ArkMalibu Weekly Update: Assessing the Impact of COVID-19

Below are our weekly summary thoughts on the M&A market, the economic outlook, and reasons to be optimistic.

Reasons for Optimism in M&A and Capital Markets

  • 123 deals closed in the U.S. & Canada over the past 7 days (last week 185 deals closed)
  • Fed buys $305 billion of U.S. listed ETFs in first two days of intervention into corporate debt market
    • Anticipating $100 – $120 billion of U.S. investment-grade corporate bond issuance in June, on pace for record $1.2 trillion supply in 1H2020
  • S&P 500 Index is up 31% from its 2020 low (down 13% from its all-time high)
  • Oil prices rise due to increasing global fuel demand, rising factory activity in China, and record supply cuts
  • U.S. lawmakers in discussions to revise small-business aid program, which includes more flexibility in spending and extension of time to spend funds
  • This is truly a tale of two cities; it is both the best of times and the worst of times
    • Number of companies having remarkable years is extraordinary: Nintendo, Clorox, Amazon, Peloton, Publix, Kroger, Wayfair, Slack, Zoom, DoorDash, 3M, Uber, etc.

Good News We’ve Been Reading

 Economic Recovery Beginning Across Globe

  • United States: all 50 states have begun reopening!
    • Entertainment update
      • South Carolina beaches opened May 16th
      • Wyoming opened Yellowstone National Park May 18th
      • Florida’s lodging space sees occupancy recover to 50% – 60% over Memorial Day weekend
      • Professional sports, childcare providers, gyms, and entertainment attractions resume in Texas
    • Sports Update
      • National Hockey League making progress on plan that would allow fall season to resume with 24-team format
      • Several National Basketball Association teams reopen facilities for players to voluntarily practice
      • National Football League releases 2020 schedule, indicating plans to start as usual in September
    • Europe: EU continues plans to reopen internal borders, goals to reopen for summer tourism with security measures and limitations in place if coronavirus is kept at bay
      • Greece: 500+ beaches reopen as temperatures look set to soar
      • France: domestic vacations resume in July & August
      • United Kingdom: campsites report increased bookings
      • “Baltic bubble” permits travel between Estonia, Latvia and Lithuania, mirroring the planned Australia-New Zealand zone
      • Croatia and Slovenia reach similar agreement
      • Italy & Spain: record fewest daily deaths since entering lockdown in March, announce plans to consider reopening internal borders in June
      • Iceland: expects to ease restrictions on international travel in mid-June
    • Thailand: traditional dancers return to streets & hotels train employees in hospital-style cleaning, preparing for travel between provinces
    • Taiwan’s pilot-program sees 500 travelers from San Francisco tested every two days to determine if shorter quarantine period is feasible
    • Aruba, Antigua, and Barbuda to open mid-June to early-July

Vaccine Development Update

  • AstraZeneca receives +$1 billion from U.S. Health Department to develop Oxford’s vaccine, agrees to supply at least 500 million doses and to secure total manufacturing capacity to produce 1 billion doses with first deliveries in September
  • Early results for Moderna’s first human study are positive, suggesting Moderna is on track to meet its ambitious timetable for emergency vaccine use in the Fall
  • Coalition for Epidemic Preparedness Innovations gives +$380 million to Novavax Inc. to develop vaccine made in various countries for worldwide distribution
  • Thomas Jefferson University signs exclusive deal with Bharat Biotech to develop vaccine using existing rabies vaccine as a carrier, delivering coronavirus proteins to trigger immune response

Testing Update

  • To date, the FDA has worked with 400+ test developers on tests that detect the virus or antibodies to the virus
    • Authorized 103 tests under Emergency Use Authorization, including 90 molecular tests, 12 antibody tests, and 1 antigen test
    • Recently includes Everlywell’s first standalone at-home sample collection kit

Innovations Bloom, Habits Change as Society Adjusts to COVID-19

  • China’s smartwatch brand Amazfit designs self-disinfecting mask with UV light
  • New Zealand’s Putti Apps launches free check-in app for sports clubs, charities, and churches
  • Canada’s Fairmont Hotel MacDonald launches social distancing wedding packages
  • Zurich Airport & Brussells’ train station boast Selecta vending machines providing essential protective gear
  • French designer Christophe Gernigon creates Plex’Eat concept for COVID-safe dining
  • London’s Forest Road Brewing Company uses “pub-on-wheels” to deliver fresh pints to doorsteps

ArkMalibu is happy to answer any questions you may have and to offer guidance during this challenging time. Please visit our website (https://www.arkmalibu.com) for more information.

Until our next update, we send best wishes to you and yours for safety and health.

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