By Ciara Linnane, MarketWatch
What’s the latest medical news?
Moderna Inc. /zigman2/quotes/205619834/composite MRNA +7.84% announced another manufacturing deal for its still investigational COVID-19 vaccine, as MarketWatch’s Jaimy Lee reported. As part of the deal, Laboratorios Farmacéuticos Rovi /zigman2/quotes/201694325/delayed ES:ROVI +1.18% , based in Madrid, will handle commercial fill-finish manufacturing of the vaccine candidate for use outside the U.S.
The company’s vaccine candidate has not yet proven that it can protect against the coronavirus; however, drug makers in the U.S. are moving forward with manufacturing plans, often with the financial support of the U.S. government, to speed up the vaccine-development process.
Moderna has announced several manufacturing deals for its experimental COVID-19 vaccine, including with Catalent Inc. /zigman2/quotes/206700489/composite CTLT +0.93% and CordenPharma.
Gilead Sciences Inc. /zigman2/quotes/210293917/composite GILD +0.54% , meanwhile, started a Phase 1a clinical study testing an inhaled version of its experimental COVID-19 drug remdesivir. The Food and Drug Administration in May granted an emergency-use authorization to an intravenous form of remdesivir as a treatment for some severely ill COVID-19 patients.
Gilead first announced plans in June for the new randomized, placebo-controlled clinical trial, which has enrolled 60 healthy adults.
“Delivering remdesivir directly to the primary site of infection with a nebulized, inhaled solution may enable more targeted and accessible administration in nonhospitalized patients and potentially lower systemic exposure to the drug,” Dr. Merdad Parsey, Gilead’s chief medical officer, said in a statement.
What’s the economy saying?
The number of initial jobless claims fell by almost 100,000 in early July to a four-month low of 1.31 million, but the pace of layoffs is still quite high and appears to be bogging down an economic recovery from the coronavirus pandemic, as MarketWatch’s Jeffry Bartash reported.
Initial jobless claims, a rough gauge of layoffs, dropped to 1.31 million in the seven days ended July 4 from a revised 1.41 million in the prior week, the Labor Department said Thursday. The figures are seasonally adjusted.
Economists polled by MarketWatch had forecast 1.4 million new claims. These figures reflect applications filed the normal way through state unemployment offices. An additional 1.04 million people applied for benefits last week through a temporary federal-relief program, pushing the combined total for the week to 2.35 million.
“Filings remain high and are declining at a stubbornly slow pace. We could see upward pressure in coming weeks in response to a surge in virus cases and related closures of businesses,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
What are companies saying?
Walgreens Boots Alliance Inc. /zigman2/quotes/203410933/composite WBA +0.09% reported third-quarter earnings that missed estimates and booked a $2 billion impairment from COVID-19 on its U.K. business.
The drugstore chain said the pharmacy business around the world was hurt by fewer doctor visits and hospital admissions. Prescriptions filled in the U.S. were down 1.3%, and U.S. retail same-store sales were up 1.9% due to increased demand for vitamins and personal protective equipment.
Walgreens will close four dozen Boots Opticians locations and cut office support headcount by 20% in U.K., impacting 4,000 jobs, or about 7% of the company’s workforce.
Bed Bath & Beyond also announced store closures, while kitchenware retailer Sur La Table filed for bankrtupcy.
Elsewhere, companies continued to cut costs, raise capital and offer guidance for the coming second-quarter earnings season.
The Coronavirus May Forever Change Grocery Shopping
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Here’s the latest news on companies and COVID-19:
• Bed Bath & Beyond Inc. /zigman2/quotes/209801102/composite BBBY -2.35% reported a wider-than-expected loss for the first quarter and said it will reduce its store locations by about 20%. The company plans to close about 200 Bed Bath & Beyond stores over the next two years to help save about $250 million to $350 million a year. Bed Bath & Beyond has 955 stores in North America. The company reported a first-fiscal-quarter loss of $302.3 million, or $2.44 a share, compared with a loss of $371.1 million, or $2.91 a share, in the year-ago period. The adjusted loss was $1.96 a share. Revenue declined to $1.31 billion from $2.57 billion in the year-ago quarter. Analysts surveyed by FactSet had forecast a loss of $1.27 a share on revenue of $1.39 billion. Bed Bath & Beyond said it was not providing an outlook for the year because of COVID-19 disruptions while analysts expect a loss of $2.06 a share on revenue of $9.02 billion.
• Carnival Corp.’s /zigman2/quotes/202325446/composite CCL -3.30% /zigman2/quotes/210414141/delayed UK:CCL -0.26% Germany-based cruise line AIDA Cruises will resume operations in August, with three ships set to restart sailing. AIDAperla will set sail on Aug 5 from Hamburg, followed by AIDAmar on Aug. 12 from Rostock-Warnemünde and AIDAblue on Aug. 16 from Kiel. Bookings for the cruises start Thursday. The restart will be the first since operations were paused industrywide in mid-March as a result of the pandemic. Measures the company has introduced in addition to existing health and hygiene standards include a health questionnaire prior to a cruise; temperature measurements before check-in for guests and crew; physical-distancing guidelines; and closely managed capacities at onboard restaurants, bars, theaters and other venues.
• Costco Wholesale Corp.’s /zigman2/quotes/201191698/composite COST +1.41% June sales rose 11% to $16.2 billion, from $14.6 billion in June 2019. Same-store sales rose 12%, including an 11% increase in U.S. same-store sales. E-commerce sales increased 86%, the company said. Costco sales in May rose 7.5%, and online sales jumped 106% that month. Costco has reported strong e-commerce sales this year, but in its last quarterly report in April the company said online sales hadn’t made up for the drop in foot traffic at stores and other businesses such as optical, food court and travel due to stay-at-home orders, social-distancing restrictions and closures related to the pandemic. Costco is slated to report its fourth-fiscal-quarter results sometime in September, with quarterly sales seen around $50 billion, according to FactSet.
• Helen of Troy Ltd. /zigman2/quotes/205565021/composite HELE +2.15% , the parent of a portfolio of consumer brands, including Oxo, Vicks and Braun, blew past earnings estimates for its fiscal first quarter. Online sales rose 33% as the pandemic closed stores. “Our Health & Home segment led the way with sales growth of 29%,” Chief Executive Julien Mininberg said in a statement. “Beauty and Housewares both held up very well in the face of many store closures and the unprecedented level of unemployment and personal disruption due to COVID-19.” The company is not offering guidance, given the “net impact of the pandemic on our consumers and supply is still very fluid and uncertain,” said Mininberg, although it is lifting some of the measures taken to preserve cash flow in the face of the crisis. The company ended the quarter with $88.5 million in cash, and short- and long-term debt of $324.9 million.
• Noble Energy Inc. funded about $100 million in investments in the second quarter, even as it cut costs in the face of the coronavirus pandemic. The Houston-based oil and natural-gas exploration and development company delivered 350,000 barrels of oil equivalent a day (MBoe/d) in the quarter, including 248 MBoe/d from U.S. onshore. The company’s cost-cutting measures delivered record-low unit production costs of $6.61 per BOE. It reduced general and administrative costs to $63 million, down 40% from the same period a year ago. Despite the significant impact on global economies from COVID-19, “we’ve materially reduced the cost structure of our business, while demonstrating robust production capacity in both our onshore and offshore businesses,” Chief Executive David Stover said in a statement. Noble will report second-quarter earnings on Aug. 7.
• Sur La Table has filed for bankruptcy and arranged for an eventual sale, the privately held cookware retailer said. The company has secured financing to complete the bankruptcy process and is weighing the sale of its Sur La Table retail stores after it resizes its footprint and closes certain stores “to prosper in the current retail environment.” The company has arranged a “stalking horse” bid with affiliates of Fortress Investment Group, which in turn is working with STORY3 Capital Partners, to bring “capital and deep consumer expertise” to revive the company. “This sale process will result in a revitalized Sur La Table, positioned to thrive in a post COVID-19 retail environment,” Chief Executive Jason Goldberger said.
• Turning Point Brands Inc. /zigman2/quotes/210126838/composite TPB +2.89% , which makes Zig-Zag rolling papers and other smoking-related products, expects to report record revenue for the just-completed quarter. In conjunction with the announcement of a public offering of 2 million shares from investors, the company revealed that it expects second-quarter revenue to top $100 million, a level the company has never previously reached for a quarter. The total is well ahead of the company’s stated expectations of $81 million to $87 million as well as the average analyst estimate of $85 million, according to FactSet. “In the Smoking segment, sales benefited from increased consumption, new product penetration and recently implemented growth initiatives which offset the COVID-related supply chain disruption experienced in the MYO cigar wraps business.”
• Walmart Inc. /zigman2/quotes/207374728/composite WMT +0.82% revealed that it has set up a health-insurance company and is looking to hire licensed insurance professionals. In a posting on the company website’s careers page, the retailer said it has set up Walmart Insurance Services LLC and is looking to hire several Medicare insurance agents to begin the first week of August. “You will be responsible for helping the Medicare community in a meaningful way, by enrolling customers in Medicare products and services over the phone,” the posting says. Walmart has had health centers at its stores since 2019.
Additional reporting by Tim Rostan.