Plus, the FDA granted Yale University’s saliva-based coronavirus test emergency use authorization, Sanofi is buying Principia Biopharma, and Amazon is mulling an investment in Rackspace Technologies.
Stocks were higher to start Monday with the Dow adding 31 points, or 0.1%. The S&P 500 advanced 0.3%, while the Nasdaq traded 0.6% higher.
Members of the House will return to Washington this week ahead of schedule to work on urgent legislation to address the crisis at the U.S. Postal Service, setting up a political showdown amid growing concerns that the Trump administration is trying to undermine the agency ahead of the election. The Postal Service is removing hundreds of mail-processing machines across the nation, has removed post boxes in several cities, and told 46 states last week that it may not be able to process all mail-in ballots in time to be counted for the election, likely disqualifying millions of votes. “In a time of a pandemic, the Postal Service is Election Central,” House Speaker Nancy Pelosi said in a letter to colleagues, who had expected to be out of session until September. “Lives, livelihoods and the life of our American Democracy are under threat from the president.” The House Oversight Committee will have an emergency hearing on August 24 and have called on Postmaster General Louis DeJoy, as well as the Postal Service board of governors, to testify at the hearing on changes made at the agency that have slowed down mail service. “The postmaster general and top Postal Service leadership must answer to the Congress and the American people as to why they are pushing these dangerous new policies that threaten to silence the voices of millions, just months before the election,” Pelosi said in a statement Sunday.
The U.S. and China postponed talks regarding progress at the six-month mark of the phase one trade deal between the two. The videoconference meeting between Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer, and Treasury Secretary Steven Mnuchin was supposed to take place Saturday, but has been rescheduled indefinitely. On Friday, President Donald Trump officially ordered the Chinese owner of TikTok to sell its U.S. assets, citing national security grounds. Trump also said on Saturday that other Chinese companies may come under his administration’s scrutiny, which may likely raise tensions between the world’s two largest economies.
On the coronavirus front, former FDA Commissioner Dr. Scott Gottlieb said today that he believes Yale University’s saliva-based COVID-19 test is an important development. “I think it’s highly significant,” Gottlieb said following the FDA’s decision to grant the test emergency use authorization over the weekend. Yale’s test is already being used on NBA players and staff during the league’s restart in Florida, and the university has described the test as “simpler, less expensive, and less invasive” than the common coronavirus testing method, which involves a nasal swab. Elsewhere, a new strain of the virus has been found by researchers in Malaysia, a mutation that could make the virus more infectious. The mutation has become the predominant variant in Europe and the U.S., though the World Health Organization says there’s no evidence the strain leads to a more severe disease.
French pharmaceutical giant Sanofi has agreed to buy U.S.-based biotech Principia Biopharma for $3.7 billion, the companies said today. Sanofi will buy all outstanding shares of Principia for $100 per share in cash, representing an aggregate equity value of around $3.68 billion on a fully diluted basis. “This acquisition advances our ongoing R&D transformation to accelerate development of the most promising medicines that will address significant patient needs,” Sanofi CEO Paul Hudson said in a statement.
Barrick Gold shares are up more than 11% this morning after Warren Buffet’s Berkshire Hathaway revealed a stake in the gold miner. Berkshire added a $562 million position in Barrick Gold in the second quarter, according to SEC filings from Friday. While the position is a small one for Berkshire, the stake makes the conglomerate the 11th largest shareholder of the gold mining company. And Rackspace Technology shares are up nearly 15% today on a report that Amazon is in talks to invest in the cloud services company, just weeks after its public debut. Reuters reported that Amazon is interested in acquiring a minority stake in Rackspace, which helps companies shift their data to Amazon Web Services and other cloud services.
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McKesson Corp (NYSE: MCK): McKesson shares got a boost on Friday after the Trump administration said the U.S. government would partner with the company to distribute a coronavirus vaccine when one has been approved. “Since the onset of the pandemic, McKesson has leveraged our deep expertise to help maintain the integrity of the healthcare supply chain, source and distribute personal protective equipment to frontline workers and stand up covid-19 testing at Health Mart pharmacies, many in underserved communities,” McKesson CEO Brian Tyler said in a statement.