The daily business briefing: May 26, 2020
1.
U.S. biotechnology company Novavax said Monday it was starting human trials of a potential coronavirus vaccine in Australia. "Administering our vaccine in the first participants of this clinical trial is a significant achievement, bringing us one step closer toward addressing the fundamental need for a vaccine in the fight against the global COVID‑19 pandemic," Novavax CEO Stanley Erck said. The results from the first phase of the trials are expected in July, followed by a second phase of testing. Novavax is one of several drugmakers racing to develop vaccines and treatments to fight the novel coronavirus, which has affected about 5.5 million people worldwide and killed nearly 350,000. The U.S. has confirmed nearly 1.7 million cases and more than 98,000 deaths. [Axios, SmarterAnalyst]
2.
Virgin Orbit, the company founded by Richard Branson with the aim of launching smaller satellites, tried unsuccessfully on Monday to launch a rocket off the coast of Southern California. It was the company's first test launch of a new rocket, which had been in development for five years. The rocket, carrying a test satellite, was released from a Boeing 747 jet dubbed Cosmic Girl over the Pacific Ocean. In a statement, Virgin Orbit said it could confirm a "clean" separation of the rocket from the aircraft. "However, the mission terminated shortly into the flight. Cosmic Girl and our flight crew are safe and returning to base," the company said, adding that it will "learn more as our engineers analyze the mountain of data we collected today." [The Associated Press]
3.
Dow Jones Industrial Average futures jumped by 2.1 percent early Tuesday, pointing to a strong open after the three-day Memorial Day weekend. Futures for the S&P 500 and the Nasdaq also rose, both by about 1.9 percent. The gains came as investors' spirits brightened after Novavax announced it had started testing on a coronavirus vaccine, and global economies showed signs of gaining strength as they began gradually reopening after two months of coronavirus lockdowns. "As is the financial market's want these days though, even the slimmest of positive news on the COVID-19 front trigger a bullish immune response and another wave of the peak-virus trade," said Jeffrey Halley, a senior market analyst at currency data and trading company OANDA, in a note to clients. [MarketWatch, CNBC]
4.
The German government said Monday that it would give German airline Lufthansa a $9.8 billion bailout to help it survive the coronavirus crisis. Berlin said Lufthansa was facing an "existential emergency" as the pandemic essentially cut off passenger air travel. Under the terms of the arrangement, the government will get a 20 percent stake in the airline, and two seats on its 20-person board. Germany also will have the option to raise its stake to 25 percent if the company faces a takeover attempt, because with one-quarter ownership, the government would be able to veto it. The anti-takeover clause was added to head off fears that foreign investors would swoop in to buy key companies while their stock prices are low due to the crisis. [The New York Times]
5.
Latam Airlines filed for Chapter 11 bankruptcy protection in the United States on Tuesday. The company, South America's biggest passenger carrier, said it was trying to cut its debt and secure new financing as it struggles to survive the sharp drop in travel caused by the coronavirus pandemic. Chile-based Latam plans to continue passenger and cargo flights. CEO Roberto Alvo said the company was "healthy and profitable" before the pandemic, and is "looking ahead to a post-COVID-19 future." Last year, Latam carried 74 million passengers, and had more than 1,300 daily flights. It said in its annual report that it had more than 340 planes and nearly 42,000 employees. [The Associated Press]
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