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Merck acquires OncoImmune to ramp supply of promising Covid drug

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Pharmaceutical giant Merck said it plans to acquire privately held OncoImmune for $425 million in cash, gaining rights to an under-the-radar drug that has shown striking results in hospitalized patients with Covid-19.

The medicine, CD24Fc, was shown in a late-stage clinical study in September to reduce the risk of respiratory failure or death by more than 50% in patients hospitalized with Covid-19 and requiring oxygen, Merck said Monday.

The drug was given as an intravenous infusion in addition to standard-of-care, which could include remdesivir and dexamethasone, and was compared to standard-of-care alone. The data, in 203 patients, also showed that patients receiving CD24Fc had a 60% higher probability of seeing improved clinical status.

“The results are remarkable,” Merck’s research chief, Dr. Roger Perlmutter, said in a telephone interview.

With cases of Covid averaging almost 170,000 a day in the U.S. and a record number of people in the hospital with the disease, a drug that could significantly speed recovery and reduce the risk of death or of patients getting so severely ill they require ventilators could make a major difference in the pandemic.

But there’s a problem: supply.

“We realized that this small little company was in no position to make CD24Fc to try and treat all of the people who could potentially benefit from this drug,” Perlmutter said. “We decided that the only way, seriously, that this could be brought to people who need it is for us to lean in with our capabilities.”

Merck plans to shift some of its manufacturing capacity to start making the drug. But it’s a complex medicine to manufacture and it will take time. Perlmutter said he’s aiming for “before the middle of next year, and ideally much before that,” for there to be ample supply.

OncoImmune, founded and helmed by Yang Liu, director of the Division of Immunotherapy at the University of Maryland School of Medicine, reported the top-line results from the trial on its website in September. They haven’t yet been published in a peer-reviewed journal. Merck says submission of detailed results is coming.

Though the findings caught little of the world’s attention, one person who did notice was Moncef Slaoui, chief advisor to the U.S. government’s Operation Warp Speed. He noted in a telephone interview on Nov. 1 that the data for OncoImmune’s drug have “just been incredible,” noting a “relative mortality impact that’s very clear.”

Slaoui explained the drug prevents the immune system “from being hyper-activated.” It’s the same reason the steroid dexamethasone proved so effective in a trial in June at treating patients in more severe stages of Covid-19; when patients become that sick, it can be their own immune system kicking into overdrive that causes problems, not the virus anymore.

“Frankly, nobody would have believed that it would have this kind of effect,” Perlmutter said, when asked why the CD24Fc results garnered so little attention. “If you look at the other anti-inflammatories that have been studied in very ill Covid-19 patients, it’s been hard to show there’s any effect at all.”

In addition to the potential to help with the pandemic, Merck acquired OncoImmune because it sees possibilities for CD24Fc beyond Covid. It has shown promise for graft versus host disease, a dangerous immune reaction that can happen after bone marrow transplantation, and Perlmutter said it may have further applications as well.

The $425 million deal comes with the potential for additional payments based on certain regulatory milestones. But Merck only gains CD24Fc, while OncoImmune will spin out other rights and assets into a new company, into which Merck will invest $50 million.

The company doesn’t plan to seek emergency use authorization from the U.S. Food and Drug Administration until it has enough supply of the medicine for people to actually use it, Perlmutter said. That’s now the task ahead of Merck — which is also developing a pill for Covid-19 as well as two vaccines for the disease.

“Now that we have this terrible, terrible surge in Covid-19 cases, and so many people are hospitalized in severe or critical condition, and so many people in ICUs, tens of thousands, or potentially hundreds of thousands or more just in the United States might need this drug,” Perlmutter said. “We’re going to move Heaven and Earth to produce the material.”


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Denmark to trial green hydrogen production using offshore wind power

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Tali Aiona | EyeEm | Getty Images

Danish energy firm Orsted is pushing ahead with plans to develop a demonstration project which will harness offshore wind energy to produce “green” hydrogen.

In an announcement Wednesday, the company said it had taken a final investment decision on the 2 megawatt (MW) H2RES scheme, which will be able to produce up to roughly 1,000 kilograms of renewable hydrogen per day.

Slated to generate its first hydrogen toward the end of this year, the project will be based at Orsted’s Avedøre Power Station, south of Copenhagen.

Orsted said H2RES would assess “how to best combine an electrolyser with the fluctuating power supply from offshore wind.” The power will come from two 3.6 MW turbines, with the hydrogen produced by the system providing fuel for road-based transport.

Hydrogen can be produced in a number of ways. One way includes using electrolysis, with an electric current splitting water into oxygen and hydrogen. If the electricity used in the process comes from a renewable source such as wind then it’s termed “green” or “renewable” hydrogen.

In a statement Anders Nordstrøm, who heads up Orsted’s hydrogen activities, described H2RES as a “small but important step towards large-scale renewable hydrogen production.”

Back in 2019, Orsted and its partners received funding for the scheme from the Danish energy agency’s Energy Technology Development and Demonstration Program. The funding amounted to 34.6 million Danish krone (approximately $5.63 million).

Orsted is one of many major firms looking to investigate the potential of green hydrogen production.

Earlier this week, a subsidiary of German industrial giant Thyssenkrupp was awarded an engineering contract to carry out the installation of an 88 MW water electrolysis plant for Hydro-Québec. The electricity for this project will come from hydropower.

And back in November, it was announced that BP would work with Orsted on the development of a large-scale renewable hydrogen project at a refinery in north-west Germany.

At the time, BP said it had signed a letter of intent with Orsted to collaborate on the initiative. According to the oil and gas giant, the scheme will involve the development of an initial 50 megawatt electrolyzer as well as “associated infrastructure” at its Lingen Refinery. The electrolyzer, BP said, was expected to generate nearly 9,000 metric tons of hydrogen per year.

Other firms to have gotten involved in projects connected to green hydrogen production over the last few years include Repsol and Siemens Energy.


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5 things to know before the stock market opens January 20, 2021

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Morgan Stanley (MS) Q4 2020 earnings

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James Gorman, chairman and chief executive officer of Morgan Stanley, speaks during a Bloomberg Television interview in Beijing, China, on Thursday, May 30, 2019.

Giulia Marchi | Bloomberg | Getty Images

Morgan Stanley on Wednesday posted fourth-quarter profit and revenue that exceeded analysts’ expectations on strong trading, investment banking and wealth management results.

The firm posted a 51% increase in profit to $3.39 billion, or $1.81 per share, compared with the $1.27 estimate of analysts surveyed by Refinitiv. Revenue of $13.64 billion was more than $2 billion beyond the $11.54 billion estimate.

Shares of the bank popped 2.5% in premarket trading.

Expectations were high after robust trading and investment banking results at Goldman Sachs and JPMorgan Chase helped drive earnings beats, and Morgan Stanely didn’t disappoint.

Morgan Stanley, led by CEO James Gorman, also has the biggest wealth management business among the six largest U.S. banks, operations that typically benefit from rising markets. That business is being bolstered by the bank’s $13 billion E-Trade acquisition announced a year ago, and the fourth quarter is the first period E-Trade is integrated into the larger enterprise.

“The firm produced a very strong quarter and record full-year results, with excellent performance across all three businesses and geographies,” Gorman said in the release. “Our unique business model continues to serve us well as we further execute on our long-term strategy with the acquisitions of E*TRADE and Eaton Vance.”

Morgan Stanley is the last of the big U.S. banks to report fourth-quarter earnings. JPMorgan and Goldman Sachs beat analysts’ expectations for revenue and profit, helped by trading, while Citigroup, Wells Fargo, and Bank of America disappointed on revenue as lending margins were squeezed.

Shares of New York-based Morgan Stanley climbed 33% in 2020, besting the 4.3% decline of the KBW Bank Index.

Here’s what Wall Street expected:

Earnings: $1.27 a share, 2.4% lower than a year earlier, according to Refinitiv.

Revenue: $11.5 billion, 6.3% higher than a year earlier.

Wealth management: $5.2 billion, according to FactSet.

Trading: Equities $2.14 billion; fixed income $1.46 billion.

This story is developing. Please check back for updates.


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