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Health – Page 2 – Wall Street Observer

Wall Street Observer

Wall Street Observer

Athene expresses interest in 19.9% stake in AIG’s life & retirement unit

By Alwyn Scott and Suzanne Barlyn

NEW YORK (Reuters) – Athene Holding Ltd has expressed interest in buying a 19.9% stake in American International Group Inc’s life and retirement business, Athene’s chief executive, Jim Belardi, told Reuters on Wednesday.

“I have no idea what will happen and whether we’re in the mix or not, but we’ve expressed interest and we’ll see what happens,” Belardi said.

AIG said earlier Wednesday that it has received inquiries from “high-quality companies” interested in the unit. AIG said last October that it intended to separate the business through an IPO or sale of a 19.9% stake.

The comments come as insurers are offloading capital-heavy assets at a frenzied pace to free up capital and reposition their businesses.

Belardi said Athene has capacity to acquire $90 billion in assets and “a healthy pipeline of inorganic deals as we speak.”

Athene’s track record with large, complex deals and its cooperation with alternative asset manager Apollo Global Management Inc prompts sellers to approach them, he said.

“Firms call us,” Belardi said.

“There’s usually something that we have an interest in on every balance sheet for an insurance company that’s going through a restructuring, or businesses they’re not committed to,” he added.

“And then you just talk about price to get something done. And they usually want to free up capital; we have a lot of capital to help them.”

(Reporting by Alwyn Scott and Suzanne Barlyn; Editing by Leslie Adler and Jonathan Oatis)


Exclusive: Pfizer COVID-19 vaccine supply to the EU about 10 million doses short of plan -sources

By Francesco Guarascio

BRUSSELS (Reuters) – Pfizer Inc has not yet delivered to the European Union about 10 million COVID-19 vaccine doses that were due in December, EU officials said, leaving it about one-third short of the supply it had expected from the U.S. drugmaker.

The shortfall is another blow to the EU, which has also been hit by delays in vaccine deliveries from Britain-based AstraZeneca Plc and U.S. biotech Moderna Inc. It had also faced earlier delays with the shot from Pfizer.

The situation raises questions about the rationale of an EU vaccine export control scheme set up in late January to ensure timely deliveries that has not yet been activated, despite the supply shortfalls.

This week, Pfizer delivered to the EU 4.8 million doses of the COVID-19 vaccine it developed with German partner BioNTech, according to an EU official who is directly involved in talks with the U.S. company.

That takes the total to about 28 million doses of the two-shot vaccine, one of the EU officials and a source familiar with the matter said.

That is still about 10 million doses less than Pfizer had promised to supply since the rollout began late last year, the EU official said.

A second EU official involved in talks with vaccine makers confirmed the shortfall but said the companies had committed to delivering those doses by the end of March.

Pfizer declined to comment, saying schedules of its deliveries were confidential. The executive European Commission did not respond to a request for comment on delivery shortfalls.

EU officials have said Pfizer committed to delivering 3.5 million doses a week from the start of January. This week’s larger delivery suggests the company is increasing supplies to make up for an earlier shortfall.

About 5 million doses will be delivered next week and in the first week of March, one of the officials said.

In mid-January, there was a temporary hiccup in supplies. EU officials said that was largely resolved last month..

The Pfizer/BioNTech vaccine was approved for use in the EU on Dec. 21. The following day, BioNTech said the companies would ship 12.5 million doses to the EU by the end of the month..

Only a portion of those doses due in December have been delivered, the EU officials said.

But the source familiar with the matter said that under the agreement with the EU, 12.5 million doses that BioNTech earmarked in December for the bloc were included in the delivery target for the first quarter of 2021.

It was not immediately clear how the difference in schedules came about, but it highlights the complexity of supply deals as governments around the world scramble to secure shots to curb the pandemic.

The EU has two contracts with Pfizer for the supply of 600 million vaccine doses.


Although the EU’s own supplies have fallen short, the European Commission has approved all requests for export of COVID-19 vaccines – mostly from Pfizer/BioNTech – since it set up its mechanism to monitor flows.

In the period between Jan. 30 and Feb. 16, the EU gave the green light to 57 requests for vaccine export to 24 countries, including Britain and the United Arab Emirates (UAE), a Commission spokeswoman said on Wednesday.

Before the monitoring scheme was set up, the bloc had already exported millions of vaccine doses to Israel, Britain and Canada among others, according to customs data cited in a EU document seen by Reuters.

Israel has inoculated more than 75% of its population, including first and second doses, figures from University of Oxford-based Our World in Data show. The UAE has administered vaccines to around 50% of its population and for Britain it is above 20%. EU countries on average stand at about 5%.

Countries with a high number of inoculations are already vaccinating people not among the most vulnerable, while many of those most in need elsewhere have not received a shot.

The World Health Organization has set the target of inoculating 20% of poor countries’ population by the end of the year.

(Reporting by Francesco Guarascio @fraguarascio, Additional reporting by Ludwig Burger in Frankfurt; Editing by Timothy Heritage and Bill Berkrot)


New York attorney general sues Amazon over COVID-19 shortfalls

By Jonathan Stempel

NEW YORK (Reuters) – New York Attorney General Letitia James sued Amazon.com Inc on Tuesday over its handling of worker safety issues around the COVID-19 pandemic at two warehouses, just days after the retailer filed its own lawsuit seeking to block her case.

In a complaint filed in a New York state court in Manhattan, James said Amazon’s drive for faster growth and higher profits led to its “flagrant disregard” of steps needed to protect workers from the coronavirus at a Staten Island fulfillment center and a Queens distribution center, both in New York City.

James also accused Amazon of illegally retaliating when employees began to complain, including last March when it fired activist Christian Smalls purportedly for violating a paid quarantine when he led a protest over conditions at the Staten Island warehouse.

“Throughout the historic pandemic, Amazon has repeatedly and persistently failed to comply with its obligation to institute reasonable and adequate measures to protect its workers,” the lawsuit said.

“Amazon has cut corners in complying with the particular requirements that would most jeopardize its sales volume and productivity rates,” it added.

James sued four days after Amazon filed its own lawsuit in Brooklyn federal court to stop her from suing.

Amazon said in its lawsuit that federal labor and safety laws took precedence over New York’s in addressing workplace safety, and that James was overstepping her authority.”We care deeply about the health and safety of our employees, as demonstrated in our filing,” Amazon spokeswoman Kelly Nantel said in response to James’ lawsuit.

“We don’t believe the Attorney General’s filing presents an accurate picture of Amazon’s industry-leading response to the pandemic,” Nantel added.Amazon also faced scrutiny last March when workers protested conditions at the Staten Island warehouse. New York City announced its own probe at the time.

The attorney general’s lawsuit seeks to require Amazon to upgrade its protections for workers, reinstate Smalls, and pay damages to him and another worker who allegedly faced retaliation.

(Reporting by Jonathan Stempel in New York; Additional reporting by Jeffrey Dastin in San Francisco; Editing by Ana Nicolaci da Costa)


Walmart investors eye push into advertising, healthcare following pandemic boom

By Aishwarya Venugopal and Melissa Fares

(Reuters) – Walmart Inc’s investors and analysts are likely to look past the retail giant’s slowest same-store sales growth since the start of the coronavirus crisis, when it reports quarterly results on Thursday and instead focus on the company’s ambitions to diversify beyond retail.

Walmart’s online sales nearly doubled and comparable sales growth touched high single digits each quarter in 2020 as Americans bought groceries and other essentials during the coronavirus pandemic. During that time, the retailer also heavily invested in advertising and health services.

“They are thinking broader picture about their customers, so it’s not so much each transaction, but how do we think more holistically,” said Chad Oviatt, director of investment management at Huntington Private Bank.

Walmart is starting to merge other parts of its business with its main retail and e-commerce business, he added.

The company started to change its media strategy in 2019 by cutting ties with its external advertising partner and taking the business in-house as Walmart Media Group and now renamed Walmart Connect, with annual advertising revenue expected to be nearly $1 billion in 2020.

Bentonville, Arkansas-based Walmart has also bolstered its presence in healthcare with its own insurance business and an expansion of its healthcare centers in the United States that provide low-priced medical services such as dental care and counseling for customers.

“We are encouraged to see Walmart expand its vision beyond retail and e-commerce, with a focus on building a powerful ecosystem, including advertising, merchant services, health services and digital payments,” Telsey Advisory analyst Joseph Feldman said in a note.

“These new elements of the ecosystem are more profitable than traditional retail and collectively should help strengthen its relationship with customers and generate profitable market share gains,” he said.

Walmart will report fourth-quarter results on Thursday, with analysts expecting same-store sales of 5.80%, according to Refinitiv estimates, the slowest for the year.

(Reporting by Aishwarya Venugopal in Bengaluru and Melissa Fares in New York; Editing by Anna Driver and Nick Zieminski)


Saudi minister: Oil producers must remain extremely cautious

DUBAI (Reuters) – Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said on Wednesday that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

“Those who are trying to predict the next move of OPEC+, to those I say, don’t try to predict the unpredictable.”

(Reporting by Rania El Gamal; editing by Jason Neely)


Ryanair loses legal fight against French, Swedish airline state aid

By Foo Yun Chee

BRUSSELS (Reuters) – Ryanair on Wednesday lost its fight against the state aid granted to rivals including Air France and Sweden’s SAS after a top European court said such schemes were not discriminatory amid the COVID-19 pandemic.

The judgment from the Luxembourg-based General Court is the first to deal with aid measures cleared by the European Commission under easier rules aimed at helping European Union governments prop up companies hit by the health crisis.

The court said the French and Swedish schemes were in line with the bloc’s rules. The airline industry has been one of the hardest-hit by virus-related restrictions and lockdowns imposed by governments worldwide.

“That aid scheme is appropriate for making good the economic damage caused by the COVID-19 pandemic and does not constitute discrimination,” the court said, referring to the French scheme.

For the Swedish scheme, it said: “The scheme at issue is presumed to have been adopted in the interest of the European Union.”

Ryanair said it would appeal to the EU Court of Justice in a process likely to take several years.

The company had taken issue with the European Commission for clearing a French scheme allowing airlines to defer certain aeronautical taxes and Sweden’s loan guarantee scheme for airlines. Both schemes benefited their flag carriers.

Europe’s biggest budget airline has filed 16 lawsuits against the Commission for allowing state aid to individual airlines such as Lufthansa, KLM, Austrian Airlines and TAP, as well as national schemes that mainly benefit flag carriers.

EU competition enforcers have to date cleared more than 3 trillion euros ($3.6 trillion) to help virus-hit companies across the 27-country bloc.

The cases are T-238/20 Ryanair v Commission and T-259/20 Ryanair v Commission.

($1 = 0.8288 euros)

(Reporting by Foo Yun Chee. Additional reporting by Ilona Wissenbach in Frankfurt and Graham Fahy in Dublin. Editing by Edmund Blair and Mark Potter)






CVS to re-enter Obamacare market in 2021

By Manas Mishra and Caroline Humer

(Reuters) – CVS Health Corp said on Tuesday it would return to selling individual health insurance plans on the online marketplaces created by the Affordable Care Act (ACA), popularly known as Obamacare, saying the market had stabilized.

CVS Health’s Aetna insurance unit and other large health insurers such as UnitedHealth Group Inc exited these online exchanges in 2017 and 2018, due to financial losses and uncertainty as Republicans took aim at former U.S. President Barack Obama’s signature law.

More than 11.4 million people signed up in 2020 for these plans, which provide government subsidies based on income levels.

“We’ve been studying the individual market for a while. Some of the remedies have been put in place. Clearly there’s a big market,” CVS Health’s recently-appointed Chief Executive Officer Karen Lynch said at a post-earnings conference call.

The move by CVS comes as President Joe Biden told the U.S. Supreme Court last week that the ACA should be upheld and Democrats consider expanding coverage to more people.

Lynch made the comments during a company conference call where the company said it expects 2021 adjusted profit between $7.39 and $7.55 per share, versus $7.50 in 2020.

Analysts’ had expected 2021 profit of $7.54 per share, according to IBES data from Refinitiv. CVS shares fell 4.7% to $70.68 in afternoon trading.

Evercore ISI analyst Michael Newshel said the share move seemed overdone given that the 2021 financial outlook was in line with the company’s previous comments.


CVS said that COVID-19 vaccinations and testing would contribute $400 mln to $500 mln next year.

The company has administered over three million COVID-19 vaccines in long-term care facilities and is now giving 250,000 shots per week in its pharmacies under a broader federal program.

The vaccines are two-dose regimens requiring 15 minutes’ observation for each patient on site, adding the potential for additional sales, the company said.

Lynch said it will increase dose vaccinations and expand into more pharmacies and states as soon as March or April if supply increases as hoped. It plans to offer 20 million to 25 million shots per month.

During the conference call, CVS executive vice president Alan Lotvin said that based on conversations with pharmaceutical makers, CVS estimates about 500 million doses of vaccines would be made available between now and the end of June.

Most vaccine will be from Pfizer Inc/BioNTech SE and Moderna Inc. The U.S. Food and Drug Administration is currently considering a vaccine from Johnson & Johnson Inc. that could be authorized in a few weeks and Novavax Inc is also hoping to apply to the FDA in coming months.

On an adjusted basis, the company earned $1.30 per share in the reported quarter, beating estimates of $1.24 per share.

(Reporting by Manas Mishra, Trisha Roy in Bengaluru and Caroline Humer in New York; Editing by Shounak Dasgupta and Nick Zieminski)


U.S. airline passenger traffic fell 60.1% in 2020 — DOT

WASHINGTON (Reuters) – U.S. passenger airline traffic fell 60.1% in 2020 as the COVID-19 pandemic devastated demand for air travel, the U.S. Transportation Department said Tuesday.

December air travel fell 62%, slightly more than the decline in November, the department said. For all of 2020, U.S. domestic air travel fell by 58.7%, while international travel fell 70.4% as many countries imposed significant travel restrictions. U.S. airlines say air travel demand remains down more than 60% through early February.

(Reporting by David Shepardson)


Relaunching in a crisis, Alitalia scales back at home

By Francesca Landini and Laurence Frost

MILAN (Reuters) – The deepest crisis in aviation history might seem the worst time to relaunch an airline. But for Alitalia the turmoil could provide just the opportunity to drive through reforms that politicians and unions have refused to accept in the past.

Under plans shown to lawmakers, the chronically loss-making Italian airline wants to surrender domestic routes to low-cost rivals as it tries to pull out of its fourth stall in a decade.

Despite political and EU regulatory hurdles, new management led by a veteran of Gulf airline Emirates sees the COVID-19 crisis as a chance to reset the business on a profitable footing, according to a detailed presentation seen by Reuters.

“Alitalia has tried in the past to cut domestic point-to-point routes, but local politicians or the government always demanded they be restored,” said a company source close to CEO Fabio Lazzerini, named in November to lead the revival.

The pandemic offers “the first real big opportunity” to make Alitalia competitive, the source said – thanks also to cheap plane deals and rival airlines’ rising debt piles.

But there’s still a mountain to climb, with travel likely to remain subdued for some time to come, low-cost airlines vowing to come out of the downturn fighting, and a new Italian prime minister bringing fresh uncertainty to the political backdrop.

Alitalia was placed in administration in 2017, after three reorganisation attempts in the nine years since privatisation. Last March, as the pandemic foiled a planned sale to investors, the government announced its renationalisation.

Founded in World War Two’s aftermath, Alitalia was long relied upon to connect Italian cities and resorts, a role now steadily usurped by low-cost carriers. In 2019, Ryanair’s Italian traffic was almost twice Alitalia’s 21.77 million passengers, with easyJet a close third.

The new business plan includes the “elimination of all hub bypass routes” lacking international connections – between Sicily and Turin, for instance – according to the recent submission to senators, first reported in the Italian press.

Despite many past bailouts, it adds: “radical restructuring (to) reposition only in profitable markets has never been implemented.”

The question now is whether Alitalia can forge a viable future as a leaner network carrier focused on international markets that are likely to be crowded when a recovery comes.


The plan targets an operating breakeven in 2023 and a 7% operating (EBIT) margin two years later on revenue of 3.4 billion euros ($4.1 billion), with a fleet growing steadily back to 110 aircraft, close to pre-crisis size. In 2014-18, Alitalia’s operating losses averaged 475 million euros annually.

A workforce of 9,500 – compared with 11,000 in 2019 – will be hired on new contracts rather than carried over, according to the presentation, and the state’s return on investment “might be (about) 10%” when the plan ends in 2025.

Industry experts voiced scepticism about a strategy reliant on long-haul and corporate travel markets that are expected to remain depressed for some time.

“The first to recover will be short-haul routes,” said James Halstead, an airlines investment analyst turned industry adviser. “Business and long-haul flights will take much longer.”

Alitalia is disadvantaged by geography against rivals based in Dubai, Paris or London, having chosen Rome over Milan as its connecting hub “for political reasons”, Halstead said. “Rome is badly placed for intercontinental routes.”

Budget carriers will also apply more pressure. “Italy is very high on the agenda,” Ryanair finance chief Neil Sorahan told Reuters this month, after the carrier announced new Italian bases and capacity plans.


Lazzerini aims to boost traffic through a new deal with current partner Air France-KLM, Lufthansa or another European player – by leveraging the “negotiating power” of coveted Milan-Linate airport slots, his plan says.

Air France-KLM and Lufthansa had no immediate comment, but a source close to one of the groups said they would be vying with each other for an Alitalia deal that includes Milan access.

The relaunch also needs swift Italian decisions on existing Alitalia jobs that successive governments have dodged, instead committing another 5 billion euros to the airline since 2017, by the reckoning of Andrea Giuricin, a transport economist at Milan’s Bicocca University.

“It no longer makes sense to have a flagship airline, since the market is European,” Giuricin said.

Union tensions have flared over Lazzerini’s resistance to retaining the old workforce, while delays in transferring planes and other assets threaten to derail his plan. The holdups could mean launching with fewer jobs and a smaller fleet than the 52 earmarked jets, the management source cautioned.

European Union officials have also questioned key aspects of the plan including continuation of in-house maintenance and handling in Rome and use of the Alitalia brand, according to correspondence reported by Italian newspapers and seen by Reuters.

It remains unclear how these challenges will play out under Mario Draghi, the former European Central Bank chief appointed last week as Italy’s prime minister. His predecessor Giuseppe Conte had backed state intervention and renationalisation to avoid mass layoffs.

Whatever happens, a relaunched Alitalia will face ever tougher competition in long- and short-haul services, aviation consultant John Strickland said. “Entry costs may be at a long-time low, but that alone is no guarantee of successful execution.”

($1 = 0.8222 euros)

(Reporting by Francesca Landini in Milan and Laurence Frost in Paris.; Additional reporting by Conor Humphries and Agnieszka Flak. Editing by Mark Potter)


Ryanair’s fight against airline state aid faces court rulings

By Foo Yun Chee

BRUSSELS (Reuters) – Ryanair’s fight against state aid for airlines will put loosened EU rules to the test on Wednesday when the bloc’s second-highest court decides on support offered to Air France and SAS.

Under European Commission state aid rules loosened since the start of the pandemic, EU countries have offered more than 3 trillion euros ($3.65 trillion) in aid to companies in various sectors across the 27-member bloc.

In its first judgments on those rules, the Luxembourg-based General Court will assess a French scheme allowing airlines to defer certain aeronautical taxes. It will also rule on Sweden’s loan guarantee scheme for airlines.

Ryanair, Europe’s biggest budget carrier, has filed 16 lawsuits against the Commission, both against state aid to individual airlines such as Lufthansa, KLM, Austrian Airlines and TAP, as well as against national schemes that mainly benefit airlines.

Ryanair in its filings to the court faulted EU competition enforcers by allowing EU countries to grant aid only to airlines with EU operating licences issued by their countries.

EU flag carriers generally need only one operating licence from their home country to operate across the bloc.

Ryanair said the Commission also erred in assessing the proportionality of the aid to the damage caused by the pandemic.

Furthermore, the EU executive did not open a formal investigation into the schemes, thereby violating Ryanair’s procedural rights and also failed in its duty to provide reasons for approving the schemes, it said.

The cases are T-238/20 Ryanair v Commission and T-259/20 Ryanair v Commission.

($1 = 0.8222 euros)

(Reporting by Foo Yun Chee; editing by Jason Neely)