Financial Times Europe - 21.03.2020 - 22.03.2020

21 March/22 March 2020 ★ FTWeekend 9

COMPANIES. WEEK IN REVIEW

BlackRock provided a little light relief

this week when it rdered executiveso

whose companies were on fire to heed

its “stewardship” goals. As managers

dealt with the debilitating side-effects

of the coronavirus, their biggest

common shareholder informed them

they would be judged in 2020 on five

measures: “board quality,

environmental risks and opportunities,

corporate strategy and capital

allocation, compensation to promote

long-termism and human capital

management”.

No, they won’t. They will be judged

this year on whether they can survive.

And to send out these demands during

a once-in-a-generation crisis is bizarre.

Millions may lose their jobs but as long

as the mushrooming masses of

environmental, social and governance

police can still pump out press releases,

they stand a chance of keeping theirs.

BlackRock had a clue in the last line

of its press release: “As of December 31,

2019, the firm managed approximately

$7.43tn in assets on behalf of investors

worldwide.” That was true then. But as

of March 2020 BlackRock managed

$1.4tn less. This economic impact —

along with the mounting death toll — is

occupying most of us right now.

If the five areas really were the

yardsticks, many companies would be

excelling. Take the environment. Air

quality is much improved since people

stopped flying, driving and working in

factories. Plumes of nitrous oxide over

Italy that were visible from space have

now dissipated as thecountry’s

industry fell silent. Fiat,

congratulations. Airlines, well done,

you have made surprising progress on

carbon goals. It didn’t take new

technology after all. You just grounded

most of your fleets.

In many of the other stewardship

goals, companies are falling short. And

to be fair to BlackRock, some of these

do count — even at times of crisis. Take

board quality. There is not much on

display at Boeing. The aerospace group

appointed Nikki Haley, the former US

ambassador to the United Nations, to

its board last year, citing her ability to

help with “Boeing’s long-term business

strategy as well as its relationships with

its global customer base and other key

stakeholders”. She did not last long,

resigning this week when Boeing

lobbied theUS government for a $60bn

industry-wide bailout. Principles, or

political ambition, trumped her

stewardship of the company.

On capital allocation, Boeing is one of

many companies where this has been

questionable. It has gone from huge

share buybacks to requesting billions

of dollars of taxpayer support. As with

the banks in 2008, this has produced

understandable anger. Other

companies that took on debt to juice

their stock price will face the same

scrutiny before this is over.

On “human capital management”:

well, companies are being criticised for

managing their humans out the door.

Some companies are making heroic

efforts to keep staff on in the most

testing circumstances. However, it is

hard to blame those that don’t. When

your revenues fall 90-100 per cent you

need to take action on costs.

But first executives must take the

axe to their own pay. Virgin Atlantic

CEO Shai Weiss was one of the first to

take a temporary pay cut. IAG’s Willie

Walsh and others have followed suit.

But whenpilots are asked to take 50

per cent pay cuts, their bosses should

make sacrifices that are the same or

bigger. One for BlackRock to bring up

at the next annual shareholder

meetings of its surviving companies.

[email protected]

Surviving this year

is the one yardstick

that matters

When

pilots are

asked to

take 50%

pay cuts,

their bosses

should

make

sacrifices

that are the

same or

bigger

In mid-January, immunologist Ugur

Sahin read an article in the Lancet, a

British medical journal, about avirus

that had surfaced in Wuhan.

The paper, which outlined how the

disease had spread among a family of

six, hardly mentioned the prospect

that it would spread globally,let

alone become a pandemic.

But the 54-year-old “saw it straight

away”, acolleague said.

Days later, Prof Sahin sent an email

to the board of his biotech group,

BioNTech, in ainz, raising theM

alarm. “Experts experienced with

previous outbreaks said this will

come and go,” he recalled. “I said:

‘No, this time it is different.’”

The Turkish-born, teetotal

professor of experimental oncology

has built two billion-dollar

companies, but until recently was

unknown outsideacademia and

biotech. That has changed with the

outbreak.

BioNTech, which Prof Sahin

founded with his wife, physician and

immunologist Ozlem Tureci, and his

former professor Christopher Huber

in 2008, was suddenly under the

media microscope, its expertise in

messenger RNA which carries—

instructions for human cells to

produce proteins from DNA — touted

as a fast rackt to mass noculation.i

Unlike regular vaccines, which can

take decades to produce, an mRNA

vaccine could theoretically be quickly

and cheaply manufactured in labs

from a DNA template. Instead of

introducing antigens into the body to

produce an immune response, mRNA

vaccines send genetic information to a

cell that can be translated into

proteins that fight disease.

BioNTech is one of three mRNA

focused companies that have caught

the world’s attention. Its share price

has almost trebled in a month and it

has signed development agreements

withChinese group Fosun Pharma

and Pfizer in the space of a few days.

It is testing a potential coronavirus

vaccine on mice in a lab in Mainz,

with trials on humans scheduled to

start as soon as the end of April.

US, European and Chinese

regulators would have to accelerate

their approval processes, and waive

requirements for large clinical trials.

Prof Sahin as been forced to adopth

a punishing schedule and take on the

role of commander in a companyon a

“war footing”.

With the BioNTech building closed

to everyone other than lab workers

and essential staff, he starts his day

with video calls to teams in China,

before checking in on the Covid-

vaccine’s progress.

Discussions with research institutes,

regulators and crisis co-ordinators

such as the Coalition for Epidemic

Preparedness in Washington follow,

and the day ends with updates from

Pfizer US collaborators, which carry on

late into the evening.

Prof Sahin is a calm, measured

person and being at the forefront of

fighting a global crisis has done little to

alter his thoughtful, deliberate style.

“I haven’t worked with anyone like

him,” said Sean Marett, BioNTech’s

UK-born chief commercial officer.

Prof Sahin, he said, avoids checking

the company’s share price, or

responding to speculative statements

emanating from the White House and

Brussels that an mRNA vaccine could

be ready by the autumn. Instead eh

spends what spare time he has

preparing data for regulators nda

investors.

He is the only board member to have

an office in the building where the

laboratory work is carried out and

generally prioritises mentoring PhD

students and overseeing experiments.

Nonetheless, he has an impressive

record of raising cash. His first

company, Ganymed Pharmaceuticals,

had entrepreneurs Andreas and

Thomas Strüngmann — founders of

Hexal that was sold to Novartis for

$7.5bn — among its first investors. The

brothers own astake in BioNTech.

Last August he Bill & Melinda Gatest

Foundation became involved,

investing $55m in Prof Sahin’s group,

which until 2015 focused mainly on

cancer therapies, to help develop drugs

to tackle HIV and tuberculosis.

The Gates’ interest in infectious

diseases prompted a board discussion

“about what we would do in a

pandemic situation”, said Mr Marett.

“But although scientists had said that

the world was overdue for another

pandemic, we weren’t expecting to

have to act on our discussion six

months later.”

Having a scientific-journal-obsessed

academic n charge helped BioNTechi

respond with speed to the outbreak,

Mr Marett said. “I didn’t immediately

register just how serious it was,” he

said. Prof Sahin “was ahead of the

curve”, immediately dedicating more

than 400 staff to Covid-19 research.

That number is likely to go up, if

BioNTech makes headway, and Prof

Sahin’s other pursuits will be put on

hold for a while.

“We are going to face two potential

scenarios: either a very fast pandemic

or a prolonged epidemic situation

which will last for the next 16 to 18

months,” Prof Sahin said. “I hope it’s

the latter.”Joe Miller

Immunologist with eye on fast track to mass inoculation

The

oncology

professor’s

company

has sealed

deals with

Fosun

Pharma

and Pfizer

Ugur Sahin was ahead of the curve,

immediately dedicating more than

400 staff to Covid-19 research

Andreas Arnold/dpa

Airlines ravaged

3 The airline industry warned that it must shed jobs

and secure state support to survive the coronavirus

crisis, as carriersgrounded the majority of their

fleetsandtookstepstoconservecash.

United Airlines f the US,o IAG— parent of British

Airways, Aer Lingus and Iberia —Air France-KLM,

easyJet,Finnair,Air New Zealand nda Aeroflotall

unveiled drastic measures to cut costs. Willie Walsh,

head of IAG, said that there was no guarantee that

many European airlines would survive. “There are

many airlines out there who are severely stressed,

withlittleornocashresources,”hesaid.

3 Thebiggest pharmaceutical companies said that

they would work together to try to find treatments

andavaccinetotacklethepandemic.

Executives from

companymembersof

the International

Federation of Phar-

maceutical Manufac-

turers and Associa-

tions — including

Roche,Sanofi Pas-

teurandJohnson &

Johnson said they—

w o u l d s h a r e

resources and clinical trial data with governments

and each other to help increase testing capacity and

developtreatments.

3 Ford uspended its dividend and drew downs

$15.4bn from two credit lines to boost its balance

sheet, as the andemic forced it to shut plants inp

NorthAmericaandEurope.

It is the largest drawdown any company has made

Many leading carriers

‘are severely stressed, with

little or no cash resources’

Willie Walsh, IAG

Scientists are racing to repurpose

drugs that have been designed for

conditions from Ebola to arthritis to

treat thecoronavirus, recruiting

thousands of patients fortrials.

The World Health Organization

has launched amulti-country study

of four possible drugs and

combinations, while drugmakers

including Roche, Sanofi, and

Regeneron have started trials fo

their potential treatments in

humans. Figures from drug

database Cortellis Clinical Trials

Intelligence reveal more than 200

trials spanning the globe are

targeting treatments for Covid-19,

but new tests are being added at a

pace. Soumi Saha, senior director of

advocacy at Premier, an alliance of

over 4,000 US hospitals, said some

drugswere being deployed to

seriously suffering patients under

‘compassionate use’ protocols, but

what doctorswanted mostwas

guidance about whatworked.

On Wednesday, a study in China

showed promising results foranti-

flu drug Avigan, developed by

Fujifilm. It stops the genes of the

virus from replicatingin infected

cells, buthas serious side-effects. A

study of24 patients in France

showed that chloroquine

accelerated their recovery from

Covid-19. But this drug too has

significant side-effects.

There have also been

disappointing results this week

fromWuhan. The controlled trial of

200 patients of thecombination

lopinavir-ritonavir, made byAbbVie,

showed it had no effect on the

disease.Hannah Kuchler

because of the outbreak, according to FT analysis of

publicdisclosures.

3 Swiss bankCredit Suisse aid it was ons

course to deliver strong performance in the first

quarter of the year, despite thechaos caused by the

coronavirus.

3 The Football Association, English football’s gov-

erning body, changed its rules to allow the season to

be extended indefinitely in a move designed to limit

the financial damage from the coronavirus outbreak

and allow fixtures in top tierPremier Leagueto be

completed.

3 Rising Pharmaceuticals, a New Jersey-based com-

pany, increased the price of chloroquine — an

antimalarial, which is one of the drugs that is

being tested against Covid-19 — on January 23by

97.86 per cent to $7.66 per 250mg pill and $19.88 per

500mgpill.

3 Sequoia Capital,the Silicon Valley-based firm

known for its early investments in Google, PayPal

and Meituan Dianping, is looking to raise about $7bn

foritslatestsetofventurecapitalfunds.

3 US hedge fundMillennium Management, the

$40bn multi-strategy firm, hasclosed more than 10

ofitstradingteamsduetoviolentmarketswings.

3 HSBC ppointed Noel Quinna its permanent chief

executive, drawing a line under a seven-month

searchtofindanewleaderforEurope’slargestbank.

3 Impossible Foods aised $500m in a funding roundr

that will help the US plant-based burger group

weather the economic turmoil. The fundraising,

which was led byMirae Asset Global Investments,

comesasseveralUSstateshaveshutrestaurants.

*Trials from major companies, hospitals and academic institutions, looking at the drugs experts believe are most likely to have some eect on Covid-

FT visual journalism: Chris Campbell; Patrick Mathurin; Hannah Kuchler Sources: Cortellis Clinical Trials Intelligence (data as at Mar ); European Union Clinical Trials Register; FT research

Trials into Covid- therapeutic treatments

Selected registered trials*, by drug category

Circle size  number of patients enrolled

This week the World Health Organization launched a trial, named Solidarity, into

four drugs to treat coronavirus. The trial joins the growing number of medical

studies being carried out by drugmakers, governments and universities

Anti-inflammatories

Antibodies

Antivirals

Adapted from

people who

have recovered

from the virus

Such as drugs designed for

HIV, Ebola and malaria

which could stop the

replication of the virus

and are especially

eective in the

earlier stages

For treating immune

system reactions such as

the one that occurs in

the later stage of the

Covid-19 disease

Other

antivirals

-month

trial in multiple

countries with

 patients

-month

trial, 

patients

-month

trial in Hong

Kong, 

enrolled

-month

trial in China

with 

patients

Large -month study of

 patients at Wuhan

Union Hospital comparing

various treatments such as

antibiotics, antiviral therapy,

globulin and hormones

Sanofi and Regeneron, a

US biotech, study into

Kevzara, a drug used to

treat rheumatoid arthritis

Roche to trial

Actemra, a drug used

to treat rheumatoid

arthritis and cytokine

release syndrome.

Expected to start

next month

Favipiravir

Antiviral developed

by Fujifilm

Remdesivir

An antiviral

developed by

California-based

Gilead for Ebola, it

is being studied in

a number of large

trials

Chloroquine and

hydroxychloroquine

Anti-malarial drugs

Ritonavir

An antiretroviral

medication, most often

used in combination

with lopinavir, to treat

HIV/Aids

Synairgen, a

UK biotech

firm, to trial

lung drug

SNG

A total of 

people will be enrolled

in a large international

trial studying

combinations of

ritonvir and lopinavir



patients

 patients

in New York

and other

sites

$15.4bn

Ford’s credit

drawdown as it

shut plants in the

US and Europe

98 %

Rising’s price hike

for a drug being

tested against

the virus

The Top Line

Tom

Braithwaite

Ugur Sahin

Chief executive, BioNTech

BEST OF

BUSINESS

Corporate

person in

the news

Under the hood undreds of trials launched using repurposed medicinesH

The WHO has started a multi-country study of four possible medicines and combinations while drugmakers kick off human testing

MARCH 21 2020 Section:Companies Time: 3/202020/ - 18:30 User:cathy.pryor Page Name:CONEWS2, Part,Page,Edition:USA , 9, 1