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How a hair-care company went from salon supplier to sanitizer powerhouse

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When AG Hair moved into its new, 70,000-sq.-foot, state-of-the-art manufacturing facility in Coquitlam, B.C., two years ago, it was part of a plan to supercharge expansion of its hair care product line to salons in international markets. Europe was next on its list. Then COVID-19 hit.

Not only was the European expansion put on hold, but salons in major markets across Canada and the United States were temporarily closed. Very few were purchasing hair products, so manufacturing was halted in mid-March, leaving most of the company’s 82 employees out of work.

AG Hair could have waited out the pandemic but instead decided to lean into its entrepreneurial culture and make a sharp pivot. It began providing hand-sanitizing products for front-line health-care workers, addressing a global shortage.

“We realized there was this massive need for health-care professionals, and we wanted to make a difference and be able to provide them with the products they needed,” says AG Hair CEO Graham Fraser.

AG Hair received Canadian and U.S. approvals a week after applying for the licences needed to make sanitizer, and produced samples to show local authorities within 48 hours.

AG Hair’s Coquitlam facility has pivoted to making hand sanitizer (Photograph by Alana Paterson)

“That rapid response time, and the fact that we had gone through all of the Health Canada regulatory hurdles, showed [the local health authorities] that we were a partner they could trust and someone they could look to, to deliver the products they needed,” Fraser says.

Within a month, the company started pumping out the products, first for the health-care industry, then for consumers on its own website and on Amazon. About 10 per cent of AG Hair’s hand-sanitizer production also went to people in need, as identified by organizations such as United Way.

Parallel 49 Brewing Company is also using AG Hair’s Coquitlam manufacturing facility to produce its own blend of liquid hand sanitizer for front-line health and emergency workers, in partnership with the B.C. government.

Fraser credits his team for its energy and creativity in making the hand-sanitizer production happen, and helping put AG Hair staff back to work.

“We realized we had an opportunity . . . and then it became this incredible, almost war-room mentality and collaboration with our owners, our executive team and our people to say, ‘How are we going to get through this?’ ” Fraser recalls. “I think our success speaks to the type of people we have and the entrepreneurial spirit of pursuing every avenue we have, understanding how we can produce the products and making it happen.”

AG Hair’s commitment to investing in future growth is a big part of what makes it a Best Managed company, says Nicole Coleman, a partner at Deloitte and co-lead of its Best Managed Program in B.C.

“Capability and innovation come through quite strongly with this company,” says Coleman, who is also AG Hair’s coach at Deloitte. “I don’t think they would be able to pivot as quickly if they weren’t so strategic and had the internal capabilities to do it.”

The manufacturing facility was a big investment, but one Coleman says has already paid dividends.

“They were looking forward with a strategic plan in mind about future growth and how they could expand, rather than just focusing on the day to day,” she says. “Best Managed companies are always pushing the envelope and are conscious about planning for the future.”

AG Hair was founded in Vancouver in 1989 by hairstylist John Davis and graphic artist Lotte Davis. The husband-and-wife team began bottling hair products in their basement and selling them direct to salons from the back of a station wagon.

The company eventually moved its manufacturing off-site, to a third party. One day, John went to watch the operations and was surprised to see salt being poured into the mixture. Although he was told salt is commonly used as a thickener, he didn’t like the potential side effects of dry hair and skin.

It was at that moment John decided the company would oversee its own manufacturing. “Through that experience, John also became an expert in product development,” says Fraser, who came to the company in 2000 as director of sales.

After having worked for more than two decades at PepsiCo and Kraft Foods, Fraser was eager to work at a smaller, more agile company where he felt he could help make a difference.

“It was perfect because I got to bring a lot of structure and process that I learned in those organizations, but I also learned an awful lot about being an entrepreneur from John and Lotte: that sense of urgency, the decision-making process, the need to get things done and drive things forward and pursue opportunities,” he says.

Fraser has helped drive AG Hair’s expansion into the U.S. and internationally, including Australia, Taiwan, and Central and South America. A portion of its sales go to One Girl Can, a charity founded by Lotte that provides schooling, education and mentoring for girls in sub-Saharan Africa.

Fraser also oversees the development of new, trending products, including a new deep-conditioning hair mask made with 98 per cent plant-based and natural ingredients. Hand-sanitizing spray and gel will be the latest addition to the company’s product lineup.

“We don’t see the demand [for hand-sanitizing products] going away,” he says. “As the isolation policies start to get lifted, people are going to need forms of security and protocols as they get back into regular life and work. We see there’s going to be a need for these types of products long-term.”


This article appears in print in the June 2020 issue of Maclean’s magazine with the headline, “Working out the kinks.” Subscribe to the monthly print magazine here.

The post How a hair-care company went from salon supplier to sanitizer powerhouse appeared first on Canadian Business – Your Source For Business News.



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3 “Strong Buy” Healthcare Stocks Under $5 That Could See Outsized Gains

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The stock market just keeps going up, up and away. COVID-19 continues to have a choke hold on the economy, yet stocks have pulled off an incredible recovery, with the S&P 500 up 50% since its March low point. But can the index keep the rally alive?Credit Suisse’s global equity strategy analyst Andrew Garthwaite says yes, noting that by the end of next year, the S&P 500 could “easily hit 3,500 on our models.” He believes there won’t be a major correction, and that “the key is whether you want to buy into dips or sell into rallies and we want to buy into dips.”Why should investors keep buying? “We’re going to get a combination of easy money, easy fiscal, with yield curve control — i.e. fiscal QE [quantitative easing] — until unemployment returns to politically acceptable levels,” Garthwaite explained.Against this backdrop, Wall Street pros argue that certain sectors are holding up substantially better than the rest, and within these areas, compelling plays can be found. Highlighting the healthcare space, the pros say there are names that have not only received a lot of love from the analyst community, but also stand to deliver hefty returns through 2020 and beyond.As these stocks tend to be riskier in nature, we narrowed our search to include only the best of the best, according to the analyst community. TipRanks’ database revealed three such stocks that won’t break the bank.; each one trades for less than $5 per share and has earned a “Strong Buy” consensus rating from the Street’s pros. If that wasn’t enough, plenty of upside potential is at play here. Gritstone Oncology Inc. (GRTS)With the goal of stomping out cancer once and for all, Gritstone Oncology develops personalized immunotherapies to fight multiple cancer types. Currently going for $3.45 apiece, several members of the Street believe that the share price reflects an attractive entry point.Looking at the company’s clinical activity, GRTS is conducting a Phase 1 dose escalation of its GRANITE (personalized vacccine targeting cancer neoantigens) and SLATE (off-the-shelf cancer vaccine targeting shared “hotspot” neoantigens) in patients with advanced cancer. Updated data from July indicated that some patients had experienced prolonged stable disease and/or tumor regression, but none had risen to the level of a RECIST response.Weighing in on the results for H.C. Wainwright, analyst Sean Lee wrote, “In our view, GRANITE and SLATE are both safe and showed encouraging signs of efficacy, which should warrant further study in larger patient populations. Both GRANITE and SLATE are well-tolerated, and as of the June 30 data cut-off date, zero dose limiting toxicities (DLTs) have been reported in the GRANITE study and only two DLTs had been reported in the SLATE study… Therefore, we believe the 50% decline in GRTS stock price on July 13 to be an overreaction which has created an attractive buying opportunity.”Going forward, GRTS will kick off single-arm Phase 2 studies for both GRANITE and SLATE in advanced cancer in 2H20. For GRANITE, the study will include two cohorts of MSS-CRC patients with prior FOLFOX/FOLFIRI therapy and GEA patients with prior chemotherapy. Based on the fact that checkpoint inhibitors have either no (MSS-CRC) or very little (GEA) activity in GI tumors, management has stated that if multiple responses in these cohorts are observed, it would demonstrate additive efficacy and could ultimately support accelerated approval.As for SLATE, GRTS is set to evaluate the original cassette of SLATE (Cassette v1) in ovarian cancer patients with the TP53 mutation and NSCLC patients with prior immunotherapy/chemotherapy. A new version of the SLATE cassette (Cassette v2) designed to optimize the immune response to KRAS mutations will also be assed.“The Phase 2 GRANITE study is expected to report data in 2H21, and the results from Phase 2 studies of SLATE Cassette v1 and Cassette v2 are anticipated in 1H21 and 2H21, respectively. In our view, all of these could be major catalysts for the stock,” Lee commented.To this end, LEE rates GRTS a Buy along with a $16 price target. Should his thesis play out, a potential twelve-month gain of 365% could be in the cards. (To watch Lee’s track record, click here) Other analysts are also optimistic about the stock. GRTS' Strong Buy consensus rating breaks down into 3 Buys and no Holds or Sells. In addition, the $14 average price target brings the upside potential to 307%. (See GRTS stock analysis on TipRanks)PDS Biotechnology Corporation (PDSB)Using its patented Versamune platform, PDS Biotechnology develops innovative infectious disease (ID) vaccines and cancer immunotherapies. Based on its impressive technology platform and $4.35 share price, it’s no wonder this name is scoring the Street’s attention.5-star analyst Geulah Livshits, of Chardan Capital, is even more optimistic after a recent call with PDSB’s CMO Dr. Lauren Wood.Highlighting the takeaways from the call, Livshits points out that it’s important to consider the similarities between cancer and ID pathogens. Part of the problem when it comes to developing cancer-targeting vaccines is that many cancer antigens are also present in normal tissue, with the immune system failing to view these self-antigens as foreign. “As such, a key gating factor for developing cancer vaccines, which can translate over to ID vaccine development, is triggering innate immunity (specifically type I interferon signals),” the analyst explained.According to Dr. Wood, T cell responses are often longer-lived than antibody responses. Livshits wrote, “Although the field does not yet fully understand what that means for immunity duration (or indeed what titer levels are sufficient for protection from SARS-CoV-2), the efficient induction of a high quality T cell response may promote longer lasting immune memory, potentially translating to longer protection or a milder disease course upon subsequent exposure.”That’s where PDSB comes in. Versamune is an adjuvant designed to overcome the mechanisms that suppress the innate immune response, specifically triggering type I interferons. In both cancer and ID, Versamune triggers “excellent presentation of antigens” by both the class I and class II pathways, creating potent, broad and long-lived T cell responses, as well as antibody responses.Also encouraging, the platform can stimulate the immune system locally (in the skin) when delivered, with Dr. Wood also noting that “Versamune's adjuvant tech can be co-formulated and delivered with other platforms beyond protein/peptides, including DNA or mRNA, to enhance immunogenicity.”Looking at its performance in a clinical setting, there has been a documented triggering of type I interferons associated with HPV tumor regression in a clinical mouse model, verified immune memory demonstrated by mice resistant to tumor re-challenge, high levels of specific CD8 killer T cells within two weeks of a single dose of vaccine and T cell regression of virus-mediated lesions. Versamune has also been well tolerated.Adding to the good news, in preclinical studies, when Versamune was co-delivered with Fluzone, a seasonal influenza vaccine, neutralizing antibody titers were 40x higher compared to Fluzone alone. Livshits added, “With regard to SARS-CoV-2, initial preclinical data in mice show the Versamune-based Covid-19 vaccine candidate induces robust neutralizing antibody response levels equivalent to those observed in recovering Covid-19 patients within 2 weeks of vaccination.”It’s clear why Livshits continues to take a bullish stance. In addition to keeping a Buy recommendation on the stock, the price target remains at $10. The implication for investors? Upside potential of 150%. (To watch Livshits’ track record, click here) With 3 "buy" ratings against just 1 "hold," PDSB shares have earned their Strong Buy consensus rating. Meanwhile, the $7.32 average price target implies shares could climb 83% higher in the next twelve months. (See PDSB stock analysis on TipRanks)GlycoMimetics (GLYC)Hoping to improve the lives of patients with unmet medical needs, GlycoMimetics develops small-molecule glycomimetic product candidates. According to Wall Street analysts, at $3.86, its share price could present investors with an opportunity to get in on the action.Standing squarely with the bulls is Roth Capital’s Zegbeh Jallah. Following the analyst’s virtual meeting with the management team, he is confident in GLYC’s long-term growth prospects.Pointing to GLYC’s Phase 3 Rivipansel asset, which was designed as a treatment for patients with Sickle Cell, Jallah argues that there is a substantial market opportunity. In the U.S., there are roughly 100,000 sickle cell patients, with some of these hospitalized 1-3 times per year for painful vaso-occlusive crisis (VOCs). Opioids are the current standard of care, but there are significant concerns regarding dependency. “We believe that a need exists for treatment options that can lessen the risks associated with opioid use, without leaving patients in pain,” the analyst commented.Currently, Rivipansel, an IV-delivered, pan-selectin antagonist, is the only therapy being clinically developed for this application. It differs from Novartis’ Crizanlizumab, a p-selectin antibody that is used to prevent VOCs, as p-selectin plays an earlier role than other selectins. “With Rivipansel more potent against e-selectin and with a half-life of 8 hours, Phase 1 data showed that its benefits were present after the onset of a VOC,” Jallah explained.As for the Phase 2 study, the results were also encouraging. However, in the Phase 3 study, the drug failed to meet its primary endpoint of time to readiness-to-discharge. That being said, Jallah still has high hopes. Expounding on this, the analyst stated, “Encouragingly, recent post-hoc analysis showed that patients treated early in their VOC achieved a significant benefit, and management noted that similar trends were observed in the Phase 2 study where there was also a significant reduction (83%) in IV opioid use. In line with the outcomes of the post-hoc analysis, an important difference between the Phase 2 and Phase 3 studies was that patients were treated earlier in their VOC in Phase 2 than in Phase 3.”Now that Rivipansel is wholly-owned by GLYC (the company had previously partnered with Pfizer on the program), management will discuss the next steps with the FDA as well as offer additional analysis of the Phase 3 study.When it comes to Phase 3 Uproleselan, which has received Breakthrough Designation, Jallah believes it “could be an excellent backbone therapy to multiple agents and in multiple treatment settings of AML, with its balanced efficacy and safety profile.” He added, “…novel drugs that can allow patients to become eligible for curative transplants would be a major value-add. GlycoMimetics’ Uproleselan has the potential to do just that, as it can impair signaling that leads to resistance, allowing for multiple treatment combinations to result in deeper remissions and long-term effectiveness.” Its GMI-1359 candidate, which is currently in Phase 1, “could have potential in multiple tumor types including leukemias and solid tumors.”With upcoming catalysts from these clinical programs and a cash runway of two years, the deal is sealed for Jallah. To this end, he maintained a Buy recommendation and $9 price target, suggesting 133% upside potential. (To watch Jallah’s track record, click here) Looking at the consensus breakdown, other analysts have also been impressed. Based on 4 Buys and no Holds or Sells, the word on the Street is that GLYC is a Strong Buy. Not to mention the $11 average price target is more aggressive than Jallah’s and implies 187% upside potential. (See GlycoMimetics stock analysis on TipRanks)To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.



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Will second stimulus checks, enhanced $600 unemployment benefits get passed by Friday? Here’s where things stand

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White House chief of staff Mark Meadows told reporters Wednesday a stimulus deal would become much less likely to pass at all if Republicans and Democrats don’t make progress or agree to a deal by the end of the week. And it appears we’re heading into that self-imposed Friday deadline without a deal.

Before heading into a Thursday evening meeting with House Speaker Nancy Pelosi, Meadows told reporters the two parties are making little progress in their talks for another stimulus package, which would include another round of stimulus checks and enhanced jobless benefits—which expired the week ending July 25.

“I think if we don’t reach a top line number, there becomes very little incentive to have further conversations,” Meadows told reporters Thursday evening. He said Democratic leaders are still wanting around $3.4 trillion, while the GOP has come up from their initial $1 trillion offer. He didn’t say how much they’ve come up.

The White House, Senate Republicans and House Democrats all support sending another round of $1,200 stimulus checks to Americans, however, they can’t come to an agreement for the broader stimulus bill in which the checks would be included. Democrats want more money for state governments and unemployment benefits, while Republicans want the extra $600 weekly federal unemployment benefit—which expired the week of July 25—reduced, and COVID-19 lawsuit immunity for businesses.

“We have said that we are going to have the $600 [enhanced unemployment benefit] … They know that we want the $600,” Pelosi said at a Thursday presser.

Republicans have proposed replacing the unemployment benefit bonus—which is paid on top of state benefits—from $600 to $200 per week for the next two months, according to Bloomberg News. After that period, the benefit would transition into covering 70% of the unemployed persons’ previous income through the end of the year.

More must-read finance coverage from Fortune:



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GDP plunges to worst on record

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By Marissa Mae M. Ramos
Researcher

THE Philippine economy shrank for the second consecutive quarter, plunging into a recession for the first time in nearly three decades, data by the Philippine Statistics Authority (PSA) showed.

Gross domestic product (GDP) slumped by 16.5% in the second quarter, the PSA said on Thursday.

This was the economy’s biggest contraction on record based on available government quarterly data dating back to 1981. The second-largest drop was in the third quarter of 1984 when GDP dropped by 10.7%.

The preliminary figure was lower than the 0.7% decline in the previous quarter and a reversal from the 5.4% growth in the second quarter of 2019. It is also worse than the median decline of 11% in a BusinessWorld poll of 17 economists conducted last week.

The second-quarter result also put the Philippines into a technical recession — defined as the economy’s GDP posting two straight quarters of decline — for the first time since 1991.

The country’s first-half GDP performance stood at -9%, lower compared to the government’s initial expected contraction of 2%-3.4% this year, as well as the later-revised 5.5% decline.

In a mobile message to BusinessWorld, PSA chief Claire Dennis S. Mapa said the decline in the second half should not exceed 2.2% for the economy to at least meet the revised target this year.

In an online press briefing on Thursday, Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said growth drivers household consumption and investment “have significantly declined” given the closures of businesses and losses in income during one of the world’s strictest lockdowns to arrest the spread of the coronavirus disease 2019 (COVID-19) in the country.

“Fully aware of the impact of the ECQ (enhanced community quarantine) on businesses and livelihoods, the government ramped up spending to protect, among others, some 18 million low-income households and 3.1 million workers of small businesses… by providing them the biggest-ever income support and wage subsidy program,” said Mr. Chua, who also heads the National Economic and Development Authority (NEDA) as director-general.

Government spending grew 22.1%, faster than the 6.8% expansion in the same three months last year. The latest figure was also the fastest since the 24.8% logged in the first quarter of 2012.

Meanwhile, household spending contracted by 15.5% compared to the 5.6% growth in the second quarter of 2019. Prior to this, the biggest year-on-year decline recorded by this segment in a quarter was 2.8% in the third quarter of 1985. Private investment, which is represented in the data as capital formation, posted a 53.5% decline — the worst since the 54.6% slump in the first quarter of 1985.

The exports and imports of goods and services shrank by record-lows of 37% and 40%, respectively.

“Capital formation… went into freefall with construction down 32.9% and investment in durable equipment plunging 62.1% as investor sentiment evaporated amidst the pandemic and 17.7% unemployment,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in a note to reporters.

Mr. Mapa also said in a separate note that the unemployment level worsened the probability of Filipino households engaging in discretionary spending as disposable incomes dwindled.

In another note, HSBC Global Research Economist Noelan C. Arbis said the magnitude of the decline seen in household spending and fixed investment is “unprecedented.”

“Net exports and government expenditures contributed positively to growth [with eight percentage points (ppt)] as a result of reduced import demand and increased social safety net spending. But these were nowhere near enough to offset the impact of the lockdown on private consumption and fixed investment — the Philippines’ two main drivers of growth over the past decade,” Mr. Arbis said.

“These two components, which account for over 90% of GDP, contributed to a 20.6-ppt drop in economic activity. This magnitude is unprecedented, as both components registered their biggest contraction on record,” he added.

Among the major economic sectors, industry posted the largest annual decline in the second quarter at 22.9% — a turnaround from the 2.5% expansion logged in the same period last year.

Likewise, services declined by 15.8%, a reversal of last year’s 7.5%.

Both slumps were largest on PSA’s record.

On the other hand, agriculture posted a 1.6% growth rate, faster than the 0.7% in the same period last year.

Gross national income — the sum of the nation’s GDP and net income received from overseas — posted a 17% decline in the April-June period compared to 4.9% growth in the 2019’s comparable three months.

DIM OUTLOOK

A few days before the GDP results were released, President Rodrigo R. Duterte put Metro Manila, Laguna, Cavite, Rizal and Bulacan back under modified ECQ (MECQ) to slow the rise in COVID-19 cases. The new lockdown began on Aug. 4 and will last until Aug. 18 after exhausted health workers asked for a “timeout” to ease the pressure on the healthcare sector.

NEDA’s Mr. Chua said reverting to MECQ “may be one step back” for economic recovery and an opportunity to address new challenges brought about by COVID-19.

He also noted that through enacting economic, social, and institutional reforms, the country is “now in a stronger position” to address the crisis unlike in previous ones.

Mr. Chua also mentioned House Bill No. 6953 or the proposed Bayanihan to Recover as One Act (Bayanihan II), which recently passed on second reading in the House of Representatives on Wednesday, as one instrument in economic recovery, along with the acceleration of the “Build, Build, Build” infrastructure program, and the 2021 national budget. “For the time being, the economic team will be providing the necessary fiscal support, as far as available resources can afford,” Mr. Chua said.

In a phone interview, Ernesto M. Pernia, Professor Emeritus of the University of the Philippines School of Economics and former Socioeconomic Planning Secretary, said GDP performance in the third quarter “would probably be just slightly better” compared to that in the second quarter.

The former Cabinet Official also noted the country’s relatively lower COVID-19-related spending such as tests and subsidies compared with neighboring countries such as Singapore, Vietnam and Indonesia. “If you compare the Philippines with ASEAN countries, we have the worst second-quarter growth rate… So the two aspects seem correlated,” he said.

“Higher spending especially for health system capacity (testing, contact tracing, isolation, and treatment, etc.) much earlier on matters a lot, as it would mean we don’t need as long and hard a lockdown as we’ve had,” Mr. Pernia added.

Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said the economy has seen the worst of COVID-19’s impact on the economy in the second quarter, but cautioned that the country is “not out of the woods yet.”

“No doubt, given the sharp drop of the economy in the second quarter, I am convinced that the [GDP performance] third quarter will be better than the second quarter and that the fourth quarter will be much better than the third quarter,” Mr. Diokno said in a Viber message to reporters.

However, the MECQ in Metro Manila and nearby areas have dimmed prospects for recovery.

“Recent reimposition of mobility restrictions on back of surging infections will impede growth recovery. Real time indicators signal a very modest improvement. Private investment is likely to remain weak as well on the back of subdued business sentiment and excess capacity,” ANZ Research Economists Kanika Bhatnagar and Sanjay Mathur said in a note sent to reporters.

For HSBC’s Mr. Arbis, the reimposition of strict lockdown measures “is likely to further curtail private consumption in the months ahead and hamper any expected recovery in the second half.”

For Capital Economics’ Asia Economist Alex Holmes: “The economic costs of trying to contain the virus is leaving large scars to household and corporate balance sheets, which will weigh heavily on demand for many months to come,” he said in a research note.



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