The Wall Street Journal - 30.07.2019

© 2019 Dow Jones & Company. All Rights Reserved. ***** THE WALL STREET JOURNAL. Tuesday, July 30, 2019 |B1

TECHNOLOGY: FACEBOOK’S VIDEO PLATFORM GRADUALLY LURES ADVERTISERS B4

BUSINESS&FINANCE

approval from both companies’

boards, shareholders and regu-

lators.

The companies said that

combined they had 360 million

orders last year worth about

€7.3 billion ($8.1 billion).

Size is becoming increas-

ingly important for delivery

firms as they expand into un-

tapped markets and as more

consumers are willing to pay

for the quick delivery of meals

and groceries to their work-

places or homes. Delivery will

account for 10% of restaurant

sales by 2022, according to

brokerage firm William Blair.

Analysts say food-delivery

companies aiming to compete

globally can gain an edge by

tying up with rivals. Earlier

this year, Amazon led a $575

million funding round for De-

liveroo to help fund the U.K.

company’s meals-delivery bat-

tle with Uber. In December,

Please turn to page B2

Two of the largest food-de-

livery companies in Europe

have struck an $11.1 billion

merger deal, joining forces to

battle the likes of Uber Tech-

nologies Inc. and Amazon.com

Inc. in a fast-growing service.

Dutch food delivererTake-

away.comNV said Monday it

had agreed to an all-share

transaction with London-listed

Just EatPLC subject to final

BYPARMYOLSON

Food Deliverers in Europe

Link Up in $11 Billion Deal

FOOD

Beyond Meat sales

surge, but stock

drops on news of

secondary offeringB2

AVIATION

United buys stake

in biometric-tech

company to speed

security linesB3

3.Drip blood

on test strip.

Testing New Ground

Technology for diabetics to monitor their blood-sugar levels can simplify

the process compared with the older finger-prick method.

Continuous glucose monitor

Finger-stick test

Blood sugar is checked as often as 10 times a day, depending on a doctor's recommendation.

2.Prick the

side of the

fingertip.

1.Insert a test

strip into the

glucometer.

4.The meter

displays the

result.

Test strip

Sources: National Institute of Diabetes and Digestive and Kidney Diseases (CGM); Mayo Clinic (finger prick)

Sensor

Every few minutes,

a sensor under the skin

measures glucose levels

and sends the information

to a monitor, app or pump.

Some monitors may need to be checked with a conventional finger-prick test.

Insulin pump

If patient has

a pump, the

correct

amount of

insulin can be

manually or

automatically

administered.

Monitor/Smartphone

An alarm may sound if the

glucose level displayed on the

monitor is too low or high.

Some monitors send

notifications to another

person, such as a parent.

selling the sensors.

Tracking blood-sugar levels

is vital for many diabetics,

who must regularly check if

they are within healthy levels

or need to take insulin, sugar

or some other medicine to

avoid fainting or worse. For

years, many patients have had

to prick their fingers several

times a day to draw blood and

then insert the blood into a

meter for a reading.

Use of digital blood-sugar

monitors, which first hit the

market in the mid-2000s, has

soared in recent years partly

because the devices have be-

come more accurate and more

health plans are paying for

Please turn to page B2

Diabetes patients are in-
creasingly using electronic
skin patches and their phones,
instead of pricking their fin-
gers, to do the complex job of
managing a disease that af-
fects more than 30 million
Americans.
The transformation in
blood-sugar testing suggests
how harnessing technology and
data may drive improvements
for disease management—and
profits for manufacturers.
Many patients now wear
coin-sized skin patches on their
arms or abdomens that test for
blood-sugar levels automati-
cally, then send the data to a
patient’s smartphone or even
to a wearable insulin pump
that delivers the medicine.
Patients in the U.S. using the
devices, known as continuous-
glucose monitors, numbered al-
most 840,000 as of March 31,
more than double the 389,000
using them at the end of 2017,
according to Seagrove Partners
LLC, a health-care research and
consulting firm.
Sales of the products are
fueling growth at companies
includingDexComInc.,Ab-
bott Laboratories and
MedtronicPLC. Their sales of
the devices are expected to hit
$3.2 billion this year, triple
the 2016 total, according to
JPMorgan Chase.
The market for the devices
“is extremely large and grow-
ing really fast,” said Mike Hill,
who heads the Medtronic unit

BYPETERLOFTUS

Market

Grows for

High-Tech

Diabetes

Devices

INSIDE

The mortgage market had

one of its most significant

quarters since the financial

crisis as falling rates

prompted a flurry of refinanc-

ing and an uptick in pur-

chases.

The 30-year mortgage rate

unexpectedly dropped to be-

low 4% in May and has re-

mained near its lowest level in

three years, opening a window

for borrowers who bought at

higher rates to lower their

payments and for purchasers

to jump in.

With the Federal Reserve

expected to lower short-term

rates this week and the yield

on the longer-term 10-year

Treasury yield lingering just

above 2%, the period of low

rates stands to continue.

Falling rates are welcome

news for lenders but mask a

housing market that by some

measures is cooling and re-

mains vulnerable to a sudden

updraft in rates. What’s more,

home prices have continued to

rise at a faster pace than me-

dian incomes, putting home-

ownership out of reach for

more Americans.

Lenders made $565 billion

of mortgage loans in the sec-

ond quarter, the most in more

than two years.

At that pace, originations

could exceed $2 trillion for

only the third year since the

financial crisis, according to

Inside Mortgage Finance, an

industry research group.

Banks includingJPMorgan

Chase&Co.,Wells Fargo&

Co. andCitigroupInc. all re-

ported higher mortgage origi-

nations.

There was also a lift for

smaller independent lenders

that have expanded their mar-

ket share in recent years by

shifting toward refinancing.

They struggled last year as

rates rose, crimping the refi-

nancing market.

“They are getting at least

one bottle of Champagne out,

if not the whole case,” said

Guy Cecala, chief executive at

Inside Mortgage Finance.

The last time mortgage

originations passed $2 trillion

was in 2016, when benchmark

Treasury yields hit record

lows. A similar boost occurred

in 2012, a year in which rates

hit what were record lows.

Refinancing accounted for

roughly half of new mort-

gages, according to Mr. Ce-

cala’s estimates, a boost from

recent periods. In 2018, for ex-

ample, when rates were rising,

refinances accounted for just

31% of mortgage business. A

one-point change in a mort-

gage rate can add—or sub-

tract—hundreds of dollars

from monthly payments.

Black Knight Inc., a mort-

gage-data and technology

firm, recently estimated that

there are 8.2 million U.S.

homeowners who would qual-

ify for and benefit from a refi-

nancing. That is a 6.3 million

increase from when rates

peaked in November 2018.

Refinance applications rose

43% in the second quarter

from a year earlier, while pur-

chase applications climbed

6.2% during that period, ac-

cording to the Mortgage Bank-

ers Association.

John Hastings, a loan offi-

cer at Movement Mortgage in

Minneapolis, saw a significant

Please turn to page B10

BYBENEISEN

Boom in Refinancing

Lifts Mortgage Market

Takeaway.com’s merger with Just Eat wouldhelp the companies combat growth by Amazon and Uber.

JASPER JUINEN/BLOOMBERG NEWS

QMA LLC. “But in the last

week or so you got a pretty

good picture of the earnings

season, suggesting those fears

are overblown. It’s a hopeful

sign.”

Earnings reports surprising

to the upside are fairly com-

mon because analysts tend to

be conservative with their es-

timates.

Still, money managers say

the latest round of results

quelled some of their concerns

that corporate profits were

rapidly shrinking amid a fal-

tering U.S. economy. More

than 80 companies had

warned ahead of the reporting

season that earnings could be

weaker than expected, helping

to temper expectations, ana-

lysts said.

The S&P 500 has risen 2.7%

so far in July, extending its

gain this year to nearly 21%,

largely driven by the expecta-

tion of an interest-rate cut

from the Federal Reserve. The

stock market’s two best

months, January and June, co-

incided with some of the

strongest signals from Chair-

man Jerome Powell that the

central bank will cut interest

rates this year.

Data from CME Group

showed investors are betting

on a 100% probability that the

Fed will cut rates at its meet-

Please turn to page B11

Corporate profits are prov-
ing to be more resilient than
expected in the second quar-
ter, nudging the stock market
higher this month and dis-
tracting from anxieties about
trade and economic growth.
Of the 225 S&P 500 compa-
nies that have reported earn-
ings through Monday, 179 have
surprised investors with bet-
ter-than-expected results, ac-
cording to FactSet.
Technology giantsAlphabet
Inc. and TwitterInc. both
topped expectations, sending
shares up 9.6% and 8.9%, re-
spectively, on Friday.
Coca-ColaCo. andUnited
Parcel Services Inc. also
jumped after reporting results
last week.
Earnings among S&P 500
companies that have reported
areup0.5%onaveragefroma
year earlier, according to Fact-
Set.
That has helped improve
analysts’ forecasts for earn-
ings to a 2.5% contraction for
the quarter, better than the
more than 3% pullback they
had been predicting last
week.
“The notion of a wide-
spread economic weakness
seemed plausible just a few
weeks ago,” said Ed Keon,
chief investment strategist at

BYMICHAELWURSTHORN

Strong Earnings Allay

Fears About Growth

43%

Increase in refinancing

applications in second quarter

S&P3020.97g0.16% S&PFINg0.78% S&PITg0.05% DJ TRANSg0.01% WSJ$IDXÀ0.13% LIBOR3M 2.256 NIKKEI (Midday)21763.38À0.68% See more at WSJ.com/Markets

modeling of one of the world’s

biggest pharmaceutical com-

panies.

In his nearly eight months

at the helm, Mr. Bourla has

moved to remake Pfizer into a

company focused on patent-

protected prescription medi-

cines with the potential for

significant sales growth, from

a more diversified but slower-

growing player.

The deal with Mylan, an-

nounced Monday, is Mr.

Bourla’s biggest move so far,

after he oversaw a restructur-

ing at the company and made

smaller deals to boost Pfizer’s

pipeline of cancer and other

drugs under development.

Mr. Bourla, 57 years old,

has also been guiding Pfizer’s

plan to combine its division

selling Advil, vitamins and

other medicine-chest staples

withGlaxoSmithKlinePLC’s

own consumer-health business

into a joint venture that will

eventually be spun off.

“A good gardener needs to

prune the tree when spring

starts,” Mr. Bourla said in an

interview. “Pfizer is in the

spring of high growth.”

Mr. Bourla, a veterinarian

from Greece hired by Pfizer

while doing animal-health re-

search, became chief executive

in January after holding a va-

riety of company roles over

more than two decades. He

said in the interview he began

plotting out his vision for the

company’s future about a year

earlier, when he was promoted

to chief operating officer and

joined the board.

That vision, he said, meant

tightening Pfizer’s focus on

prescription medicines after

his predecessor had already

moved the company in that di-

rection by hiving off the com-

pany’s animal-health and other

non-pharmaceutical assets.

Brand-name drugs and vac-

cines, like the company’s top-

selling Prevnar pneumonia

vaccine, can generate more

sales and bigger margins than

off-patent medicines facing

competition from lower-price

generics. Yet off-patent prod-

ucts have been reliable

sources of billions of dollars in

cash flow for Pfizer, and as it

Please turn to page B4

A deal to merge Pfizer
Inc.’s off-patent drugs busi-
ness with generic drugmaker
MylanNV caps Pfizer Chief
Executive Albert Bourla’s re-

BYJAREDS.HOPKINS

Mylan Deal Caps Pfizer CEO’s Remake

Drugmaker aims to

boost profit by

focusing on vaccines,

brand-name products

 Heard on the Street: Pfizer is

buying low and smart........ B12