Plus, U.S. cases of the coronavirus are about to surpass 6 million, China threw a wrench in TikTok-owner ByteDance’s sale of its U.S. operations, and Amazon one approval from the FAA for its drone delivery service.
Stocks were mixed to start Monday with the Dow slipping 200 points, or 0.8%. The S&P 500 was just below the flatline, while the Nasdaq rose 0.5%.
As confirmed coronavirus cases in the U.S. near 6 million, the head of the FDA promised over the weekend that the review of a potential COVID-19 vaccine in the U.S. will be transparent to the public, with any clearance by the agency driven by data alone. Commissioner Stephen Hahn said in an interview on Sunday that the FDA could clear a vaccine for use either under an emergency use authorization based on more limited data and for use in a narrow group should a company apply for such use, or a broader approval that could lead to wider use following calls from President Donald Trump that the agency was deliberately moving slowly on approving a vaccine to hurt him politically. “We’ve said all along we’re not going to pre-judge what mechanism we’re going to use to authorize or approve a vaccine,” Hahn told Bloomberg News. “We’re going to let the data dictate that. The data will dictate what kind of decision is made on the vaccine.” In other vaccine news, Novavax announced today that it has reached an agreement in principle with Canada to supply 76 million doses of its experimental coronavirus vaccine to the country should it prove to be safe and effective. Novavax said it expects to finalize an agreement to supply Canada with the doses “as early as the second quarter of 2021” and is contingent on the vaccine getting a license from Health Canada. Novavax shares opened 7% higher following the announcement.
TikTok has reportedly chosen a bidder for its U.S., New Zealand, and Australian businesses, and could announce the deal as soon as Tuesday, with the Microsoft–Walmart pair-up and Oracle the two top contenders. However, China threw a wrench in the sale of the social media app. TikTok parent company ByteDance now needs Beijing’s approval to sell its U.S. operations under new curbs imposed on the export of artificial intelligence technologies, with the rule aimed at delaying the sale. “AI is a foundational technology and is one of the key sectors that China aims to lead, competing with the U.S.,” said Rebecca Fannin, founder of Silicon Dragon Ventures. “This pushback by Beijing could be seen as part of the growing U.S.-China tensions and tech cold war.”
Warren Buffett’s Berkshire Hathaway is betting big on Japan. Buffett announced Sunday on his 90th birthday that the conglomerate has acquired a slightly more than 5% stake in each of Japan’s five leading Japanese trading companies, Itochu Corp, Marubeni Corp, Mitsubishi Corp, Mitsui & Co, and Sumitomo Corp. Berkshire said it has acquired the holdings over the last year, and has spent more than $6 billion on the holdings. Berkshire signaled it may increase its holdings in the Japanese companies, pledging to only hold as much as 9.9% unless approved by the firms. “I am delighted to have Berkshire Hathaway participate in the future of Japan and the five companies we have chosen for investment,” Buffett said. “I hope that in the future there may be opportunities of mutual benefit.”
Nestle is planning to pay $2 billion to gain full ownership of peanut allergy treatment maker Aimmune Therapeutics, as the Swiss company expands its fast-growing health science business. Nestle said in a statement that its offer for Aimmune values the biopharma firm at $2.6 billion. “Aimmune has $261 million in cash and $134 million in debt,” said Nestle Health Science head Greg Behar. “With our prior investment of $473 million in Aimmune, we’ll be making a cash payment of just under $2 billion.” Aimmune’s Palforzia peanut allergy treatment, which recent gained FDA approval for use in children, has sales potential of $1 billion. Palforzia “has 12 years of exclusivity, global rollout will follow and they have the technology platform for other food allergies in development,” Behar said.
And Amazon shares are up around 2% this morning after receiving federal approval to operate its fleet of Prime Air delivery drones, putting it one step closer to expanding its unmanned package delivery service. The FAA said its approval grants Amazon broad privileges to “safely and efficiently deliver packages to customers,” and the company said it will use the certification to begin testing customer deliveries. “This certification is an important step forward for Prime Air and indicates the FAA’s confidence in Amazon’s operating and safety procedures for an autonomous drone delivery service that will one day deliver packages to our customers around the world,” said David Carbon, vice president of Prime Air in a statement. “We will continue to develop and refine our technology to fully integrate delivery drones into the airspace, and work closely with the FAA and other regulators around the world to realize our vision of 30 minute delivery.”
Stocks We’re Watching
Calix Inc (NYSE: CALX): Calix shares got a boost late last week after announcing that Cumberland Connect, a subsidiary of one of the largest electric cooperatives in the U.S., has partnered with it to simultaneously deliver fiber broadband connections and the Revenue EDGE ultimate subscriber experiment to Cumberland’s entire membership base. “Electric cooperatives tend to be aggressive in their broadband deployments, but Cumberland Connect is unique in rolling out a new fiber network and an unparalleled subscriber experience concurrently,” said Mark Dressler, senior vice president of global sales for Calix. “Since the original founding of the electric cooperative, the Cumberland team has provided essential services, which is exactly what broadband has become with so many people across the country working, learning, and entertaining from home. The importance of broadband services cannot be understated, and fortunately for the people of northern middle Tennessee, Cumberland Connect is connecting them at an uncommonly rapid pace. We look forward to growing this partnership as they continue to expand.”