Raphael Stevens

CNBC Travel

The holiday island of Bali reopened to tourists from select countries Thursday in what Indonesian authorities have called a “baby steps” approach to resuming international travel.
Indonesia closed its borders to foreign travelers some 18 months ago.

Vaccinated tourists from 19 countries — including China, India, Japan, South Korea and New Zealand, as well as parts of Western Europe and the Arabian Gulf — can now travel to Bali and Indonesia’s Riau Islands. Travelers are subject to a five-day quarantine and Covid-19 testing.

The plans are seen as a milestone for the Southeast Asian country’s tourism-dependent islands, which have been crushed by ongoing travel restrictions. Yet several major feeder markets for foreign tourism — including Bali’s No. 1 market of Australia, and neighboring Singapore — were omitted from the list.

Talks with Singapore and Australia ongoing

Speaking to CNBC Thursday, Indonesia’s Minister of Tourism and Creative Economy Sandiaga Uno said the current policy was based on scientific data and guidance from a panel of epidemiologists. He added that the list would be expanded once data from additional markets supports it.

We want to make sure that it’s not going to be stop and go.

Sandiaga Uno
Indonesia’s minister of tourism and creative economy

“We want to make sure that it’s not going to be stop and go, but rather a smooth, incremental basis,” Uno told CNBC’s “Street Signs.”
“[With] Singapore and Australia, definitely, we are continuing to talk,” he said, noting that the conversations are focused on ensuring reopening “will be done first on a safe and secure basis.”

Competing with quarantine-free destinations

Indonesia’s partial reopening comes as neighboring nations, including Thailand, Singapore and parts of Vietnam, welcome vaccinated tourists from select countries on a quarantine-free basis.
Indonesia — burned by a lackadaisical approach to quarantines which led to a spike in Covid-19 cases in July — is taking a more cautious approach. They have reason, too. The country is gearing up to host the G-20 summit on Bali in 2022.
“It will be purely scientific, making sure that this process will be smooth in terms of the next 18 months as we host G20 events here,” said Uno.

People visit Seminyak on Indonesia’s holiday island of Bali on Jan. 5, 2021.
Sonny Tumbelaka | AFP | Getty Images

In addition to quarantines, which Uno said would be revised in time, the islands are implementing new safety measures, such as hotel certifications and vaccine boosters.
“We are making sure Bali is prioritizing the whole island to be 100% vaccinated with boosters… in the Q1 of next year,” he said.
Authorities are hoping the new measures will help revive Indonesia’s tourism industry, which accounts for around 4% of the country’s gross domestic product. But Uno acknowledged that reaching pre-pandemic numbers may take time, with visitors likely to opt for less frequent but longer stays in the near term. More

The NHL opened its 2021-22 season this week, returning to ESPN with a doubleheader that averaged 884,000 viewers.
Turner Sports’ Wednesday coverage attracted more than 669,000 viewers for its doubleheader.

Pittsburgh Penguins center Evan Rodrigues (9) has a break away and Tampa Bay Lightning goaltender Andrei Vasilevskiy (88) makes a save during the NHL Hockey match between the Tampa Bay Lightning and Pittsburgh Penguins on October 12th, 2021 at Amalie Arena in Tampa, FL.
Andrew Bershaw | Icon Sportswire | Getty Images

The National Hockey League commenced its 2021-22 season on Tuesday. It’s also the first year of its $1 billion media rights package with ESPN and Turner Sports.
The networks said the NHL averaged 884,000 viewers for ESPN’s doubleheader on Tuesday, and Turner drew roughly 669,500 viewers for its Wednesday national slot. Both figures are up from the NHL’s average for its last two season openers.

ESPN’s first game featured the Pittsburgh Penguins beating defending Stanley Cup champion Tampa Bay Lightning, 6-2. That game averaged 984,000 viewers, on Tuesday, and peaked over one million viewers, according to ESPN, who used metrics from research company Nielsen.
The Disney-owned network added the 2021 contest topped its last highly-rated NHL opener in Oct. 2001 between the Penguins and Colorado Avalanche. That 2001 opener attracted 927,000 viewers.
ESPN also debuted expansion franchise Seattle Kraken who fell to the Las Vegas Golden Knights, 4-3. The game averaged 782,000 viewers and also peaked at over one million viewers. The network said streaming metrics from ESPN+ are not included in the viewership stats.
By comparison, the first game of the NHL’s 2020-21 season-opener averaged 972,000 total viewers on NBC’s sports network. That contest featured the Philadelphia Flyers and Penguins and was the most-watched regular-season game on NBCSN.
Other games from last season’s tripleheader included the Chicago Blackhawks against the Lightning and Avalanche versus St. Louis Blues. The combined telecast averaged 774,000 viewers, up from 600,000 viewers the season prior.

Alex Ovechkin #8 of the Washington Capitals shoots the puck against the New York Rangers during the second period at Capital One Arena on October 13, 2021 in Washington, DC.
Patrick Smith | Getty Images

The NHL ended its 16-year partnership with NBC Sports and reached a $1 billion package with ESPN and Turner Sports last April.
On Wednesday, TNT rolled out its doubleheader national package and included some crossover appeal. The network featured star NBA commentator Charles Barkley in the pregame show of the Washington Capitals’ 5-1 victory over the New York Rangers. The game averaged 817,000 total viewers, and peaked at 920,000 viewers around 9:00 p.m. to 9:15 p.m ET.
In the contest, Capitals star Alex Ovechkin scored twice to move into fifth all-time. Ovechkin, 36, has 732 career goals and needs 163 more to pass Wayne Gretzky’s NHL record of 894 goals. TNT said it averaged 522,000 total viewers for the second contest featuring the Avalanche beating the Blackhawks, 4-2.
On the advertising front, metrics firm EDO estimated the automotive category led with 15.4% of ad spend for this season’s NHL openers. Restaurants made up 12.9% and insurance had 11.9% of ad spend. EDO added Apple commercials led search engagement. It’s a metric the company uses to measure online search activity for brands in the minutes following TV ads airing.

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Virgin Galactic is delaying the beginning of its commercial space tourism service to fourth quarter 2022.
The space tourism company will this month begin work refurbishing and improving its spacecraft and carrier aircraft, rather than fly its next spaceflight test.
Virgin Galactic’s enhancement process, which is expected to take eight to 10 months, makes mid-2022 the earliest that the Unity 23 spaceflight may fly.

Virgin Galactic is delaying the beginning of its commercial space tourism service to fourth quarter 2022, with the company on Thursday announcing a reorganization of its development and test flight schedule.
The space tourism company will this month begin work refurbishing and improving its spacecraft and carrier aircraft, a process a Virgin Galactic spokesperson told CNBC is expected to last eight to 10 months – with completion expected between June and August.

Virgin Galactic had planned to begin the “enhancement” period after the next spaceflight, called Unity 23. But the company said a recent test “flagged a possible reduction in the strength margins of certain materials used to modify specific joints” in its vehicles that will require “further physical inspection.”
With the work on Virgin Galactic’s spacecraft VSS Unity and carrier aircraft VMS Eve beginning this month, the process makes mid-2022 the earliest that the Unity 23 may fly.
“The re-sequencing of our enhancement period and the Unity 23 flight underscores our safety-first procedures, provides the most efficient path to commercial service, and is the right approach for our business and our customers,” Virgin Galactic CEO Michael Colglazier said in a statement.
Shares of Virgin Galactic dropped as much as 13% in after hours trading from its close of $24.06. The stock is up just 1% for 2021 as of Thursday’s close, effectively unchanged the year.
Unity 23 will now take place after the enhancement process, which Virgin Galactic said is “designed to further increase margins that will enable improved reliability, durability and reduced maintenance requirements.” Virgin Galactic had two more spaceflights scheduled – Unity 24 and Unity 25, with the latter representing the launch of commercial service – for the third quarter of 2022, but those no longer have public target dates.
The refurbishment period had also been expected to begin in September, but the Federal Aviation Administration had grounded Virgin Galactic for most of last month to investigate a mishap that occurred during the flight that carried company founder Sir Richard Branson. The FAA cleared Virgin Galactic to return to flight after completing the investigation.

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A key FDA advisory committee unanimously recommended Thursday giving booster shots of Moderna’s Covid-19 vaccine to people ages 65 and older and other vulnerable Americans.
The endorsement is a crucial step before the U.S. can start giving third shots to some of the millions of Americans who originally received Moderna’s vaccine.

A key Food and Drug Administration advisory committee on Thursday unanimously recommended giving booster shots of Moderna’s Covid-19 vaccine to people ages 65 and older and other vulnerable Americans. The vote was a crucial step before the U.S. can start administering third shots to some of the more than 69 million people who originally received that vaccine.
The nonbinding decision by the FDA’s Vaccines and Related Biological Products Advisory Committee would bring guidelines for Moderna in line with third shots of the Pfizer-BioNTech vaccine. Those shots were authorized less than a month ago to a wide array of Americans, including the elderly, adults with underlying medical conditions and those who work or live in high-risk settings, such as health-care and grocery workers.

While the agency hasn’t always followed the advice of its committee, it often does. A final FDA decision on Moderna boosters could come within days. A CDC vaccine advisory committee is then expected to vote on the FDA’s proposal next week. If it recommends approval and the CDC endorses it, booster shots could begin immediately for eligible Americans who completed their immunizations at least six months ago.
Booster shots have been a contentious topic for scientists — in and outside the government — especially as many people in the U.S. and other parts of the world have yet to receive even one dose of a vaccine. The World Health Organization is urging wealthy countries to hold off on distributing boosters, and some scientists say they aren’t convinced most Americans need boosters right now.

When the FDA committee met last month, they rejected a proposal to distribute booster shots of Pfizer and BioNTech’s vaccine to the general public. Some committee members at the time said they were concerned there wasn’t enough data to make a recommendation, while others argued third shots should be limited to certain groups.
After Moderna’s unanimous vote Thursday, committee member Dr. Patrick Moore said the data the company submitted for authorization of a booster “was not well explained,” adding he voted yes more on “gut feeling.”
“The data itself is not strong, but it is certainly going in a direction that is supportive of this vote,” he said.

Some members said the boosters should prevent so-called breakthrough infections, which they said is critical for protecting health-care institutions from becoming overwhelmed, while other members said the third shots should ensure those at high risk won’t suffer from severe disease. Some committee members also suggested young people may not need boosters, as the initial shots are still holding up in those groups.
Dr. Paul Offit, another member, stressed that most people who have received the first two doses of Moderna’s vaccine are still well protected and said he hopes the recommendation doesn’t send the “wrong message” to the general public.
“If we’re trying to prevent what is inevitable, which is a decline in neutralizing antibodies and an erosion in protection against mild or asymptomatic infection, that is a high bar to which we hold no other vaccine,” he told his colleagues.
The Biden administration hopes giving the U.S. population additional doses will ensure long-term and durable protection against severe disease, hospitalization and death as the fast-moving delta variant continues to spread.
Dr. Peter Marks, the FDA’s top vaccine regulator, addressed the committee Thursday before the vote, telling the panel of experts that the agency encourages “all the different viewpoints” regarding the “complex and evolving” data.
“That said, as we proceed, I would ask that we do our best to focus our deliberations on the science related to the application under consideration today, and not on operational issues related to a booster campaign or issues related to global vaccine equity,” he added.
Moderna applied for FDA authorization of a booster dose on Sept. 1. The company said the results are based on a clinical trial of roughly 170 adults, fewer than the 318 people studied for Pfizer’s booster. Moderna said a third shot at half the dosage — 50 micrograms — used for the first two jabs was safe and produced a strong immune response.
Upon approval, the company plans to send a letter to health-care providers explaining the difference in dosage for the third shot, Dr. Jacqueline Miller, the company’s head of infectious disease research, said during a presentation Thursday.
Side effects of Moderna’s boosters were comparable with those experienced after the second dose, the company wrote in a document released Tuesday by the FDA. Most adverse reactions were low in severity, and Moderna reported no cases of a rare heart inflammation condition, myocarditis or pericarditis, in trial participants up to 29 days after they received their boosters.  
Before recommending the third shots, the panel listened to multiple presentations, including from health authorities from Israel, which began offering boosters to its population ahead of many other countries. The country has used mostly Pfizer’s vaccine, but some Moderna boosters have been given.
Israel has administered 3.7 million third shots since it began its booster campaign in late July, with roughly a third of the extra shots going to people age 60 and older, Sharon Alroy-Preis, director of public health services at Israel’s Ministry of Health, told the panel.
She presented data that suggested people who receive a booster dose were less likely to get infected with Covid or become severely sick. She said officials have so far identified 17 cases of myocarditis or pericarditis following third doses.
“I think we can say when we’re looking at all the data in Israel so far is that the administration of booster doses helped Israel lessen the infections and the severe cases,” she said.
– CNBC’s Robert Towey contributed to this report.

CNBC Health & Science

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Walgreens Boots Alliance CEO Roz Brewer said the drugstore chain’s new health-care division will drive growth.
The company plans to open hundreds of doctor offices, offer in-store consultations with nurses and pharmacists and put a healthy spin on its front-of-store merchandise.
It acquired stakes in several health-care companies, including primary care company VillageMD.
Walgreens expects to get a boost from administering Covid-19 booster shots and its beauty brands, which sold by other retailers, including Walmart.

Walgreens Boots Alliance’s new CEO Roz Brewer said Thursday that the drugstore chain will sharpen its focus on health care and turn it into the company’s “new growth engine.”
At a virtual investor day, she said the company’s nearly 9,000 stores across the U.S. will become places where customers can go to a doctor appointment, get medical tests and seek advice from a nurse or pharmacist. Those services will be under a new division of the company called Walgreens Health.

“This new Walgreens Health will make a difference and will began to transform us away from retail and just dispensing pharmaceuticals,” she said in an interview with CNBC’s Bertha Coombs. “It will be about the lives that we manage, and the lives that we touch and the lives that we can wrap physician and clinicians around in our buildings, both physically and digitally.”
Investors appeared receptive to Walgreens’ plan. Shares closed up 7.4% at $50.77 on Thursday. So far this year, shares are up more than 29%.
Brian Tanquilut, an equity research analyst for Jefferies, said Walgreens delivered on what many investors wanted Thursday by spelling out how it will become a proactive health-care player.
“Right now, people are saying, ‘It’s a sound strategy and we’ll give you a little bit of credit for that'” he said.
Walgreen’s plan calls for opening hundreds of primary care clinics, shaking up its selection of front-of-store merchandise and taking a stake in several health-care companies.

The company expects that strategy to pay off in the coming years. Next year, adjusted earnings per share are expected to show flat growth on a constant currency basis, it said. But growth will accelerate so that adjusted earnings per share will rise about 4% annually over the next three years. Beyond fiscal 2024, the company’s growth algorithm will lead to adjusted earnings per share growth of between 11% and 13%.
Brewer pointed to the company’s fourth-quarter earnings as evidence that Walgreens is building on a firm foundation.
Tanquilut said the new vision for Walgreens is a notable pivot.
“You are making the pharmacy a health center,” he said. “Instead of having a retail focus, the driver of value is no longer driving scripts [prescriptions] out of the pharmacy. It’s actually delivering care and making the patient loyal to the store.”

Ramping up health services

It recently decided to invest an additional $5.2 billion in VillageMD, a primary care company that will run clinics inside of Walgreens stores and is on track to go public in 2022. It also acquired a majority stake in home health-care company, CareCentrix, and specialty pharmacy company, Shields Health Solutions.
Along with ramping up on health-care services, Walgreens will step up its cost savings goal to $3.3 billion by 2024. It decided to raise that goal after shaving off $2 billion in costs, Chief Financial Officer James Kehoe said.

Brewer stepped into the top leadership role of Walgreens in mid-March after serving as chief operating officer of Starbucks and CEO of Walmart-owned Sam’s Club.
She said for her, the health-care mission is personal. At the company’s investor day, she recalled the final months of her mother’s life, when her family juggled medical bills, numerous doctors and kidney dialysis appointments. The experience, she said, was “incredibly confusing and unwieldly and burdensome.”
She said that distracted her family from what should have been the focus: enjoying the remaining time she had with her mom.
For so many Americans, she said that is the same experience — and one that Walgreens aims to solve by weaving together primary care with pharmacies and freeing up more of employees’ time to help patients.

A new look and feel at stores

Over the next few years, Walgreens leaders say consumers will start to see and feel the difference when they walk into neighborhood stores.
Walgreens said it will have 85 primary-care clinics in stores by the end of the year. They will be under the name Village Medical at Walgreens. It plans to have at least 600 of the doctor offices in more than 30 U.S. markets by 2025 and 1,000 by 2027. More than half of them will be in parts of the country that are medically underserved.
In some stores and online, it will add Walgreens Health Corners. The in-store spaces will be staffed by medical professionals, such as nurses and pharmacists, who can consult with patients and help them manage chronic conditions.
So far, Walgreens has opened 40 of them. It plans to have more than 100 by the end of this fiscal year and to ultimately have more than 3,000 across its stores.  
Customers will be able to get other kinds of medical tests, such as for pneumonia, strep, HIV and sexually transmitted infections, Walgreens President John Standley said. He said the company already has pilots, including a testing pilot for HIV in two states that it expects to grow to $26 million in revenue by fiscal year 2024.
To free up pharmacists’ time to answer customer questions, administer vaccinations and give other medical tests, Walgreens is opening centralized centers that fill prescriptions and ship them to stores and people’s homes, Standley said. It already has two centers open in Dallas and Phoenix and plans to open an additional nine by the end of fiscal year 2022, which will bring the number of pharmacies served to around 3,900.
In the front of the store, the company’s merchandise will have “more a spin towards healthy for you,” Brewer said in a CNBC interview. Already, she said, Walgreens has seen consumers gravitate on their own toward supplements and beauty products with a wellness bent. She said it will add more private label products, too.
She said Walgreens will take a hard look at tobacco sales. It has continued to sell cigarettes, even after rival CVS Health dropped the products in 2014.
With the strategy, Walgreens is following a similar path as rival CVS Health — but with a major caveat. CVS is an insurance provider, too. It acquired Aetna in 2018 in a $69 billion merger. It also owns one of the largest pharmacy benefits managers, Caremark.
CVS has expanded the health-care services it offers in drugstores by opening urgent care centers called MinuteClinics. It is turning hundreds of its stores into HealthHubs where people can meet with a therapist, participate in a yoga class or get help managing their diabetes.
Jefferies’ Tanquilut said CVS has a more holistic health strategy with Caremark, Aetna and its stores. That leads to natural synergies, he said, such as encouraging Aetna members to go to MinuteClinic for flu shots or urgent care. Plus, he said, CVS has a “first mover advantage” with turning stores into health-care destinations.
He has a hold rating for Walgreens shares with a price target of $53, roughly 5% above where shares are currently trading. He has a buy rating for CVS shares with a price target of $95, about 12% higher than where shares are currently trading.
On Thursday, Kehoe said Walgreens’ lack of an insurance company can work to its advantage. He said the company is payer agnostic and solely focused on improving health outcomes. Plus, he said Walgreens will have full-fledged primary-care clinics, not the more limited services that MinuteClinic provides.
So far, Walgreens has struck deals with Clover Health, a Medicare insurance start-up, and Blue Shield of California to provide health-care services for their more than 2 million members.
A.J. Rice, a equity research analyst for health-care services at Credit Suisse, said Walgreens hopes that by “being Switzerland,” insurers will see it as a “partner of choice.”
He said CVS and Walgreens both have a big opportunity to turn retail pharmacies into community touchpoints for health care. Yet he said the companies must prove they can attract employees with clinical backgrounds and make the cultural change.
He has a neutral rating for Walgreens shares with a $48 price target, below where shares are currently trading, and an outperform rating for CVS with a price target of $100, above where shares are currently trading.
Walgreens will look for growth in other areas, too. In the United Kingdom, Boots stores have become known for their wide selection of premium makeup and beauty brands. Kehoe said store traffic has picked up again as the country lifted pandemic restrictions, making people feel more comfortable to browse aisles and socialize.
Some of Walgreen’s beauty brands, No. 7 and Soap & Glory, are now carried by major U.S. retailers, including Target, Ulta Beauty and Walmart. Those brands are currently a $750 million business and are expected to grow to $1 billion, Kehoe said.
Credit Suisse’s Rice said Walgreens leaders also hinted at reevaluating some of the businesses that the company owns. He said investors will watch to see if Walgreens will sell off assets — such as some of its international businesses — to help fund some of its health-care growth in the U.S.

More vaccine demand still ahead

Covid-19 vaccines are expected to continue to drive business over the coming year. Walgreens administered 34.6 million vaccines in the fiscal year, ended Aug. 31. It administered 13.5 million in the fourth quarter — which accounted for 21% of the total vaccines given.
Walgreens estimates that it will give 25 million Covid vaccines in the coming fiscal year, as some people get booster shots and younger children are expected to qualify for the shots.
But the company will have to navigate a laundry list of challenges that retailers currently face, too. They include a rise in shoplifting, a shortage of workers and pandemic-related supply-chain snarls.
For instance, Walgreens is closing five more locations in San Francisco due to organized retail theft. It recently announced plans to raise its minimum wage to $15 an hour by Nov. 22 to keep up with other retailers who have raised wages or dangled perks.
Kehoe said the company is staffing up the company’s health-care business at a time when there is “a war for talent.” He said Walgreens, however, is having an easier time hiring medical professional who are learning about the company and “believing in the vision.”

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