Business

Patients who received donanemab demonstrated a 35% slower decline in memory, thinking and their ability to perform daily activities, according to clinical trial data from its maker, Eli Lilly.
The monthly antibody infusion also significantly reduced brain plaque that is associated with Alzheimer’s disease.
Though the results are promising, donanemab also carries a risk of brain swelling and bleeding that in rare cases can be severe and even fatal.
Lilly plans to apply for Food and Drug Administration approval of donanemab as soon as this quarter.

An Eli Lilly and Company pharmaceutical manufacturing plant is pictured at 50 ImClone Drive in Branchburg, New Jersey, March 5, 2021.
Mike Segar | Reuters

The Alzheimer’s treatment donanemab, which is made by Eli Lilly, significantly slowed progression of the mind-robbing disease, according to clinical trial data released Wednesday by the company.
Patients who received the monthly antibody infusion during an 18-month study demonstrated a 35% slower decline in memory, thinking and their ability to perform daily activities compared with those who did not receive the treatment, Eli Lilly’s data showed.

Patients who took donanemab were 39% less likely to progress to the next stage of the disease during the study, according to the trial results.
But the treatment’s benefits will have to be weighed against the risk of brain swelling and bleeding that can be serious and even fatal in rare cases. Three participants in the trial died from these side effects.
Eli Lilly’s stock was up more than 6% in premarket trading Wednesday.
Lilly plans to apply for Food and Drug Administration approval of donanemab as soon as this quarter, according to the company. The trial studied individuals in the early stages of Alzheimer’s who had a confirmed presence of brain plaque associated with the disease. 
Dr. Daniel Skovronsky, Lilly’s chief scientific and medical officer, said donanemab demonstrated the highest level of efficacy of any Alzheimer’s treatment in a clinical trial. The company is working to get donanemab approved and on the market as quickly as possible, he said.

And Skovronsky believes the FDA feels the same sense of urgency. 
“Every day that goes by, there are some patients who pass through this early stage of Alzheimer’s disease and become more advanced and they won’t benefit from treatment,” he said in an interview with CNBC. “That’s a very pressing sense of urgency.”  
Lilly previously applied for expedited approval of donanemab.
The FDA rejected that request in January and asked the company for more data on patients who received the antibody for at least 12 months. Lilly said the data wasn’t available at the time because many patients were able to stop dosing at six months because the treatment cleared plaque quickly.
Nearly half of patients — 47% — who received donanemab showed no disease progression a year after treatment began, compared with 29% who did not receive the antibody, according to the data released Wednesday.
More than half of patients completed the treatment in the first year and 72% completed it in 18 months due to clearance of brain plaque. 
In a separate measure, patients who received donanemab showed 40% less decline in their ability to conduct daily activities at 18 months. This means they could better manage finances, drive, pursue hobbies and hold conversations than those who did not receive the treatment. 
“These are the strongest phase 3 data for an Alzheimer’s treatment to date. This further underscores the inflection point we are at for the Alzheimer’s field,” said Maria Carrillo, the Alzheimer’s Association chief scientific officer, in a statement.

Brain plaque reduction

Donanemab targets brain plaque associated with Alzheimer’s disease. The treatment significantly reduced the plaque as early as six months after treatment, according to Lilly. Many patients saw such significant reductions that they tested negative for plaque presence on their PET scans, according to the company.
Donanemab cleared the plaque at six months in 34% of patients who had intermediate levels of a protein called tau that can become toxic and kill neurons. At 12 months, donanemab cleared the plaque in 71% of patients with the same tau levels.
“It should be unequivocal that drugs that remove plaque, particularly if you can remove plaque completely and do it quickly, can lead to very significant clinical benefits for patients,” Skovronsky said in an interview.
“The earlier in the disease course you do this, the more you can slow the disease,”  he said.
Dr. Eric Reiman, executive director of the Banner Alzheimer’s Institute, said the results do not necessarily mean the plaque is completely gone, but donanemab cleared the plaque to such a degree that the treatment removed measurable evidence of it. The Banner Alzheimer’s Institute had two physicians who participated in the donanemab trial as principal investigators. 

CNBC Health & Science

Read CNBC’s latest global health coverage:

Brain swelling and bleeding risk

Donanemab can cause brain swelling and bleeding in patients that in some cases can be severe and even fatal. Three trial participants died from these side effects, according to Lilly.
These types of side effects have been observed in other Alzheimer antibody treatments such as Eisai and Biogen’s Leqembi, which received expedited FDA approval in January. 
Reiman said he’s encouraged by the potential clinical benefit to patients but it’s important to be clear about the risks.
“We also need to be clear that there are side effects, including an uncommon but potentially catastrophic risk,” said Reiman. “And we need to continue to do our best to understand what that risk is for individual patients, to inform patients and family caregivers, and do everything we can to mitigate that risk,” he said. 
About 24% of patients who received donanemab showed brain swelling on an MRI, but only 6% displayed actual symptoms. About 31% of patients had small brain bleeds called microhemorrhages, compared with 13.6% among patients who didn’t receive the treatment.
Lilly said the majority of the cases of brain swelling and bleeding were mild to moderate and patients stabilized with the right care, but cautioned that serious and life-threatening events can occur. About 1.6% of the swelling and bleeding cases were serious, according to Lilly. 
Skovronsky said every patient would need to have a discussion with their doctor that weighs the potential benefits of donanemab with the possible risks. 
“On a population basis, our view is its benefits outweigh risks,” Skovronsky said.
“FDA is the steward of that for the U.S.,” he said of the risk-benefit analysis that will determine whether donanemab wins approval. More

Yum Brands’ earnings fell short of Wall Street estimates for the first quarter.
Yum’s same-store sales increased 8% in the quarter as KFC, Taco Bell and Pizza Hut outperformed expectations.

Cars wait in a line at a KFC (Kentucky Fried Chicken) drive-thru in Bloomsburg.
Paul Weaver | LightRocket | Getty Images

Yum Brands on Wednesday reported quarterly earnings that fell short of analysts’ expectations, despite a China sales rebound for KFC and Pizza Hut.
Yum joins the growing list of companies that includes Procter & Gamble and Starbucks that have reported recovering sales in China.

Shares of the company dropped more than 2% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $1.06 adjusted vs. $1.13 expected
Revenue: $1.65 billion vs. $1.62 billion expected

Yum reported first-quarter net income of $300 million, or $1.05 per share, down from $399 million, or $1.36 per share, a year earlier. The company said its earning per share decreased by 7 cents per share due to decreases in the value of unnamed investments, and took an 8 cent per share hit because of foreign currency.
Excluding items, the restaurant company earned $1.06 per share.
Net sales rose 6% to $1.65 billion. Its same-store sales increased 8% in the quarter as its three largest chains outperformed expectations. Digital sales exceeded 45% of transactions, CEO David Gibbs said.

KFC’s same-store sales rose 9%, thanks to its international markets. In China, KFC’s largest market, system sales climbed 17%, helping lift the chain’s international same-store sales growth 11%.
Similarly, Pizza Hut reported that China’s system sales soared 24% in the quarter. The country is Pizza Hut’s second-largest market, trailing on the U.S.
The pizza chain also performed well stateside, reporting domestic same-store sales growth of 8%. Overall, Pizza Hut’s same-store sales rose 7%.
Taco Bell reported same-store sales growth of 8% for the quarter.
Yum opened 746 new locations during the quarter. Taco Bell saw the largest increase in openings as the chain focused on expanding its international footprint.
Shortly after the quarter ended, Yum completed its exit from Russia through the sale of those KFC restaurants to Smart Service, an existing Russian franchisee. The company had already sold its Pizza Hut locations there to a local operator last summer following Moscow’s invasion of Ukraine.
Next quarter, Yum won’t face any comparisons that include its Russian business because the company suspended operations there in early March last year. More

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.50% from 6.55%
Mortgage applications to purchase a home dropped 2% last week compared with the previous week.
The spread between conforming and jumbo mortgage rates narrowed again.

Homes in Centreville, Maryland, US, on Tuesday, April 4, 2023. 
Nathan Howard | Bloomberg | Getty Images

Mortgage demand from homebuyers has been erratic to say the least during the usually busy spring housing market. That is likely because today’s buyers are hypersensitive to mortgage rates, which have been fluctuating widely week to week but which are still considerably higher than they were a year ago. Now, several bank failures are starting to make it more difficult even for wealthier buyers.
Mortgage applications to purchase a home dropped 2% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Demand was 32% lower than the same week one year ago.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.50% from 6.55%, with points remaining at 0.63 (including the origination fee) for loans with a 20% down payment. The rate was 5.36% the same week one year ago.
The average rate for jumbo loans (higher-balance mortgages) was slightly lower at 6.37%, but that spread has been shrinking for the last few months. Jumbo loan rates had been far lower than conforming because banks generally hold these loans on their balance sheets, as Fannie Mae and Freddie Mac don’t purchase them. Fannie and Freddie have imposed higher fees since the Great Recession, so their rates are now higher.
“The jumbo-conforming spread continues to narrow, an indication that there is reduced lender appetite for jumbo loans following the recent turmoil in the banking sector and heightened concerns about liquidity,” wrote Joel Kan, MBA’s deputy chief economist, in a release. “The spread was 13 basis points last week, after being as wide as 64 basis points in November 2022.”
Applications to refinance a home loan increased 1% from the previous week but were 51% lower than the same week one year ago. The refinance share of mortgage activity rose to 27.2% of total applications from 26.8% the previous week.
Mortgage rates were volatile to start this week, with more concern over bank failures and a much-anticipated Federal Reserve meeting Wednesday. The Fed is expected to raise its benchmark interest rate by a quarter point, but it will be the commentary from Fed Chairman Jerome Powell that will have the greatest impact on the bond market, and consequently mortgage rates. More

Ford will lower pricing of the Mach-E by a range of $1,000 to $4,000. The cuts will make the starting price of the vehicle be between $42,995 and $59,995.
The cuts are the latest price adjustments in the EV market following Tesla changing prices on its vehicles several times this year.
Automakers are attempting to balance growth and earnings potential when it comes to electric vehicles.

Ford Mustang Mach-E is presented at the New York International Auto Show, in Manhattan, New York City, April 5, 2023.
David Dee Delgado | Reuters

DETROIT — Ford Motor is once again cutting the starting prices of its electric Mustang Mach-E by thousands of dollars, as the automaker increases production of the crossover and reopens order banks for the vehicle.
The Detroit automaker said Tuesday it will lower pricing of the Mach-E by a range of $1,000 to $4,000. The cuts will make the starting price of the vehicle fall between $42,995 and $59,995.

related investing news

an hour ago

The reductions are the latest price adjustments in the electric vehicle market following Tesla cutting prices several times this year, but also slightly raising prices on some models this week.
Ford last announced it was cutting prices of the Mach-E by $600 to $5,900 in January, weeks after Tesla announced similar price cuts for vehicles such as its Model Y, which is comparable to the Mach-E.
Automakers are attempting to balance growth and earnings potential when it comes to EVs — something Wall Street analysts have been watching to better determine company’s strategies with the vehicles.
“Like other [automakers], Ford must decide what kind of EV strategy to pursue: Grow fast and burn cash or a more focused approach that prioritizes capital discipline,” Morgan Stanley analyst Adam Jonas said in an investor note last week.
Tesla CEO Elon Musk last month said the EV maker would prioritize growth ahead of profits in a weak economy.

Musk said the company has “taken a view that pushing for higher volumes and a larger fleet is the right choice here, versus a lower volume and higher margin,” but noted that he expects Tesla vehicles “over time will be able to generate significant profit through autonomy.”
In addition to the price change, Ford said Tuesday that standard range models of the Mach-E will now be powered by lithium-iron phosphate batteries instead of lithium ion. The vehicles also will add additional horsepower and range, Ford said.
“The production increase for Mustang Mach-E in the second half of this year is part of Ford’s plan to scale electric vehicles and make them more accessible and affordable for customers,” Ford said in a release.
Ford also said Tuesday that its BlueCruise hands-free driver-assistance system will be available on all Mustang Mach-E models. A complimentary 90-day trial of the system will be included for new owners. Ford said a three-year subscription for BlueCruise will cost $2,100, up from $1,900. More

Ford on Tuesday reported first-quarter results that topped Wall Street’s estimates.
The automaker’s fleet and legacy operations outperformed amid growing losses in electric vehicles, as the operation scales up.
Despite the significant beat, Ford maintained its previously announced 2023 guidance of adjusted earnings between $9 billion and $11 billion.

DETROIT — Ford Motor on Tuesday reported first-quarter results that significantly topped Wall Street’s estimates, as the automaker’s fleet and legacy operations outweighed growing losses in electric vehicles.
Despite the significant beat, Ford maintained its previously announced 2023 guidance, and the stock ticked lower in extended trading.

related investing news

an hour ago

2 days ago

Ford finance chief John Lawler said the quarter was a “peek at what’s possible to generate value and growth.” His comments come months after CEO Jim Farley said the company failed to capitalize on $2 billion in additional profits last year due to “execution issues.”
Here’s how Ford did during the quarter, compared with what Wall Street expected based on average estimates compiled by Refinitiv:

Earnings per share: 63 cents, adjusted, vs. 41 cents expected
Automotive revenue: $39.09 billion vs. $36.08 billion expected

Farley said during the earnings call that the company had a “solid quarter while making real progress on our Ford+ growth plan.”
“I hope that becomes a trend at Ford, boringly predictable when it comes to execution and delivering financials, but extremely ambitious in dynamically creating the Ford of the future,” Farley said.
The company reiterated it expects full-year adjusted earnings between $9 billion and $11 billion and roughly $6 billion in adjusted free cash flow. Ford said it plans to have capital expenditures of between $8 billion and $9 billion in 2023.

Ford also reconfirmed it expects to lose about $3 billion from its electric vehicle operations, known as Model e, in 2023. Ford said the operations’ loss widened to $722 million in the first quarter from $380 million a year earlier as it ramps up EV production.
Those losses were washed out, however, by the company’s traditional car business, known as Ford Blue, which earned $2.6 billion, and the automaker’s Ford Pro fleet operations, which reported $1.4 billion in earnings. The automaker said both business segments were profitable in every region where they operate.
Lawler reconfirmed the automaker expects Model e to report a positive EBIT margin of 8% by the end of 2026, including its first-generation EVs by 2024.
Ford is reporting its quarterly financial results by business unit, instead of by region, for the first time. The Detroit automaker earlier this year released revised results for 2021 and 2022 according to the new structure.
Wall Street is closely monitoring the Model e EV unit in addition to any comments on EV pricing following Tesla price changes. Ford earlier Tuesday said it would again cut the starting prices of its electric Mustang Mach-E by thousands of dollars, as it increases production and reopens order banks for the crossover.
“It’s a competitive segment, and we’re working on cost reductions,” Lawler told reporters after the company’s quarterly results. Ford expects $5,000 in build-cost reductions on average. He said some models switching to lithium-iron phosphate batteries from lithium ion should assist in such reductions.
For the first quarter, Ford reported net income of $1.8 billion, or 44 cents per share, compared to a net loss of $3.1 billion, or 78 cents per share, during the year-earlier period. Results last year were dragged down by a one-off charge related to its investment in EV startup Rivian.
Total revenue, which includes the impact of Ford Credit, grew 20% year over year to $41.5 billion, the company said.
There was additional pressure on Ford’s first-quarter results after crosstown rival General Motors last week raised key guidance for 2023 and reported results that topped Wall Street’s forecasts for both revenue and earnings.
GM raised its adjusted earnings expectations to a range of $11 billion to $13 billion, or $6.35 to $7.35 a share, and expectations for adjusted automotive free cash flow to between $5.5 billion and $7.5 billion.
Despite GM’s results and guidance raise its shares notably fell last week as Wall Street analysts remained skeptical about the company’s ability to perform amid broader economic challenges and an automotive industry that’s normalizing away from pricey vehicles and record profits.
Ford’s Lawyer said “there will definitely be some pressure on pricing” regarding the automaker’s legacy operations, as supply and demand normalize. Pricing for the automaker was level during the first quarter, he said.
— CNBC’s Michael Bloom contributed to this report.
Correction: Analysts polled by Refinitiv expected Ford to report first-quarter automotive revenue of $36.08 billion. An earlier version misstated the estimate. More

Starbucks on Tuesday reported quarterly earnings and revenue that beat analysts’ expectations.
China, the company’s second-largest market, saw its same-store sales increase.
U.S. same-store sales jumped 12%, helped by a 6% increase in traffic.

Starbucks on Tuesday reported quarterly earnings and revenue that beat analysts’ expectations, fueled by better-than-expected international sales.
In China, the company’s second-largest market, Starbucks saw its same-store sales increase for the first time since Starbucks’ fiscal third quarter in 2021, as customers returned to its cafes following the rollback of Beijng’s zero-Covid policy.

related investing news

However, shares fell 5.6% in extended trading after executives reaffirmed its full fiscal-year outlook.
Here’s what Starbucks reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: 74 cents adjusted vs. 65 cents expected
Revenue: $8.72 billion vs. $8.4 billion expected

The coffee giant reported fiscal second-quarter net income of $908.3 million, or 79 cents per share, up from $674.5 million, or 58 cents per share, a year earlier.
Excluding items, Starbucks earned 74 cents per share.
Net sales rose 14.2% to $8.72 billion. The company’s same-store sales climbed 11% in the quarter, beating StreetAccount estimates of 7.1%. Both the U.S. and international markets outperformed expectations.

“This is remarkable on any level, but specifically given the seasonality pressures we typically experience in [the second quarter],” finance chief Rachel Ruggeri said on the company’s conference call.
U.S. same-store sales jumped 12% on a 6% increase in traffic. Some restaurant companies, like Outback Steakhouse owner Bloomin’ Brands, have reported shrinking traffic as customers pull back on dining out. Starbucks joins fellow outliers like McDonald’s and Chipotle Mexican Grill, which also saw traffic jump.
The company said its active U.S. loyalty program members gained 15% from the year-ago period to 30.8 million during the quarter ended April 2.
Outside the U.S., the coffee chain’s same-store sales increased 7%.
In China, the metric rose 3%. Starbucks China Chair Belinda Wong said that the business saw 30% same-store sales growth in March and that momentum has continued into the fiscal third quarter.
“We’re very encouraged by the signs that we see, but there’s a lot that we’re navigating,” Ruggeri said.
Last quarter, then-CEO Howard Schultz said the company expected its business in China would recover in the second half of fiscal 2023.
Starbucks reaffirmed its fiscal-year outlook, projecting revenue growth of 10% to 12% and adjusted earnings-per-share growth on the low end of 15% to 20%.
Starbucks opened 464 net new locations during the quarter. More

The U.S. is trying to enforce CDC patents on a two-drug PrEP regimen that helps prevent HIV infection.
The U.S. says Gilead’s drugs Truvada and Descovy infringe on those CDC patents. Gilead denies the allegations.
A trial in the case kicked in federal district court in Delaware and is expected to last six days.

Gilead Sciences logo displayed on a laptop screen and medical pills are seen in this illustration photo taken in Krakow, Poland on October 18, 2021. (Photo by Jakub Porzycki/NurPhoto via Getty Images)
Nurphoto | Nurphoto | Getty Images

Gilead Sciences and the U.S. government faced off in court Tuesday in the first day of a trial that will probe allegations that the drugmaker violated patents for a crucial HIV prevention drug regimen.
The U.S. is trying to enforce four patents issued to the Centers for Disease Control and Prevention on a two-drug regimen known as pre-exposure prophylaxis, or PrEP for short. The government accuses Gilead of reaping billions of dollars in PrEP sales without paying royalties to the CDC.

The U.S. filed the lawsuit against Gilead in 2019. Gilead has rejected U.S. allegations that the company’s sales of its PrEP oral medications, Truvada and Descovy, infringe on any CDC patents.
The trial in Delaware federal district court is expected to last six days.
Scientists at the CDC discovered in the mid-2000s that two drugs, emtricitabine and tenofovir, taken together were highly effective in preventing HIV infection, according to U.S. government’s lawsuit.
Gilead’s Truvada and Descovy both contain emtricitabine and tenofovir. The company’s combined sales worldwide for Truvada and Descovy were about $2 billion in 2022.
“Gilead has repeatedly refused to obtain a license from CDC to use the patented regimens,” Justice Department lawyers wrote in the original complaint. “Indeed, Gilead has reaped billions from PrEP through the sale of Truvada and Descovy, but has not paid any royalties to CDC.”

“Accordingly, Gilead has willfully and deliberately induced infringement of CDC’s patents and continues to do so,” the DOJ said.
Gilead rejects CDC claims that agency scientists developed the the PrEP regimen. The company said it’s not obligated to apply for a license with the CDC or pay the agency any royalties.
“Not only did Gilead invent Truvada and Descovy, but the concept of using Truvada to prevent HIV was well-known by the time the government tried to obtain its patents,” a Gilead spokesperson said.
This two-drug PrEP regimen has played a key part in reducing new HIV infections in communities that face a higher risk from the virus, such as men who have sex with men, after decades of failed efforts to develop a vaccine.
Subsequent clinical trials have demonstrated that PrEP is 99% effective at preventing HIV infection.

CNBC Health & Science

Read CNBC’s latest global health coverage: More

More than 11,000 film and television writers are on strike.
It’s the first strike of its kind during the streaming era.
Production on daily late-night shows is expected to go dark this week.
It could take awhile for disruptions to affect TV series and movies.

Demonstrators carry signs during a screenwriter’s strike in New York City on May 2, 2023.
Leonardo Munoz | AFP | Getty Images

Hollywood writers are officially headed to the picket line, halting production on a slate of film and television projects in the process.
More than 11,000 film and television writers, who say their compensation doesn’t match the revenue generated in the streaming era, are on strike for the first time since 2007-08. That work stoppage lasted 100 days and disrupted production on several series and films.

Writers Guild of America members are set to start walking picket lines Tuesday afternoon. Under strike rules, they are prohibited from doing work on any television or film projects for the duration of the stoppage. 
Most immediately, this will have a significant impact on late-night shows, where writers are tasked with crafting timely and topical jokes. Production on daily shows, including “The Tonight Show Starring Jimmy Fallon,” “The Late Show with Stephen Colbert” and “Late Night with Seth Meyers,” is expected to go dark this week.
Late-night hosts have been in favor of the strike, offering up segments to support their writing staffs. “I wouldn’t have a show if it wasn’t for my writers, I support them all the way,” Fallon said of the strike during Monday’s annual Met Gala in New York City. “I couldn’t do the show without them.”

Pictured: (l-r) Bowen Yang as ‘The Iceberg That Sank The Titanic’ and anchor Colin Jost during Weekend Update on Saturday, April 10, 2021.
NBC | NBCUniversal | Getty Images

Other timely shows, like NBC’s “Saturday Night Live,” could also shut down this week. It’s unclear what kind of immediate impact the strike will have on daytime talk shows, which often rely more heavily on interviews and banter between hosts than on scripted monologues or jokes.
Meanwhile, scripted comedies and dramas may be forced to cut their seasons short or delay filming. If the strike continues into the summer, broadcast TV’s fall season would also be delayed, as preparations typically begin in late spring and summer.

Depending on the strike’s duration, at-home viewers and moviegoers might not notice the strike’s impact until it’s over. That’s because many shows and films have already wrapped production and will enter the marketplace unaffected by the strike.

However, if the strike is prolonged, production shutdowns will catch up with content release timelines, much like they did during the pandemic. Theatrical releases likely wouldn’t be affected until the last quarter of 2023 or early 2024.
This is the first strike of its kind during the streaming era. Streamers have relatively more flexibility than networks and theaters and could choose to promote legacy content on their platforms or license material from other countries in order to pad their libraries in the event of content shortages.
The strike is only the second of its kind in nearly four decades. The length of the last strike encouraged the growth of reality unscripted shows. It’s possible this strike will be lengthy as well. Leading up to the deadline, the two parties were said to be far apart on a number of key bargaining issues. 
The WGA is seeking higher compensation and residuals, particularly when it comes to streaming shows, as well as new rules that will require studios to staff television shows with a certain number of writers for a specific period. The guild also is seeking compensation throughout the process of pre-production, production and post-production. Currently, writers are often expected to provide revisions or craft new material without being paid.

What’s different this time

The film and television landscape is radically different than it was in 2007, and the changes brought on by the streaming era are at the core of this strike. 
While the explosion of streaming services such as Netflix and Disney+ has ushered in a glut of TV shows and movies, the WGA says its writers aren’t seeing requisite benefits. Instead, they feel they’ve been shortchanged on compensation as studios, networks and streaming platforms write a new rulebook in real time. Consequently, they’re seeking pay increases, plus structural changes to the business model undergirding the shows and movies they write for.
According to WGA statistics, median writer-producer pay has declined 4%, or 23% when adjusted for inflation, over the last decade, while streaming platforms have become increasingly popular.

A still from “Stranger Things” season three, with the Hawkins crew on the cusp of adulthood and facing enemies old and new.

“The companies have used the transition to streaming to cut writer pay and separate writing from production, worsening working conditions for series writers at all levels,” the guild said in a March memo. 
WGA writers have taken particular issue with the length of series in the streaming era, which tend to run fewer episodes than broadcast shows. Writers say that has made it difficult to make a consistent income. The growth of streaming also has all but killed residual fees, in which writers profit every time a show is put into syndication or aired abroad.
Unlike the 2007 strike, writers currently have social media on their side and are rallying on platforms like Twitter, Instagram and TikTok to get their message out.
“We’re going on strike to remind them that while our work has made them rich, without us they have nothing,” wrote Adam Conover, the creator of “Adam Ruins Everything” and “The G Word with Adam Conover,” in a tweet. “It’s going to be hard, but we’re going to win, because we’re going to stand together, be honest with each other, and fight for each other. And when we do that, we win.”

What studios are offering

In recent years, media companies have faced a tricky economic landscape, as studios and streamers faced pressure to make their streaming platforms profitable. Many studios and companies, including Netflix, have cut spending on content as they try to turn a profit. Streaming’s popularity has also led to declining television ad revenue for traditional networks.
Producers have argued that the streaming business is new and studios and networks still don’t know what profit margins will look like in the future.

The Mandalorian and the Child on Disney+’s “The Mandalorian.”

The Alliance of Motion Picture and Television Producers, which represents networks, streamers and studios, said it offered “generous increases in compensation” for writers, and “improvements in streaming residuals.”
According to the AMPTP, the primary sticking points in negotiations have concerned union proposals that would require companies to staff shows with an allotted number of writers, whether needed or not, for certain periods of time.
While producers said they were prepared to increase their offers for higher pay and residuals, there were concerns about the “magnitude” of other proposals from the WGA that were still on the table, AMPTP said.
Among those proposals included one that material produced through artificial intelligence or similar technologies be more carefully regulated so that studios cannot use AI to undermine writers or skimp on compensation.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is one of the entertainment companies represented by the Alliance of Motion Picture and Television Producers. Some editorial employees of the NBCUniversal News Group are represented by the Writers Guild of America. More