AstraZeneca Said Its COVID-19 Vaccine Showed 70% Effectiveness On Average

Plus, Merck is buying OncoImmune, Gap got an upgrade, and Cineworld shares skyrocket on financial lifeline news. 

Stocks were higher to start Monday with the Dow adding 279 point, or 0.9%. The S&P 500 rose 0.9%, while the Nasdaq gained 0.7%.

That makes three. AstraZeneca and Oxford University said today that an interim analysis of its late stage trial showed its COVID-19 vaccine has an average efficacy of 70%. While the results aren’t as impressive as Moderna’s, and Pfizer and BioNTech’s vaccines, AstraZeneca said that one dosing regimen showed an effectiveness of 90% when trial participants received a half dose, followed by a full dose at least one month apart. The other dosing regimen showed 62% efficacy when given as two full doses at least one month apart. “With three vaccines now showing efficacy at 90%+ and health officials in the U.S. and EU rushing to approve them, the vaccination process is set to commence before the end of the year,” wrote Adam Crisafulli of Vital Knowledge. “This vaccine optimism is more than offsetting the very grim near-term transmission/mitigation landscape as cases spike and governments take further action to curb the virus spread.”

Speaking of cases spiking, the U.S. reported more than 3 million new coronavirus cases between November 1 and 22, according to data from Johns Hopkins University, or roughly a quarter of all U.S. cases since the beginning of this pandemic. As new cases spike, hospitalization rates have followed. The U.S. reported at least 83,870 COVID-10 patients were hospitalized on Sunday, making the 13th straight day the nation has broken its hospitalization record at the start of one of the busiest travel weeks of the year. Airport screenings rose to an eight-month high over the weekend ahead of Thanksgiving, despite warnings from federal health officials to avoid travel for the holiday given the surge in coroanvirus cases nationwide. Dr. Tom Frieden, the former director of the CDC, warned on Twitter that if “we’re not much more careful than we’re planning to be, this Thanksgiving will be the Super Bowl of superspreading events.”

Merck announced this morning that it plans to acquire privately held OncoImmune for $425 million in cash, gaining rights to an under-the-radar drug that has shown impressive results in hospitalized patients with COVID-19. OncoImmune’s experimental CD24Fc drug was shown in a late-stage clinical study in September to reduce the risk of respiratory failure or death by more than 50% in patients hospitalized with the coronavirus and requiring oxygen, Merck said. “The results are remarkable,” said Merck’s research chief Dr. Roger Perlmutter. “Frankly, nobody would have believed that it would have this kind of effect. If you look at the other anti-inflammatories that have been studies in very ill COVID-19 patients, it’s been hard to show there’s any effect at all. …We realized that this small little company was in no position to make CD24Fc to try and treat all of the people who could potentially benefit form this drug. We decided that the only way, seriously, that this could be brought to people who need it is for us to lean in with our capabilities.”

Gap shares are up more than 7% this morning following JPMorgan analyst Matthew Boss upgrading the stock to Overweight from Neutral, and boosting his price target from $22 to $30 – 14% higher than the price as of this writing. Boss said Gap’s Old Navy is “benefitting larger picture from the disproportionate growth of ‘value retail,’” and said the company’s Athleta brand is “well positioned to capitalize on the athletic apparel sector growth.” Boss argued that Old Navy and Athleta could account for around 70% of Gap’s revenues by 2023, offering he most attractive margins in the company’s portfolio. The analyst said he sees an “embedded call option on Gap/Banana Republic with zero-value attributed to the two brands today, despite a potential near-term catalyst path” with the coming launch of Gap’s Kanye West partnership next year, and a likely increase in demand for work clothing as coroanvirus vaccines are made widely available.

And Cineworld shares are up more than 14% at the time of writing after the world’s second-biggest movie chain announced a financial lifeline worth more than $750 million. Cineworld announced it has secured a new debt facility of $450 million and extended maturity on its $111 million incremental revolving debt facility, from December 2020 to May 2024, an accelerated tax-year closure to bring forward an expected refund of over $200 million, and said it has gotten bank covenants waived until June 2022. In a press release, Cineworld said the actions will help give it “financial and operational flexibility until lockdown restrictions in key jurisdictions are eased and studios are able to bring their enhanced pipeline of major releases back to the big screen.”

Stocks We’re Watching

Natural Grocers by Vitamin Cottage Inc (NYSE: NGVC): Natural Grocers shares gained as much as 29% on Friday following the company’s fourth quarter and fiscal year 2020 results. The grocer said it reached $1 billion in sales for the first time in fiscal 2020 as fourth-quarter sales jumped 16.3% year-over-year. “We faced many challenges and opportunities in fiscal 2020, and our response resulted in a record performance including achieving over $1 billion net sales and 89 cents in diluted earnings per share,” Natural Grocers co-president Kemper Isely said on the earnings call. “Fiscal 2020 was an unprecedented year, presenting numerous challenges amid the global pandemic and related government mandates. We are very proud of our strong response and performance.”


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