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Hiscox in £105m loss after cancelled events and holidays

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hiscox in 105m loss after cancelled events and holidays

Hiscox has made a £105m loss after being hit by payouts for cancelled sports events and holidays. 

The Lloyd’s of London insurer said coronavirus had triggered £175m of payouts in the first six months of 2020 – even though it has made the controversial decision not to hand money to thousands of small companies which had taken out business interruption policies, which is being considered by the High Court. 

Under pressure: Chief executive Bronek Masojada said it had been a 'testing six months'

Under pressure: Chief executive Bronek Masojada said it had been a ‘testing six months’

Though the firm refused to say which cancelled events had caused its pain, Lloyd’s of London insurers typically help to cover major events like Wimbledon and the Olympics. 

Chief executive Bronek Masojada said it had been a ‘testing six months’.

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Aside from Covid-19, what lies ahead for British pharma firms?

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aside from covid 19 what lies ahead for british pharma firms

This pandemic has been much worse for the elderly, who have borne the overwhelming brunt of the deaths. 

But one sector that leans heavily on pensioner pounds is doing noticeably well this year – pharmaceuticals, and it not just because of Covid.

Share prices of many British pharmaceutical firms have grown strongly despite a stock market-wide March dip as worldwide worries over the economy were superseded by public health threats.

Since 1 January , the share price of the country’s largest pharma business AstraZeneca have risen 14 per cent in value, while Vectura’s have jumped by around double that amount, and FTSE 100 firm Hikma has climbed by a third.

AstraZeneca and GlaxoSmithKline are both working to manufacture vaccines to treat Covid-19

AstraZeneca and GlaxoSmithKline are both working to manufacture vaccines to treat Covid-19

GlaxoSmithKline (GSK) has been an outlier among British pharma firms with a 14 per cent decline in its share price since 1 January, although this is still some way above its March low.

Amidst smaller firms, some have had an even better run in 2020. Both London-listed Amryt Pharma and Guildford-based Ergomed have seen shares rise 74 per cent.

Each of them invests copiously in orphan drugs research, which is becoming a highly lucrative market. 

An orphan drug is defined as one intended for the treatment, prevention or diagnosis of a rare disease or condition.

According to one 2016 analysis of 86 publicly-listed pharmaceutical companies by two academics from Liverpool and Bangor universities, orphan drug producers had a 9.6 per cent greater return on investment than non-orphan drug makers.

Ergomed executive chairman: 'Our PrimeVigilance services have been essential in recent times, partly due to an increase in adverse event reporting as a result of the pandemic'

Ergomed executive chairman: ‘Our PrimeVigilance services have been essential in recent times, partly due to an increase in adverse event reporting as a result of the pandemic’

Amryt’s chief executive and founder Joe Wiley says his business’s acquisition of two marketed rare disease products – Lojuxta and Myalept – last year ‘transformed our company overnight.’

‘We quickly integrated these products into our existing business, and since the start of the year we have been consistently growing revenues quarter-on-quarter, and we moved into EBITDA profitability ahead of schedule and the market’s expectations.’

He also believes Amryt has ‘broken the mould’ of tradition biotech firms by gaining strong revenues and profits, a sentiment shared by Ergomed’s boss Dr Miroslav Reljanović, whose firm reported a 15 per cent rise in first-half revenues back in July.

Both companies state that Covid-19 has given them a further boost. Wiley says his company moved quickly to a work-from-home model and had a robust supply chain and inventory when the pandemic hit.

For Dr Reljanovic, it is the ‘essential’ nature of Ergomed’s research and drug safety services that has made it a crucial business during this unusual time.

‘We act as an essential services provider to larger pharmaceutical firms, as evidenced by our ability to orchestrate complex clinical trials (e.g. for Covid-19 patients) with a rapid turnaround time.

‘Our PrimeVigilance services have been essential in recent times, partly due to an increase in adverse event reporting as a result of the pandemic, and partly through the establishment of safety services to support Covid-related clinical trials.’

Another company, 4D Pharma, is running a trial giving an oral drug to hospitalised coronavirus patients, although whether this has boosted its share price is disputable.

Ergomed's executive chairman t is the 'essential' nature of Ergomed's research and drug safety services that has made it a crucial business during this unusual time

Ergomed’s executive chairman t is the ‘essential’ nature of Ergomed’s research and drug safety services that has made it a crucial business during this unusual time

AstraZeneca’s much more eminent Covid vaccine trial on the other hand, has given its share price an enormous (metaphorical) shot in the arm.

Even the announcement of a pause on clinical trials last week did little to scare investors. The FTSE 100 firm’s share price been on a long ascent in the last decade, thanks in large part to better success rates in getting new medicines to market.

By contrast, GSK had been tarnished with bribery scandals and flat turnover. Even if the company manufactures Covid treatments, it expects to not profit off them. AstraZeneca has also declared it will supply any potential Covid vaccine at no profit.

If the two firms were cities, AstraZeneca would be London, hogging most of the money and glory, while GSK would be Birmingham or Manchester – still prominent and world-famous, but dwarfed by their much bigger, richer and older sister.

AstraZeneca has declared it will supply any potential Covid vaccine at no profit

AstraZeneca has declared it will supply any potential Covid vaccine at no profit

So, what about the rest of the British pharma sector? According to consulting firm GlobalData’s Pharma Intelligence Center Drugs Database, there are 235 known private independent pipeline-only Bio/Pharma companies headquartered in Britain.

Peter Shapiro, the senior director of Drugs and Business Fundamentals at GlobalData, says: ‘It is hard to generalise about these smaller Pharma companies as they are quite diverse, spanning every major molecule type and therapeutic area.’

GSK and AstraZeneca though ‘both have blockbuster drugs and diversified, innovative therapeutic pipelines. Their pipelines include Covid-19 vaccines or collaborations, and they have made significant investments in advanced therapy medicinal products, especially in the growing field of Immuno-Oncology (IO).’

But whatever the size of each pharma business, one long-term trend should give the wider industry a considerable boost in confidence – the world is getting older.

GSK's share price has been hurt in the last decade as bribery scandals and flat turnover beset the Brentford-based company

GSK’s share price has been hurt in the last decade as bribery scandals and flat turnover beset the Brentford-based company

This year 2020 is the first time in human history that the number of over-65s outnumbers those under five. The Office for National Statistics projects that one in four Britons in 2050 will be 65 or older.

China and India, the world’s two largest countries by population, have seen women’s fertility rates plummet as they have grown richer, while the Asian tiger economies have already had below-replacement birth rates for decades.

As journalist Camilla Cavendish writes in her book Extra Time: 10 Lessons for an Ageing World: ‘The twenty-first century will be defined by people living longer, in societies which are growing older much faster than we have fully realised.’

Health spending is also disproportionately concentrated on the elderly. The Institute for Fiscal Studies (IFS) estimates that 65-year olds cost the NHS two and a half times more than a 30-year old, but 85-year olds cost five times as much.

The year 2020 will be the first time in human history that the number of over-65s outnumbers those under five. About one in four Britons in 2050 will be 65 or older as well

The year 2020 will be the first time in human history that the number of over-65s outnumbers those under five. About one in four Britons in 2050 will be 65 or older as well

And just to throw in an extra secret sauce, the world is getting fatter, putting people at greater risk of diabetes, heart disease, depression, and other medical problems.

Put it all together, and pharmaceutical firms are set for a golden century. Surely nothing could throw a spanner in the works? Well, the industry has one major worry on its immediate horizon – the threat of a hard Brexit.

A parliamentary report on the sector published two years ago warned that ‘any small gains [from Brexit] would be hugely outweighed by additional costs or the loss of access to existing successful markets.’

It added that the ‘potential for new, untapped markets simply does not exist in an already global sector in which the UK is highly engaged.’

The report called on the UK to have a close relationship with the EU, with medicines able to travel across borders with as little hassle as possible, something that could be severely affected if the two parties end up trading on WTO terms.

A parliamentary report on the pharma industry said 'any small gains [from Brexit] would be hugely outweighed by additional costs or the loss of access to existing successful markets'

A parliamentary report on the pharma industry said ‘any small gains [from Brexit] would be hugely outweighed by additional costs or the loss of access to existing successful markets’

CMC Market analyst David Madden believes such a scenario will hurt pharma stocks across the board, though he thinks GSK and AstraZeneca may not be as badly impacted.

He says because their overseas earning are proportionally higher, a fall in the pound’s value will not hurt them as much and that ‘big pharma players like GSK are more likely to produce a Covid-19 vaccine so that will be on traders’ minds too.’

GlobalData’s Peter Shapiro says the major pharma firms have also been extensively preparing for a hard Brexit. However, the potential regulatory dealignment between Britain and the European Medicines Agency (EMA) remains a significant worry in the industry.  

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AA share skid off track as suitor walks away

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aa share skid off track as suitor walks away

Platinum Equity, one of the potential buyers for breakdown business AA, has withdrawn from the race three weeks after a deadline for bids was extended.

The private equity firm said that it had walked away from discussions with AA’s board ‘by mutual agreement.’

The news was unwelcome among AA shareholders with many hitting the sell button, sending the stock down 17 per cent to 28p.

Platinum Equity has withdrawn from the race to buy the AA by mutual agreement

 Platinum Equity has withdrawn from the race to buy the AA by mutual agreement

It follows weeks of speculation over the future of the business after it announced talks with three potential bidders in early August.

However, finding a buyer from the trio has so far proved elusive, and earlier this month a deadline set by the Takeover Panel passed without any firm bids arriving.

This forced AA to ask for an extension, with the new deadline of 29 September.

In a statement on Tuesday, Platinum said: ‘Platinum Equity announces today that discussions with the board of AA have been terminated by mutual agreement and it does not intend to make an offer for AA.’

But the US investor reserved its right to make an offer for AA at a later point. However, this will be only with the agreement of the AA’s board and if a rival bid is made.

Platinum’s withdrawal potentially leaves only one consortium left in the race.

Late last month reports emerged that rival bidder Warburg Pincus was talking to Centerbridge Partners and Towerbrook Capital Partners about combining forces rather than making competing bids for AA.

Last month AA said that its trading has been resilient during the pandemic and it expects only a small hit when it presents its results on 29 September.

Chairman John Leach said the businesses needed to pay down debts in order reach its ‘full potential’.

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Electrified Range Rover Velar 4X4 gains a new £57k plug-in hybrid option

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electrified range rover velar 4x4 gains a new 57k plug in hybrid option

Range Rover has added a new £57,000 electrified plug-in hybrid option to its refreshed and upgraded Velar 4X4 line up.

The aerodynamically-shaped mid-size luxury SUV, which sits between the Range Rover Evoque and Range Rover Sport, is gaining a new additional P400e model variant combining a 2.0-litre four-cylinder petrol engine with a 105kW electric motor.

The set-up produces a combined 404 horsepower, which propels the Velar from 0-to-60mph in 5.1 seconds (0-62mph in 5.4 seconds) up to a top speed of 149mph – and 33 miles can be covered without the unleaded motor kicking in.

Electrified: Range Rover has added a new £57,000 plug-in hybrid model to its range

Electrified: Range Rover has added a new £57,000 plug-in hybrid model to its range

With the 17.1kWh lithium ion battery fully charged, it can be driven for 33 miles in pure electric mode

With the 17.1kWh lithium ion battery fully charged, it can be driven for 33 miles in pure electric mode

The 17.1Wh lithium-ion battery housed under the floor of the boot can be charged to 80 per cent in just 30 minute using a fast DC charge point, or in 1 hour 40 minutes using a standard 7kW domestic wallbox. That rises to 5 hours 29 minutes on a domestic plug – enough to give an overnight charge.

As a hybrid, linked to an eight speed automatic transmission, it has a claimed average overall fuel economy of 130.2mpg and CO2 emissions from 49g/km.

There are three driving modes: EV (Electric Vehicle) mode, which enables the vehicle to prioritise running solely on the electric power using the energy stored in the battery, for quiet, zero emissions journeys up to 33 miles with a full battery charge; Hybird (also the ‘default’ driving mode), combining petrol and electric drive in the most efficient manner; and finally Save model that prioritises the petrol combustion engine to conserve the battery to be used when needed – such as when entering urban areas. 

The plug-in hybrid p400e is priced from £56,550 up to £71,020 for the range-topping R Dynamic HSE. The Velar ranged itself is priced from £46,110 for the base D200 specification.

The aerodynamically-shaped mid-size luxury SUV, which sits between the Range Rover Evoque and Range Rover Sport, is gaining a new additional P400e model variant combining a 2.0-litre four-cylinder petrol engine with a 105kW electric motor

The aerodynamically-shaped mid-size luxury SUV, which sits between the Range Rover Evoque and Range Rover Sport, is gaining a new additional P400e model variant combining a 2.0-litre four-cylinder petrol engine with a 105kW electric motor

The battery can be charged to 80% in just 30 minute using a fast DC charge point, or in 1 hour 40 minutes using a standard 7kW domestic wallbox

The battery can be charged to 80% in just 30 minute using a fast DC charge point, or in 1 hour 40 minutes using a standard 7kW domestic wallbox

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Order books open today for first deliveries in December – just in time for Christmas.

Land Rover said the plug-in hybrid Velar ‘offers customers the perfect balance of design and technology – now with electric power’.

Colin Kirkpatrick, chief product engineer for the Range Rover Velar, said: ‘It’s smooth and enjoyable to drive, while delivering the same power as a 3-litre petrol engine with more torque and better fuel consumption. We’ve also maintained the Velar’s all-terrain ability, with equivalent ground clearance on the plug-in hybrid as its non-electric counterpart.’

For company car owners, Land Rover said: ‘The emissions efficiency of the Range Rover Velar PHEV significantly improves cost-of-ownership, with a benefit-in-kind tax rate for business/company car drivers starting from just 10 per cent. 

‘For a 40 per cent taxpayer, this rate would mean a monthly tax bill of just £214.30 in the current financial year.’  

The set-up produces a combined 404 horsepower, which propels the Velar from 0-to-60mph in 5.1 seconds (0-62mph in 5.4 seconds) up to a top speed of 149mph

The set-up produces a combined 404 horsepower, which propels the Velar from 0-to-60mph in 5.1 seconds (0-62mph in 5.4 seconds) up to a top speed of 149mph

Land Rover said the plug-in hybrid Velar ‘offers customers the perfect balance of design and technology – now with electric power'

Land Rover said the plug-in hybrid Velar ‘offers customers the perfect balance of design and technology – now with electric power’

The plug-in hybrid p400e is priced from £56,550 up to £71,020 for the range-topping R Dynamic HSE

The plug-in hybrid p400e is priced from £56,550 up to £71,020 for the range-topping R Dynamic HSE

Elsewhere, a new family of 3.0-litre straight-six Ingenium 400 horse-power petrol and 300 horse-power diesel engines is also introduced to the Range Rover Velar for the first time, all with 48-volt mild hybrid electric vehicle technology for reduced fuel consumption and heightened refinement. 

The new P400 straight-six engine delivers allows Velar to accelerate from 0 to 60mph in 5.2 seconds (0 to 62mph in 5.5 seconds.) The engine features an electric supercharger supported by a twin scroll turbocharger.

The D300 in-line diesel offers 0 to 60mph in 6.1 seconds (0 to 62mph in 6.5 seconds) with fuel economy of up to 37.2mpg and CO2 from 199g/km. It also meets latest emission standards including Euro 6d-final real-world driving compliance.

The next generation four-cylinder Ingenium D200 (204 horse-power diesel) offers more power, lower CO2 of 165g/km and improved fuel economy of up to 44.9mpg.

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Inside are integrated digital screens fitted with Land Rover’s Pivi and Pivi Pro infotainment systems. Land Rover says: ‘Customers can access software updates ‘over-the-air’ reducing the need to visit a retailer.’

Land Rover said the experience inside the Range Rover Velar is now ‘an even calmer sanctuary’ thanks to the addition of ‘active road noise cancellation technology. 

Will it fit in my garage?

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New plug in hybrid P400e Range Rover Velar

Price: from £56,550 to £71,020

On sale: Now

First deliveries: December

Length: 4,797mm

Width:

Body: 1,930mm

Mirrors folded: 2,041mm

Mirrors unfolded: 2,147mm

Height: 1,683mm

Weight: 2,233mm

Hybrid set up: 2.0-litre four-cylinder petrol engine with a 105kW electric motor.

Power: 404 horse-power

Transmission: Eight speed automatic

Top speed: 149mph

0 to 60mph: 5.1 seconds

0 to 62mph: 5.4 seconds

Average fuel economy: 130.2mpg

CO2 emissions: from 49g/km.

Range in pure electric mode: 33 miles

Battery: 17.1Wh lithium-ion battery

Charging times: 80 per cent in 30 minute using fast DC charge point

1 hour 40 minutes using standard 7kW domestic wallbox.

5 hours 29 minutes on domestic plug 

This works like a pair of noise cancellation headphones, constantly monitoring vibrations from the road surface and calculating the opposing sound wave needed to remove or cancel-out the noise heard by the occupants.

Land Rover said: ‘The effect is subtle, but the minimum reduction of 4 decibels ensures an even more refined and calming interior space.

‘This advanced system delivers a more serene experience inside Velar, even reducing driver tiredness, which can be brought about by extended exposure to low-frequency sound on long journeys.’

A new cabin air filtration system reduces levels of harmful particulates, pollen, allergens, and even odours and helps keep the driver and occupants feeling fresh.

New design features include a steering wheel with integrated smart buttons ready to receive the latest software updates over-the-air.

A tactile new ‘Drive’ selector replaces the rotary gear version. 

The firm said: ‘The Range Rover Velar is now even more desirable, sustainable and intelligent with the introduction of an electric plug-in hybrid option, advanced new infotainment technology and elegant new design features.’

Nick Rogers, executive director for product engineering at Jaguar Land Rover said: ‘The Range Rover Velar’s name and bloodline dates back to the code name of the original Range Rover prototypes. It has been fifty years since the introduction of the pioneering Range Rover in 1970, and now every family member is electrified with our awesome plug-in hybrid technology.’

He added: ‘Electrified powertrains and cleaner mild hybrid diesel engines mean the Velar is an even more efficient and sustainable option for our customers. ‘

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