đź’Š Historic opioid settlement

Friday, July 23, 2021 by Snacks
_Ready, set, stream [Pete Saloutos via GettyImages]_

Ready, set, stream [Pete Saloutos via GettyImages]

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Hey Snackers,

If your baby's first word is "mummy," "biscuits," or "bonkers," then they might have "Peppa Pig Syndrome." British cartoon Peppa Pig has American kids talking in proper British accents.

Stocks ticked up yesterday as investors turned their attention to corporate earnings from Intel, Twitter, and Snap.

Pills

1. The $26B opioid settlement: what it means for major drug companies and states

Settled, but unsettling... Since 1999, the opioid crisis has claimed half a million lives in the US. Addiction to opioid drugs like OxyContin, Percocet, fentanyl, and heroin has become a national epidemic. During the pandemic, it got worse: opioid overdose deaths last year were up 37% from 2019 to a record 93K. After two years of negotiations, a few companies that have been blamed for fueling the epidemic have reached a historic $26B settlement with states.

  • Why: 3K+ lawsuits allege that drugmakers pushed their painkillers for uses beyond what was medically necessary, and that distributors didn't do enough to halt the influx of pills.
  • Who: Major drug distributors  McKesson, AmerisourceBergen, and Cardinal Health would together pay up to $21B over 18 years. Drugmaker J&J would contribute $5B over nine years.

A landmark deal... It's the second-largest settlement in US history, after the $206B deal with tobacco companies in the '90s. If completed, the settlement could end thousands of lawsuits and secure funding for communities to fight the epidemic. Think: addiction treatment programs, opioid education, and funds for first responders. In addition to the payout, distributors also agreed to create a system to help them better spot suspicious drug orders.

THE TAKEAWAY

Investors reward certainty... Despite the major price tag, shares of McKesson, Cardinal, and AmeriCorp jumped ~5% this week after reports anticipating the settlement broke — J&J stock barely budged. Meanwhile, pharma companies that didn't participate in the settlement — like Teva and AbbVie – face more uncertainty. Investors don’t know how much longer their lawsuits will last, and how much they might cost. OxyContin-maker Purdue Pharma had to file for bankruptcy two years ago to handle its legal liabilities.

Run

2. NBC’s already booked $1B+ in Olympic ads, but streaming could be the real gold medal

More like E-lympics... After a year-long pandemic postponement, the 2020 Olympics kick off today in Tokyo — minus the fans. All spectators have been banned from this year's Games, after Japan declared another state of emergency amid rising Covid cases. Despite the lack of IRL viewers, NBCUniversal is poised to win big even before the competition begins:

  • On your mark: NBC owns exclusive US broadcast, online, and mobile viewing rights to the Games. Read: it's the only place to watch 'em.
  • Get set: But not the TV kind. While TV viewership has been dropping, NBC’s YouTube subscribers jumped 7X during the Rio Games, while 35M engaged with it on Snap.
  • Go: For the green gold. With Tokyo, NBC has already beat the $1.2B it earned for Rio ad sales, and expects to surpass Rio's record profit, too.

Think outside the cable box… Four billion people will watch the Olympics somehow, but NBC is getting creative about where and how they engage:

  • Peacock-forward: Men’s basketball will be paywalled on NBC’s new streaming platform Peacock. The rest of the Olympic action will be streamable for free.
  • Platforms-a-plenty: 7K hours of Olympic coverage will be available across Peacock, NBC’s site, app, and several of its TV channels.
  • Social strong: Partnerships with TikTok, Twitch, Snap, and Twitter will feature influencer-studded “side-streams" to draw fans into main-stream coverage.
THE TAKEAWAY

The Dream Team is now the “Stream Team”… From Amazon adding Premier League matches and Thursday Night Football on Twitch and Prime, to Disney beefing up its ESPN+ offerings — streaming platforms are becoming go-tos for live sports. And live sports are becoming increasingly important to growing streaming subscribers. By packing Peacock with Olympic exclusives, NBC is vying for a “Hamilton moment” — a jump in paid subscribers like the 74% boost Disney+ saw after its exclusive, streaming debut of the fan-favorite musical.

What else we’re Snackin’

  • Sold: The housing boom pushed the median US home price to a record high of $363K last month.
  • Crunch: Shares of Intel — aka: the world’s largest chip-maker — fell after it shared lackluster earnings expectations, despite a global chip shortage.
  • Data: After spinning off its media brands in May, AT&T gew its telecom profits last quarter, and wireless subscribers beat expectations.
  • Alexa: Amazon will now allow customers to pursue complaints in federal court — good news for the 75K people who've accused Alexa of snooping.
  • Bitspac: Carbon neutral crypto mining company Core Scientific is going public through a SPAC merger that values it at $4.3B.
  • Juicy: Daimler's Mercedes announced plans to invest $47B in electric vehicles by 2030, and expects to sell nothing but EVs by 2030.

Friday

  • The Summer Olympics begin
  • Earnings expected from Honeywell, American Express, and Kimberly-Clark

Authors of this Snacks own: shares of Amazon and Bitcoin

ID: 1733989

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