Tuesday Nov.17, 2020

💉 Moderna's big(ger) vax announcement

_The big checkmate_

Hey Snackers,

SpaceX's historic NASA flight included an adorable guest: Baby Yoda. Astronauts brought The Child onboard as a “zero-gravity indicator." Strong, The Force of gravity is.

In other Elon-related news: Tesla is joining the famous S&P 500 index. Meanwhile, the Dow hit a record high yesterday on more promising vax news.

Distribute

Moderna makes big vax news, and logistics companies could benefit

When you get a 90% on the test… and your friend immediately mentions they got a 95%. Last week, Pfizer and BioNTech announced that their COVID-19 vaccine was more than 90% effective in final-stage trials (huge). Yesterday, Moderna said its vaccine was more than 94% effective, according to early results (huge-er). Moderna's vax is also easier to store, temperature-wise. But how soon could a vax get approved and start shipping?

Moderna plans to request emergency FDA approval by early December. Pfizer could seek emergency use authorization this month.
If Moderna gets the greenlight, it could start distributing in December with 20M doses ready to ship by end of year.
Potato, not potatoe: Pfizer is a 170-year-old pharma with 300+ drugs on the market. Moderna's a 10-year-old biotech that has never sold a single drug.

But they have one thing in common... Moderna and Pfizer both have mRNA vaccines, which are faster and cheaper to make than traditional vaccines — but have never been approved for human use. Both have said they're planning to sell for profit, while some traditional vax frontrunners like AstraZeneca pledged to initially sell "at cost" (no profit). But Pharma isn’t the only industry that could be poised to profit...

Logistics companies could benefit (big)... Distributing the vaccine will be a massive undertaking, and airlines and shipping companies will likely be key to that. Providing a single dose to 7.8B people will require 8K Boeing 747 cargo planes. Delta and UPS are already gearing up by expanding their cooling facilities for vaccine storage/shipment. Pharma products are one of the most profitable cargo types, so this could be a huge financial opportunity.

Zzz

Casper's sales fall despite record interest in its mattresses (it needs to get vertical)

Googling: "How long can human go on 4 hours sleep"... Don't worry, Casper's right there with ya. The direct-to-consumer mattress company was a unicorn before it went public back in February. Now its valuation has dropped from $1.1B to just over $250M (quarter-corn?). Casper lost more sleep yesterday when its stock plunged 14% after earnings.

Casper's sales fell 3%, even though time spent in bed probably increased 1,000% (#work-from-bed). And it's still dreaming of profit. Buuut...
Casper saw record website traffic last quarter, pointing to record interest in its mattresses. People were browsing Casper.com to upgrade their takeout-in-bed game.

Sounds counterintuitive.... But it makes sense. Casper's sales fail wasn't due to weak demand, but to weak supply. Many mattresses were out-of-stock for weeks at a time, meaning Casper couldn't ship out enough to meet demand. Casper blamed supply chain challenges like fabric and foam chemical shortages. It should really blame its lack of vertical integration:

Vertical integration is when a company owns multiple stages of production in its supply chain. Apple just got more vertically integrated by ditching Intel to put its own Apple-made chips in Macs.

Controlling your supply chain helps control your destiny... Vertical integration can help lower costs, boost profitability, and avoid situations like Casper's. Casper isn't vertically integrated. That puts it at a disadvantage compared to competitors like Purple, which largely controls its manufacturing and saw sales jump 60% last quarter. Purple stock has nearly 3X'd in value this year while Casper is down by half.

What else we’re Snackin’

IPO: Airbnb released its S-1 filing to go public, revealing it made $219M in profit last quarter.
Bust: Experts predict birth rates will fall, so Procter & Gamble and Nestle are bracing for a pandemic drop in diaper and baby food sales.
Trade: China signed a huge Asia-aPacific free trade deal with 14 countries (US not included).
Belly: Gourmet food deliverer Goldbelly has nearly 2X'd its restaurant and customer count in 2020 — and it just added NYC's Momofuku.
Nuggy: Chicken nugget legend Tyson beat earnings estimates last quarter thanks to an uptick in beef and pork demand.

🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up here.

Tuesday

Earnings expected from Walmart, Home Depot, and Nio

Disclosure: Authors of this Snacks own shares of Moderna and Apple

ID: 1415624

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Quite a few news outlets are reporting that Apple thinks it’s only going to sell 400,000 to 450,000 Vision Pros in 2024, compared a “market consensus” of 700,000 to 800,000. They’re all citing a note from Apple analyst Ming-Chi Kuo.

Obviously there’s no question that Apple’s $3,500 face computer will have a limited audience and could be a huge flop, but this also doesn’t seem like accurate news.

The issue is that 1) this 400,000 number isn’t new. Back in July of 2023, the Financial Times reported that Apple planned to make fewer than 400,000 units in 2024, reducing its initial projections of 1M units, citing two people close to Apple and, the Chinese contract manufacturer assembling the device. 2) It's unclear who was estimating 700,000-800,000 Vision Pros in the first place, but it appears that it was Ming-Chi Kuo himself?