Plague’s a pox on society — except for the society of pharmaceutical and healthcare companies.

A day after the World Health Organization declared mpox to be a global public health emergency, a handful of big winners have emerged. 

Monkeypox Business

Mpox, formerly known as monkeypox, is surging once again after a 2022 outbreak. The virus, which spreads from skin-to-skin contact and causes flu-like symptoms and lesions, is usually mild, but can be fatal in some cases. Earlier this week, the Africa Centres for Disease Control and Prevention declared an emergency for the continent on fears of rapid spread (the latest variant, clade Ib, seems to be more contagious than previous strains), with 17,000 suspected cases and around 500 deaths, primarily among children in the Congo. 

Fortunately, an effective vaccine does already exist. Unfortunately, “there are not enough doses,” Brian Ferguson, an associate professor of immunology at the University of Cambridge, told CNBC. Still, some pharma firms are in a strong position to capitalize off of the emerging global crisis:

• Danish vaccine maker Bavarian Nordic, whose Jynneos vaccine is one of just two jabs recommended by the US CDC to prevent the spread of mpox, saw shares rise nearly 8% Thursday; it’s up nearly 36% in the past month.
• Meanwhile, Emergent Biosolutions, which makes the other CDC-recommended vaccine, saw shares jump 14% Thursday. Medical tools-maker Precision Systems Science saw shares jump nearly 40% on the Tokyo Stock Exchange.

“We have inventory and we have the capabilities. What we’re missing are the orders,” Bavarian Nordic CEO Paul Chaplin told Bloomberg on Wednesday, adding that “pricing is no doubt going to be an issue.”

“We’re very sensitive about the pricing. We’re fully aware we have to do our bit here and look at pricing in a responsible way,” Chaplin said.

COVID Blues: If the coronavirus pandemic proved one thing, it’s that being on the winning side of a war against a virus is lucrative — until it isn’t. Moderna’s share price is down some 23% year-to-date as the company still seeks to find its next big opportunity. Pfizer, similarly adrift, is down around roughly 4% year-to-date, but nearly 19% in the past 12 months overall. AstraZeneca, on the other hand, is up nearly 25% year-to-date, but unlike its COVID-19 vaccine peers, it has much sturdier non-COVID revenue streams to fall back on — its oncology unit in particular drives significant revenue. The lesson: Don’t be a one-stick pony.

Believe it or not, the UK has an even bigger export than television shows like “Downton Abbey,” “Black Mirror,” and “Peaky Blinders.” The UK’s top-notch schools are a premier destination for international students, and education is a big part of the economy. 

It was just exam results day for British high school students, and 9% more students got into top-level universities this year than last. That’s great news for Britain’s hardworking high schoolers, but underneath the statistics lies a big problem for UK universities’ bottom lines: a drop in international students.

Migrant Cum Laude

Universities in the UK only started charging tuition fees in 1998, and back then they were capped at £1,000 per year. Since then, tuition fees have risen to £9,250 ($11,860); universities actually run at a loss taking on British students. But there is no cap on international students’ fees, so British universities have pursued them to make up ground. Oxford University, for example, charges overseas students between £33,050 and £48,620.

As travel restrictions eased post-2020, the UK saw a particularly sharp influx, so much so that in the 2021-2022 academic year overseas students made up 24% of the nation’s total student population, according to government figures. Now, though, the UK’s higher-education institutions are coming down off that high, and it could spell a major funding crisis:

• According to the Financial Times, UK universities saw a nearly 50% fall in the number of overseas student applications last year. Dr. Ben Brindle, a researcher at the Oxford Migration Observatory, told The Daily Upside that the sudden drop in numbers may be partly due to a change in visa laws: International students can no longer bring their partners with them to the UK. 
• Brindle added that the Nigerian currency crisis may also have played a role, as Nigerian postgraduate students made up a significant part of the post-2020 uptick, but said the jury’s still out on exact causes.

Economics Exam Jitters: In a recent interview, Peter Slee, vice chancellor of Leeds Beckett University, told Britain’s Channel 4 News that the international student economy in the UK is worth £42 billion. The fear is that if that market contracts then universities will go bust, casting a pall over the new Labour government’s economic outlook, which is otherwise cautiously optimistic.

Quis custodiet ipsos custodes; who watches the watchmen? In the US audit industry, that would be the Public Company Accounting Oversight Board. And it does not like what it sees.

The PCAOB called out an “unacceptable” level of deficiencies at the country’s biggest auditors alongside the release of its latest inspection results Thursday.

Bad Audit-tude

The audit profession was one of those most adversely impacted by COVID-19, and it has yet to recover. As income declined, so too did performance. A mass exodus of auditors, often overworked and underpaid, didn’t help: Some 300,000 US accountants left their jobs between 2019 to 2021, according to Bureau of Labor Statistics data. There aren’t enough people entering the field to bridge the gap, and given the essential role number-crunching plays in the markets, commentators have gone so far as to suggest the industry woes threaten capitalism itself.

The PCAOB, which has the power to review the audit of any US-listed company, performed 287 checks of audits carried out by the six largest firms in the country, as well as a smattering of inspections of smaller auditors’ work. The findings showed an industry still reeling from the unusual world that was the early 2020s:

• PCAOB found deficiencies in 46% of audits last year, up from 40% in 2022. Deficiencies occur when an auditor fails to collect enough evidence to support part or all of their conclusion.
• Among the six largest firms, 86% of audits carried out by BDO were found to contain deficiencies, as well as 54% of audits at Grant Thornton. The so-called Big Four Auditors fared better, with 38% of audits carried out at Ernst & Young containing deficiencies, 26% at KPMG, 21% at Deloitte, and 18% at PwC — though only EY and KPMG’s rates fell.

No Pajamas: “While there is no single reason for the aggregate increase in deficiencies, it’s clear the Covid pandemic influenced audit quality,” the organization — not a government agency, but a nonprofit whose rules are approved by the SEC — said. One thing that the PCAOB said has helped improve audit quality is requiring staff to show up to the office, at least for part of the week.