Health backed by serious wealth represents progress
▶ Strides made in Chinese cancer care and misgivings over Ryanair. Our latest roundup on the world’s wealthy
With an abundance of patients, specialised treatment is an urgent matter in China, And in France the telecoms landscape is changing.
Li Ka-shing
A pair of Harvard-trained American oncologists, backed by Hong Kong billionaire Li Ka-shing, are attempting to harness technology to revamp cancer care. They are taking some of their earliest steps in China cancer’s ground zero.
China has the world’s largest number of cancer patients, yet specialised treatment is in such short supply that patients must often travel long distances to top hospitals, living in dilapidated housing for months for short oncologist visits.
That problem has begun drawing the attention of bigname investors, and Mr Li, one of Asia’s richest men, in 2015 became the first funder for the physicians’ start-up, called Driver. Other investors joined, and now backed with $100 million, the firm is developing technology to give cancer patients more control over their care. It begins formally signing up patients in China and the US this week, after a 17-month trial run with several hundred people.
The hope is to use technology to address a perennial problem at the heart of global oncology. Cancer drugs and experimental treatments have exploded, and $133 billion worldwide is spent on these medicines each year, according to researcher Iqvia Institute. Yet patients often can’t find all the available options, except filtered through an overworked oncologist. Researchers, meanwhile, can’t always stay abreast of other studies – sometimes even inside their own medical institutions.
Driver’s solution? The startup’s labs in San Francisco and southern China analyse patient tumours, DNA and other medical records. Then an app shows patients the best treatments and clinical trials that match their specific tumours. Driver works in both countries. Yet the information shortfalls it is focused on are particularly visible in China: there are just 18 oncologists per 1 million people in China compared with 161 for the same number in the US, according to the Journal of Global Oncology.
But for its biggest ambitions to be realised, Driver needs large numbers of patients to sign up. The full service, including tumour and records processing, will have a $3,000 price tag, limiting access to affluent patients.
David Bonderman
Most Ryanair Holdings shareholders have long put up with the airline’s peculiar corporate governance for the same reason passengers take one of its no-frills flights: they felt they were getting value for money in the form of a soaring share price.
That indifference emboldened management to stand up to the minority of investors who have on occasion dared to question how the company is run. Responding to a row over his pay last year, chief executive Michael O’Leary said investors who did not like it should “sell your shares”. Some of his other reported comments were rather more colorful than that.
The roughly €7.5 billion (Dh31.83bn) of Ryanair’s market value that has been obliterated since August 2017 indicates some shareholders followed Mr O’Leary’s advice. A staff rostering crisis that morphed into labour strife and, eventually, Ryanair’s shock decision to recognise trade unions, have prompted investors to reassess Ryanair’s once seemingly impregnable investment case.
With labour and fuel costs on the rise, Ryanair’s earnings are not expected to grow for the next couple of years, according to analysts surveyed by Bloomberg. Those same factors should also nudge Ryanair to re-examine whether its governance is still fit for purpose.
Along with two prominent labour groups, proxy advisor Glass Lewis is recommending that shareholders oppose the re-election of billionaire chairman David Bonderman at this month’s annual general meeting.
The proximate cause of Glass Lewis’s displeasure is Mr Bonderman’s role in appointing Kyran McLaughlin – a 17-year veteran on Ryanair’s board – as senior independent director. One of his jobs is to listen to concerns that investors feel can’t be addressed by the chairman, chief executive or chief financial officer. Another is to review the performance of the chairman.
Besides his long tenure, the trouble with Mr McLaughlin’s candidacy is he is also deputy chairman of Davy Stockbrokers – which provides corporate advisory services to Ryanair.
Mr Bonderman, 75, who stepped down from the Uber Technologies board last year after making a sexist comment, has been chairman of Ryanair for about the same time as Mr O’Leary has been chief executive – more than two decades. His huge experience in the airline industry is certainly valuable. But he has been there for more than twice the length of time the UK corporate governance code says a chairman should normally stay in his post.
Xavier Niel
The French refer to l’arroseur arrosé – when the gardener gets soaked by their own hose. In English, the equivalent is to be hoisted by one’s own petard.
Either way, it applies to telecoms billionaire Xavier Niel. The majority shareholder of Iliad helped to create much of the turmoil in the French mobile phone market by undercutting the prices charged by incumbents Orange, Bouygues and Altice Europe NV’s SFR.
Now the tables have turned, and those rivals are beating
Iliad with their own low-cost offerings. The upshot is that Iliad’s mobile and broadband subscriber numbers both fell in the first half. Sales missed analyst estimates.
Mr Niel’s response has been to offer yet another round of price promotions. But there must be serious questions about how sustainable that approach is. It will surely provoke another reaction from competitors.
That there is little tariff difference now between the French carriers plays into the hands of market leader Orange. As the former national operator, it has the best network coverage so consumers will turn to it if it’s just as cheap as Iliad. A record number of subscribers defected to Orange from Mr Niel’s operator in the second quarter.
Iliad is trying to close the quality gap by investing heavily in its own network. Capital expenditure has soared since 2014. But it is a long way behind Orange and has less funds. While it promises operating free cash flow of about €1bn in 2020, on a net basis analysts expect just €253 million of free cash flow that year. Net free cash flow this year will be negative.
More than anything, Iliad’s travails confirm the urgency for French consolidation. It need not take part itself. But the billionaire trifecta of Mr Niel, Martin Bouygues of his namesake firm and Altice’s Patrice Drahi must find a resolution. Mr Bouygues has said that no deal is possible before a French spectrum auction is completed, and an attempt earlier this year with Altice failed. Iliad chief executive Thomas Reynaud says he won’t trigger any tie-up. Having four operators at each others’ throats is wonderful for French consumers but a nightmare for shareholders.
Paul Allen
Paul Allen, the billionaire Seattle Seahawks and Portland Trailblazers owner and Microsoft co-founder, made his largest-ever foray into congressional politics this year by donating $100,000 to a group seeking to keep Republicans in control of the US House.
The Seattle Times reports that the June 14 donation went to Protect the House, a committee headed by House majority Lleader Kevin McCarthy of California. It is the biggest cheque Mr Allen has sent to a federal political candidate or committee, according to Federal Election Commission filings.
Protect the House is a joint fundraising committee, a type of group that lets wealthy donors make a single large contribution which is then divided among candidates and political-action committees, or PACs, across the country.
FEC records show the largest chunk of Mr Allen’s $100,000 went to the National Republican Campaign Committee, which received $33,900. The Great America Committee, a PAC created by Vice President Mike Pence, received $5,000. More than a dozen other congressional Republicans from Iowa to New York received about $2,600. Overall in the 2017-18 election cycle, Mr Allen has donated $173,500 to Republican congressional candidates and PACs compared with $45,900 to Democratic candidates and PACs, FEC records show.
The GOP tilt represents somewhat of a turnabout from Mr Allen’s past political giving on the federal level, which has tended to be more bipartisan – and even Democratic-leaning in most years. In the 2016 election cycle, he donated $74,500 to federal Democratic candidates compared with $52,400 to Republicans.
Mr Allen, whose net worth is estimated at more than $20bn by Forbes, is identified as owner of the Seahawks on his $100,000 donation.
Mr Allen’s interests go beyond professional sports. He owns the real estate development company Vulcan, and founded the Allen Institute for Brain Science and the aerospace firm Stratolaunch, which has built a colossal airplane designed to launch satellites into orbit.