its rigid ways and continues to search for a way forward.

For the British PM and the Brexiteers, it would mean that there is yet more time to avoid ceding ground to the EU.

From a Brexit perspective, any compromise is likely to be considered unacceptable by the electorate and by Parliament.

Leaving the EU yet falling under EU rules and regs, while giving access to UK fisheries would be a bad deal.

GBPUSD 201120 Daily Chart

The Internal Market Bill

Away from the ongoing negotiations, one other key area of focus will likely be the Internal Market Bill.

With President-Elect, Joe Biden, clear on his stance, vis-à-vis the Good Friday Agreement, the Bill’s passage will be eyed closely.

Following the House of Lords vote against the Bill, it will return to the House of Commons for debate. Mindful of Joe Biden’s view and the possible implications on a U.S – UK trade agreement, the Tories will need to tread carefully.

For the British Prime Minister, the House of Lords vote could offer an easy way to pull the Bill. A trade agreement with the U.S, while also supporting the Good Friday Agreement would be a positive outcome.

Such a move even could lead to the U.S President–Elect’s involvement in the Brexit deal. The last thing that the EU needs is to be at odds with Joe Biden from the get-go…

COVID-19 Vaccine Update – The Numbers are Impressive but the Markets Need More

Pfizer Inc. Delivers Again

Following positive 3rd phase trial results last week, Pfizer Inc. and BioNTech were back in the news on Wednesday.

Off the back of impressive trial results from Moderna Inc., Pfizer Inc. filled in some missing pieces of the jigsaw.

The American-German partnership announced an efficacy rate of 94% for the over 65s’.

This was another big success story for the pharmas, who are now likely to deliver multiple vaccines globally.

The availability of multiple-vaccines should address logistical issues, including refrigerated transportation to warmer climates.

In addition to addressing the age vulnerability issues, Pfizer Inc. also stated that there had been no safety issues in the clinical trial phases.

Side effects reportedly included fatigue and headaches among a small number of volunteers. More importantly, however, side effects amongst the aged were on the milder side.

The FDA

Following the announcement, Pfizer Inc. is now due to submit a request for an emergency approval from the FDA.

In the wake of Donald Trump’s Presidential Election loss, the good news for the FDA is that there will no White House pressure to jump the gun.

On the FDA website, the FDA makes the following statement:

“We are committed to expediting the development of COVID-19 vaccines, but not at the expense of sound science and decision making. We will not jeopardize the public’s trust in our science-based, independent review of these or any vaccines. There’s too much at state.”

The statement is apt considering the speed at which both Pfizer Inc. and Moderna Inc. have completed 3rd phase trials.

At this point, however, there have been no reports of any major safety issues to suggest that the FDA will decline either or both.

That then brings manufacturing capacity and distribution into the picture.

While both have similar efficacy rates, Moderna Inc. has the edge over Pfizer Inc. on the logistics front.

The Moderna Inc. vaccine can be distributed at significantly higher temperatures, making it more cost-effective and easier to transport.

We continue to wait on the likes of AstraZeneca who, in partnership with the University of Oxford, are likely to be next in line to deliver clinical trial results.

The 2nd Wave

Since the weekend, new COVID-19 cases continued to surge across Europe, the US, and beyond.

In the U.S, the total number of cases has risen to 11,873,863. That has taken the total number of cases worldwide to 56,569,692.

COVID-19 related deaths have also continued to rise, with the U.S reporting 256,262 deaths. That sits at just below 20% of 1,354,890 COVID-19 related deaths worldwide.

Things have got so dire that even U.S states are reintroducing containment measures in a bid to curb the spread. This has gone against the wishes of outgoing President Trump, who has continued to press for normal life to continue.

One other curveball for the markets and for the pharmas is the fact that the number of reinfections is also rising.

Reinfections suggest some sort of mutation in the virus that could limit the effectiveness of the current vaccines in clinical trials.

When looking back at the difficulties in suppressing HIV, it was its ability to mutate that contributed to such a lengthy search for effective treatment and a way to suppress the virus.

The Race Participants

As the race continues to heat up to deliver an effective vaccine worldwide, Moderna Inc. and Pfizer Inc. are the front runners.

AstraZeneca is a close 3rd and then there are a number of pharmas likely to deliver clinical trial results later this year and in the first quarter of next year.

As at 12th November, 670 drugs and vaccines were in development, targeting the coronavirus.

The figures are made available by statista.com and Pharma Intelligence.

Looking at the top pharmas in the race in more detail:

U.S Headquartered

Johnson & Johnson: Listed on the NYSE (“JNJ”) and headquartered in New Jersey, USA.

Mateon Therapeutics: Listed on OTCMKTS (“MATN”) and headquartered in California.

Medicago: and is headquartered in Quebec, Canada.

Merck & Co.: Listed on the New York Stock Exchange (“MRK”) and headquartered in New Jersey, USA.

Moderna Inc.: Listed on the NASDAQ (“MRNA”) and headquartered in Cambridge, Massachusetts, USA.

Novavax: Listed on the NASDAQ (“NVAX”) and headquartered in Gaithersburg, Maryland, USA.

Pfizer Inc.: Listed on the New York Stock Exchange (“PFE”) and headquartered in New York City. (Pfizer Inc. has partnered with Germany’s BioNTech SE)

Sorrento Therapeutics: Listed on the NASDAQ (“SRNE”) and headquartered in California. Currently trailing many of the front runners in the race for an effective vaccine.

Talem Therapeutics: This is a wholly-owned subsidiary of ImmunoPrecise Antibodies USA. Its parent company, ImmunoPrecise Antibodies Ltd is listed on the Toronto Stock Exchange.

Tonix Pharmaceuticals: Listed on the NASDAQ (“TNXP”) and headquartered in New Jersey.

Europe Headquartered

AstraZeneca: Listed on the London Stock Exchange (“AZN”) and headquartered in Cambridge, England and Sodertalje, Sweden.

GlaxoSmithKline: Listed on the London Stock Exchange (“GSK”) and headquartered in Brentford, England.

Grifols, S.A: Listed on the Bolsa de Madrid (“GRF”) and headquartered in Barcelona, Spain.

Sanofi: Listed on the CAC40 (“SAN”) and headquartered in Paris, France.

Asia Headquartered:

GC Pharma: Listed on the Korea Stock Exchange (“006280”) and headquartered in Yongin, South Korea.

As indicated above, the U.S pharmas make up the lion’s share of companies in the race to deliver a COVID-19 vaccine.

The Road Ahead

The key considerations for the likes of the FDA and the markets remain the same for now.

In addition to efficacy rates, other vaccine attributes include:

  • Safety: Side effects are a key consideration and any safety concerns would delay approval by government agencies. At present, Pfizer Inc. and BioNTech are accumulating safety data for the FDA. These numbers may well have a greater impact on the global financial markets than the efficacy numbers released earlier this month.
  • Effectiveness: While the latest efficacy numbers were impressive, more information on effectiveness is required. In particular, effectiveness where severe cases of COVID-19 are present.
  • Consistency in manufacturing: With the global COVID-19 pandemic raging on, pharmas will need to provide evidence that the vaccine can be mass-produced. Additionally, pharmas will also need to have the right logistics plans to deliver vaccines to facilities, hospitals, clinics, and pharmacies.
  • Durability: Some vaccines work for longer than others. For an effective COVID-19 vaccine, the durability would most likely need to be similar to that of the flu shot. Anything less and the vaccine would likely be ineffective in immunization for the winter months.

With the above in mind, Pfizer Inc. looks to have ticked the safety box, for now, leaving Moderna Inc. to follow. That will then shift the focus to manufacturing and then distribution.

There is some talk of production and the availability of a vaccine by the end of the year. On these timelines, it would therefore be safe to say that an effective vaccine would be available at the end of the first quarter, at the earliest.

Looking at the U.S equity market moves on Wednesday, concerns over the timelines need to be addressed.

The Front Runners

  • Pfizer Inc. (“PFE”) and BioNTech SE: Awaiting safety and manufacturing consistency data for emergency FDA approval.
  • AstraZeneca (“AZN”) and the University of Oxford: There have been reports of AstraZeneca’s vaccine being as much as 7 times less expensive than Pfizer’s. While Pfizer and BioNTech are currently leading the race, this could give AstraZeneca the edge, particularly across the emerging markets.
  • Moderna Inc. (“MRNA”): Experts are continuing to suggest that Moderna will deliver similar results to that of Pfizer Inc. and BioNTech. Clinical trial data could be out as early as this week. Reuters reported last week that the Swiss government has started a rolling review of its vaccine. This is to ensure a quick approval can be given should it deliver positive results. Swissmedic is also reportedly viewing vaccines under development by AstraZeneca and Pfizer & BioNTech.

Trailing Big Names

  • Johnson & Johnson: Phase 3 clinical trials are continuing and are taking place in a number of geographies. Johnson & Johnson began its phase 3 clinical trials back in September. J&J had to put trials on hold following a serious medical event. Trials resumed in late October, however. Trailing Pfizer and a number of others, Johnson & Johnson reportedly received additional funding to ramp up its clinical trials. Partnered with the U.S government, the U.S government has reportedly committed an additional US$454m to support phase 3 trials.
  • Medicago: Last week, Medicago released phase 1 trial results. 100% of subjects who received the trial vaccine developed significant antibody and cellular immune responses after two doses. With no safety concerns, the pharma is due to enter phase 2/3 clinical trials before the end of this year. Reuters also reported last week, that Medicago will use a booster from GlaxoSmithKline in its bid to develop an effective vaccine.
  • Novavax: While trailing the majority of the front runners, Novavax is expected to release phase 3 clinical trials from the UK in the 1st Unlikely its peers, Novavax is looking to deliver a dual vaccine. In addition to a COVID-19 vaccine, the company is looking to also include a flu vaccine. For the Novavax dual vaccine, storage of between 35F and 46F means that transport is far simpler and cheaper. One final advantage that Novavax reportedly has over its peers is production capacity.

Sanofi / GlaxoSmithKline: The partnership received a US$2.1bn funding commitment from the Trump administration to deliver a COVID-19 vaccine. Their first results are expected in early December, with late-stage trials to begin before year-end. Along with Johnson & Johnson, Medicago, and Novavax, the vaccine currently trails Pfizer, Moderna, and AstraZeneca.

Brexit – Politics is a Game and Neither Side Wants to Concede

The Latest

Another deadline and yet the Pound makes its way back through to $1.32 levels this week.

It wasn’t long ago that the Pound was back at sub-$1.30, with Macron’s arm flexing raising the prospects of a no-deal departure.

Since then, the EU has softened its stance and it really is hardly surprising.

With the 2nd wave of the COVID-19 pandemic hitting the EU, the last thing anyone needs is default to WTO trade terms.

Just look how easy it was for China and 14 other Asian nations to close out an APAC trade agreement…

Well, it wasn’t easy, but it certainly didn’t take 4 years. 15 Asian nations with their own currencies and agendas versus the EU project. It is almost astounding that the EU member states are unable to agree with one country. Well, it would be astounding if it wasn’t for the EU hardliners wanting to take over Merkel’s position as the voice of Europe…

Things have changed since the early days, however. Populist governments are abound and few are interested in Macron and a number of other state leaders who clearly have little regard for the minions.

Sadly, it is the “so-called” minions that could bring the end to a project that should have thrived, on paper at least.

Joe Biden to the Rescue

We have continued to hear of Biden’s soft stance on foreign policy. In reality, however, his warning to Britain over the Internal Market Bill and peace in Northern Ireland should be a warning to the EU.

Biden is unlikely to enter the Oval Office and begin targeting the UK from the get-go. That special relationship that many refer to is perhaps more one-sided than many would like to admit.

Unlike other EU member states, Britain has, without hesitation, stood by the side of the U.S even when it was perhaps wise not to.

Until there is a new philosophy in Parliament, Britain’s support is unlikely to waver. The last thing Biden needs is to lose a close ally sitting at the gateway to Europe.

Other EU member states are in a state of flux. While populist governments failed to take over, the threat remains. That means that Britain and the Tories are more important than ever.

Joe Biden and the Democrats are right in being concerned over peace in Northern Ireland. What they fail to consider, however, is that Britain would pay a high price if the Good Friday Agreement fails.

The U.S President-Elect

With Trump as a predecessor, however, Biden has an easier time when it comes to foreign policy. It would be more than a market shock should Biden take a more hostile stance on foreign policy.

Britain should therefore rest easy and supporters of the Pound shouldn’t panic just yet.

The Pound

At the time of writing, the Pound was up by 0.20% to $1.32235.

Off the back of a 0.64% rally on Friday, a 3rd consecutive daily gain looks on the cards.

News of the EU planning to extend the deadline on trade talks has delivered support as has COVID-19 vaccine news.

Both are certainly positives for the Pound.

Brexit, however, remains the greater threat when viewing the Pound against its peers.

Many will wonder why the Pound continues to receive such support when talks are going down to the wire.

It must be the fact that neither side is willing to walk away. There have been many threats of it but none have actually closed the curtain on trade talks.

Perhaps if Trump had won the election, things would be different?

The disagreement over UK fisheries, however, suggests that reaching an agreement is a tall order. Theresa May would have been better off focusing on this aspect of the agreement…

So, the news wires continue to deliver bad news and the Pound continues to hold its ground.

At some point, one will need to give. With all EU member states needing to vote on any agreement, you would think that the Pound would come out 2nd best.

Politics is a funny game, however. Just look across the Pond at Trump’s antics. An unwillingness to concede in the interest of democracy questions the very ethos of 2 party politics. Britain is no different and to be completely honest, the political systems in France, Germany, and beyond have continued to shut out populist governments. Yes, they have a greater voice, but actually running the country is an altogether different proposition.

An overhaul is due, but who would give up the golden egg in the interest of country and democracy? Trump isn’t, so why should anyone else…

COVID-19 – Moderna Delivers Even More Impressive Results

Moderna Inc. Delivers

Following Pfizer Inc. and BioNTech’s announcement, however, the markets were awaiting Moderna Inc. trial results.

The markets didn’t have to wait long. With pressure building on pharmas to deliver an effective vaccine, Moderna Inc. delivered its phase 3 trial results today.

According to the phase 3 trial results, Moderna Inc.’s mRNA-1273 vaccine was 94.5% effective in preventing COVID-19.

Not only were the numbers more impressive than that of Pfizer Inc. and BioNTech, the trial results included severe disease cases.

Efficacy rates of in excess of 90% are impressive. Both Pfizer Inc. /BioNTech and Moderna Inc. have delivered hope of an end to the pandemic.

Logistics and cost issues remain, however. Both Moderna and Pfizer Inc. will need to deliver vaccines in refrigerated containers. This raises the cost and availability of the vaccine in warmer climates. The good news for Moderna Inc., however, is that Moderna Inc.’s temperature requirements are more favorable than that of Pfizer Inc.

While positive for Moderna Inc., it also means that the likes of AstraZeneca and Novavax remain viable global alternatives should clinical trials impress.

Near-term, both Pfizer and Moderna will need to deliver safety, durability, and manufacturing sustainability data.

Favorable figures will give the two a continued edge over the rest of the front runners and those playing catch up.

The 2nd Wave

From the weekend, new COVID-19 cases continued to surge across Europe, the US, and beyond.

The impact of the negative numbers on the markets was muted, however, with Moderna Inc.’s results delivering riskier assets with yet another boost.

Looking at the latest COVID-19 numbers, the U.S has seen the total number of cases rise to 11,367,214. From the weekend, the total number of COVID-19 cases has risen by more than 500,000 to 54,896,579.

With India reporting 8,845,617 total COVID-19 cases, France has edged ever closer to the 2 million mark.

Geographically, the 2nd wave of the pandemic has been so significant that a global inoculation remains key to ending the risk of an extended economic meltdown.

The harsh reality remains that borders will remain closed until there is confidence in a global end to the pandemic.

The Race Participants

Pharmaceutical companies in the race to deliver an effective COVID-19 vaccine are vast in number. Some have progressed more than others, however, and are therefore of greater interest to governments and the global financial markets.

The companies are shown in the chart below:

statistic_id1119090_top-companies-by-covid-19-treatment-vaccines-in-development-2020

While the companies listed above were trialing 60 different drugs and vaccines. There are many more in trial phases, however. As at 12th November, 670 drugs and vaccines were in development, targeting the coronavirus.

The figures are made available by statista.com and Pharma Intelligence.

Looking at the top 10 companies listed above and a few more in more detail:

U.S Headquartered

Johnson & Johnson: Listed on the NYSE (“JNJ”) and headquartered in New Jersey, USA.

Mateon Therapeutics: Listed on OTCMKTS (“MATN”) and headquartered in California.

Medicago: and is headquartered in Quebec, Canada.

Merck & Co.: Listed on the New York Stock Exchange (“MRK”) and headquartered in New Jersey, USA.

Moderna Inc.: Listed on the NASDAQ (“MRNA”) and headquartered in Cambridge, Massachusetts, USA.

Novavax: Listed on the NASDAQ (“NVAX”) and headquartered in Gaithersburg, Maryland, USA.

Pfizer Inc.: Listed on the New York Stock Exchange (“PFE”) and headquartered in New York City. (Pfizer Inc. has partnered with Germany’s BioNTech SE)

Sorrento Therapeutics: Listed on the NASDAQ (“SRNE”) and headquartered in California. Currently trailing many of the front runners in the race for an effective vaccine.

Talem Therapeutics: This is a wholly-owned subsidiary of ImmunoPrecise Antibodies USA. Its parent company, ImmunoPrecise Antibodies Ltd is listed on the Toronto Stock Exchange.

Tonix Pharmaceuticals: Listed on the NASDAQ (“TNXP”) and headquartered in New Jersey.

Europe Headquartered

AstraZeneca: Listed on the London Stock Exchange (“AZN”) and headquartered in Cambridge, England and Sodertalje, Sweden.

GlaxoSmithKline: Listed on the London Stock Exchange (“GSK”) and headquartered in Brentford, England.

Grifols, S.A: Listed on the Bolsa de Madrid (“GRF”) and headquartered in Barcelona, Spain.

Sanofi: Listed on the CAC40 (“SAN”) and headquartered in Paris, France.

Asia Headquartered:

GC Pharma: Listed on the Korea Stock Exchange (“006280”) and headquartered in Yongin, South Korea.

As indicated above, the U.S pharmas make up the lion’s share of companies in the race to deliver a COVID-19 vaccine.

The Road Ahead

As pharmas roll out phase 3 clinical trial results, there are other factors that remain key considerations.

In addition to efficacy rates, other considerations include:

  • Safety: Side effects are a key consideration and any safety concerns would delay approval by government agencies. At present, Pfizer Inc. and BioNTech are accumulating safety data for the FDA. These numbers may well have a greater impact on the global financial markets than the efficacy numbers released earlier this month.
  • Effectiveness: While the latest efficacy numbers were impressive, more information on effectiveness is required. In particular, effectiveness where severe cases of COVID-19 are present.
  • Consistency in manufacturing: With the global COVID-19 pandemic raging on, pharmas will need to provide evidence that the vaccine can be mass-produced. Additionally, pharmas will also need to have the right logistics plans to deliver vaccines to facilities, hospitals, clinics, and pharmacies.
  • Durability: Some vaccines work for longer than others. For an effective COVID-19 vaccine, the durability would most likely need to be similar to that of the flu shot. Anything less and the vaccine would likely be ineffective in immunization for the winter months.

With the above in mind, safety will need to be proven for emergency approval. Once approvals are given, the focus will then shift to manufacturing capacity and logistics.

Governments including those of EU member states, the U.S, and beyond continue to place orders.

Any hint of a distributable vaccine by year-end should provide riskier assets with further support.

As we covered over the weekend, the front runners remain unchanged and are summarized below.

The Front Runners

  • Pfizer Inc. (“PFE”) and BioNTech SE: Awaiting safety and manufacturing consistency data for emergency FDA approval.
  • AstraZeneca (“AZN”) and the University of Oxford: There have been reports of AstraZeneca’s vaccine being as much as 7 times less expensive than Pfizer’s. While Pfizer and BioNTech are currently leading the race, this could give AstraZeneca the edge, particularly across the emerging markets.
  • Moderna Inc. (“MRNA”): Experts are continuing to suggest that Moderna will deliver similar results to that of Pfizer Inc. and BioNTech. Clinical trial data could be out as early as this week. Reuters reported last week that the Swiss government has started a rolling review of its vaccine. This is to ensure a quick approval can be given should it deliver positive results. Swissmedic is also reportedly viewing vaccines under development by AstraZeneca and Pfizer & BioNTech.

Trailing Big Names

  • Johnson & Johnson: Phase 3 clinical trials are continuing and are taking place in a number of geographies. Johnson & Johnson began its phase 3 clinical trials back in September. Trials had to be put on hold following a serious medical event. Trials resumed in late October, however. Trailing Pfizer and a number of others, Johnson & Johnson reportedly received additional funding to ramp up its clinical trials. Partnered with the U.S government, the U.S government has reportedly committed an additional US$454m to support phase 3 trials.
  • Medicago: Last week, Medicago released phase 1 trial results. 100% of subjects who received the trial vaccine developed significant antibody and cellular immune responses after two doses. With no safety concerns, the pharma is due to enter phase 2/3 clinical trials before the end of this year. Reuters also reported last week, that Medicago will use a booster from GlaxoSmithKline in its bid to develop an effective vaccine.
  • Novavax: While trailing the majority of the front runners, Novavax is expected to release phase 3 clinical trials from the UK in the 1st Unlikely its peers, Novavax is looking to deliver a dual vaccine. In addition to a COVID-19 vaccine, the company is looking to also include a flu vaccine. For the Novavax dual vaccine, storage of between 35F and 46F means that transport is far simpler and cheaper. One final advantage that Novavax reportedly has over its peers is production capacity.
  • Sanofi / GlaxoSmithKline: The partnership received a US$2.1bn funding commitment from the Trump administration to deliver a COVID-19 vaccine. Their first results are due out in early December, with late-stage trials to begin before year-end. Along with Johnson & Johnson, Medicago, and Novavax, the vaccine currently trails Pfizer, Moderna, and AstraZeneca.

What’s to come?

With Moderna Inc. now having delivered, the focus will shift to Sanofi and AstraZeneca. The two are likely to deliver the next set of results.

Phase 3 trial results will not be enough, however. The pharmas will need to support global inoculation. That means that safety, manufacturing capabilities, and durability will also become a factor in the race to delivering a global vaccination.

It remains a tall order as key economies enter the winter months. While the phase 3 clinical trial results are positive to date, a global inoculation remains a difficult task. This continues to leave the race to deliver a global vaccine wide open.

COVID-19 – Updates on Vaccine Trials are coming. Is Pfizer Still out Ahead?

The 2nd Wave

COVID-19 continued to spread over the weekend, with the total number of COVID-19 cases standing at 54,328,752 at the time of writing.

While there are reportedly 37,871,087 who have recovered, there have been 1,318,278 related deaths.

The U.S and India continue to have the largest number of cases, with the U.S reporting 11,226,038 cases. Additionally, the U.S also has the largest number of COVID-19 related deaths, currently at 251,256.

Things also continue to be bleak across Europe, with France nearing 2 million cases after having overtaken both Italy and Spain.

While the total number of cases in Italy and Spain sit at 1,492,608 and 1,144,552 respectively, the UK has also seen a jump in new cases. At the time of writing, the total number of new cases stands at 1,344,356.

With the winter months rapidly approaching, the race towards an effective COVID-19 vaccine has intensified.

More cases and more COVID-19 related deaths are anticipated, in spite of governments introducing containment measures.

For the U.S, the headline figure will likely get far worse before any effective vaccine is widely available. The outgoing administration continues to leave the economy open, in spite of new daily cases sitting at record highs.

As a result, market sentiment and updates from the pharmas on when a vaccine is likely to be available remain key to risk sentiment.

The Race Participants

Pharmaceutical companies in the race to deliver an effective COVID-19 vaccine are vast in number. Some have progressed more than others, however, and are therefore of greater interest to governments and the global financial markets.

The companies are shown in the chart below:

statistic_id1119090_top-companies-by-covid-19-treatment-vaccines-in-development-2020

While the companies listed above were trialing 60 different drugs and vaccines. There are many more in trial phases, however. As at 12th November, 670 drugs and vaccines were reportedly in development, targeting the coronavirus.

The figures are made available by statista.com and Pharma Intelligence.

Looking at the top 10 companies listed above and a few more in more detail:

U.S Headquartered

Johnson & Johnson: Listed on the NYSE (“JNJ”) and headquartered in New Jersey, USA.

Mateon Therapeutics: Listed on OTCMKTS (“MATN”) and headquartered in California.

Medicago: and is headquartered in Quebec, Canada.

Merck & Co.: Listed on the New York Stock Exchange (“MRK”) and headquartered in New Jersey, USA.

Moderna Inc.: Listed on the NASDAQ (“MRNA”) and headquartered in Cambridge, Massachusetts, USA.

Novavax: Listed on the NASDAQ (“NVAX”) and headquartered in Gaithersburg, Maryland, USA.

Pfizer Inc.: Listed on the New York Stock Exchange (“PFE”) and headquartered in New York City. (Pfizer Inc. has partnered with Germany’s BioNTech SE)

Sorrento Therapeutics: Listed on the NASDAQ (“SRNE”) and headquartered in California. Currently trailing many of the front runners in the race for an effective vaccine.

Talem Therapeutics: This is a wholly-owned subsidiary of ImmunoPrecise Antibodies USA. Its parent company, ImmunoPrecise Antibodies Ltd is listed on the Toronto Stock Exchange.

Tonix Pharmaceuticals: Listed on the NASDAQ (“TNXP”) and headquartered in New Jersey.

Europe Headquartered

AstraZeneca: Listed on the London Stock Exchange (“AZN”) and headquartered in Cambridge, England and Sodertalje, Sweden.

GlaxoSmithKline: Listed on the London Stock Exchange (“GSK”) and headquartered in Brentford, England.

Grifols, S.A: Listed on the Bolsa de Madrid (“GRF”) and headquartered in Barcelona, Spain.

Sanofi: Listed on the CAC40 (“SAN”) and headquartered in Paris, France.

Asia Headquartered:

GC Pharma: Listed on the Korea Stock Exchange (“006280”) and headquartered in Yongin, South Korea.

As indicated above, the U.S pharmas make up the lion’s share of companies in the race to deliver a COVID-19 vaccine.

The Clinical Trials

Last week, Pfizer and BioNTech SE spurred a global equity market rally, with their impressive phase 3 clinical trial results.

As the week wore on, however, greater awareness led to some apprehension over what lies ahead.

While Pfizer announced an efficacy rate of more than 90%, there are a number of other important considerations. As importantly, there is also some way to go before an effective vaccine is available worldwide.

Other Vaccine Considerations

In addition to efficacy rates, other considerations include:

  • Safety: Side effects are a key consideration and any safety concerns would delay approval by government agencies. At present, Pfizer Inc. and BioNTech are accumulating safety data for the FDA. These numbers may well have a greater impact on the global financial markets than the efficacy numbers released earlier this month.
  • Effectiveness: While the latest efficacy numbers were impressive, more information on effectiveness is required. In particular, effectiveness where severe cases of COVID-19 are present.
  • Consistency in manufacturing: With the global COVID-19 pandemic raging on, pharmas will need to provide evidence that the vaccine can be mass-produced. Additionally, pharmas will also need to have the right logistics plans to deliver vaccines to care facilities, hospitals, clinics, and pharmacies,
  • Durability: Some vaccines are effective for longer than others. For an effective COVID-19 vaccine, the durability would most likely need to be similar to that of the flu shot. Anything less and the vaccine would likely be ineffective in immunization for the winter months.

So, as clinical trial data begins to hit the news wires, the markets will also need to begin focusing on the other considerations. For emergency approvals to be given by the likes of the FDA, safety requirements must be met as a minimum.

While Pfizer Inc. and BioNTech SE are currently out in front, a number of other pharmas are likely to release results imminently.

The World Health Organization has listed more than 200 vaccines in the works, with 48 currently in clinical evaluation. The WHO’s overview of COVID-19 candidate vaccines is available to download here.

The Front Runners

  • Pfizer Inc. (“PFE”) and BioNTech SE: Awaiting safety, duration, and manufacturing consistency data for emergency FDA approval.
  • AstraZeneca (“AZN”) and the University of Oxford: There have been reports of AstraZeneca’s vaccine being as much as 7 times less expensive than Pfizer’s. While Pfizer and BioNTech are currently leading the race, this could give AstraZeneca the edge, particularly across the emerging markets.
  • Moderna Inc. (“MRNA”): Experts are continuing to suggest that Moderna will deliver similar results to that of Pfizer Inc. and BioNTech. Clinical trial data could be out as early as this week. Reuters reported last week that the Swiss government has started a rolling review of its vaccine. This is to ensure that a quick approval can be given should it deliver positive results. Swissmedic is also reportedly viewing vaccines under development by AstraZeneca and Pfizer & BioNTech.

Trailing Big Names

  • Johnson & Johnson: Phase 3 clinical trials are continuing and are taking place in a number of geographies. Johnson & Johnson began its phase 3 clinical trials back in September. Trials had to be put on hold following a serious medical event. Trials resumed in late October, however. Trailing Pfizer and a number of others, Johnson & Johnson reportedly received additional funding to ramp up its clinical trials. Partnered with the U.S government, the U.S government has reportedly committed an additional US$454m to support phase 3 trials.
  • Medicago: Last week, Medicago released phase 1 trial results. 100% of subjects who received the trial vaccine developed significant antibody and cellular immune responses after two doses. With no safety concerns, the pharma is due to enter phase 2/3 clinical trials before the end of this year. Reuters also reported last week, that Medicago will use a booster from GlaxoSmithKline in its bid to develop an effective vaccine.
  • Novavax: While trailing the majority of the front runners, Novavax is expected to release phase 3 clinical trials from the UK in the 1st quarter. Unlikely its peers, Novavax is looking to deliver a dual vaccine. In addition to a COVID-19 vaccine, the company is looking to also include a flu vaccine. For the Novavax dual vaccine, more favorable storage requirements mean that transport is far simpler and cheaper. One final advantage that Novavax reportedly has over its peers is production capacity.
  • Sanofi / GlaxoSmithKline: The partnership received a US$2.1bn funding commitment from the Trump administration to deliver a COVID-19 vaccine. The first results are due out in early December, with late-stage trials to begin before year-end. Along with Johnson & Johnson, Medicago, and Novavax, the vaccine currently trails Pfizer, Moderna, and AstraZeneca.

What Lies Ahead

We can expect plenty of updates in the coming weeks and we will see plenty of movement in the respective stocks.

Pharmas trailing, in the event of further positive news, will likely come under further pressure.

For Pfizer, safety results, manufacturing, and durability results will be in focus near-term. For Moderna and AstraZeneca phase 3 clinical trial results will be in focus. With AstraZeneca commencing vaccine production ahead of approvals, favorable results could give them an edge.

Trailing pharma/government partnerships may also announce further investment commitments to bridge the gap.

White House Down – Trump’s Ultimate Mission?

The Latest

Reading the news wires in recent days, you would have to wonder what has happened to U.S democracy.

This week, there has been the talk of a coup. If the markets contrast recent political moves in the U.S to those in Asia and beyond, the coup is already unfolding.

Trump refuses to concede and has even replaced key officials with loyalists. For the Republican minority, these loyalists are not Republican loyalists but Trump loyalists.

In the 4-years of Donald Trump, we saw the rise of white supremacy and attempts to quash the Black Lives Matter movement.

He failed on one, while continued to avoid condemning the other.

So, the big question is whether U.S President Donald Trump has had ulterior motives since entering the Oval Office.

COVID-19 and the U.S President’s blasé views and mismanagement should have been an immediate red flag. Hindsight can be a wonderful thing… It wasn’t just COVID-19, however.

Friend or Foe?

If we look back at the last 4-years, other than Iran, Trump embraced key enemies of the U.S. Not only did he embrace them but even talked highly of them and called them friends.

Some of Trump’s buddies now include Kim Jong-Un and Vladimir Putin. Not a bad circle when becoming a property mogul once more.

Who needs a cold war when Trump is rubbing shoulders with such reputable political leaders?

Then throw in the clear intent to ruffle China’s feathers and attempt to disrupt peace in the Middle East.

Not only did Donald pull out of the Iran nuclear agreement, he also stepped back from responding to an alleged Iran attack on Saudi oil refineries.

His predecessors would certainly have responded to such a move by the Islamic Republic of Iran.

Then consider ISIS and the claim to have killed off ISIS. Europe continues to face terrorism and that is before considering what is happening in Turkey and the Middle East.

Global political disruption and anarchy seem to be the product of Trump’s presidency.

With all of this in mind, one then has to consider what Trump’s true intent was when entering office.

Clearly, the foreign policy rule book was thrown out the window. Worst yet, even the likes of China briefly attempted to be an advocate of globalization.

It didn’t last long, however. In response to ‘Making America Great Again’, China appears to be making China even greater.

While the U.S economy languishes in the 2nd wave of the COVID-19 pandemic, China has begun to flourish.

Even more impressive is the fact that China has reportedly reneged on its phase1 trade agreement obligations. Then consider democracy and China’s handling of Hong Kong. The U.S is currently in no position to chastise a failure of democracy…

On the trade front, it was always a matter of time and China bided its time and got the result that it wanted. A trade-friendly Biden President.

White House Down

Between now and Biden’s inauguration, there is plenty that can go wrong. The biggest threat is that Biden loses the election on a recount or court rulings. Even Republicans have talked these threat down, however.

So, all that is left is for Trump to hand over the keys…

Easier said then done. Will we see the White House Down? The movie involved shootings and more on the lawns of the White House. The film told the story of anarchy in the face of democracy.

Is Trump about to deliver a taste of theater to Capitol Hill?

With friends like Kim Jung Un and even Putin, who supposedly put Trump in office, it is a scary thought.

The markets are certainly calm over the threat of a political coup. Things may change, however, should we see Trump make use of his Presidential powers to further break the democracy of the U.S.

Brexit – Another Deadline Gives Negotiators 7-Days to Wrap Up a Deal

The Latest

Another EU Summit and yet another Brexit deadline. This time around, the EU Summit on 19th November is said to be the deadline for all deadlines.

While Boris Johnson has attempted to force things along, the EU is now also of the view that an end must come at some point. The November Summit is that point in time.

Updates from both sides of the table suggest that talks are likely to continue until the 11th hour.

As has been the case throughout the summer, UK fisheries and the EU’s access to UK waters remains a key stumbling block.

Until now, EU negotiators have put trade talks largely on ice until a compromise is found on UK fisheries.

For the British side of the table, leaving the EU yet yielding to the demands of Macron would leave Britain in the grips of the Establishment.

It isn’t UK fisheries alone, however. Fair competition rules for businesses and a mechanism to resolve future disputes are also sticking points.

Much like Macron’s stance on UK fisheries, the Establishment is attempting to force British firms to operate under Brussels rules.

When considering the stumbling blocks, it seems unsurprising that British negotiators are making little headway.

Time is running out, however, with negotiators no longer having a cushion in case talks fail to progress.

The only other option is for Boris Johnson to take over and negotiate with EU Commission President Ursula von der Leyen. There is one alternative, though one does not even want to imagine how the Brexiteers would react. Boris Johnson could attempt to extend the transition period to allow talks to continue. Even that may not be achievable, however…

Kicking the Brexit can down the road would be a pointless exercise if an agreement isn’t in place by the November Summit.

That Special Relationship

For Boris Johnson, the gamble of allowing talks to extend beyond the U.S Presidential Election has not paid off.

While President Trump files lawsuits and states recount ballots, the writing looks to be on the wall. It would now be a market shock should Trump manage to reverse the outcome of the election.

Joe Biden has already been in dialogue with the British Prime Minister and the Good Friday Agreement was a hot topic of discussion.

The U.S President-Elect

The markets are making a big deal about Joe Biden’s likely support for Europe. In reality, however, the President-Elect is unlikely to throw the U.S-Britain relationship under the bus.

This is assuming that the British government doesn’t jeopardize peace in Northern Ireland as a result of the Internal Market Bill and Brexit.

Whatever happens, Britain is going it alone and will need a favorable trade agreement with the U.S.

According to the updates from the Biden-Johnson talk, a trade agreement will be hinged on respecting the Good Friday Agreement. Ahead of the Presidential Election, Democrats had delivered similar messages in the wake of the Internal Market Bill vote.

With the EU suing the UK over the Internal Market Bill and Biden’s clear message, the Brexiteers will need to tread carefully.

All eyes will be on the House of Commons, following the House of Lords voting down of the Bill.

For Britain, it would be a double blow should a no-deal Brexit also end any hopes of a U.S – UK trade agreement.

The Pound

At the time of writing, the Pound was up by just 0.01% to $1.32201.

Following a 0.38% pullback on Monday, stemming from Dollar demand, the Pound continues to stand its ground.

This is in spite of updates from the EU, where talks are not expected to deliver an agreement this week.

That leaves negotiators just a few days to iron out their differences and present an agreement at the EU Summit.

At some point, the markets will need to consider the worst-case scenario, however unlikely this may be.

Between now and next Thursday, therefore, convincing the Democrats that the Internal Market Bill does not risk jeopardizing peace in Northern Ireland seems key.

If the Democrats are convinced, then there is at least the fighting chance of a U.S – UK trade agreement.

It is somewhat ironic that the Biden administration is placing such emphasis on peace. In the years gone by, that special relationship has drawn British troops into a number of unwanted conflicts. Conflicts that the U.S has been a centerpiece in.

Perhaps we are entering a new era. One where the U.S looks to deliver peace through diplomatic channels. Such a future wouldn’t be a bad one for Britain that has worked hard to maintain that special relationship.

GBP/USD 12/11/20 Daily Chart

COVID-19 – Pfizer Leads the Race to a COVID-19 Vaccine

The 2nd Wave

The West continues to see rising new COVID-19 cases, with the U.S continuing to report more than 100,000 new cases a day.

Things have not been much better for Europe, which has seen lockdown measures reintroduced in a number of member states.

While the economic impact of the 2nd wave is likely to be particularly severe, hopes of a COVID-19 vaccine continue to prop up the global equity markets.

Maintaining current levels, however, will largely depend upon the timing of a vaccine.

The longer that lockdown measures remain, the slower the economic recovery will likely be.

An effective vaccine will not bring back small to medium-sized companies that collapsed due to the pandemic. A vaccine would also fail to deliver a sharp rebound in labor market conditions.

The Race Participants

There are a vast number of pharma companies that are currently in the race to deliver the 1st effective COVID-19 vaccine.

A number of the leading companies are shown in the chart below:

statistic_id1119090_top-companies-by-covid-19-treatment-vaccines-in-development-2020

While the companies listed above were trialing 60 different drugs and vaccines. There are many more in trial phases, however. As at 5th November, 670 drugs and vaccines were in development, targeting the coronavirus.

The figures are made available by statista.com and Pharma Intelligence.

Looking at the top 10 companies listed above and a few more in more detail:

U.S Headquartered

Mateon Therapeutics: Listed on OTCMKTS (“MATN”) and headquartered in California.

Merck & Co.: Listed on the New York Stock Exchange (“MRK”) and headquartered in New Jersey, USA.

Moderna Inc.: Listed on the NASDAQ (“MRNA”) and headquartered in Cambridge, Massachusetts, USA.

Pfizer Inc.: Listed on the New York Stock Exchange (“PFE”) and headquartered in New York City. (Pfizer Inc. has partnered with Germany’s BioNTech SE)

Sorrento Therapeutics: Listed on the NASDAQ (“SRNE”) and headquartered in California. Currently trailing many of the front runners in the race for an effective vaccine.

Talem Therapeutics: This is a wholly-owned subsidiary of ImmunoPrecise Antibodies USA. Its parent company, ImmunoPrecise Antibodies Ltd is listed on the Toronto Stock Exchange.

Tonix Pharmaceuticals: Listed on the NASDAQ (“TNXP”) and headquartered in New Jersey.

Europe Headquartered

AstraZeneca: Listed on the London Stock Exchange (“AZN”) and headquartered in Cambridge, England and Sodertalje, Sweden.

GlaxoSmithKline: Listed on the London Stock Exchange (“GSK”) and headquartered in Brentford, England.

Grifols, S.A: Listed on the Bolsa de Madrid (“GRF”) and headquartered in Barcelona, Spain.

Asia Headquartered:

GC Pharma: Listed on the Korea Stock Exchange (“006280”) and headquartered in Yongin, South Korea.

As indicated above, the U.S pharmas make up the lion’s share of companies in the race to deliver a COVID-19 vaccine.

Coronavirus – The Latest Numbers

At the time of writing, the total number of COVID-19 cases has risen to 51,241,021. This is up from 49 million cases less than a week ago. More than 20% of the total number of cases has stemmed from the U.S. The U.S has reported 10,421,956 COVID-19 related cases and 244,448 related deaths.

With India not far behind, reporting 8,591,075 COVID-19 related cases, the sense of urgency towards a COVID-19 vaccine has increased.

France, Spain, and the UK have now seen more than 1 million COVID-19 related cases. Italy and Germany have fared somewhat better, but not by much.

For this reason, the EU and U.S economies remain the greatest concern. Biden’s Presidential Election victory adds another dimension to the economic outlook for the U.S and beyond.

Following Trump’s willingness to reopen the U.S economy at any cost, Biden’s stance is likely to be a more conservative one.

The President-Elect has clearly stated that tackling the COVID-19 pandemic will be a priority. This could mean enforced containment measures in the near-term, which would add further pressure on the U.S economy.

A lack of a sizeable stimulus package this year would make things all the more bearish for the U.S economy.

The Clinical Trials

After last week’s review of the key pharmas in the race to develop an effective COVID-19 vaccine, Pfizer delivered a boost for the global equity markets on Monday.

Working with Germany’s BioNTech SE, Pfizer released its latest results, which were particularly promising.

On Monday, Pfizer Inc. announced that its COVID-19 vaccine had an efficacy rate of more than 90%. This meant that the trial vaccine prevented COVID-19 in more than 90% of candidates in phase 3 testing. In response, Pfizer Inc.’s share price jumped by 7.69% on Monday. BioNTech SE’s share price shot up by an even more impressive 14.69% in response to the news.

While this is a huge step towards an effective vaccine, however, there is some way to go before a worldwide distribution of a vaccine.

In addition to efficacy rates, safety and consistent manufacturing are additional requirements that need to be met in order to receive FDA approval.

The markets will therefore need to monitor progress in the coming weeks, as Pfizer delivers more data.

So, with Pfizer Inc. and BioNTech SE leading the charge, other pharmas will now be under pressure to deliver similar results.

Since last week’s review, the front runners and main players remain the same.

The Front Runners

  • Pfizer Inc. (“PFE”) and BioNTech SE will announce further results in the next few weeks. The results will not only include efficacy numbers but also details on safety and manufacturing sustainability. Pfizer Inc. will apply from the FDA for emergency use authorization once it satisfies all three criteria. This could come as soon as the end of November.
  • AstraZeneca (“AZN”) announced last week that they are on track to deliver a vaccine as early as this year. In response to last week’s announcement, news hit the wires yesterday that AstraZeneca has commenced vaccine production in Australia. This is despite the fact that the AstraZeneca and University of Oxford vaccine is still in phase-3 clinical trials. Vaccine tests results are scheduled to be delivered by the end of the year. The move is a gamble, with the group producing vaccines in the hope of acceptable results. In response to Pfizer Inc.’s news on Monday, AstraZeneca’s stock fell by 2.03% on the day.
  • Moderna Inc. (“MRNA”) is expected to have similar results to that of Pfizer Inc. as it has relied upon the same mRNA tech in vaccine development. Moderna Inc. is due to release its clinical trial results in the coming weeks.

What Lies Ahead

So, as the big pharmas make progress towards an effective COVID-19 vaccine, there are a few issues to consider.

Key considerations will include

  • Duration of effectiveness: The shorter the duration of the vaccine’s effectiveness, the less effective the vaccine.
  • Asymptomatic prevention: Clarity on whether the vaccine can prevent asymptomatic carriers.
  • Initial support and supply projections near to medium-term: For bringing an end to the global pandemic, supply will be a key consideration.
  • Side effects: Major side effects could reduce the number of the population willing to take the vaccine.
  • Storage requirements: The storage requirements of the virus will also influence delivery on a global scale.

While the efficacy numbers are impressive, therefore, the pharma world will need to deliver more to end the COVID-19 pandemic. This could therefore lead to sizeable swings across the global financial markets as optimism shifts to reality.

COVID-19 – The Race to a Vaccine

The 2nd Wave

The 2nd wave of the COVID-19 pandemic has hit Europe hard. As a result, a number of countries across the EU have had little choice but to reintroduce lockdown measures.

Britain has also reintroduced lockdown measures across England this week.

For the U.S, things are not much better. New daily COVID-19 cases continue to set new records as the West enters an uncertain winter.

The economic devastation from the 1st wave could pale into insignificance when considering the likely impact of the 2nd wave.

For this very reason, the race towards an effective and widely available COVID-19 vaccine is all the more important.

Until an effective vaccine is readily available, containment measures, border control, and more will remain economically debilitating.

The Race Participants

There are a vast number of pharma companies that are currently in the race to deliver the 1st effective COVID-19 vaccine.

Some of these companies are researching more drugs than others, suggesting that they may be more likely to deliver first. Others may argue, however, that having too many varieties to test will result in a lack of progress.

The companies are shown in the chart below

statistic_id1119090_top-companies-by-covid-19-treatment-vaccines-in-development-2020

While the companies listed above are trialing 60 different drugs and vaccines, as at 28th October, there were reportedly 674 drugs and vaccines in development, targeting COVID-19.

The figures are made available by statista.com and Pharma Intelligence.

Looking at the top 10 companies listed above and a few more in more detail:

U.S Headquartered

EpiVax: Unlisted and headquartered in Providence, USA.

Mateon Therapeutics: Listed on OTCMKTS (“MATN”) and headquartered in California.

Merck & Co.: Listed on the New York Stock Exchange (“MRK”) and headquartered in New Jersey, USA.

Moderna Inc.: Listed on the NASDAQ (“MRNA”) and headquartered in Cambridge, Massachusetts, USA.

Pfizer Inc.: Listed on the New York Stock Exchange (“PFE”) and headquartered in New York City. (Pfizer Inc. has partnered with Germany’s BioNTech SE)

Sorrento Therapeutics: Listed on the NASDAQ (“SRNE”) and headquartered in California. Currently trailing many of the front runners in the race for an effective vaccine.

Talem Therapeutics: This is a wholly-owned subsidiary of ImmunoPrecise Antibodies USA. Its parent company, ImmunoPrecise Antibodies Ltd is listed on the Toronto Stock Exchange.

Tonix Pharmaceuticals: Listed on the NASDAQ (“TNXP”) and headquartered in New Jersey.

Europe Headquartered

AstraZeneca: Listed on the London Stock Exchange (“AZN”) and headquartered in Cambridge, England and Sodertalje, Sweden.

GlaxoSmithKline: Listed on the London Stock Exchange (“GSK”) and headquartered in Brentford, England.

Grifols, S.A: Listed on the Bolsa de Madrid (“GRF”) and headquartered in Barcelona, Spain.

Asia Headquartered:

GC Pharma: Listed on the Korea Stock Exchange (“006280”) and headquartered in Yongin, South Korea.

As indicated above, the U.S pharmas make up the lion’s share of companies in the race to deliver a COVID-19 vaccine.

Coronavirus – The Latest Numbers

When considering the fact that the U.S has recorded an alarming 9,919,522 COVID-19 cases and 240,953 COVID-19 related deaths, it is not surprising that Pharma U.S is leading the charge.

Looking at the latest Coronavirus figures, the total number of cases currently sits at 49.031. While 34.98m have reportedly recovered, there have been 1.24m reported deaths.

For Europe and the U.S, the number of cases reported amidst the 2nd wave has been far more significant than in the 1st wave.

When considering the fact that the winter has just begun, these numbers are likely to balloon further.

For the Global Economy, the key to any recovery rests on finding an effective vaccine and soon. Failure to successfully trial a vaccine by the end of the year will leave the world exposed for another full quarter.

Larger multinational companies may be able to tighten the belt. Small to medium-sized companies, however, will begin to shut down in far greater numbers than seen in the 1st wave.

The damage to the economy would be so severe that some nations will be in the economic wilderness for a decade if not more.

So, having identified the key players in the race to an effective COVID-19 vaccine, the next step is to understand at what stage of clinical trials each currently stands.

The Clinical Trials

Companies that are more advanced may not ultimately reach the end goal first, but they do have a greater chance.

For this reason, share prices have tended to reflect how advanced and successful trials have been to date.

According to Pharmaintellgence.informa.com,

Of the total 674 drugs, 510 are currently in the preclinical trial phase. This means that the vast majority may not make it to clinical trials.

Of the remainder:

  • 49 are currently in phase 1 clinical trial.
  • 75 are in phase 2, and
  • 28 are in phase 3.

Taking a closer look at the current trials testing drugs for the treatment and/or prevention of COVID-19 fund in Trialtrove, the breakdown in phases is as follows:

  • I: 431
  • II: 1,728
  • III: 1,011
  • IV: 327

From the numbers above, it is clear that the sector is making strong progress towards effective treatment and/or vaccine.

The Front Runners

  • AstraZeneca (“AZN”) announced this week that they are on track to deliver a vaccine as early as this year. The company is due to deliver test results by the end of the year. AstraZeneca is working with the University of Oxford to deliver an effective vaccine.
  • Moderna Inc. (“MRNA”) is reportedly getter ready for a global launch. In late October, the company stated that it had already accepted in excess of $1bn in deposits from governments. Late-stage trials are underway.
  • Pfizer Inc. (“PFE”) and BioNTech SE have announced that they may release initial late-stage trial data this month. If results are positive, Pfizer Inc. will apply from the FDA for emergency use authorization.

While the above are in their final stages, there are a number of other pharmas also making progress.

FDA approvals, however, may be hard to come by for pharmas looking to enter the largest COVID-19 market. That will, therefore, give the likes of Moderna Inc. and Pfizer Inc. the upper hand for now. The flood gates could open, however, should both hit snags at this late stage. Such an event could give AstraZeneca a green light to enter the U.S market.

In the days and weeks ahead, we will continue to monitor progress towards a vaccine and review other pharmas in the race.