A shopper carries a bag of Nike merchandise along the Magnificent Mile shopping district on December 21, 2022 in Chicago, Illinois.
Scott Olson | Getty Images
WASHINGTON — A House committee examining the U.S. government’s economic relationship with China is asking some of the world’s largest clothing companies for information about the use of forced labor during production — a potential violation of U.S. trade law.
Lawmakers asked retailers Temu, Shein, Nike and Adidas North America about the use of materials and labor sourced from the Xinjiang Uyghur Autonomous region of China, according to letters sent to company leaders on Tuesday. Such practices would constitute violations of the 2021 Uyghur Forced Labor Prevention Act, according to the lawmakers.
Congress passed the UFLPA with bipartisan support after the State Department determined China is “committing genocide against Uyghurs and other minority groups in Xinjiang.”
The letters were sent to Rupert Campbell, president of Adidas North America; Qin Sun, president of Temu; Chris Xu, CEO of Shein and John Donahoe, president and CEO of Nike, Inc. They were signed by Reps. Mike Gallagher, R-Wisc., chair of the House Select Committee on the Chinese Communist Party, and Ranking Member Raja Krishnamoorthi, D-Ill.
“Using forced labor has been illegal for almost a hundred years—but despite knowing that their industries are implicated, too many companies look the other way hoping they don’t get caught, rather than cleaning up their supply chains. This is unacceptable,” Gallagher in a statement. “American businesses and companies selling in the American market have a moral and legal obligation to ensure they are not implicating themselves, their customers, or their shareholders in slave labor.”
The inquiries also follow a March hearing of the committee that included an expert assessment finding that U.S. companies finance “state-sponsored forced labor programs in the Uyghur region.”
The lawmakers requested responses to their questions, including the identity of materials suppliers, supply chain policies and audit measures for suppliers, by May 16.
Representatives for the companies did not immediately respond to requests for comment from CNBC.
The latest inquiries follow a separate bipartisan effort earlier this week urging the Securities and Exchange Commission to require Shein to certify it does not use Uyghur labor before the company can expand into the U.S. market. Shein has denied the accusation.
Chinese brands Shein and Temu, which is owned by Chinese parent company PDD Holdings, are also accused of capitalizing on a 90-year-old loophole to avoid tariffs on many goods sold directly to U.S. consumers, the lawmakers said Tuesday.
The lawmakers say Shein and Temu rely heavily on the de minimus provision of Section 321 of the Tariff Act of 1930 to waive import tariffs if the fair retail value of in the country of shipment does not exceed $800.
An Eli Lilly and Company pharmaceutical manufacturing plant is pictured at 50 ImClone Drive in Branchburg, New Jersey, March 5, 2021.
Mike Segar | Reuters
The Alzheimer’s treatment donanemab, which is made by Eli Lilly, significantly slowed progression of the mind-robbing disease, according to clinical trial data released Wednesday by the company.
Patients who received the monthly antibody infusion during an 18-month study demonstrated a 35% slower decline in memory, thinking and their ability to perform daily activities compared with those who did not receive the treatment, Eli Lilly’s data showed.
Patients who took donanemab were 39% less likely to progress to the next stage of the disease during the study, according to the trial results.
But the treatment’s benefits will have to be weighed against the risk of brain swelling and bleeding that can be serious and even fatal in rare cases. Three participants in the trial died from these side effects.
Eli Lilly’s stock was up more than 6% in premarket trading Wednesday.
Lilly plans to apply for Food and Drug Administration approval of donanemab as soon as this quarter, according to the company. The trial studied individuals in the early stages of Alzheimer’s who had a confirmed presence of brain plaque associated with the disease.
Dr. Daniel Skovronsky, Lilly’s chief scientific and medical officer, said donanemab demonstrated the highest level of efficacy of any Alzheimer’s treatment in a clinical trial. The company is working to get donanemab approved and on the market as quickly as possible, he said.
And Skovronsky believes the FDA feels the same sense of urgency.
“Every day that goes by, there are some patients who pass through this early stage of Alzheimer’s disease and become more advanced and they won’t benefit from treatment,” he said in an interview with CNBC. “That’s a very pressing sense of urgency.”
Lilly previously applied for expedited approval of donanemab.
The FDA rejected that request in January and asked the company for more data on patients who received the antibody for at least 12 months. Lilly said the data wasn’t available at the time because many patients were able to stop dosing at six months because the treatment cleared plaque quickly.
Nearly half of patients — 47% — who received donanemab showed no disease progression a year after treatment began, compared with 29% who did not receive the antibody, according to the data released Wednesday.
More than half of patients completed the treatment in the first year and 72% completed it in 18 months due to clearance of brain plaque.
In a separate measure, patients who received donanemab showed 40% less decline in their ability to conduct daily activities at 18 months. This means they could better manage finances, drive, pursue hobbies and hold conversations than those who did not receive the treatment.
“These are the strongest phase 3 data for an Alzheimer’s treatment to date. This further underscores the inflection point we are at for the Alzheimer’s field,” said Maria Carrillo, the Alzheimer’s Association chief scientific officer, in a statement.
Donanemab targets brain plaque associated with Alzheimer’s disease. The treatment significantly reduced the plaque as early as six months after treatment, according to Lilly. Many patients saw such significant reductions that they tested negative for plaque presence on their PET scans, according to the company.
Donanemab cleared the plaque at six months in 34% of patients who had intermediate levels of a protein called tau that can become toxic and kill neurons. At 12 months, donanemab cleared the plaque in 71% of patients with the same tau levels.
“It should be unequivocal that drugs that remove plaque, particularly if you can remove plaque completely and do it quickly, can lead to very significant clinical benefits for patients,” Skovronsky said in an interview.
“The earlier in the disease course you do this, the more you can slow the disease,” he said.
Dr. Eric Reiman, executive director of the Banner Alzheimer’s Institute, said the results do not necessarily mean the plaque is completely gone, but donanemab cleared the plaque to such a degree that the treatment removed measurable evidence of it. The Banner Alzheimer’s Institute had two physicians who participated in the donanemab trial as principal investigators.
Donanemab can cause brain swelling and bleeding in patients that in some cases can be severe and even fatal. Three trial participants died from these side effects, according to Lilly.
These types of side effects have been observed in other Alzheimer antibody treatments such as Eisai and Biogen’s Leqembi, which received expedited FDA approval in January.
Reiman said he’s encouraged by the potential clinical benefit to patients but it’s important to be clear about the risks.
“We also need to be clear that there are side effects, including an uncommon but potentially catastrophic risk,” said Reiman. “And we need to continue to do our best to understand what that risk is for individual patients, to inform patients and family caregivers, and do everything we can to mitigate that risk,” he said.
About 24% of patients who received donanemab showed brain swelling on an MRI, but only 6% displayed actual symptoms. About 31% of patients had small brain bleeds called microhemorrhages, compared with 13.6% among patients who didn’t receive the treatment.
Lilly said the majority of the cases of brain swelling and bleeding were mild to moderate and patients stabilized with the right care, but cautioned that serious and life-threatening events can occur. About 1.6% of the swelling and bleeding cases were serious, according to Lilly.
Skovronsky said every patient would need to have a discussion with their doctor that weighs the potential benefits of donanemab with the possible risks.
“On a population basis, our view is its benefits outweigh risks,” Skovronsky said.
“FDA is the steward of that for the U.S.,” he said of the risk-benefit analysis that will determine whether donanemab wins approval.
When Bed Bath & Beyond shuts its doors for good, certain retailers should benefit from both the real estate and inventory opportunities, Bank of America wrote in a note Tuesday. Bed Bath & Beyond will close its remaining 360 namesake and 120 Buy Buy Baby locations by June 30 after filing for Chapter 11 bankruptcy protection last week. Since the storefronts are largely in high-traffic suburban areas, the locations are attractive to retailers as shoppers return to stores after Covid. “Stores average 30k square feet and are located in ideal off mall or strip center spots,” said analyst Lorraine Hutchinson. In addition, its assortment of home decor and baby products could flow through to off-price retailers at significant discounts, she noted. Bed Bath & Beyond vendors will also likely redirect products to off-price retailers as a way to diversify the business without seeing a drop in sales, she added. “While one bankruptcy is not thesis-changing, competitors going out of business is one of the tenets of the off-price market share story that has been missing over the past few years. We expect off-price to be ready to take advantage of this and any others,” Hutchinson wrote. Burlington and TJX are among the biggest beneficiaries, she said. Vacant Bed Bath & Beyond stores should be “great” for Burlington, which plans to grow its store count by 8% this year. Only 35% of Bed Bath & Beyond stores already have a Burlington location within a one-mile radius and 50% within two miles, Hutchinson pointed out. Burlington, which is trying to increase its penetration in home goods, could also see a 3% sales lift from taking 5% of Bed Bath & Beyond’s sales, she said. Hutchinson has a buy rating on the stock and $250 price target, which implies nearly 34% upside from Monday’s close. Meanwhile, TJX’s HomeGoods could also gain from snatching up vacancies. Only 38% of Bed Bath & Beyond stores have a HomeGoods store within a one-mile radius and 52% within two miles, Hutchinson pointed out. TJX plans to grow its HomeGoods store count by 5% this year and its T.J. Maxx and Marshalls store count by 2%. The company should also snag deals on the beleaguered retailer’s inventory. “We expect TJX will be a key beneficiary of the closeout product given it is the largest (making it the top choice for vendors) and the HomeGoods assortment is aligned with that of BBBY,” Hutchinson said. She estimated TJX could see a 1% sales lift if it can capture 5% to 10% of Bed Bath & Beyond’s sales. Hutchinson has a buy rating and $94 price target on the stock, which suggests 20% upside. — CNBC’s Michael Bloom contributed reporting.
Travelers wearing protective masks receive nasal swabs from nurses at a COVID-19 test site inside Terminal B at Los Angeles International Airport (LAX), on Sunday, Nov. 22, 2020.
Bing Guan | Bloomberg | Getty Images
The Biden administration will end its Covid-19 vaccine mandates for federal employees, contractors and international air travelers next week.
The White House said in a statement Monday that those vaccine requirements will end on May 11, the same day the Covid public health emergency expires.
“While vaccination remains one of the most important tools in advancing the health and safety of employees and promoting the efficiency of workplaces, we are now in a different phase of our response when these measures are no longer necessary,” the White House said.
Although Covid cases, hospitalizations and deaths have declined dramatically this year, the virus is still killing more than 1,000 people per week.
The Health and Human Services Department also will start phasing out its vaccine mandate for health-care facilities that participate in Medicare and Medicaid, the White House said. In addition, it will end vaccination requirements for Head Start programs.
And the Department of Homeland Security will lift vaccination requirements for people entering the U.S via its land borders with Canada and Mexico, according to the Biden administration. U.S. citizens, nationals and permanent residents were never subject to those requirements.
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HHS and DHS will provide more details on the end of these vaccine requirements in the coming days, the White House said.
The Biden administration implemented the vaccine requirements for health workers, federal employees, contractors, and international air travelers as part of its drive to boost lackluster vaccination rates and slow the spread of the virus as the delta variant surged in late 2021 followed by omicron in the winter of 2022.
The mandates faced fierce opposition and lawsuits from critics who decried the requirements as government overreach, while the White House stressed they were essential to protect public health.
Workers walk through the garden center at a Home Depot store
Scott Olson/Getty Images
In its last quarterly earnings report, Home Depot forecast flat sales and lower profits for 2023, partly because consumers aren’t spending as much on home improvement products as they did during the pandemic, a boon period for the sector. Another hit to its bottom line, the company predicted, was the decision to invest $1 billion this year to increase hourly wages for every one of its frontline workers.
Giving pay raises at the same time sales are slumping seems like an incongruous strategy, but Home Depot executives project that it will actually boost the big-box retailer’s industry-leading position. “We plan to continue to capture market share,” CFO Richard McPhail told analysts during the February earnings call. One reason, he said, is “the unique advantage that our orange-blooded associates give us over our competition,” alluding to Home Depot’s signature color and the term for its frontline employees.
While Home Depot made a splash with the billion-dollar pay hike, it comes on the heels of similar moves by other major retailers that also espoused the benefits of investing in a well-paid workforce.
A year ago February, Target set a new starting wage range from $15 to $24 an hour for its so-called team members and expanded access to health care benefits, at a cost of $300 million in 2022. “We know that those investments lead to a more engaged team and that team then builds greater guest trust and loyalty, which in turn continues to power our growth across the company,” said Melissa Kremer, chief human resources officer, last fall when Target was named 12th among Fortune’s 100 best companies to work for.
In January, Walmart announced it was raising the minimum hourly wage for its store employees to $14 from $12 and up to $19 an hour, establishing an average wage of $17.50 an hour. “Retaining talent and establishing career opportunities for our associates remains a central objective to our growth ambitions,” CFO John David Rainey said at an investor meeting in April. “We are confident we can make the investments needed to remain competitive in a tight labor market while also growing our profitability.”
Although it’s difficult to draw a straight line from the cost of labor to sales, profits and market share — and retailers are also making big investments in automation — retaining a loyal and satisfied workforce can be seen as a wise strategy amid an ongoing battle for talent, and even as persistent inflation and interest rate hikes are expected to further moderate what has been robust consumer spending.
Irrespective of Home Depot’s strong track record on Wall Street, Morgan Stanley analyst Simeon Gutman said he was somewhat surprised by the $1-billion outlay. “The investment community largely thought Home Depot was already in prime position in terms of wage rates,” he said, noting a series of pay increases in recent years. And the fact that the company is anticipating less-than-rosy sales this year was another eyebrow-raiser. “The [home improvement] environment seems to be weakening, not accelerating, and therefore incremental wage investments at this time would open the door to more questions and surprise. But if you look at Home Depot over multiple years, you’re okay with it.”
Ann-Marie Campbell, executive vice president of U.S. stores and international operations at Home Depot, says the increase in wages is just one component of the investment story in associates. “We know that the key to an engaged and committed workforce is investing in the person and in their development,” she said.
The company also began the year with a new store leadership structure, creating new management positions and increasing the number of managers on the floor at any given time. “This is a meaningful investment that we believe will position us favorably in the marketplace,” she said.
“Essentially what they’re doing is reinvesting in a key competitive advantage of their business model, which is service within their stores,” said Brian Nagel, an analyst with Oppenheimer.
Market leaders such as Home Depot, Walmart and Target that have scale should be in better positions than mid-size competitors to invest in their labor force, Gutman said. “They’re behaving as they should given the tight labor market, showing leadership and not just thinking about a 12-month timeframe. They’re thinking about 12 to 36 months.”
The efficiency wage theory
The concept that maintaining a well-compensated, enthusiastic workforce is good for business is at the heart of what labor economists refer to as the efficiency wage theory, which postulates that paying employees higher than minimum wages increases productivity, retention rates and loyalty. That, in turn, is reflected in customer satisfaction and goodwill versus the competition.
“Providing customers a compelling reason to shop at your stores requires giving them real value and good service, and that’s not possible without having motivated and empowered employees,” said Zeynep Ton, a professor at MIT Sloan School of Management in Cambridge, Massachusetts, who has studied retail operations for more than 20 years. “Any retailer that wants to win needs to make sure they attract and retain the right employees and design their jobs so they can be productive and serve their customers well. And in a tight labor market, it’s getting increasingly difficult to keep talent [if] you pay unlivable wages and [offer] few opportunities for growth and success.”
In addition to the efficiency wage theory, there is significant empirical evidence that paying low wages hinders employees’ ability to focus on the job and be productive, said Ton, who expounds on this topic in her forthcoming book, “The Case for Good Jobs.”
“It also drives turnover and attendance problems,” she said. “The bottom line is that employee turnover and low pay cost companies a lot more than executives may think, both financially and competitively.”
It’s hard to say when, and if, Home Depot will see a demonstrable return on the monumental expenditure for its frontline workers. Regardless, CEO Ted Decker said during the February earnings call, “We harken back to … what our founders said: that if we take care of our associates, they take care of the customer and everything takes care of itself. That’s what this investment is all about.”
Seniors with early Alzheimer’s disease will face major hurdles to get treated even if promising new drugs roll out more broadly in the coming years, putting them at risk of developing more severe disease as they wait months or perhaps years for a diagnosis.
The U.S. health-care system is not currently prepared to meet the needs of an aging population in which a growing number of people will need to undergo evaluation forAlzheimer’s, according to neurologists, health policy experts and the companies developing the drugs.
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There are not enough dementia specialists or the needed testing capacity in the U.S. to diagnose everyone who may benefit from a new treatment like Eisai and Biogen‘s Leqembi. After patients are diagnosed, the capacity may not exist — at least initially — to provide the twice monthly intravenous infusions for everyone who is eligible.
Researchers estimate that the wait time from the initial evaluation to the confirmatory diagnostic tests to the infusions could range anywhere from a year and a half to four years or longer. Those months are critical for people with Alzheimer’s.
“The whole process from that time of the family physician conversation to the point of infusion, I worry how long it will take and the complexities of the patient navigating through all of that to successfully get to the end,” Anne White, president of neuroscience at Eli Lilly, which is developing its own Alzheimer’s treatment, told CNBC.
There are promising innovations in development, such as blood tests and injections that patients would take at home, which could make it significantly easier to get diagnosed and treated in the future.
White also said Lilly is confident that more doctors will get into the field and help to alleviate capacity issues, as awareness grows that medicines are entering the market to treat Alzheimer’s.
But time spent waiting robs early patients of their memory and ability to live independently. Alzheimer’s gets worse with time, and as patients deteriorate into more advanced stages of the disease, they no longer benefit from treatments like Leqembi that are designed to slow cognitive decline early.
More than 2,000 seniors transition from mild to moderate dementia from the disease a day, according to estimates from the Alzheimer’s Association. At that stage, they become ineligible for Leqembi.
The central challenge is that a large and rapidly growing group of people have early memory loss and other thinking problems known as mild cognitive impairment. This condition is often, though not always, a sign of early Alzheimer’s disease.
An estimated 13 million people in the U.S. had mild cognitive impairment last year, according to a study published in the Alzheimer’s and Dementia Journal. As the U.S. population ages, the number of people with this condition is expected to reach 21 million by 2060, the study projected.
The U.S. health-care system will deal with major logistical challenges in diagnosing the growing population of people with early Alzheimer’s — even before patients face potential issues with accessing treatment.
“There’s a very large population of undiagnosed cognitive impairments that need to be evaluated in order to determine if people are eligible for treatment,” said Jodi Liu, an expert on health policy at the Rand Corporation.
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Access to drugs like Leqembi is severely restricted because Medicare for nowwill only cover the $26,500-per-year treatment for people participating in clinical trials. Medicare has promised to provide broader coverage if Leqembi receives full approval from the Food and Drug Administration, which Eisai expects to happen in July.
Eisai has estimated that 100,000 people in the U.S. will be diagnosed and eligible for Leqembi by the third year of the treatment’s rollout. The sum is a fraction of the total population that could benefit.
Those patients could have other options if new treatments emerge from trials with positive marks.
Eli Lilly will publish clinical trial data on its antibody infusion donanemab in the second quarter of this year. If the data is positive, the company will ask the FDA to approve the drug.
Eisai’s U.S. CEO Ivan Cheung and Lilly’s White said during the companies’ respective earnings calls in February that they are focused on working with the U.S. health system to address the challenges of rolling out of Alzheimer’s treatments.
“The primary goal right now during this launch phase […] is really get the market ready in terms of the diagnostic pathway, the infusion capacity, the education on how to monitor for this therapy, get all the hospitals and clinics ready,” Cheung said.
Long lines are expected at the offices of geriatricians, neurologists and radiologists as millions of people with mild cognitive impairment undergo evaluation to diagnose whether they have Alzheimer’s disease.
Demand for geriatricians — doctors who are experts in diseases that affect the elderly — is expected to outstrip the number of specialists available in the field through at least 2035, according to projections from the federal Health Resources and Services Administration.
The American Academy of Neurology told Medicare in a February letter that increased demand for Alzheimer’s treatments will put substantial pressure on neurologists, who will need additional resources. The federal data predicts a substantial shortage of these specialists in rural areas through at least 2035.
“You just look at the neurologists, look at geriatricians — there are fewer and fewer geriatricians per person in the U.S.,” Rand’s Liu said. “It’s just a few number of specialists to do this kind of work.”
White said Lilly has heard stories of patients waiting six to 12 months to see a neurologist or other doctors who treat dementia due to current capacity issues.
The number of radiologists — who also play a role in diagnosing the disease — is expected to decline in the U.S. through 2035 even as demand increases, the data shows.
In a study published in 2017, Liu and other Rand researchers estimated an initial wait of 18 months for patients to get evaluated by a dementia specialist, tested to confirm a diagnosis, and then treated in the first year that an Alzheimer’s antibody treatment becomes available. The wait would decrease to 1.3 months by 2030 as the patient backlog is cleared, they estimated at the time.
But more recent research found that the wait would actually increase as demand created by an aging U.S. population outstrips the supply of specialists.
Patients seeking a first specialist visit could face an initial wait of 20 months, according to a study by researchers at the University of Southern California published in the journal Alzheimer’s and Dementia in 2021. The delay could increase to about four years as early as 2028 and grow longer through 2050, the study found.
The journal is published by the Alzheimer’s Association.
Both studies are based on assumptions made before Leqembi received expedited approval from the FDA in January. Actual wait times could differ from the studies’ projections.
Two types of tests can diagnosis Alzheimer’s disease: PET scans and spinal taps. PET scans are accurate and safe diagnostic tools, but they are also cumbersome and expensive, said Dr. David Russell, a neurologist.
Patients are injected with a tracer that makes brain abnormalities visible to the machine that does the imaging. Tracers have to be made for each patient and used on the same day.
“We don’t have the infrastructure to roll out PET scanning on a major scale,” said Russell, director of clinical research at the Institute for Neurodegenerative Disorders in New Haven, Connecticut. He is the principal investigator on the clinical trials of Leqembi and donanemab at the institute.
Medicare coverage of PET scans for Alzheimer’s patients is also limited right now. The insurance program for seniors will only cover one scan per lifetime, and only when the patient is participating in a clinical trail approved by the federal Centers for for Medicare and Medicaid Services.
“That’s concerning because people may actually test negative at one point but then obviously as they age, they may need to get tested again,” White said.
Early Alzheimer’s disease can also be diagnosed with a spinal tap, in which fluid around the spinal cord is extracted with a catheter and tested. While there’s plenty of capacity to do spinal taps, this option isn’t attractive to many patients due to unfounded fears that it’s painful and dangerous, Russell said.
Though “there’s a lot of resistance” to the procedure, it is well tolerated and safe, he noted.
“There are certainly areas that don’t have a PET scanner, rural areas, so people would need to travel to a health center that has a PET scanner,” Liu said.
In a large, sparsely populated rural state like New Mexico, many patients would have to drive three to five hours to get a PET scan in a city such as Albuquerque, said Dr. Gary Rosenberg, a neurologist and director of the New Mexico Alzheimer’s Disease Research Center.
“It’s not California or the East Coast where everything’s very compressed and people can travel and get to a center pretty easily and go through these kinds of treatments,” Rosenberg said.
The state has an estimated population of 43,000 people with dementia, and there are very few neurologists outside of the Albuquerque area, Rosenberg said. The New Mexico Alzheimer’s Disease Research Center in Albuquerque is one of only three such facilities funded by the federal National Institute of Aging in a vast region stretching west from Texas to Arizona.
To do a PET scan, a tracer has to be made for each patient off-site in Phoenix, flown on a private plane to Albuquerque and used within hours because the tracers have a short shelf life, according to Rosenberg. The whole process costs more than $12,000 per patient, he added.
“It’s logistically going to be very challenging,” Rosenberg said.
After spending months or possibly years waiting to get diagnosed with early Alzheimer’s, patients would then be eligible for intravenous infusions of Leqembi. But the U.S. doesn’t currently have the capacity to give infusions twice monthly for everyone who likely has the disease, Russell said.
“Having an IV infusion every two weeks would sort of ration people to availability and that’s a problem,” Russell said.
The University of New Mexico Hospital is already maxed out with demand for infusion therapies for cancer, rheumatoid arthritis and autoimmune diseases, and could have a “problem” adding new capacity, said Rosenberg.
Intravenous infusions of monoclonal antibodies like Leqembi aren’t difficult to administer, Russell said.
The infrastructure to offer infusions should expand rapidly once industry sees there’s demand for treatments like Leqembi. But the process of building out capacity could still take a couple years, Russell said. He believes big players like CVS will provide infusions for Alzheimer’s disease on a major scale if they see there’s a large and stable market.
“In one sense, capitalism works, and if it looks like that’s going to be the future, I think infusion centers will explode onto the scene,” the neurologist said.
Eisai and Biogen hope to move early Alzheimer’s patients to a single monthly dose of Leqembi after they’ve completed their initial course of twice monthly infusions, which could help alleviate some of the capacity issues with infusions over time. They plan to ask the FDA to approve this plan in early 2024.
Eli Lilly’s Alzheimer’s candidate antibody treatment donanemab is a single monthly dose, potentially making the logistics of administration easier if the drug gets approved. Dr. Dan Skovronsky, Lilly’s chief medical officer, told analysts during the company’s first-quarter earnings call that he expects many patients will be able to stop taking donanemab at 12 months.
Though the projected wait times to get diagnosed and treated are sobering, innovations on the horizon promise to significantly improve access to Alzheimer’s drugs over time.
Blood tests for Alzheimer’s are in development and some are already on the market. Primary-care doctors could administer the tests, which would ease the burden on patients, especially those in rural communities where the closest PET scan machine is hours away.
These tests detect proteins in the blood associated with Alzheimer’s. They promise to help diagnose the disease before people display cognitive symptoms, potentially giving patients the chance to get treated before they suffer irreparable brain damage, according to the National Institutes of Health.
At least three blood tests made by C2N Diagnostics, Quest Diagnostics and Qaunterix are currently on the market. But they are used to evaluate people who are already presenting symptoms and aren’t available on the mass scale needed for the expected increase in Alzheimer’s patients.
C2N’s PrecivityAD test costs $1,250 and is not covered by insurance — though the company has a financial assistance program. Quest Diagnostics’ AD-Detect test costs $650. Quest’s test is covered by some insurance plans but not Medicare at the moment. The company also has a financial assistance program. Quanterix wouldn’t disclose the price of its test, which insurance does not cover.
Right now, these are not stand-alone tests that can definitively diagnose Alzheimer’s. But the tests could help identify the patients who likely have the disease, which would narrow the population that needs further evaluation and reduce wait times for dementia specialists or confirmatory PET scans.
A study in the journal Alzheimer’s and Dementia estimated that a cognitive test combined with a blood test could slash wait times for dementia specialists from 50 months down to 12 months.
Eisai believes that inexpensive blood tests could completely replace PET scans and spinal taps by the fourth year of Leqembi’s rollout. The quicker diagnosiscould increase the number of people eligible for treatment.
Rosenberg said widespread availability of blood tests will allow mobile clinics to go into rural communities and identify who has markers associated with Alzheimer’s. This would allow patients in remote towns avoid the hours-long drive to cities with PET scan machines, Rosenberg said.
“It’s a game changer,” the neurologist said.
Lilly is developing at least two blood tests. The company is already using one test in clinical trials and hopes to commercialize it sometime this year. It is developing a second test through a collaboration with Roche. White said it is reasonable to expect that in a few years blood tests could replace more burdensome PET scans.
Biogen and Eisai are also developing an injectable form of Leqembi which patients could administer themselves with an autoinjector similar to insulin pens, saving the trip to a site that provides intravenous infusions. They plan to ask the FDA to approve these so-called subcutaneous injections in early 2024.
Eli Lilly is also conducting clinical trials on an antibody treatment called remternetug as a self-administered injection. But the promise of injections that can be administered at home could make companies reluctant to invest in building out intravenous infusion capacity, Russell said.
In the future, Alzheimer’s diagnosis and treatment could be folded into routine checkups with a family doctor, Russell said. When people turn 50 and head in to get a colonoscopy or a cholesterol check, the doctor could also run a blood test for Alzheimer’s.
If the test comes back positive, the doctor could then schedule patients for an MRI and get them started on an autoinjector treatment, Russell said.
“That’s going to be the way that we’re looking at it in the not too distant future,” he said.
The SpaceX Starship lifts off from the launchpad during a flight test from Starbase in Boca Chica, Texas, on April 20, 2023.
Patrick T. Fallon | Afp | Getty Images
Elon Musk expects SpaceX to spend about $2 billion on its Starship rocket development this year, as the company pushes to build on its first launch earlier this month.
“My expectation for the next flight would be to reach orbit,” Musk said, speaking during a discussion on Twitter Spaces on Saturday.
While SpaceX does secondary rounds about twice a year, to give employees and other company shareholders a chance to sell stock, Musk said the company does “not anticipate needing to raise funding” to further bolster the Starship program and its other ventures.
“To my knowledge, we do not need to raise incremental funding for SpaceX,” Musk said.
As for the dramatic first fully stacked Starship rocket launch on April 20,” the SpaceX CEO said, “The outcome was roughly in what I expected, and maybe slightly exceeding my expectations.”
“The goal of these missions is just information. Like, we don’t have any payload or anything — it’s just to learn as much as possible,” Musk said.
He put the probability of reaching orbit with a Starship flight this year at “probably” 80%, but espoused that he thinks there is a “100% chance of reaching orbit within 12 months.”
Starship launches for the first time on its Super Heavy booster from Texas on April 20, 2023.
SpaceX
The Starship flight got off the launchpad and achieved several milestones, but Musk gave more details on a variety of the problems the rocket suffered.
The rocket took off with only 30 of the 33 Raptor engines ignited at the base of the Super Heavy booster. Musk said SpaceX “chose not to start” three engines, as they were not “healthy enough to bring them to full thrust. Starship slid laterally off the launchpad as it climbed into the sky, which Musk said was “because of the engine failures.”
About 27 seconds into the flight, SpaceX “lost communications” with another engine — an incident that happened “with some kind of energetic event” that removed the heat shield around several other engines. “Things really hit the fan” around 85 seconds into the launch, when SpaceX lost “thrust vector control” — or the ability to steer the rocket.
Additionally, Musk reported that it took about 40 seconds for the rocket’s AFTS (Autonomous Flight Termination System, which destroys the vehicle in the event it flies off course) to kick in, which SpaceX will need to correct before the next launch attempt.
The strongest part of the rocket’s performance was how well it held together, including passing through a launch milestone called “Max Q,” or the moment when atmospheric pressure is strongest on the rocket.
“The vehicle’s structural margins appear to be better than we expected, as we can tell from the vehicle actually doing somersaults towards the end and still staying intact,” Musk said.
Looking forward, Musk said SpaceX has “made so many improvements” to future prototypes. The company needs to ensure “that we don’t lose thrust vector control” with the next launch.
Members of the public walk through a debris field at the launch pad on April 22, 2023, after the SpaceX Starship lifted off on April 20 for a flight test from Starbase in Boca Chica, Texas.
Patrick T. Fallon | Afp | Getty Images
Back on the ground, Musk said the booster created a “rock tornado” underneath the rocket as it was lifting off. While SpaceX has not seen “evidence that the rock tornado actually damaged engines or heat shields in a material way,” Musk noted that the company “certainly didn’t expect” to destroy the launch pad’s concrete and create a crater in its wake.
“One of the more plausible explanations is that … we may have compressed the sand underneath the concrete to such a degree that the concrete effectively bent and then cracked,” Musk said.
A priority for the next flight will be starting the 33 Raptor engines “faster and get off the pad faster,” Musk said. It took about five seconds for SpaceX to start the engines and launch the rocket, which Musk noted “is a really long time to be blasting the pad.” The company aims to cut that time in half for the next attempt.
A dust cloud grows underneath Starship as the rocket launches on its Super Heavy booster from Texas on April 20, 2023.
SpaceX
Photos of the aftermath have shown the violent result of the Super Heavy booster’s engines. A report from the U.S. Fish and Wildlife Service said the launch flung concrete and metal “thousands of feet away” and created a cloud of dust and pulverized concrete that fell as far as 6.5 miles from the launch site.
On Saturday, Musk said “the pad damage is actually quite small” and should “be repaired quickly.” He estimated the needed repairs mean SpaceX will be “probably ready to launch in six to eight weeks.” SpaceX will replace some of the propellant tanks near the launchpad. The 500-foot tall tower “is in good shape,” with “no meaningful damage” even though it was struck by “some pretty big chunks of concrete.”
Musk believes the biggest hurdle to flying again “is probably requalification” of the AFTS that destroyed the rocket, since “it took way too long” to detonate.
SpaceX is moving forward with a plan to put steel plates, which will be cooled by a water system, underneath the launch tower for the next Starship rocket.
Environmental activists and researchers have raised alarms about the cloud of pulverized concrete and dust that the launch created. Musk argued that the debris was “not toxic at all,” but said that “we don’t want to do that again.”
“To the best of our knowledge there has not been any meaningful damage to the environment that we’re aware of,” Musk said.
Carl Icahn speaking at Delivering Alpha in New York on Sept. 13, 2016.
David A. Grogan | CNBC
Carl Icahn on Friday called Illumina’s first-quarter results “very disappointing” and slammed the DNA sequencing company’s new plans to cut costs.
The activist investor, who owns a 1.4% stake in Illumina, is in a heated proxy fight with the company over its 2021 acquisition of cancer test developer Grail.
Icahn and Illumina have been trading jabs for more than a month.
Icahn is seeking seats on Illumina’s board of directors and pushing the company to unwind the Grail acquisition. He is also calling for the San Diego-based company to oust CEO Francis deSouza “immediately.”
Illumina on Tuesday reported quarterly revenue and earnings that topped Wall Street’s expectations.
But the company also posted net income of $3 million for the quarter, which was down more than 96% from the $86 million it raked in during the same period a year ago.
In an open letter Friday to Illumina shareholders, Icahn accused deSouza of “desperately, hilariously and, most of all, unsuccessfully” trying to spin the “decidedly mediocre” quarterly results during a press tour this week.
Icahn pointed to deSouza’s interview on CNBC’s “Squawk Box” on Wednesday, when the CEO touted strong demand for Illumina’s diagnostic testing services.
“Illumina CEO Francis deSouza seems to believe that he can fool all of the people all of the time,” Icahn wrote.
“Those not skilled in deciphering doublespeak might actually get the impression that Illumina was doing well!” he added.
Icahn also said that the price of Illumina shares fell the more its CEO during this week, “clearly signaling dissatisfaction with the earnings report and dissatisfaction with Mr. deSouza’s transparent attempt to put lipstick on a pig.”
Illumina’s stock is down more than 10% since the company reported earnings. Shares closed largely flat Friday after Icahn released his letter.
In that missive, Icahn also took shots at cost-cutting plans Illumina unveiled to improve its shrinking margins. He called those measures “vague” and “extraordinarily unambitious.”
The company on Tuesday said it will enable unnamed “activities” in more cost-effective areas of the world and will use its new NovaSeq X sequencing system to accelerate genomic discoveries, among other efforts.
Those plans will help Illumina reach its adjusted operating margin goals of 24% in 2024 and 27% in 2025, the company said in its earnings release.
Icahn called those margin targets “less than modest.” And he argued that they will “take years to realize, if they are achieved at all.”
The company has projected an estimated 22% operating margin for 2023, down from the 23.8% it reported in 2022.
Illumina reported a negative operating margin of 5.7% for the quarter, down from 15% during the same period a year ago. The company’s gross margins for the period fell to 60.3%, down from 66.6% in the first quarter of 2022.
Illumina did not immediately respond to a request for comment on Icahn’s letter.
Elsewhere in his letter, Icahn slammed deSouza’s positive remarks this week about Illumina’s $7.1 billion acquisition of Grail.
DeSouza had told CNBC the deal “makes sense” because Illumina can significantly expand the market for Grail’s early screening test for different types of cancer.
The CEO also touted Grail’s 100% revenue growth during the quarter compared with the same period a year ago.
But Icahn said the deSouza failed to tell the public about an opinion issued earlier this month by the Federal Trade Commission, which said that the deal would stifle competition and innovation.
The FTC also ordered Illumina to divest itself of the acquisition over those concerns.
The European Commission, the executive body of the European Union, also blocked the deal last year over similar concerns.
Illumina is appealing both orders and expects final decisions in late 2023 or early 2024.
Last week, a U.S. federal appeals court said that it will fast-track its review of Illumina’s challenge of the FTC order.
Icahn’s resistance to the acquisition stems from Illumina’s decision to close the deal without getting approval from those antitrust regulators.
Earlier this month he strongly criticized Illumina and its management for finalizing the “reckless deal,” calling it “a new low in corporate governance.”
Illumina has urged shareholders to reject Icahn’s three board nominees during its annual shareholder meeting scheduled for May 25.
Amazon on Wednesday began laying off some employees in its cloud computing and human resources divisions.
Amazon Web Services CEO Adam Selipsky and human resources head Beth Galetti sent notes to staffers in the U.S., Canada and Costa Rica informing them of the job cuts.
“It is a tough day across our organization,” Selipsky wrote in the memo.
The layoffs are part of the previously announced job cuts that are expected to affect 9,000 employees. Last week, Amazon laid off some employees in its advertising unit, and it has let go of staffers in its video games and Twitch livestreaming units in recent weeks.
Amazon wrapped up a separate round of cuts earlier this year that affected approximately 18,000 employees. Combined with the cuts this month, it marks the largest layoffs in Amazon’s 29-year history.
Amazon CEO Andy Jassy has been aggressively slashing costs across the company as the e-retailer reckons with an economic downturn and slowing growth in its core retail business. Amazon froze hiring in its corporate workforce, axed some experimental projects and slowed warehouse expansion.
By announcing layoffs in ads and AWS, Jassy has shown that two of Amazon’s biggest and most profitable businesses aren’t immune to the cost-cutting. Both AWS and ads have experienced slowing growth in recent months as companies trim their spending amid a challenging economic environment.
Some teams within AWS were included in the earlier round of layoffs. A portion of the cuts on Wednesday is expected to land in AWS’ professional services arm, which helps customers troubleshoot issues with their cloud infrastructure, according to a current employee, who asked to remain anonymous because they weren’t authorized to speak on the matter.
Head count in AWS ballooned during the Covid pandemic, which proved to be a massive boon for Amazon and other cloud providers, as companies, government agencies and schools sped their transition to the cloud.
“Given this rapid growth, as well as the overall business and macroeconomic climate, it is critical that we focus on identifying and putting our resources behind our top priorities — those things that matter most to customers and that will move the needle for our business,” Selipsky wrote in the memo. “In many cases this means team members are shifting the projects, initiatives or teams on which they work; however, in other cases it has resulted in these role eliminations.”
Amazon is scheduled to report first-quarter earnings after the bell Thursday. Investors will look for any insight into whether Jassy’s cost-cutting efforts have improved profitability, and when Amazon executives expect AWS growth to reaccelerate.
Shares of Amazon surged more than 3% in afternoon trading Wednesday.
Here’s the full memo from Selipsky:
AWS team,
As you know, we recently made the difficult decision to eliminate some roles across Amazon globally, including within AWS. I wanted to let you know that conversations with impacted AWS employees started today, with notification messages sent to all impacted employees in the U.S., Canada, and Costa Rica. In other regions, we are following local processes, which may include time for consultation with employee representative bodies and possibly result in longer timelines to communicate with impacted employees.
It is a tough day across our organization. I fully realize the impact on every person and family who is affected. We are working hard to treat everyone impacted with respect, and to provide a number of resources and touchpoints to aid in this transition. This also includes packages that include a separation payment, transitional health insurance benefits, and external job placement support.
To those to whom we are saying goodbye today, thank you for everything you have done for this business and our customers. I am truly grateful. To all AWS builders, thank you for your compassion and empathy for your colleagues.
Both the size of our business and the size of our team have grown significantly over recent years, driven by customer demand for the cloud and for the unique value AWS provides. This growth has come quickly as we’ve moved as fast as we could to build what customers have needed. Given this rapid growth, as well as the overall business and macroeconomic climate, it is critical that we focus on identifying and putting our resources behind our top priorities—those things that matter most to customers and that will move the needle for our business. In many cases this means team members are shifting the projects, initiatives or teams on which they work; however, in other cases it has resulted in these role eliminations.
The fundamentals and the outlook for our business are strong, and we are very confident in our long-term prospects. We are the leading cloud provider by a wide range of benchmarks, from our feature set to our security capabilities to our operational performance. We are focused on continuing to innovate in the areas that matter most to our customers as we help them minimize expense, innovate rapidly, and transform their organizations.
I am optimistic about the future. We’ll tackle our opportunities and our challenges, and continue to change the world.
Thank you,
Adam
And here’s the full memo from Galetti:
PXT Team,
As Andy shared a few weeks ago, leaders across the company have worked closely with their teams to decide what investments they are going to make for the future, prioritizing what matters most to customers and the long-term health of our businesses. Given PXT’s close partnership with the business, these shifts impact our OP2 plans as well, and we have made the difficult decision to eliminate additional roles within the PXT organization.
Today we shared this update with our PXT colleagues whose roles were impacted across the U.S., Canada, and Costa Rica. In other regions, we are following local processes, which may include time for consultation with employee representative bodies and possibly result in longer timelines to communicate with impacted employees.
These decisions are not taken lightly, and I recognize the impact it will have across both those transitioning out of the company as well as our colleagues who remain.
To those leaving, I want to say thank you for your contributions. You’ve helped build Amazon into the extraordinary company it is today, and we are here to support you during this difficult time. In the U.S., we are providing packages that include a 60-day, non-working transitional period with full pay and benefits, plus an additional several weeks of severance depending on tenure, a separation payment, transitional benefits, and external job placement support.
While this moment is hard, I remain energized by the important work that lies ahead of us. Together, we are building a workplace that helps fuel how Amazonians invent and deliver for customers. From making it easier for employees to find the information and help they need, to expanding our benefits, I am proud of the progress we’ve made over the last few years. This meaningful work is a direct reflection of PXT’s perseverance, resilience, and leadership. Thank you.
Please know that the entire PXTLT, including myself, is here to answer your questions and support you.
Chipotle Mexican Grill on Tuesday reported quarterly earnings and revenue that topped analysts’ expectations, fueled by better than expected same-store sales growth.
Like McDonald’s, Chipotle said traffic to its restaurants grew during the first quarter despite higher menu items. Chipotle’s menu prices are up roughly 10% from a year earlier. CEO Brian Niccol said the chain has demonstrated that it has pricing power.
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“We don’t want to be in front of the inflationary environment, but we also don’t want to fall behind,” he said on the company’s conference call.
Pedestrians wearing protective masks walk in front of a Chipotle restaurant in San Francisco, California, April 19, 2021.
David Paul Morris | Bloomberg | Getty Images
For now, Chipotle is pausing price increases, Niccol said on CNBC’s “Closing Bell.”
Shares of the company rose more than 7% in extended trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
Earnings per share: $10.50 vs. $8.92 expected
Revenue: $2.37 billion vs. $2.34 billion expected
Chipotle reported first-quarter net income of $291.6 million, or $10.50 per share, up from $158.3 million, or $5.59 per share, a year earlier. The company’s menu price hikes and lower avocado prices helped improve profit margins compared with the year-ago period.
Revenueclimbed 17.2%, to $2.37 billion, from $2 billion during the year-earlier period. Same-store sales rose 10.9%, topping StreetAccount estimates of 8.6%.
Niccol said that higher-income consumers are returning to restaurants more frequently. Even lower-income diners are visiting more often than they were in the prior six months, although their traffic remains down from a year ago. Overall, traffic rose roughly 4% in the quarter, reversing last quarter’s decline.
In February, executives said January’s same-store sales grew by double digits. A year earlier, the company saw sluggish sales as the omicron Covid outbreak put pressure on staffing and caused some temporary store closures.
Chipotle’s chicken al pastor is on track to be the chain’s most popular limited-time protein option ever, Niccol said on the company’s conference call. The company launched it in mid-March.
Digital orders accounted for nearly 40% of sales during the quarter. Chipotle customers have been ordering their burritos and tacos more in person compared with the year-ago period.
Executives also outlined changes coming to restaurants to improve speed of service and accuracy. The chain has been testing new grills that cook faster and more consistently. It has also been experimenting with how to staff its two make lines to keep up with demand from both in-person diners and digital orders.
The company opened 41 new locations during the quarter, 34 of which included its drive-thru lanes reserved for digital order pickup.
Looking to the rest of the year, Chipotle is anticipating same-store sales growth in the mid-to-high single digits. It’s expecting the same range for its second-quarter same-store sales growth, roughly in line with StreetAccount estimates of 5.8%.
The company reiterated its plans to open between 255 to 285 new restaurants during 2023.
Legendary investor Peter Lynch has one of the best investing records under his belt, but he still has regrets for not buying into some of the biggest tech companies in recent years.
The former Fidelity Magellan fund manager revealed Tuesday that he wished he hadn’t missed out on the explosive growth in Apple.
“Apple was not that hard to understand. I mean, how dumb was I?” Lynch, vice chairman of Fidelity Management & Research, said on CNBC’s “Squawk Box.” Apple has a “nice balance sheet. I should have done some work on Apple … it’s not a complicated company.”
Lynch recounted how his daughter had bought an iPod for $250 at the time and how he recalled thinking Apple was making a high margin on it. Yet he didn’t buy the stock.
Peter Lynch (L), Fidelity Funds Advisory Board Member.
Peter Lynch (L), vice chairman of Fidelity Management and Research Co
Lynch, 79, acknowledged that Warren Buffett saw Apple’s potential and capitalized on it. The “Oracle of Omaha” had shied away from tech stocks for decades, claiming they were outside of his expertise. But under the influence of his investing lieutenants, he bought into Apple in 2016 and made it his single biggest holding in his portfolio.
Apple stock – long term
The tech giant turned out to be one of Buffett’s most successful bets in his career, making him more than $100 billion on paper in just a few years. Buffett still views Apple as a consumer product company for its loyal customer base and strong brand effect.
Other than Apple, Lynch expressed regret for not buying into chip giant Nvidia, one of the biggest gainers in the semiconductor space in the past few years and a big enabler in artificial intelligence.
“Nvidia has been a huge stock I wish I could pronounce it,” Lynch joked.
Nvidia long term
Lynch made his name for managing Fidelity’s Magellan Fund from 1977 to 1990. Under his 13-year management, the fund earned an annualized return of 29.2%, consistently more than doubling the S&P 500′s performance. He also increased Magellan’s assets under management from $20 million to $14 billion during his tenure.
The outstanding record made Lynch a renowned figure on Wall Street, who later wrote investment books including “One Up on Wall Street.”
Tom Holland is Spider-Man in the Sony-Marvel film “Spider-Man: No Way Home.”
Sony
LAS VEGAS — CinemaCon kicked off Monday with a major announcement from Sony Pictures — its upcoming “Kraven the Hunter” would mark the first R-rated Marvel film produced by the studio.
The reveal came during the company’s presentation at the annual convention for Hollywood studios and movie theater owners in Las Vegas, in which Sony unveiled new footage and trailers from its upcoming slate, including “Spider-Man: Across the Spider-Verse,” “Gran Turismo” and “No Hard Feelings.”
“F— yes, it’s rated R,” said Kraven himself Aaron Taylor-Johnson in a pretaped teaser for the film before Sony showed the first trailer for the profane and bloody action flick.
Kraven wouldn’t be the first R-rated superhero flick to hit theaters in the last decade. Fans of the genre have been treated to “Logan,” “Deadpool,” “Watchmen” and “The Suicide Squad” in recent years from 20th Century Fox (now owned by Disney) and Warner Bros. Discovery. But it opens the door for Sony to develop darker, bloodier and more mature films within the Spider-Man universe — namely, around the fan favorite character Venom.
Sony currently owns the film rights to Spider-Man and his cavalcade of villains and has found success in alternative universe productions that fall outside Disney’s Marvel Cinematic Universe. The companies have partnered on three MCU standalone Spider-Man films featuring Tom Holland in the spidey suit and have granted Disney permission to use the character in its ensemble films.
In 2023, the studio will have a sequel to its Oscar-winning animated feature “Spider-Man: Into the Spider-Verse.” On Monday, the company shared an extended look at “Spider-Man: Across the Spider-Verse,” in which Miles Morales reunites with Gwen Stacy after becoming Brooklyn’s full-time friendly neighborhood Spider-Man.
He’s catapulted into the Multiverse where he encounters a team of Spider-People charged with protecting it. When the heroes clash on how to handle a new threat, Miles finds himself pitted against the other Spiders.
Sony showed 14 minutes of the film — due out June 2 — to CinemaCon audiences, who laughed and cheered for the uniquely animated feature.
Josh Greenstein, president of Sony Pictures’ Motion Picture Group, teased that the company would release 23 movies in 2023, after being introduced via video by Will Smith and Martin Lawrence, who are currently filming “Bad Boys 4.”
Sony showed the opening clip of “Dumb Money,” a film by Craig Gillespie about how an everyday investor played by Paul Dano flipped the script on Wall Street, placing all his savings into GameStop in 2021. The film due out in October also stars Sebastian Stan, Seth Rogen, Pete Davidson, Shailene Woodley, America Ferrera, Anthony Ramos, Vincent D’Onofrio, Dane DeHaan and Nick Offerman.
It followed with trailers for “Insidious: The Red Door,” due out in July, “The Machine,” coming in May and “Gran Turismo,” hitting screens in August.
Sony also showcased a clip from Jennifer Lawrence’s upcoming R-rated drama “No Hard Feelings” to raucous applause. It also teased an R-rated comedy “Anyone But You” starring Sydney Sweeney and Glen Powell as well as a sequel to “Ghostbusters: Afterlife.”
After accepting CinemaCon’s Lifetime Achievement Award, Denzel Washington brought on stage Antoine Fuqua and Dakota Fanning to show a trailer of “The Equalizer 3.”
“You can see at Sony we are not f—ing around,” said Tom Rothman, chairman and CEO of Sony Pictures’ Motion Picture Group, closing out the presentation.
He revealed that Apple and Ridley Scott’s “Napoleon” will be distributed by Sony. The film, due out at Thanksgiving, will have a “robust window,” Rothman promised.
“Hold onto your tri-cornered hats,” he teased before showing the first footage of the war epic, which recieved thunderous applause.
Jeff Shell left his role as NBCUniversal CEO on Sunday after he admitted an “inappropriate relationship” with a woman in the company, corporate parent Comcast announced.
“Today is my last day as CEO of NBCUniversal. I had an inappropriate relationship with a woman in the company, which I deeply regret. I’m truly sorry I let my Comcast and NBCUniversal colleagues down, they are the most talented people in the business and the opportunity to work with them the last 19 years has been a privilege,” Shell said in a statement.
Comcast hired outside counsel to begin an investigation following a complaint. The complaint was filed by the woman with whom Shell said he had an “inappropriate relationship,” according to people familiar with the matter. They declined to be named due to the sensitive nature of the developments.
A company email said Shell’s team will report to Comcast President Mike Cavanagh. The company hasn’t been interviewing or searching for a replacement, and has no plans to do so immediately, said a person close to the matter. Shell, as well as other leaders at NBCUniversal, have already been reporting into Cavanagh for some time and he knows the business well, the person said.
“We are disappointed to share this news with you. We built this company on a culture of integrity. Nothing is more important than how we treat each other. You should count on your leaders to create a safe and respectful workplace. When our principles and policies are violated, we will always move quickly to take appropriate action, as we have done here,” Cavanagh and Comcast CEO Brian Roberts said in a separate statement Sunday.
Roberts will also get more involved with the NBCUniversal business alongside Cavanagh, the person said.
Shell, who is married, took over as CEO of NBCUniversal in January 2020. He oversaw the company’s theme parks, its Peacock streaming service, sports production operations, television stations group, and entertainment and news television networks like NBC News.
Much of his time as CEO was shaped by the Covid pandemic, which forced the U.S. and much of the world to shut down weeks into his new position. During that time theme parks and movie theaters were shuttered, and the entertainment industry was upended as film and TV production shut down.
Shell, who succeeded Steve Burke, ushered in the launch of Peacock in mid-2020, NBCUniversal’s answer to the streaming wars. While Peacock was formulated under Burke, the streaming service grew and added more subscribers and content with Shell at the helm.
Peacock’s losses have weighed on NBCUniversal’s overall business. During the company’s last earnings call, Cavanagh said Peacock’s 2022 losses were in line with its earlier outlook of $2.5 billion. Comcast has said it expects Peacock’s losses to be up to around $2 billion in 2023. Comcast is due to report earnings Thursday. Shares of Comcast are up about 8% so far this year.
Just months after taking the CEO post, Shell reshaped NBCUniversal’s business and broke down the fiefdoms in the TV segment, with the aim of streaming and traditional TV working more closely together.
As part of the restructuring, layoffs took place that had been expected to effect less than 10% of the then-35,000 full-time employees. Cuts had been made across all of NBCUniversal’s business segments.
NBCUniversal has also assessed its portfolio of cable TV networks under Shell. In 2021, the company shut down NBC Sports, shifting much of its sports programming to USA Network and Peacock. Peacock has also become the streaming home of the Olympics.
During the same time, longtime NBCUniversal executive Ron Meyer left the company after disclosing he was under extortion threat due to a private settlement he reached with a woman after an extramarital affair.
At the time, Shell informed employees of Meyer’s exit, saying, “Ron Meyer informed NBCUniversal that he had acted in a manner which we believe is not consistent with our company policies or values.”
Shell had risen through the ranks of Comcast and NBCUniversal over the years.
One of his earliest roles was as president of Comcast’s programming group, where he managed national and regional TV networks, including E! He had also previously served as the chairman of NBCUniversal International, and later served as the chairman of the Universal Filmed Entertainment Group from 2013 to 2019. Before taking the helm as CEO, Shell was chairman of NBCUniversal Film and Entertainment.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
A “Store Closing” banner on a Bed Bath & Beyond store in Farmingdale, New York, on Friday, Jan. 6, 2023.
Johnny Milano | Bloomberg | Getty Images
Bed Bath & Beyond on Sunday filed for Chapter 11 bankruptcy protection after a series of last-ditch efforts to raise enough equity to keep the business alive failed at the eleventh hour.
“Bed Bath & Beyond Inc.today announced that it and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey to implement an orderly wind down of its businesses while conducting a limited marketing process to solicit interest in one or more sales of some or all of its assets,” a statement Sunday read.
“The Company’s 360 Bed Bath & Beyond and 120 buybuy BABY stores and websites will remain open and continue serving customers as the Company begins its efforts to effectuate the closure of its retail locations.”
Bed Bath has been hanging on by a thread ever since but has refused to go down without a fight. It secured what was then-considered a Hail Mary stock offering in early February that was expected to infuse more than $1 billion in equity into Bed Bath, but the plan faltered and brought in only $360 million, the company said.
At the end of March, Bed Bath announced another stock offering it hoped would bring in $300 million, but that news sent the share price tumbling and it struggled to raise the funds it hoped the offering would provide. As of April 10, the company had sold approximately 100.1 million shares and raised only $48.5 million.
In filings, the company warned if it didn’t raise the anticipated proceeds from the offering, it would likely have to file for bankruptcy protection.
Days after the second stock offering was announced, Bed Bath said it had partnered with liquidator Hilco Global to boost its inventory levels. Under the agreement, Hilco subsidiary ReStore Capital agreed to buy up to $120 million in merchandise from the company’s key suppliers after relationships with Bed Bath’s vendors soured because of its liquidity issues.
However, the plans ultimately proved futile and weren’t enough to keep the lights on.
The retailer has struggled to maintain relationships with its vendors and has been grappling with low inventory levels, lagging sales and a rapidly dwindling cash pile.
Going into the holiday season, Bed Bath had difficulty keeping its shelves stocked and because of its liquidity issues, some vendors began asking for prepayments, the company said in securities filings.
Plus, consumers who had spent 2020 and 2021 staying at home and updating their living spaces amid the pandemic were now spending on travel, eating out and other out-of-home experiences.
In mid-January, the company was looking to find a buyer willing to keep it afloat with an infusion of cash. Soon, though, Bed Bath revealed in a securities filing that it didn’t have enough cash to pay its debts and had defaulted on its credit line with JPMorgan.
The company was able to make its interest payments using funding gained from the first stock offering, but at the time it warned it would “likely” have to file for bankruptcy and see its assets liquidated if the deal didn’t go as planned.
The company had loans with JPMorgan and lender Sixth Street that were reduced in late March after its second stock offering was announced. At the time, its total revolving commitment decreased from $565 million to $300 million and its revolving credit facility was reduced from $225 million to $175 million. Under the reduced credit agreements, Bed Bath was on the hook for monthly interest payments.
The company said it was attempting to lower costs by reducing capital expenditures, closing stores and negotiating lease deals but warned in filings the efforts “may not be successful.”
At a popular Bed Bath outpost in New York City, a since laid-off staffer recently told CNBC that workers were standing around not knowing what to do after the company suddenly cut off in-store pickup and deliveries at the location. The worker was told liquidators would be coming the following day and soon learned employees wouldn’t receive severance after more than two decades with the company.
Demonstrators rally in support of abortion rights at the US Supreme Court in Washington, DC, April 15, 2023.
Andrew Caballero-Reynolds | AFP | Getty Images
The Supreme Court on Friday ordered the abortion pill mifepristone to remain broadly available as litigation plays out in a lower court.
The high court’s decision came in response to an emergency request by the Department of Justice to block lower court rulings that would severely limit access to the medication even in some states where abortion remains legal.
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The case will now be heard in the U.S. 5th Circuit Court of Appeals. The appeals court has scheduled oral arguments for Wed., May 17 at 1 p.m. CT.
Mifepristone has become the flashpoint in the legal battle over abortion since the Supreme Court last summer overturned Roe v. Wade, the landmark 1973 decision that guaranteed abortion nationwide as a constitutional right.
Mifepristone, used in combination with another drug called misoprostol, is the most common method to terminate a pregnancy in the U.S., accounting for about half of all abortions.
President Joe Biden said the court’s decision keeps mifepristone available to women and FDA approved to terminate early pregnancies. Biden said his administration will fight to protect access to mifepristone in the ongoing legal battle in the 5th Circuit Court of Appeals.
“I continue to stand by [the Food and Drug Administration’s] evidence-based approval of mifepristone, and my administration will continue to defend FDA’s independent, expert authority to review, approve, and regulate a wide range of prescription drugs,” the president said.
Planned Parenthood President Alexis McGill Johnson said the reproductive health-care provider is relieved by the Supreme Court’s decision.
But McGill Johnson warned that access to mifepristone remains in jeopardy as the legal battle plays out in the appeals court.
“While mifepristone’s approval remains intact and it stays on the market for now, patients and health care providers shouldn’t be at the mercy of the court system,” McGill Johnson said. “Medication abortion is very much still under threat — as is abortion and access to other sexual and reproductive health care.”
Justices Samuel Alito and Clarence Thomas, both conservatives, opposed the court’s majority decision to grant the emergency request from the DOJ and Danco Laboratories, the distributor of the brand-name version of the drug, Mifeprex.
The DOJ and Danco, in their emergency requests, told the Supreme Court the restrictions imposed by the lower courts would effectively take mifepristone off the market for months as the FDA adjusted the medication’s labelling to comply with the orders. This would deny women access to an FDA-approved drug that is a safe alternative to surgical abortions, they argued.
Alito rejected that argument in his dissent. The justice said the FDA could simply use its enforcement discretion as the litigation played out and allow Danco to continue distributing mifepristone.
The court’s majority decision to maintain the status quo means mifepristone remains available by mail delivery, and women can obtain the prescription medicationwithout having to visit a doctor in person.
However, in the dozen states that have effectively banned abortion over the past year, the drug will remain largely unavailable. Other states also have restrictions in place that are much tighter than FDA regulations.
The national legal battle over mifepristone began with a lawsuit filed by a coalition of doctors who oppose abortion, the Alliance for Hippocratic Medicine. Those doctors sought to force the FDA to pull the medication from the U.S. entirely.
Earlier this month, U.S. District Judge Matthew Kacsmaryk ruled in favor of the antiabortion doctors and issued a sweeping order that would have halted sales of mifepristone nationwide.
Days later, the U.S. Fifth Circuit Court of Appeals blocked part of Kacsmaryk’s order and allowed Mifeprex to remain on the market. But the appeals court judges imposed restrictions on the medication that would severely limit access.
The appeals court blocked mail delivery of the drug, imposed doctors’ visits as a condition to get the medication, and reduced the length of time when women can take the pill to the seventh week of pregnancy.
The appeals court judges also suspended the 2019 approval of the generic version of mifepristone. The company that sells the generic version, GenBioPro, told the high court the majority of the nation’s supply of the medication would “disappear overnight” if the appeals court ruling went into effect.
GenBioPro said it supplies two-thirds of the mifepristone used in abortions in the U.S.
Johnson & Johnson reported adjusted earnings and revenue that topped Wall Street’s expectations on Tuesday, and lifted its full-year forecast.
J&J, whose financial results are considered a bellwether for many health companies, said its first-quarter sales grew 5.6% over the same quarter last year.
The consumer staples giant reported a net loss of $68 million, or 3 cents per share, due to a special one-time charge. That’s compared to a net income of $5.2 billion, or $1.93 per share, for the same period a year ago. Excluding certain items, adjusted earnings per share were $2.68for the period.
Here’s how J&J results compared with Wall Street expectations based on a survey of analysts by Refinitiv:
Earnings per share: $2.68 adjusted, vs. $2.50 expected
Revenue: $24.75 billion, vs. $23.67 billion expected
J&J is now forecasting 2023 sales of $97.9 billion to $98.9 billion, about $1 billion higher than the guidance provided in January. The company raised its full-year adjusted earnings outlook to $10.60 to $10.70 per share, from a previous forecast of $10.45 to $10.65.
CFO Joseph Wolk told CNBC on Tuesday that J&J raised its guidance due to strong growth across all three business sectors — consumer health, pharmaceuticals and medtech.
“If you think about how we started the year and guidance in January, we were responsibly cautious,” he said on “Squawk Box.” “First-quarter growth was much stronger than even fourth-quarter growth for all three business units, and our positions kind of change to responsibly optimistic at this point. We feel very good about 2023.”
The company’s shares rose nearly 2% in premarket trading. The stock is down more than 6% for the year through Monday’s close, putting the company’s market value at roughly $430 billion.
But the New Brunswick, New Jersey-based company entered this earnings season with its shares on the rise after it offered more clarity on the long-running legal fight over its talc-based baby powder products. Earlier this month, J&J proposed to pay nearly $9 billion over the next 25 years to settle thousands of allegations that its baby powder and other talc products caused cancer.
Ford Motor will import its next-generation Lincoln Nautilus from China to the U.S., the company said Monday night.
The midsize crossover is currently produced for the U.S. at Ford’s Oakville Assembly Plant in Ontario, Canada. The automaker recently announced it would be investing 1.8 billion Canadian dollars (about $1.3 billion) to transition the facility into a new electric vehicle hub.
This marks the first time Lincoln will import a vehicle to the U.S. from China.
Importing a vehicle from China to the U.S. is not unprecedented but can draw public and political criticism or backlash, especially when tensions between the two countries are high.
Most notably, General Motors has been criticized for importing its Buick Envision crossover from China to the U.S. since 2016. The Detroit automaker has sold more than 200,000 of the China-made vehicles, which American union officials have called the “Invasion” and “a slap in the face.”
2024 Lincoln Nautilus
Ford
Importing a vehicle from overseas to the U.S. can make good business sense, however, for a company such as Ford.
“In this case, it’s a good use of resources,” said Stephanie Brinley, associate director of research at S&P Global Mobility. “Without importing, Lincoln does not get the product, and the brand needs products between now and when its EVs arrive.”
Brinley said the decision to import the Nautilus does not suggest a fundamental shift for future Lincolns for the U.S. market, noting the company continues to produce most of its vehicles for the U.S. market in North America.
“Lincoln is a global brand that is growing,” a Lincoln spokeswoman said in an email. “As we execute our U.S. manufacturing growth plans, we think it makes sense to centralize Nautilus production in China for both markets (since we already produce Nautilus in China for the local market) which allows us to gain manufacturing efficiencies and retool our Oakville facility to get ready to build our next generation EVs.”
The news comes a week after Ford released a report that said it was the top automaker in terms of vehicles assembled and hourly autoworkers employed in America as well as vehicles exported from America to other countries.
2024 Lincoln Nautilus
Ford
The new Nautilus will feature a redesigned exterior and new interior that includes nearly door-to-door screens for occupants in the front seats. It also offers a new feature called “Lincoln Rejuvenate.”
Ford describes Lincoln Rejuvenate as a “multisensory, in-cabin experience including lighting and digital scenting.” Lincoln revealed a concept vehicle called the Star last year that included such features, but the Nautilus is the first production car for the U.S. to be built with the unique characteristics. The automaker has offered vehicles with the feature in China.
“Lincoln Rejuvenate, a stationary experience, orchestrates specially curated sensory experiences tied to lighting, screen visuals, personal preferences such as seating position and massage options — allowing clients to recharge,” the company said in a release for the vehicle’s reveal Monday night.
Scent cartridges to fill the vehicle’s cabin are housed in the center armrest. The company said scents that come with the package include:
“Mystic Forest, an earthy blend with woody, rich notes of patchouli.”
“Ozonic Azure, a crisp blend of aromatic patchouli and traces of bright violet.”
“Violet Cashmere, exotic white florals and trusted violet that are crisp and refined as fresh linen.”
Lincoln Star concept electric vehicle
Lincoln
The vehicle will be powered by a 2.0-liter turbocharged engine as well as a hybrid powertrain. The car is expected to go on sale in early 2024, with starting prices between $51,810 and $75,860.
The redesigned Nautilus and “Lincoln Rejuvenate” come as the once-prominent American luxury brand attempts to rejuvenate itself.
Sales of Lincoln vehicles were down by 4% last year in the U.S. to fewer than 83,500 vehicles. That’s down from a recent peak of more than 112,200 in 2019.
A Starship prototype is seen stacked on top of a Super Heavy booster at the company’s launch facility near Brownsville, Texas.
SpaceX
The Federal Aviation Administration issued a Starship launch license to Elon Musk’s SpaceX, a crucial final regulatory step that clears the company to attempt an orbital launch of its towering rocket for the first time.
“After a comprehensive license evaluation process, the FAA determined SpaceX met all safety, environmental, policy, payload, airspace integration and financial responsibility requirements. The license is valid for five years,” FAA said in a statement.
SpaceX, with the FAA license now in hand, aims to launch Starship as soon as Monday from its private facility in Texas along the Gulf Coast.
“SpaceX is targeting as soon as Monday, April 17 for the first flight test of a fully integrated Starship and Super Heavy rocket from Starbase in Texas. The 150-minute test window will open at 7:00 a.m. CT,” SpaceX said in a statement.
The company recently stacked Starship prototype 24 on Super Heavy booster prototype 7 in preparation for the launch. Together they stand nearly 400 feet high. SpaceX in February completed a test firing of the Super Heavy booster, which has 33 Raptor engines at its base, in one of the final technical steps toward the launch.
SpaceX for several years has been building up to the first orbital flight test of its Starship rocket, with company leadership stressing the experimental nature of the launch. While SpaceX had hoped to conduct the first orbital Starship launch as early as summer 2021, delays in progress and regulatory approval have pushed back that timeline.
The rocket is set to lift off from SpaceX’s development facility near Brownsville, Texas, before heading east across the Gulf of Mexico, according to 2021 filings that revealed the flight plan. The ultimate goal of the mission is to reach orbit, with the rocket aiming to travel most of the way around the Earth and splash down in the Pacific Ocean off the coast of Kauai, Hawaii.
Starship is designed to carry cargo and people beyond Earth and is critical to NASA’s plan to return astronauts to the moon. SpaceX won a nearly $3 billion contract from the space agency in 2021 to use Starship as a crewed lunar lander.
In this photo illustration, a Burger King Whopper hamburger is displayed on April 05, 2022 in San Anselmo, California.
Justin Sullivan | Getty Images
Seven months after Burger King unveiled a strategy to revive its U.S. business, the chain is selling more Whoppers than ever before.
Burger King U.S. President Tom Curtis told CNBC that preliminary improvements to restaurant operations and new marketing campaigns are already boosting sales and customer satisfaction, although it’s still early innings.
Parent company Restaurant Brands International is scheduled to report its first-quarter earnings and sales results for its divisions, including Burger King U.S., before the bell on May 2. Last quarter, Burger King’s U.S. same-store sales rose 5% on the back of implementing early steps in the turnaround plan.
The $400 million plan to rejuvenate Burger King’s domestic sales was developed in partnership with franchisees and focuses on revamping its restaurants and investing in advertising.
“What’s happened in the last six months is that sense of ‘We’re in this together’ that we have with our franchisees. I think it’s unique in the business, and I think that differs from what you see from some of the competition as well,” Curtis said.
Burger rival McDonald’s has had much-publicized spats with its operators over the years. Recently, tension has been boiling over changes to its franchise policies.
Before Burger King announced its official turnaround strategy, the company spent roughly a year simplifying operations with a goal to improve efficiency and order accuracy, Curtis said. For example, Burger King reformulated and renamed its chicken sandwich. The now-retired Ch’King sandwich involved 21 steps to prepare the final menu item. The Royal Crispy Chicken sandwich takes just five.
After announcing its “Reclaim the Flame” strategy at a franchisee convention in September, Burger King turned its attention to an in-store training program for all of its restaurants that instructed workers to greet customers, make Whoppers properly and give out Burger King’s iconic crowns. Curtis said it was “the most important thing that we did coming out of the convention.”
Burger King also held roundtables for general managers in 45 cities. Those roundtables included training general managers on how to execute a five-week-long deep clean of their restaurants.
“I think those things are foundationally important, and they resulted in a 20% uplift in guest satisfaction,” Curtis said.
Additionally, Burger King launched its “You Rule” marketing campaign in the fall. The chain’s mascot, the Burger King, is nowhere to be seen in the ads. Instead, customers are royalty.
And despite Curtis’ own initial misgivings about the “Whopper Whopper” jingle used in the campaign (he was underwhelmed by the lyrics and asked the marketing team to rethink it), the song went viral and spawned memes across Twitter and TikTok. The company officially released the song in response to the popularity, and it has nearly 3.3 million streams on Spotify as of Friday.
“We’re selling more Whoppers than we ever have. It’s had a really positive impact that we didn’t pay for or foresee on the business … it’s really exceeded my expectations,” Curtis said, adding that he’s excited for Restaurant Brands to release its earnings.
Since the company announced its “Reclaim the Flame” strategy, former Domino’s Pizza CEO Patrick Doyle has joined Restaurant Brands as its executive chair. Doyle oversaw the pizza chain’s transformation into a digital powerhouse in the restaurant industry. Curtis, who started as a Domino’s franchisee, worked alongside Doyle during his long career at Domino’s as an operations executive before joining Burger King in 2021.
One of Doyle’s priorities for Burger King has been improving franchisee profitability. Two Burger King franchisees have filed for bankruptcy so far in 2023. The first franchisee to file for bankruptcy, Toms King Holdings, sold most of its locations at auction for $33 million earlier in April.
“I don’t want to say that it’s welcome, because it’s not, but I do think that if managed correctly, the outcome can be better than where you were before,” Curtis said.
While early signs point to the turnaround taking hold, Curtis is deferring the victory lap for now, emphasizing that “Reclaim the Flame” is meant to be a multiyear growth strategy.
For example, of the $50 million that Restaurant Brands earmarked to improve restaurants’ appearances in conjunction with franchisees’ own investment, Burger King spent just $15 million in 2022.
“We’re not even halfway, and these things just take time,” Curtis said.
Boeing 737 Max airplanes sit parked at the company’s production facility on November 18, 2020 in Renton, Washington.
David Ryder | Getty Images
Boeing on Thursday warned it will likely have to reduce deliveries of its 737 Max airplane in the near term because of a problem with a part made by supplier Spirit AeroSystems.
Boeing said its supplier informed the company a “non-standard” manufacturing process was used on two fittings in aft fuselages. It said the issue affects certain 737 Max 8 planes, the company’s most popular model, with customers including American Airlines and Southwest Airlines. It also affects certain 737 Max 7, the 737 8200 and P-8 planes.
Boeing said the problem was not an “immediate safety of flight issue and the in-service fleet can continue operating safely.”
Boeing has notified the Federal Aviation Administration of the issue and is working to inspect and address the fuselages as needed, the company said. The FAA said Boeing notified it of the issue and also said there is no immediate safety issue.
However, the issue will likely affect a significant number of undelivered 737 Max airplanes, both in production and in storage,” the manufacturer said in a statement.
“We expect lower near-term 737 MAX deliveries while this required work is completed. We regret the impact that this issue will have on affected customers and are in contact with them concerning their delivery schedule,” Boeing said in a statement. “We will provide additional information in the days and weeks ahead as we better understand the delivery impacts.”
The problem, the most recent in a string of production issues, hits Boeing as it scrambles to increase production and deliveries of its best-selling plane while customers await new jetliners to capitalize on a rebound in travel.
Shares of Boeing were down 6% in premarket trading Friday. Shares of Spirit AeroSystems were down roughly 14%.
Spirit manufacturers some of the fuselages used in Boeing jets and said in a statement it notified Boeing of a “quality issue” with certain 737 models.
“Spirit is working to develop an inspection and repair for the affected fuselages. We continue to coordinate closely with our customer to resolve this matter and minimize impacts while maintaining our focus on safety,” the company said.
It’s the latest production problem for Boeing and its customers. Boeing earlier this year paused deliveries of its 787 Dreamliners for several weeks to address a data analysis flaw, and in 2021 and 2022 it struggled with other production flaws on the wide-body jets that halted deliveries for months.
The company on Tuesday reported March deliveries of 64 planes, the highest tally since December, amid an industry-wide shortage of new jets.
Airline executives have cited aircraft supply constraints as among the chief challenges in ramping up flying ahead of the peak travel season.
“We’re aware of the issue and working with Boeing to understand how it may impact our MAX deliveries,” an American Airlines spokesman said in statement.
Southwest said in a statement that it expects the issue to impact its delivery schedule of new Max planes and that it is discussing the details of that timeline for this year “and beyond.”
United said it didn’t expect any “significant impact” to its capacity planes for this summer or the rest of 2023.
— CNBC’s Leslie Josephs and Phil LeBeau contributed to this report.
