Breakingviews - Corona Capital: Vaccine hedge, UK lockdown, Gloves

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LONDON/HONG KONG (Reuters Breakingviews) - Corona Capital is a column updated throughout the day by Breakingviews columnists around the world with short, sharp pandemic-related insights.


- Vaccine hedge

- UK lockdown 2.0

- Glove and condom boom

A BIRD IN THE HAND. Roche has a useful backup plan in case the race for a Covid-19 vaccine slows. On Friday the $320 billion pharmaceutical giant said that one of its drugs is helping to keep viral patients off ventilators. Mechanical breathing devices were initially seen as the best hope of treating the deadly virus, but recent falling death rates have been tied to better treatments rather than the machines. Roche says that hospital patients taking its drug were 44% less likely to need ventilators or die.

It’s just as well. The hunt for a vaccine is looking tougher. Last week, AstraZeneca slammed the breaks on its trial after a participant fell ill. That trial has partly resumed. But Moderna, another developer of a leading vaccine candidate, said on Thursday that it may have to wait until December to analyse data from its trials. With infections rising again, a drug in the hand may be better than several vaccines in the bush. (By Aimee Donnellan)

BACK TO THE DRAWING BOARD. A sharp rebound in the number of new UK cases of the coronavirus increases the chances of a second national lockdown. Health Secretary Matt Hancock said on Friday that such a measure would be a last resort. If imposed, finance minister Rishi Sunak may have to rethink his opposition to extending a furlough scheme that is due to wind up next month and will have cost an estimated 54 billion pounds over its duration.

Sunak believes that keeping jobs that are no longer viable on life support is counterproductive. Instead, he unveiled measures in July to create youth work placement schemes and encourage employers to retain furloughed workers. But a second lockdown would strengthen the argument for helping businesses and workers weather the crisis. Sunak has resisted political pressure to extend the furlough, but may be more pliant in the face of economic imperatives. (By Swaha Pattanaik)

HANDS-ON. The world’s top disposable-gloves maker is seizing its moment. Malaysia’s $15 billion Top Glove reported a dizzying 18-fold surge in quarterly earnings from a year ago, to $311 million, thanks to a global shortage. The company, already listed at home and in Singapore, has paid down debt, lifted dividends, and is now eyeing a Hong Kong listing to boost its global profile.

Top Glove is betting that “supernormal” demand for latex gloves will endure, growing at least 15% even after Covid-19 comes under control. More anxiety about hygiene in public and at home should help. The firm also makes condoms – another hot pandemic item – and has already earmarked roughly $2 billion for capital expenditures over the next six years. Flush with cash and big plans, Top Glove is making the most out of the crisis. (By Robyn Mak)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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