UK science drives value

The way in which British life sciences have risen to the challenge of Covid-19 is hugely exciting and an enormous contrast to the stuttering early response to the pandemic from Public health england.

The decision by Astrazeneca (AZ) chief executive Pascal Soriot to place the pharma group’s resources behind the Oxford Jenner Institute’s vaccine is paying off brilliantly.

The first Lancet-published results on the efficacy of the vaccine AZD1222 show a strong immune response in healthy adults to an antibody-based therapy. Larger scale testing continues in Brazil and South Africa, and optimism is rising that there could be a working vaccine later this year. earlier pessimism that it could take years to develop a safe vaccine has been turned on its head.

Investors who backed Astrazeneca in April have seen healthy gains with the shares advancing more than 20pc, making it the most valuable company in the FTSe 100 with a market capitalisation of £133bn. When Soriot spoke to this paper last month and suggested there could be a vaccine ready for use in the UK as soon as September there was scepticism. however, Downing Street and AZ’s early backing for the trials means that Britain’s most vulnerable populations to Covid-19 will be first in line for protection.

Another huge stock market winner is the biotech firm Synairgen, producer of a medicine which shows great efficacy in reducing severe illness among Covid-19 patients. That the firm was founded by professors at the University of Southampton is another demonstration of the dynamism of the UK’s research based economy.

But savers who put their faith in Neil Woodford’s biotech investment prowess will look on with consternation.

Just a month ago, authorised corporate director Link Fund Solutions, which is liquidating Woodford’s empire, sold a stake in Synairgen when it was worth just £8.1m.

After a dramatic rise in the stock those shares would now be worth about £40.5m.

Link has new, very serious questions to answer about its terrible timing.

Retail therapy

COvID-19 has turbo- charged change in commerce and the economy. In retail, the most obvious development has been the way in which the exit from the high Street to online has speeded up.

There is a hidden revolution taking place too in terms of shortened and less complex supply chains and in the case of Marks & Spencer more autonomy to store managers. The latest 950 job cuts at M&S in store support functions and central office reflect that.

The pandemic has forced the pace of change across the whole economy. Zoom’s and Microsoft’s ‘meeting room’ technology has demonstrated that more flexible working is not a pipedream. The switch from use of notes and coins to plastic and electronic currency and payments has become the natural order.

In unveiling the latest job cuts, M&S is making the same kind of painful adjustments already seen at Boots and John Lewis. Much of the blame used to be heaped on business rates. The pandemic has shown there are more fundamental reasons why there have been so many insolvencies in retail. Shops are often in the wrong places, the way rents are set dates back to victorian times, digital connections are transforming supply chains and online shopping is becoming the new norm.

What people buy also has changed. At M&S demand for men’s suits has tumbled and sales of shorts soared. Kidswear is booming with displays moved to front of store. M&S shares selling at less than one pound, one third of the value of a year ago, have proved a terrible investment. With a market value of less than £2bn, M&S is worth a fraction of £15.3bn Ocado and much less than upstarts Boohoo and Asos.

Can the M&S tanker be turned? Transformation is being speeded up with grocery joint venture with Ocado, a streamlined supply chain and store portfolio and the embrace of online.

One would hope that M&S’s ethical supply chain will have more long-term appeal to consumers than Leicester sweat shops.

Sand castles

FANCy renting a beach hut for your staycation? It will be pricey. Data firms howsy and GetAgent report that renting a hut in Mudeford in Dorset would cost £3,860 a month. In contrast a similar hut in fashionable Southwold in Suffolk would cost £832. Families wanting to buy might need a mortgage. One Dorset hut is advertised at £300,000. Jaw dropping.