Using Amenity’s suite of NLP solutions, we created a Coronavirus Tracker that analyzes news and earnings call transcripts to assess how public health outbreaks like the COVID-19 epidemic affect business operations and economic conditions.

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Amenity Analytics
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April 20, 2020

Coronavirus Tracker Insights

Article

Using Amenity's suite of NLP solutions, we created a Coronavirus Tracker based on our proprietary Risk Monitoring model to analyze news and earnings call transcripts to assess how public health outbreaks like the coronavirus affect business operations and economic conditions.

We will be sharing data related to the COVID-19 outbreak throughout the public health emergency and the tables and figures below will be updated regularly. To request a real-time refresh of the data or for further information about Amenity's models and NLP solutions, email dvalles@amenityanalytics.com.

April 20, 2020: Big Week for the S&P 500

Nearly one in five companies in the S&P 500 will report earnings this week, so we decided to get down to brass tacks this Monday morning. Going into a deluge of earnings calls, we ranked firms reporting this week by COVID-19 related Impact Scores calculated over the last seven days.

As a reminder, Impact Scores account for the amount and sentiment of company-specific news coverage related to COVID-19’s impact on business fundamentals. In the absence of reliable guidance and consensus views, we believe these metrics are an appropriate proxy for the market’s expectations of COVID-19’s relative impact on fundamentals.

About 10% of S&P 500 companies have reported to date with earnings declines of nearly 15% year-over-year – the steepest in over a decade. While we are conscious that performance will only be partially impacted given the sluggishness of the US response to COVID-19, this week will nevertheless offer readings across sectors that begin to clarify the depth of the repercussions.

Given the amount of uncertainty percolating, we believe management commentary in the near term will be of exceptionally high value. We remind our readers that our Coronavirus Dashboard offers access to our data and findings on earning calls as well as news feeds.

We will be revisiting the names above over the course of this week to examine how managers address the COVID-19 pandemic on earnings calls and encourage you to do the same. As always, we are available around the clock to offer guidance and answer any questions.

April 17,2020: US vs. Europe

The global nature of the COVID-19 pandemic is impacting populations and markets with no respect for ordinary boundaries. Much to our collective chagrin, the same channels of globalization that afford capital and consumers freedom of movement have allowed viral vectors to ride the coattails of the global economy and take hold virtually everywhere.

We believe comparative bearings are an integral component of a reliable situational awareness solution. Fortunately, our universe of data is global by design. This allows us to leverage our coronavirus model to examine the impacts of the virus on foreign and domestic financial markets.

To that end, we set out to examine differences in COVID-19’s impact on business fundamentals in the United States and Europe. In the figure below, we compare COVID-19 related sentiment for companies in the S&P 500 and STOXX Europe 600.

We observe suppressed European sentiment over the last few weeks against a relative upward trend in US sentiment in the same period. This is an interesting insight on its own, but the line of inquiry it is tied to is essential for global investors to consider when navigating global markets.

Given diverging policy responses, there will be disproportionate repercussions on the US and European economies depending on the duration of the crisis. Central to that imbalance is the labor component of the policy response.

As discussed in a previous insight, the US has experienced the fastest growth in unemployment on record with 20 million initial claims in four weeks. Employers are responding to the pandemic with rapid layoffs that leave people with no income, hard fought unemployment benefits, and, at best, temporary healthcare with a short half life – all while a virus spreads like wildfire.

This delivers a one-two punch to the all important American consumer, whose spending accounts for 70% of US GDP. Stop filling wallets and consumption dollars disappear. One off fiscal relief – maxed out at $1,200 – is a start, but that won’t get city dwellers and families far when rents are due and bellies are empty

Europeans have not been spared. The pandemic hit their shores earlier than the US and led to stringent containment strategies. Where Europe has diverged is in its labor policy response, which bets the farm on the efficacy of social distancing in shortening the duration of the crisis.

Onerous labor policy makes for sticky employment. Put plainly, it’s a lot harder to fire people in Europe. Consider that after one year of work, German employees are entitled to 60% of their salary on dismissal for the following year. Mass layoffs under the rules of the game would put the state purse under extreme pressure.

Instead, European policymakers are embracing wage subsidies that borrow from short time programs (in German, Kurzarbeit) – essentially, the scaling back of full-time hours in exchange for state-funded subsidies that make up most of the difference in wages. Programs in Germany and France fund as much as two thirds of normal salaries while the UK has embarked on an 80% wage subsidy.

The rationale behind wage subsidy plans is that it is more costly to fire employees that you intend to rehire after a crisis passes. Controlling public costs, minimizing private sector disruption, and maintaining the readiness of skilled labor for the ramp back up makes for shorter recovery times.

Hence the gamble on duration. If the crisis is resolved quickly, European economies may be favorably positioned compared to the US in terms of industrial readiness. The public outlays in such a case will have been wisely spent on resilience. However, if the crisis continues interminably, then such programs may very well compromise the engine and safety net of the European economy.

This makes objective metrics for comparison during a crisis extremely valuable. Amenity’s COVID-19 data is uniquely well suited as a barometer for the durational effects of the pandemic on business fundamentals. We will be keeping a close eye on this data as things develop and encourage our clients to do the same in our Coronavirus Dashboard.

April 16, 2020: Long vs. Short Term Sentiment

In the early innings of earnings season, we have focused on answering the broad uncertainty caused by COVID-19 with contextual insights from our data to offer informed situational awareness from a differentiated approach. While Financials have been in focus, we will soon be dealing in a diversity of sectors as the docket of daily calls grows.

With that in mind, we set out to summarize the state of COVID-19 related sentiment at the sector level in the long- and short-term. We examined daily net sentiment data filtered by GICS Sectors to calculate the implications for business fundamentals in earnings calls and news over two time ranges – year to date and the past seven days.

These metrics identify long-term sentiment "baked into the cake" as being different from short-term sentiment related to the "here and now" that is likely to drive share responses. We plot this data in the radar chart below with YTD sentiment in gray and Last 7 Days sentiment in blue. The radials account for each of the eleven GICS Sector and one aggregated All GICS Company average.

Three sectors – Consumer Staples, Health Care, and Industrials – have lower COVID-19 related sentiment on a short-term basis. This suggests that fundamentals have deteriorated to varying degrees in the most recent period. Consumer Staples is the most disjointed due to the accelerating effects of widespread commercial stoppages that are taking an increasingly heavy toll on business operations. Health Care and Industrials have more stable sentiment differentials in comparison, though increasing utilization of the health system is stretching capacity thin and spare resources are being routed to the pandemic's front lines.

The remaining eight sectors have seen measurable improvements in their short-term sentiment. While Information Technology and Utilities are the only two sectors with net positive sentiments, upward trends suggest that this cohort has seen some meaningful improvements in coming to terms with with the corporate impact of and required response to COVID-19.

Directionally speaking, improvements or declines in sector sentiment in the near-term may serve as useful proxies for consensus expectations in the absence of reliable figures and management guidance. Corporate resiliency will be top of mind going into earnings. For clients invested across sectors, we believe these metrics offer a unique approach to discerning insights that can help formulate a sorting mechanism for idea generation and risk management.

Pilots are trained to manage obstacles with an ordered approach of "aviate, navigate, communicate." In that spirit, our Coronavirus Dashboard is designed to offer an analytical toolkit that can be wielded reliably, actionable insights that steer through complexity, and a conceptual framework aligned with the language of business. As always, we're here to ensure that this translates to improved situational awareness and encourage you to reach out at any point with questions and comments.

April 15, 2020: Day Earnings Sentiment, Transcripts vs. News

Earnings have kicked off and markets are getting a first glance at how management will thread the needle this quarter. A preview of S&P 500 Financials was the subject of yesterday’s daily insight and the banks that reported were certainly under the microscope.

Adverse economic conditions caused by the coronavirus pandemic drove JPMorgan & Chase (JPM) profits down 69% and Wells Fargo (WFC) profits down 90%. Both banks are stockpiling reserves for loan loss provisions with the expectation that a tsunami of defaults will bring darker days to come. JPM and WFC shares took a bath while First Republic Bank (FRC) closed the day up on news of merely “modest” forbearances cushioned by an advantageous client base.

We used data from our Coronavirus Dashboard to examine day of earnings sentiment for each of these three banks. In the figure below, we visualize a set of three data points per company (described below).

(1) Amenity Scores account for the sentiment expressed about business fundamentals in earnings calls. This is a holistic measure that takes the entirety of a call into consideration by calculating a weighted net sentiment score between -100 and +100.

(2) Earnings Call Sentiment Scores (COVID-19) filter to extractions in earnings calls related to the topic of COVID-19. To the extent that the pandemic is an exogenous shock on business fundamentals, its directional magnitude is indicated by these figures. The topic-driven earnings call score demarcates the company/analyst perspective.

(3) News Sentiment Scores (COVID-19) filter to extractions in news articles related to company-specific mentions of the topic of COVID-19. The directional magnitude is indicative of the sentiment expressed by journalists with respect to the pandemic’s impact on specific businesses. These scores represent an external expert view.

Taken together, these figures offer a unique set of barometers to triangulate the impact of COVID-19. Amenity Scores act as a central reference point by capturing the entirety of the conversation in earnings calls whereas the COVID-19 specific scores for earnings calls and news provide topically driven context.

In the case of FRC, a bifurcation between the Amenity Scores and both COVID-19 scores suggests the pandemic has not dramatically skewed the overall health of the business. We saw as much with shares reacting positively to quarterly performance. On the other hand, in JPM we observe a different sort of divergence between the Amenity Score and each of the COVID-19 specific scores. Put plainly, the sentiment expressed on the earnings call related to the coronavirus was not nearly as drastic as that expressed in news coverage on the day of earnings.

For analysts and investors, these insights can help steer deeper investigations that call for drilling down to the event type and extraction level. This is, as always, well within reach in our Coronavirus Dashboard.

April 14, 2020: S&P Financials Earnings Preview

And so it begins...

Financials kick off earnings season today with JPMorgan (JPM) and Wells Fargo (WFC) reporting before the bell. Among others, Bank of America (BAC), Citigroup (C), Goldman Sachs (GS), BlackRock (BLK), Bank of New York Mellon (BK), Morgan Stanley (MS), and State Street (STT) are set to report this week.

Financial stocks are ordinarily bellwethers for broader earnings. Against the backdrop of rapidly deteriorating macroeconomic conditions, clear expectations are lacking. With the depth and duration of the COVID-19 driven downturn still unknown, equity markets that usually look to the future are staring into a nebulous crystal ball.

Trading revenues should be up on volatility, though banks face a bevy of headwinds. Interest rates near the zero bound will hammer net interest margins. Considerable loan loss reserves will be required in light of general corporate health, credit quality, and CECL adoption. Buybacks are already out the window for the most part, but investors will be tuning in for hints about dividends and management outlooks.

Recognizing that COVID-19 is an exogenous shock that is difficult to model with the traditional financial toolkit, we turned to our Coronavirus Dashboard for contextual clues into what fundamentals are driving the narrative around financial firms. As few companies have maintained guidance, investors are left to fly by instruments without reliable readings. We offer an alternative source of insight to help frame expectations.

We examined news related to S&P 500 Financials (GICS Sector) and identified 259 extractions related to 34 companies in the past week. We calculated Impact Scores for each company to account for the amount of extractions and the net sentiment expressed. We rank those companies from most positive to negative in the figure below.

This ranking captures the degree of exposure each company has to the COVID-19 pandemic as a function of the amount of coverage they received and the implication for business fundamentals. We expect firms with greater magnitude scores will continue to be in close focus and those with more negative scores will have more to prove in climbing out of deeper holes.

Over the same seven day window, we further distill which event types have driven the conversation around S&P 500 Financials. We visualize the relative distribution of extractions for the top ten event types in the figure below. Analysts, investors, and management alike should expect these to be the talking points for earnings calls this week. The evidence demonstrates that dividends are the leading topic going into the conversation.

Bigger picture, we are conscious that the bulk of COVID-19’s impact on Financials is likely to come to bear next quarter. Skyrocketing unemployment, dramatic shifts in consumption, and reliable health metrics and economic indicators are just starting to come into focus. Under such extraordinary circumstances, we are skeptical of those that claim this is the beginning, middle, or end. We’re reminded of Monty Python’s Spamalot: “Why do they call us the middle ages when nothing yet comes after us?” Instead, we are steadfastly focused on helping our clients read their instruments.

Wherever we may be in the trajectory, Amenity is committed to sifting through the noise to extract what matters most. We remind you that the data presented here and much more are fully explorable in our Coronavirus Dashboard. Please reach out with comments and questions as earnings ramp up. We look forward to hearing from you.

April 13, 2020: Customer Traffic Growth

Firms with fortress balance sheets, economies of scale, resilient supply chains, and available distribution channels have demonstrated a capacity to sustain operations through the COVID-19 pandemic. Some of these firms are also seizing an opportunity to expand and deepen their customer base. Given that consumer behavior will be shaped by the current crisis, we set out to determine which firms have benefited from measurable increases in customer traffic.

We used our Coronavirus Dashboard to filter to positive Customer Traffic events that capture meaningful commentary about patterns including foot and site traffic, subscriptions and memberships, as well as clicks, views, user counts, etc. These metrics indicate growth in current adoption that will fuel future utilization.

We began by analyzing which of the largest US firms has exhibited the most significant customer traffic increases year to date. For S&P 500 companies, we identify 303 positive Customer Traffic events related to 40 companies. We visualize the top 15 in the figure below.

This composition of this list is unsurprising, but the degree to which these firms have grown adoption is astounding. Microsoft’s Xbox Live, Teams, and Skype have added millions of users in a matter of weeks and months. Netflix streaming has spiked so significantly that some regulators asked the firm to throttle down streaming quality to preserve network integrity (thanks in no small part to Tiger King castle intrigue). The list goes on and can be explored fully in our dashboard.

On first glance, this is confirmatory evidence that the titans of industry are widening their moats. However, we also identify meaningful Customer Traffic events for companies outside the S&P 500 universe. We inverted our analysis to identify positive Customer Traffic events for companies outside the S&P 500. This includes smaller companies in the US as well as international firms within our coverage universe.

Year to date, we identify 163 positive Customer Traffic events related to 104 companies that are outside the S&P 500. We present a similar top 15 ranking in the figure below.

The counts per company in this cohort are notably lower than the S&P 500, which we attribute at least partly to the amount of media coverage they receive. The percentage of companies exhibiting customer traffic increases within the S&P 500 is also far higher than without. We identify positive Customer Traffic events for 9.0% of S&P 500 firms and only 2.3% of non-S&P 500 firms.

Rather that discrediting the resiliency of smaller and international firms, we believe this quantifiably identifies a selection of companies that may form the basis for investable idea generation. Discerning a firm’s capacity to sustain and grow their business during a crisis is a challenge in the best of times. In the midst of a crisis, our analytics provides a differentiated approach to observing such behavior when it matters most and without sacrificing scarce resources, all the while bringing into focus firms that may sit beyond the peripheral vision of many investors navigating a crisis

April 10, 2020: Consumer Prices

Markets are closed today, but our insights carry on and consumer prices are top of mind.

The Bureau of Labor Statistics released it's monthly Consumer Price Index figures today. The latest CPI data showed a -0.4% decline in consumer prices driven by energy and travel declines, only partially offset by increases in food and medical costs. (Even core inflation, which excludes food and energy, fell -0.1%). This is the fastest decline in consumer prices in five years.

Deflationary dynamics during a crisis can spiral. Consumers saving more and spending less means losses for businesses that pay wages that eventually drive consumption. Imagining that destructive cyclicality, a potential demand shock on the heels of a supply shock should give us pause. While disrupted supply chains may bounce back quickly, bruised consumer confidence can linger.

In light of existential uncertainty, we turned to our data to examine fact-based evidence of price changes in the market. Our Price event captures evidence of increases and decreases in the price of goods and services. We examined daily trends in news mentioning price increases and decreases over the last month, which we visualize in the figure below as a percent of each day's extractions.

We identify 284 extractions related to 139 companies, of which 45% are positive (price increases) and 55% are negative (price decreases).
The -0.1 unweighted net polarity of these extractions implies a deflationary environment and captures the directionality of consumer prices in the current period independent of CPI data.

Questions about the permanence of consumption impacts will continue to obfuscate CPI data in the near term. If social distancing and enterprise stoppages are temporary, then trends in price data may also be temporary. (Consider that ~1% of the CPI basket is comprised of haircuts and personal care, line items likely to recover once salons reopen.) That said, the longer the disruption, the more changes in consumption may take hold.

In the meantime, clients with access to our dashboard have the ability to drill down to Price events at the company level to identify firms raising and lowering prices. In addition to the macroeconomic insights, this will help steer investment theses through a complicated period where ordinary pricing dynamics are up in the air.

April 9, 2020: Corporate Social Responsibility

In times of crisis, collective action is of paramount importance. The practicalities of our response to COVID-19 are now acutely tangible. Social distancing and an abundance of caution in the name of public health are bearing down on ordinary life. And yet, the call to arms to do less and more at the same time has sprouted good faith efforts by individuals and organizations worldwide.

In yesterday's daily email, we identified the most frequently occuring event type as CSR, which captures meaningful evidence of companies and their leaders engaging in Corporate Social Responsibility. This inspired us to examine trends in CSR to determine which firms are dedicating resources to public health efforts.

Year to date, we identify 1,804 extractions related to 278 companies that are classified as CSR events.

In the figure below, we plot daily CSR event counts in the dotted line. Overlaid are stacked columns that show attribution to companies with the highest CSR extraction counts. (Note: The lumpiness is a function of less news content being published over weekends.)

We observe a significant ramp up in CSR efforts in the middle of March that continues to accelerate. Five or so companies have dominated on CSR: Apple, Facebook, Twitter (+ Square), Amazon, and Intel. Most notable this week are commitments made by Jack Dorsey, CEO of Twitter and Square, who committed roughly $1 billion of his Square holdings to COVID-19 response efforts. It is an extraordinary act of generosity, but one that no doubt also brands Twitter and Square as being in the fight.

We note that this collection of firms are likely overrepresented in the news given their size. We remind our readers that >270 other companies are engaged in CSR efforts. The data is explorable in our Coronavirus Tracker dashboard as always, where you can examine how companies in your portfolio are contributing. In the interim, we offer the figure below which details the sector breakdown of firms engaged in CSR efforts related to COVID-19.

April 8, 2020: Global M&A Chatter

Despite a strong open to the year, COVID-19 drove M&A activity in Q1 down nearly 30% to four year lows. Robust deal flows thrive on confidence that is presently in short supply. As dealmakers come to terms with present uncertainties, the spillover effects on the M&A market remain to be seen. This creates a need for analytical solutions that capture corporate transactions throughout their life cycle.

To offer our clients measurable context, we used our Coronavirus Dashboard to trace M&A chatter in news. Amenity classifies text into event types that include Asset Acquisition, Asset Sale, Merger Acquisition, M&A Announcement, and Synergy. We applied these as filters to construct the figure below, which shows daily totals of company-specific M&A extractions.

Year to date, we capture a steady increase in chatter with 713 M&A related events attributable to 226 different companies.

For illustrative purposes, we overlay data related to two pairs of firms to demonstrate which deals are driving the M&A market in any given period. We highlight T-Mobile & Sprint (deal since completed) and Xerox & HP (deal since scuttled) as examples. However, there remain >500 meaningful extractions and >200 other companies to explore in our dashboard where you can drill down into companies, event types, polarities, time ranges, and more.

April 7, 2020: Forecast Statements as Proxies for Guidance

Given the abundance of uncertainty resulting from the COVID-19 pandemic, management teams have been hesitant to issue formal guidance if not eager to withdraw any that might have been offered previously. As a result, analysts and investors are left to make projections and set expectations on their own under less than ideal circumstances.

Approximately 20% of S&P 500 companies have issued Q1 guidance, of which one third is positive and two thirds are negative. That means some 80% of S&P 500 companies have not issued or withdrawn Q1 guidance.

We set out to address this challenge by capitalizing on a core benefit of Amenity's NLP methodology – namely, the contextual understanding that comes from fully parsing text data. To generate a proxy for guidance, we filtered our data to include only "forecast" statements. By applying only two filters in our Coronavirus Tracker dashboard, we capture how management, analysts, and journalists view the future prospects of S&P 500 companies.

To the extent the stock market is forward looking, we believe "forecast" type news content should have immediate relevancy for the perspective formation of market participants. We plot the three day moving average sentiment of those forecast statements against the S&P 500 Index in the figure below and find the directionality of sentiment over time appears to be a leading indicator of where the S&P 500 Index trends. The underlying extractions can, as always, be explored in our dashboard.

April 6, 2020: Companies Launching New Products

The COVID-19 outbreak is impacting go to market strategies for enterprises of all sizes. In light of disruptions to global value chains, one matter weighing on corporate leaders is whether, how, and when to launch products.

Using Amenty’s Coronavirus Dashboard, we analyzed which companies have brought new offerings to market during the crisis. We found 236 positive New Product events related to 36 companies in the S&P 500 year to date. Frequencies by company are shown in the figure below.

Apple leads the S&P 500 by a country mile with 43% of New Product extractions. Operational scale, loyal customers, and a fortress balance sheet will no doubt help Apple keep mindshare now to sustain market share later.

Despite closing retail stores and concerns about consumer spending, Apple refreshed three product lines, launched a COVID-19 app and website, told Apple Card holders they can defer April payments without penalty, and is expected to announce iPhone updates in the near term. These are power moves, all of which are traceable to the extraction in our dashboard.

That said, the most valuable insights likely relate to firms that launched new offerings with less attention paid. While markets are distracted and volatile, diligent investors have a unique opportunity to identify companies that are resilient and responsive in times of crisis. Such companies have seized on their capacity to act instead of sitting in limbo waiting for the dice to roll.

The following are examples captured by our New Product event type that may offer investable insights (sorted by highest extraction count):

  • Rollins – Subsidiary Orkin launched “VitalClean” to offer pathogen suppression and disinfection services to businesses that will be mission critical to post-crisis recovery.
  • Stryker – Announced a low-cost, limited release emergency response bed for healthcare providers battling COVID-19.
  • General Motors – Offering zero-interest loans for up to 84 months for customers in the highest credit tiers.
  • AT&T – Free, no-contact delivery options for online orders and an additional 15GB of mobile hotspot data.
  • UnitedHealth Group – Launching self-administered COVID-19 test to reduce exposure risk for healthcare workers.
  • CVS – Adding 600 HealthHUBs to its footprint and offering low-to-zero copayments for Aetna members.
  • Southwest Airlines – Added additional transit service to Hawaii from Oakland and San Jose.
  • The Walt Disney Co. – Released Frozen 2 on Disney+ three months in advance to prioritize home streaming.
  • Ulta Beauty – Launched buy online, pick up in-store service across its footprint.

April 5, 2020: Workforce Expansion

The coronavirus pandemic struck a body blow to US employment this month. Between March 14 and March 28, 10 million Americans filed initial jobless claims. This is a staggering number; history provides little consolation.

Over roughly the same period (March 14 to date), Amenity detected a spike in Workforce events in news and earnings calls that capture company-specific changes in employment. More than half of >1,300 extractions were positive, indicating evidence of an expanding workforce. We set out to analyze what was driving that story.

The figure above shows daily counts of positive Workforce events for the S&P 500 with attribution overlaid for two companies that comprise most of the total – namely, Amazon and Walmart. The e-commerce giant and omnichannel titan have been short staffed as consumers rush to fill their cupboards in the middle of a public health crisis that has led to long lines and empty shelves.

Rapid workforce expansion may appear to be a promising signal in the context of mass layoffs. The underlying data shows that the spikes are driven by announcements that (1) Amazon is hiring 100,000 new employees and (2) Walmart is hiring 150,000 new employees to meet a surge in demand.

We believe these are likely short term spikes in positive sentiment. News extractions from yesterday (April 2) reveal Amazon has almost completed its hiring campaign in three weeks. We include two examples below:

  • “We have already hired over 80,000 people into those roles…”
  • “[Amazon] has filled 80,000 jobs in the span of a few weeks…”

Company-targeting allows us to discern the concentration of these data points in our dashboard. To be sure, the ability to rapidly scale to meet demand will hearten Amazon investors. (We would expect similar performance from Walmart.) However, the nature and magnitude of the hiring suggests these are temporary signals rather than a grand turnaround story where 10 million people get back to work. Unfortunately, there seems to be more crisis to come.

April 2, 2020: Strategic Alliances

Going forward, we will share insights here when our commentary can shed light on interesting findings in our data. We begin with a data-driven insight into the response of healthcare companies to the coronavirus outbreak.

As the global pandemic weighs on public life and markets, we are witnessing the greatest concentration of scientific effort on one problem in at least a generation. Solidarity and partnership in collectively addressing an outbreak that transcends ordinary boundaries is promising and we are glad to see this reflected in our data.

Year to date, Amenity's Coronavirus model captured >1,000 positive Strategic Alliance events in news and earnings calls related to 194 companies, of which 30% are in the healthcare sector.

Of the 58 healthcare companies identified, the ten with the most coverage for strategic alliances are Johnson & Johnson, Pfizer, Vir Biotechnology, Moderna, Sanofi, Regeneron, Dynavax, Inovio, Eli Lilly, and Translate Bio. To the extent partnerships catalyze innovation, we highlight these firms as those leading the charge.

Unfortunately, scientific capacity is not limitless and social distancing imposes constraints. Triage requires assessing urgency to prioritize action. And as scarce resources are diverted to the frontlines, otherwise promising research is likely to become collateral damage. In the past week, we began detecting evidence of such impacts in negative Product Trial events attributed to the global coronavirus outbreak:

  • 3/30 – AVEO Pharmaceuticals (AVEO) suspended Phase 2 acute myeloid leukemia study.
  • 3/30 – Reata Pharmaceuticals (RETA) suspended Phase 3 pulmonary arterial hypertension study.
  • 3/26 – PAION AG (PA8) warned of a potential suspension to a Phase 3 general anesthesia study.

Redirecting resources and enforcing public health protocols is without question the right course of action. However, disruptions pose material challenges that suggest some players will suffer and that not all healthcare firms are positioned equally. For pharma and biotech investors whose theses are driven by pipeline reliability, we suggest paying careful attention to these types of risk signals

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Interested running these types of analyses with our platform?

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About Amenity

Amenity Analytics is the industry leader in providing insights from unstructured text by using Natural Language Processing (NLP) assisted by Artificial Intelligence (AI) and Machine Learning (ML). Amenity’s NLP system is a sector-agnostic, language-dependent tool for quantitative text analysis that is deployed across the financial services industry and beyond.

This communication does not represent investment advice. Transcript text provided by FACTSET and S&P Global Market Intelligence.

Copyright ©2020 Amenity Analytics. 

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