The Weekly Scan July 26, 2021

Welcome to the Weekly Scan. Here’s what we’re following for the week of July 26, 2021.

A shot at the big time. Last week, biotechnology company and Covid-19 vaccine producer Moderna joined the S&P 500, one of the world’s best known indexes, which tracks the performance of the 500 biggest companies in the U.S. Moderna’s stock price increased about 207% in 2021, making it the top performer in the index so far, beating out fashion retailer L Brands, which surged 104% in 2021. Moderna’s recent success stems from its work using messenger RNA (mRNA) to produce one of the world’s first Covid-19 vaccines. Analysts have suggested that Moderna could have a new flu vaccine on the market by 2023, and a combined flu and Covid-19 vaccine by 2024. Both vaccines would use mRNA technology to stimulate antibodies.

• The takeaway: Companies joining the S&P 500 must typically have a market cap of $13 billion, according to sources. They typically see an uptick in value ahead of their entrance, Bloomberg reports. Some critics of Moderna’s value have pointed to uncertainty around whether or not people will need booster shots of the Covid-19 vaccine. In one survey of 191 hedge funds and institutional investors mentioned by Bloomberg, 73% of respondents said they expected Moderna’s shares to stay roughly where they are, or fall 20% or more in 2021. However, no one can say for certain how the stock will perform in the future and all investing involves uncertainty and risk.

Bloomberg and Reuters

Fierce competition. President Biden signed an executive order last week asking the Federal Trade Commission (FTC) to begin the rulemaking process of banning or restricting the use of non-compete agreements by employers. Employers have increasingly required workers to sign these agreements as a condition of employment, to prevent them from working for competitors and sharing trade secrets or other confidential information with competitors. Historically, laws around non-compete agreements have been left to states. Currently, California, Oklahoma, and North Dakota disallow the use of such agreements. 

• The takeaway: The executive order is designed to encourage competition among American businesses, making it easier for employees to switch jobs and make more money. Biden has called non-compete agreements “ridiculous,” saying that they exist to keep wages low. (One way employees might increase their earnings is by switching jobs.) One survey found that almost 30% of employers with an average hourly wage below $13 require their employees to sign noncompete agreements. While it’s not yet clear what direction the FTC will take, the Commission is expected to potentially ban non-compete agreements for lower-wage workers, rather than for everyone, according to one source within the article.

JD Supra and NPR

Getting rusty. Somerville, Massachusetts-based startup Form Energy Inc. (Form) claims to have built a battery that can cheaply store power for days using a widely available resource: iron. While the batteries would be too heavy to power cars and trucks, they could reportedly be useful in storing renewable energy to power grids. The battery operates by turning the iron inside the battery to rust, and then back into iron, emitting oxygen in the process. 

• The takeaway: These iron-powered batteries could be a solution to storing energy that is affordable, reliable, and carbon-free. These three factors are critical as nations and companies seek to reduce greenhouse gas emissions and curb the effects of climate change. The Biden administration, for one, is working towards making the power grid carbon-free by 2035. Form’s iron batteries would reportedly cost $20 per kilowatt-hour all told, compared to batteries that use nickel, cobalt, lithium, and manganese minerals, which cost between $50 and $80 per kilowatt-hour. Form claims that its batteries could eliminate the need for coal and natural gas power plants. It has received financial backing from Breakthrough Energy Ventures, a climate investment fund supported by Microsoft co-founder Bill Gates, and Amazon founder Jeff Bezos.

Wall Street Journal

Here’s what we covered in last week’s Scan: 

• Three major hospitals reject Aduhelm, the controversial new Alzheimer’s drug.
• Netflix expands into the world of gaming.
• Senate Democrats reach a budget agreement.
• Coca-Cola rolls out a new Coke Zero.

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