PM — No more animal testing?

Good afternoon, lovely people. We have a calm Monday on our hands as the August slowdown continues to hold here on the home front. It is, however, raining earnings as companies report their 2Q and 1H results.

THE BIG STORY TODAY

Unemployment rate holds steady q-o-q: Egypt’s unemployment rate remained unchanged at 7.2% in 2Q 2022 from the preceding quarter, data by official statistics agency CAPMAS showed (pdf). The rate is down by 0.1 percentage points in comparison to the same quarter last year.

THE BIG STORY ABROAD

The international business press is mostly leading with disappointing economic data out of China leading to a surprise interest rate cut. Industrial production, retail sales, and real estate investment figures all rose in July, China’s National Bureau of Statistics said, but these figures fell below analyst expectations. The People’s Bank of China responded by slashing interest rates by 10 bps in a bid to boost the country’s growth. The story is on the front pages of the Financial Times, the Wall Street Journal, and CNBC.

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** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

• At least 41 people were killed yesterday when a fire broke out during mass at the Abu Sefein church in Imbaba.
• The EGX just got an “undo” button on suspicious bourse trades: The Financial Regulatory Authority (FRA) has approved a proposal from the EGX allowing it to prompt securities brokers to reverse transactions that appear to have violated trading rules.
• The retail component of Ghazl El Mahalla’s IPO has been extended for another two weeks until 28 August due to weak investor demand.

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FOR TOMORROW-

MNHD shareholders have the final word on SODIC takeover bid: Madinet Nasr Housing and Development will hold a general assembly meeting tomorrow to decide whether to allow SODIC to conduct due diligence ahead of a potential takeover.

The Madbouly government will hold another two rounds of consultations on its privatizations strategy tomorrow and Thursday: Timber merchants are up tomorrow while Thursday will see the return of the experts and think tanks. Every Sunday, Tuesday, and Thursday see workshops on how privatization plans will affect specific industries. You can find more details on the schedule of the meetings here.

???? CIRCLE YOUR CALENDAR-

Expect more details on how gov’t plans to cut back on electricity: The Electricity Ministry will hold a press conference in the next few days to announce details of measures to curb electricity use that cabinet approved last week, Electricity Minister Mohamed Shaker reportedly told Al Mal.

Interest rates: The Central Bank of Egypt will meet to discuss interest rates on Thursday, 18 August. Economists and analysts we surveyed in our customary poll expect the Monetary Policy Committee to raise rates, with most calling a 100 bps hike.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

☀️ TOMORROW’S WEATHER- Expect temperatures to rise to 39°C during the day tomorrow before falling to 24°C at night, our favorite weather app tells us.

Heatwaves in Europe are driving up gas prices: Benchmark futures for natural gas in Europe rose 2.5% today as low water levels in rivers across the continent have hindered the movement of energy sources such as diesel and coal, leading to more demand for gas, Bloomberg reports. The low water levels come as a result of heat waves across Europe that are drying up rivers and waterways.

Europe has already been contending with soaring gas prices and is facing the prospect of rationing in the coming months, after Russia curbed gas supplies to several European countries, with shipments through the key Nord Stream pipeline at around 20% of capacity. The increased demand for gas could set back governments’ efforts to reduce gas consumption and store more for colder months.

With that energy crunch coming in hot, it’s all the more important for Europe to slash red tape for renewables players: Two of the world’s largest renewable energy companies are voicing their frustration over delayed approvals for new wind farms, arguing that such delays risk green goals, the Financial Times reports, citing the companies’ chief execs. Denmark’s Vestas Wind Systems, the world’s biggest wind turbine manufacturer, and Ørsted, an offshore wind farm developer, are urging governments to accelerate approvals for projects in the wind industry that could face knotty processes and legal hurdles. Navigating the bureaucratic maze of approvals can be so arduous and time-consuming that “turbine designs [become] obsolete by the time permits are granted,” the salmon-colored paper says.

Governments need to step it up: “We need a fundamental review on how we dramatically shorten the consenting process,” Ørsted chief executive Mads Nipper said. Vestas chief executive Henrik Andersen believes that the government is not exerting much effort in solving the energy crisis. “We spend a lot of time listening to why they’re going to apologize for why they didn’t do what they should have done in the past five years. There is a task force required in every government right now that needs to accelerate permitting,” Andersen said.

???? ON THE TUBE TONIGHT-
(all times CLT)

Rotten is an investigative documentary series exposing corruption in the global food supply chain, with each of its one-hour episodes focusing on different issues in the food industry, taking us on a behind-the-scenes look at different products’ journeys before they end up on grocery store shelves. Season one’s most shocking episode features a Chinese garlic supplier that was accused of forcing prisoners to peel garlic for up to 16 hours a day, through undercover footage taken at the prison. Rotten helps educate viewers on how to make more responsible and healthier choices when grocery shopping, giving insights on what may be hiding in product’s nutrition labels. The show’s two seasons are available to stream on Netflix.

⚽Liverpool wraps up its fixtures for Matchday 2 with a game against Crystal Palace tonight at 9pm.

Speaking of matchday, don’t forget to sign up for the Enterprise Fantasy League via this link, or by using this code: 8o4sut.

Make sure to tune in to La Liga’s most important games today: Athletic Club v Mallorca at 5:30pm, Getafe v Atlético Madrid at 7:30pm and Real Betis v Elche at 9:30pm.

In the Serie A: Juventus clashes with Sassuolo at 8:45pm.

In Egypt: Zamalek goes head-to-head with Ismaily in Egypt Cup’s last Round of 16 games at 8pm.

???? OUT AND ABOUT-
(all times CLT)

Jordanian Kitchen Crowd is kickstarting the night at Cairo Jazz Club tonight at 8pm, followed by German-based DJ Nicone, who will be playing deep house beats.

Calling on all fans of The Weeknd: Tribute band Party Monsters will be performing covers from the singer’s albums at Room New Cairo at 9pm.

In the mood for a laugh? The Elite are back at Cairo Jazz Club 610 tonight at 9pm with a line up of seven comedians.

The Wannabe Comedians are taking over the Tap West’s stage tonight at 9pm, featuring Egyptian comedians Naif Al Dhaferi, Karim Ayman, Omar Al Hassan, Mark Fanous and Mohamed Habib.

Massar Egbari are taking the stage today at the Citadel International Festival for Music and Singing at the Cairo Citadel. There will also be live performances by cello ensemble State of Harmony and an Indian Kathak dance performance.

???? UNDER THE LAMPLIGHT-

Another exposé on corporate greed and the US opioid crisis: John Kapoor founded Insys Therapeutics in the early 2000s and developed a niche fentanyl (the strongest opioid on the market) spray, Subsys. The US Food and Drug Administration approved the spray to help cancer patients already taking prescribed opioids such as OxyContin manage breakthrough pain. The Hard Sell sheds light on how Kapoor’s once high-flying startup became the first pharma company whose executives were convicted for crimes in the opioid crisis. Author Evan Hughes draws upon legal documents, court records and interviews with over 100 people to detail the ploys Insys executives and salespeople used to boost sales of a product that was meant to be used sparingly. Unethical and illegal behavior misconduct by Insys employees resulted in Subsys being prescribed for all sorts of ailments from back pain to migraines, until a few employees came forward and blew the whistle.

EARNINGS WATCH-

Prime Holding narrowed its losses in 2Q 2022 to EGP 10.14 mn, from EGP 14.88 in the same quarter last year, according to the company’s earnings release (pdf). The company’s revenues dipped 3.5% y-o-y during the quarter to EGP 22.78 mn.

MM Group reported a 40.6% y-o-y drop in its 1H 2022 net income to EGP 144 mn, according to its earnings release (pdf). The company’s consolidated revenues in the first six months of the year fell 25.1% y-o-y to EGP 3.62 bn.

Cheesemaker Domty achieved a net income of EGP 60.73 mn y-o-y in 2Q 2022, reversing a net loss of EGP 29.12 mn in 2Q 2021, according to the company’s financial statements (pdf). Its sales rose 72% y-o-y in the second quarter of the year to EGP 1.15 bn.

Juhayna’s bottomline fell 9.6% y-o-y in 2Q 2022 to EGP 174.53 mn, the company’s earnings release (pdf) showed. The juice and dairy maker’s sales rose 24% y-o-y during the quarter to EGP 2.76 bn.

Heliopolis Housing and Development’s 2Q 2022 bottom line shot up 290% y-o-y to EGP 639.88 mn, according to the company’s financials (pdf). Revenues for the quarter soared 335% y-o-y to record EGP 1.51 bn.

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MARKET ROUNDUP-

The EGX30 fell 0.7% at today’s close on turnover of EGP 1.52 bn (47.7% above the 90-day average). Local investors were net buyers. The index is down 17.0% YTD.

In the green: Egyptian Kuwaiti Holding-EGP (+1.0%), GB Auto (+0.9%) and Ibnsina Pharma (+0.9%).

In the red: Housing and Development Bank (-3.1%), Ezz Steel (-3.0%) and Rameda (-3.0%).

Good news for animal lovers: Groundbreaking new tech could pave the way for pharma testing that bypasses our furry friends. Technology based on human cells — a new field known as microphysiological systems (MPS) — could be the key to phasing out the controversial practice of animal testing when developing new medical treatments, the Financial Times says in a lengthy (but fascinating) piece. Though it will take time for the medical community to feel comfortable starting clinical trials on humans using data gathered without experimenting on animals, the rise of this alternative tech is a key step to getting the ball rolling, pharma reps tell the salmon-colored paper.

What exactly is MPS? Essentially, miniature human organs or organ systems grown in a lab. MPS uses human cell-based models to help scientists study organs and how pathogens and toxicants affect their functioning — helping to replace or reduce animal use in these processes. The models include tumoroids, which replicate miniature human tumors in a dish; organoids, stem cell tissue that resembles miniature human organs; and organs-on-a-chip, plastic blocks lined with stem cells and a circuit that simulates the response of a human organ or organ system.

Even besides the ethical benefits, there are key scientific advantages to using tech designed to replicate human tissue: Scientists’ growing ability to interpret human genomes has shown that, despite having saved “mns of lives” over the years, animal testing quite often doesn’t accurately show what kind of medical treatment will work on people, a senior figure at AstraZeneca tells the FT. There are many experimental treatments — particularly for cancer — that haven’t entered the clinical trial stage until being proven safe in animal testing, despite these results having “patchy reliability.” MPS opens up the potential for pharma companies to test interactions between different kinds of medication on systems that replicate the human body, pharma leaders say.

MPS allows for the study of human systems that have no animal equivalent: Out of 7k known rare human diseases, only 400 are currently being actively researched because there are no animal models to allow for study and medical testing, a chief scientist of an organ-on-a-chip company tells the FT. MPS “[fills] a void where animal models don’t exist,” he adds.

And it could reduce costs across the board: Within five years, the tech could substantially reduce research and development costs, by allowing real biological tests to occur earlier in the development process, says one research scientist. This would boost pharma profitability, but could also reduce medical treatment costs, he says.

But MPS won’t eliminate the need for animal testing overnight, industry insiders say. French pharma group Sanofi recently received approval for a clinical trial of medication to treat a rare autoimmune condition, based only on organ chip data, the FT says. This is “an important milestone,” notes a Johns Hopkins University scientist quoted in the article. But convincing the broader medical community to completely ditch animal experiments — which have long been an essential part of guaranteeing medication is safe for human use — in favor of data from a chip may not happen for at least a couple of decades, other specialists warn.