The Wall Street Journal - 11.03.2020

THE WALL STREET JOURNAL. Wednesday, March 11, 2020 |B7

utilised for non-group pur-

poses,” the statement said,

without providing further de-

tails.

A spokesman for NMC de-

clined to comment and re-

ferred to previous statements

to investors over recent

months.

NMC’s stock has been sus-

pended from trading since

Feb. 27 after losing about 60%

of its value in less than three

months.

In December, Muddy Wa-

ters, the firm of the short

seller Carson Block, ques-

tioned NMC’s finances and

management. Muddy Waters

bet on the stock’s decline, say-

ing in a report that it had “se-

rious doubts about the com-

pany’s financial statements,

including its asset values, cash

balance, reported profits, and

reported debt levels.”

NMC said in December that

the Muddy Waters report was

“false and misleading.”

Last month the company

said it didn’t know the hold-

ings of its largest investors,

including those of its founder,

Bavaguthu Raghuram Shetty.

Mr. Shetty, who had served

as co-chairman, later gave up

managerial responsibilities at

the company. Mr. Shetty

couldn’t be reached for com-

ment.

The statement issued to in-

vestors Tuesday said that the

company’s board hadn’t been

aware of the $2.7 billion debt

and hadn’t sanctioned it.

The company said earlier

this month that it had ap-

pointed the investment banker

Moelis & Co. and audit firm

PricewaterhouseCoopers LLP

to help it manage talks with

lenders and to shed light on

its financial position.

NMC Health PLC, a Lon-

don-listed health-care pro-

vider that operates hospitals

in Abu Dhabi, said Tuesday

that it owes $2.7 billion more

in debt than it had previously

told investors.

The acknowledgment is the

latest setback for the com-

pany, which had prided itself

as a burgeoning Middle East

success story.

That narrative unraveled

this year when the company

said it couldn’t verify the

holdings of its biggest inves-

tors. Its chief executive left in

February, and outside auditors

and bankers were brought in

to look at the company’s

books.

In a statement, NMC said it

was trying to understand the

“nature and quantum” of its

debts. The company had previ-

ously reported debt of $2.1 bil-

lion and said its overall debt

was now around $5 billion.

“The Board believes that

some proceeds may have been

BYANNAISAAC

Hospital Operator Uncovers

An Extra $2.7 Billion in Debt

60%

Decline in NMC Health stock

before trading was suspended

The company had been targeted by short seller Muddy Waters. An NMC hospital in Abu Dhabi.

CHRISTOPHER PIKE/BLOOMBERG NEWS

convened at the Marriott on

Feb. 26 and 27, a Biogen

spokesman said. Then early

last week, some attendees be-

gan reporting flulike symp-

toms, he said.

The company soon after-

ward contacted public-health

authorities, the Biogen spokes-

man said. Those who attended

the company meeting were

asked to stay home and moni-

tor symptoms for 14 days, a

Massachusetts health depart-

ment spokeswoman said.

A Marriott spokeswoman

said it was informed of the

coronavirus infections. “We

are working closely with the

appropriate public-health au-

thorities and are following

their guidance,” she said.

BUSINESS & FINANCE

biggest impact from the Biogen

meeting’s role in the transmis-

sion of the virus. The state’s

health department said Tuesday

that 70 patients presumed or

confirmed to be infected in the

state have links to the meeting,

up from 32 on Monday. To limit

further spread, schools in the

area briefly closed.

Two Indiana residents linked

to the Boston meeting have

been presumptively diagnosed

with the infection, according to

Indiana’s health department.

Five people who live in Wake

County, N.C., which includes

Raleigh, are presumed to be in-

fected after attending the

meeting, the Wake County Pub-

lic Health Division said.

Washington, D.C., said a 77-

year-old man who attended the

Biogen meeting tested positive

for the novel infection.

Palm Beach County, Fla., of-

ficials linked another pre-

sumed case to the company,

saying a Biogen employee from

Pennsylvania who traveled to a

multiple-sclerosis conference

held in West Palm Beach later

tested positive for the virus.

The strategy meeting is an

annual planning event at Bio-

gen, a multinational drug-

maker known for its multiple-

sclerosis treatments that is

headquartered in Cambridge,

Mass., and counts 7,500 em-

ployees world-wide and about

$14 billion in global sales.

About 175 Biogen senior

managers from around the U.S.

and international locations

The Biogen meeting’s role

in transmitting the virus has

led health authorities, hospi-

tals and schools to scramble to

prevent further spread.

As of Tuesday evening, the

Massachusetts Department of

Public Health counted a total

of 92 presumed or confirmed

coronavirus cases in the state.

Among the area hospitals that

mobilized to help detect addi-

tional cases was Massachu-

setts General in Boston.

At an ad hoc clinic con-

structed in the Massachusetts

General’s ambulance bay, it has

been examining, since last Fri-

day, anyone who might have

been exposed as a result of the

Biogen meeting, said Eileen

Searle, the hospital’s bio-

threats clinical operations pro-

gram manager.

Last Friday, two public

schools in Wellesley, Mass.,

sent students home early after

being informed that a resident

with children at the schools

had been presumptively diag-

nosed with the virus after

coming into close contact with

a person who became ill after

the Biogen meeting.

The schools reopened Mon-

day after officials determined

they had been thoroughly

cleaned and disinfected, ac-

cording to the Wellesley

Health Department.

Officials in Arlington, Mass.,

a Boston suburb, closed an ele-

mentary school on Monday af-

ter a parent who had attended

the Biogen meeting was diag-

nosed with the virus and a stu-

dent started showing symp-

toms, the town health

department said.

The student has since tested

positive for the novel coronavi-

rus infection, local health au-

thorities said. Close contacts of

the infected student have been

asked to self-quarantine for 14

days and not go to school.

Meantime, public-health au-

thorities face the prospect that

the virus has spread further as

some Biogen managers who at-

tended the company’s strategy

meeting then went on to other

large gatherings for their work,

though there haven’t been any

reported infections so far.

Four company executives, in-

cluding Chief Executive Michel

Vounatsos, attended a Boston-

based health-care investor con-

ference held by Cowen Inc. on

March 2, the Biogen spokesman

said.

The other Biogen executives

who attended were the com-

pany’s chief financial officer,

Jeff Capello; Al Sandrock, exec-

utive vice president for re-

search and development; and

head of investor relations, Joe

Mara.

One of the four Biogen exec-

utives at the Cowen conference

subsequently tested positive for

the virus, the spokesman said.

The infected executive is re-

covering well in isolation, and

all four are performing their

normal duties while working re-

motely, the spokesman said.

The company told office-based

employees to work from home

starting today, though some lab

staff are still working on site, he

said.

A Cowen spokesman said

that it notified everyone attend-

ing its conference and is follow-

ing federal government guide-

lines, and that there haven’t

been any cases among Cowen

employees or reports of infec-

tions from other attendees so

far.

The Biogen employee who

traveled to West Palm Beach

was at a company booth on Feb.

28 at the annual meeting of the

Americas Committee for Treat-

ment and Research in Multiple

Sclerosis,.

—Amy Dockser Marcus

contributed to this article.

A strategy meeting for se-

nior managers at Boston-area

biotech Biogen Inc. late last

month has emerged as a hot-

bed for novel coronavirus in-

fections, resulting in dozens

around the country so far, ac-

cording to public-health and

company officials.

The spread of coronavirus

infections from the meeting

highlights the potential dan-

gers in going ahead with the

gatherings and conferences

that are a staple of conducting

business but which also

threaten to amplify epidemics.

“There’s a lot of handshak-

ing, there’s a lot of being in

closequarters, and that puts

you at risk,” said Manish

Trivedi, the director of the divi-

sion of infectious diseases at

AtlantiCare in New Jersey. “You

eat something. You rub your

eyes. You touch your face.”

Senior Biogen managers

who attended the strategy

meeting at the Boston Marriott

Long Wharf hotel have since

traveled to gatherings of inves-

tors and doctors, as well as re-

turned to their homes in com-

munities that are also now

confronting infection risks.

Among those testing posi-

tive for the coronavirus be-

cause of the meeting is an un-

named Biogen executive now in

isolation, a company spokes-

man said.

Massachusetts has felt the

BYJOSEPHWALKER

ANDBRIANNAABBOTT

Infections Tied to Biogen Meeting Grow

The conference was at the Boston Marriott Long Wharf hotel.

JOSEPH PREZIOSO/AGENCE FRANCE-PRESSE/GETTY IMAGES

Vir Biotechnology Inc.

slumped 23% and Regeneron

Pharmaceuticals ended the

session up a mere 0.1% after

spending much of the day in

negative territory.

Analysts said some of the

declines across the sector

could be tied to lingering ques-

tions about how successfully

coronavirus treatments could

be monetized amid rising po-

litical pressure to keep medi-

cations affordable. There are

also worries about how long

development of treatments

will take. Some research trials

for drugs aren’t expected to be

completed for several years.

“We’ve seen this in the past

with other pandemics histori-

cally,” said Brian Abrahams,

senior biotech analyst at RBC

Capital Markets, noting that

biotech stocks can rise sharply

“just on pandemic potentials.”

Gilead and Moderna are

widely considered to be lead-

ers in developing vaccines and

treatments for the virus.

Biotech stocks were ex-

pected to be a bright spot in a

stock market battered by wor-

ries over the coronavirus.

The shares initially surged

when the rest of the market

tumbled as companies raced to

develop vaccines and treat-

ments for the virus. But inves-

tors may be realizing that the

path to containing the patho-

gen is more complicated than

originally thought.

Shares of biotech and phar-

maceutical companies working

on coronavirus medications

tumbled Tuesday despite gains

across the broader U.S. mar-

ket. Drugmaker Gilead Sci-

ences Inc. fell as much as 6.4%

shortly after the market

opened, before ending the day

down 1.6%. In contrast, the

benchmark S&P 500 jumped

4.9%.

Moderna Inc. also re-

treated, falling 8%. Inovio

Pharmaceuticals Inc. fell 42%,

BYCAITLINMCCABE

Drugmaker Shares Slide Despite Rush to Find a Vaccine

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