A new antiviral pill shows promise, as do vaccine mandates

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Everything we know about the covid-19 coronavirus

Two pieces of hopeful news on the COVID front this week.

First, pharmaceutical manufacturer Merck announced this morning that molnupiravir, the oral antiviral drug it developed along with Ridgeback Biotherapeutics, reduced hospitalizations among newly diagnosed COVID patients by 50 percent. A five-day course of the drug was so successful in Merck’s clinical study that an independent monitoring group recommended halting the study and submitting the pill to the Food and Drug Administration (FDA) for emergency use authorization. Molnupiravir is activated by metabolism, and upon entering human cells, is converted into RNA-like building blocks, causing mutations in the COVID virus’s RNA genome and interfering with its replication. For that reason, the drug is unlikely to be prescribed during pregnancy, but otherwise the therapy seems to hold great promise in adding to the limited armamentarium available to fight the pandemic. One possible concern: the drug’s price tag. The federal government has agreed to purchase 1.7M courses of the drug at $700 per course, and with most insurance companies having returned to normal cost-sharing for COVID treatments, the drug may be out of reach for some patients. Still, a major clinical development to be celebrated, and more to come as Merck’s drug is vetted by the FDA.
 
At $20 to $40 per dose, with costs fully absorbed by the federal government, and remarkable effectiveness at preventing severe disease, hospitalizations, and deaths, vaccines remain far and away our best frontline weapon for fighting the COVID pandemic. Promising, then, that the much-debated vaccine mandates have begun to demonstrate success in increasing vaccination rates, even among those who have thus far resisted getting the shot.

Despite concerns about massive staffing shortages among hospitals resulting from the implementation of its mandate, the state of New York found that 92 percent of healthcare workers had been vaccinated by Monday, when the mandate went into effect. That was a 10-percentage-point increase from a week earlier, holding promise that the Biden administration’s planned federal mandate for healthcare workers could have the desired effect.

California’s mandate for healthcare workers went into effect yesterday, and was credited with boosting vaccination rates to 90 percent at many of the state’s health systems. Among private employers considering mandates, the experience of United Airlines may also be instructive: its employee mandate led to the vaccination of more than 99 percent of its workers, resulting in the termination of only 700 of its 67,000 employees. Of course, everyone prefers carrots to sticks, but sweepstakes and bonuses have only gotten so far in encouraging people to get vaccinated—now it appears mandates have a useful role to play as well.

With 56 percent of the population fully vaccinated, the US now ranks 43rd among nations, just ahead of Saudi Arabia and far behind most of Europe. In the next few days we’ll reach the grim milestone of 700,000 COVID deaths in this country—anything that helps stop that number from growing further should be welcome news.

Statistics of the Day on Vaccination

As CEOs push for office returns, CFOs don’t mind staying put

The past year and a half has brought prolonged hand-wringing from executives about whether working from home is sustainable over the long-term. 

Perhaps no voice on the issue has been louder than that of Jamie Dimon, CEO of JPMorgan Chase, who is against working from home as a new standard. 

Remote work, Dimon has said, could hurt company culture and prevent some employees from advancement, especially younger bankers who may lose out on mentorship and training opportunities. 

Working from home “doesn’t work for those who want to hustle. It doesn’t work for spontaneous idea generation. It doesn’t work for culture,” Dimon said in May, according to Banking Dive.

David Solomon, CEO of Goldman Sachs, believes the same. Remotely onboarding new analysts is “an aberration that we are going to correct as quickly as possible,” he said in February. “For a business like ours, which is an innovative, collaborative apprenticeship culture, this is not ideal … and it’s not a new normal.”

No concerns 

The same sentiments have not held true on the finance side. CFO Dive has spoken with finance chiefs working at mid-size and large companies throughout the U.S., Canada and Oceania, who reported no problems with remote work, maintaining the trend has not materially impacted their bottom lines. 

With the advent of technology that allows for bridging the gap between remote and in-person work, most agile companies, particularly those who invested in digital before the pandemic made it an imperative, the finance team’s ability to accomplish tasks has remained largely uncompromised. 

Some CFOs have even said that the migration to digital-first has come as a welcome respite from unnecessary meetings or in-person commitments.

“I’m a convert to remote work,” Justin Coulombe, CFO of Momentive, formerly known as SurveyMonkey, said. “Pre-pandemic, I believed teams worked best in the office, but I’ve come to realize that point of view was more shaped by my preferences and leadership style [rather than] our team’s actual ability to work effectively.”

Flexible working arrangements bring great value to Coulombe’s finance team, which spans beyond the company’s traditional geographic hubs. 

“My current working theory: generally, the teams that may find in-office work more effective are those with heavy business partnering roles, like procurement and FP&A,” he said. “We’re a service function, so many times we’ll align to where our partners are and how they work.” 

The world’s largest brewery, AB InBev, which owns Corona, Modelo, Stella Artois and Budweiser, currently operates in a flexible hybrid environment, its CFO, Fernando Tennenbaum, said, but he sees pros and cons to all approaches. 

“Probably, in the future, there will be some combination of remote and in-person work,” he said. “Definitely, sometimes meeting in person is valuable, but it’s also possible to work remotely.”

At the start of the pandemic, when AB InBev was forced to close the books remotely for the first time, Tennenbaum was worried about everything coming together. But because his team paid a great deal of attention to the quarterly close process, on account of it being the first time they’d done it, everything went smoothly, which he took as “a great sign.”

Even so, Tennenbaum wouldn’t be able to pinpoint one role over another that would be best suited to return to in-person work permanently. “It’s more about maintaining people’s interactions than about any specific task,” he said. 

“If anything, the pandemic proved remote work is essentially just as good as in-person; all jobs got done on time without sacrificing quality,” Kirsty Godfrey-Billy, CFO of New Zealand-based cloud accounting company Xero said. “Cloud accounting [allows for] pretty much all finance-related tasks to be done anywhere, anytime on a single, up-to-date general ledger.” 

But in order to keep evolving and thriving as a profession, accountants must truly embrace technology and the changes that come with it, Godfrey-Billy added.

Laura Mineo says the longtime-distributed workforce at Rokt, an ecommerce tech company where she is CFO, positioned it well for the hybrid mode it currently uses.

“In my view, the importance of in-person work isn’t necessarily related to completing certain tasks, but to everything that surrounds those tasks and allows us to complete them more effectively and efficiently as we scale,” she said. “Things like knowledge sharing across functions, onboarding new employees, supporting other departments throughout our organization and maintaining the apprenticeship culture we prioritize are all easier and more effective in person.”

In-person potential

Marten Abrahamsen, CFO of financial services platform Fundbox, agrees. “As a whole, our finance team functions very well remotely,” he said. 

However, Abrahamsen, who joined Fundbox weeks before the pandemic, has found the company’s strategic finance and corporate development teams stand to benefit most from in-person collaboration and discussion. 

“These teams, in particular, engage in frequent white boarding sessions and healthy, back-and-forth debates that are best done in person,” he said.

Vanessa Kanu joined Canadian telecom giant TELUS International as CFO one year ago. In that time, completely virtually, TELUS pulled off the largest technology IPO in the history of the Toronto Stock Exchange, participated in investor roadshows and hosted its first two earnings calls. 

She credits the company’s carrier-grade infrastructure, backed by cloud technologies, with allowing her and her team to simulate an in-office experience from home. 

“That said, I do believe in-person meetings and events are valuable and offer unique moments for team-building and establishing more personal connections,” Kanu added. “Those interactions are especially helpful for new team member onboarding, training, and reinforcing a company’s culture.”

Business forecasters see inflation heating up to 5.1%

Dive Brief:

  • Inflation as measured by the consumer price index will surge 5.1% year-over-year during the fourth quarter, forecasters for the National Association for Business Economics (NABE) said, raising their estimate in May for a 2.8% year-over-year increase in prices. The forecasters anticipate inflation will ease to 2.4% year-over-year during the fourth quarter of 2022, according to a survey.
  • “Inflation expectations have moved up significantly from those in the May 2021 survey,” according to Holly Wade, survey chair and executive director for the research center at the National Federation of Independent Business. “But panelists anticipate inflation will ease in 2022.”
  • The NABE panel reduced its estimate for growth in gross domestic product (GDP) this year to 5.6% from 6.7% in May, citing the coronavirus delta variant as the biggest risk to the expansion.

Dive Insight:

NABE expectations that inflation will cool next year align with the view of Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen. Both policy-makers have staked record stimulus in part on the premise that the fastest price gains in decades will slow as pandemic-induced kinks in supply chains even out.

The Fed’s preferred inflation measure — the core personal consumption expenditures price index — rose 3.6% in July compared with a year earlier, well above the central bank’s 2% target.

In an estimate released after a two-day meeting on Wednesday, Fed officials forecast that so-called core inflation will rise 2.3% next year, slightly above the 2.2% estimate by the NABE panel.

Confident that inflation will ease, Fed policy-makers indicated after their meeting that they may begin to cut $120 billion in monthly purchases of Treasury and mortgage bonds as early as their next scheduled gathering in November. Powell said that the Fed will gradually taper and may conclude bond buying “around the middle of next year.”

Half of the 18 participants in the Fed’s policy-making committee expect to raise the benchmark interest rate from a record low by the end of 2022.

“I expect inflation to decelerate,” Fed Governor Lael Brainard said Monday in a speech to NABE. “But with delta disrupting the rotation from goods to services and prolonging supply bottlenecks, it is uncertain just how fast and how much inflation will decelerate over the remainder of the year and into next year.”

With the delta variant disrupting demand and supply, the employment report for September due out on Oct. 8 “may be weaker and less informative of underlying economic momentum than I had hoped,” she said.

More than half (58%) of the NABE forecasters see downside risks to economic growth for the remainder of 2021, while 16% “expect the balance to be to the upside — a complete reversal from the May survey results,” Wade said.

Sixty-three percent of panelists identify the delta variant as the leading risk to growth, while 5% of respondents said fiscal policy inaction or gridlock as their greatest growth concern, NABE said. Two-thirds (67%) of survey respondents predict that nonfarm payrolls will return to pre-pandemic levels by the end of 2022.

Powell and Yellen will have an opportunity to update their views on inflation and the economy, and the outlook for record monetary and fiscal stimulus, in testimony scheduled for Tuesday before the Senate Banking Committee.

The NABE panel of 47 forecasters spans a range of organizations, including economists from Ford, Grant Thornton, Moody’s Analytics, the Conference of State Bank Supervisors, Nationwide Insurance, Morgan Stanley, the National Association of Homebuilders, Visa and Wells Fargo.