Key events

47m ago GSK ends Alector collaboration after drug failures
53m ago AstraZeneca biggest FTSE 100 loser after heart disease drug fails in trial
1h ago Capita boss admits work on UK civil service pension scheme not good enough amid profit warning
2h ago Introduction: UK housing market downturn eases but sentiment remains fragile, surveyors say

GSK ends Alector collaboration after drug failures

Britain second-biggest drugmaker GSK has also taken a hit from recent drug failures.

The Californian biotech Alector has said that GSK has ended their neuroscience collaboration covering two experimental antibody drugs, after both drug candidates suffered setbacks in clinical trials.

The decision follows the failure of a late-stage study of latozinemab in a rare inherited form of frontotemporal dementia last year, followed by the discontinuation of a mid-stage Alzheimer disease trial of nivisnebart in April.

This is a big blow to Alector. Under the terms of the deal announced in 2021, Alector received $700m upfront from GSK and could have received up to $1.5bn in further payments tied to drug development-related milestones and royalties.

The failure of latozinemab prompted Alector to cut nearly half its workforce, while the nivisnebart trial was discontinued after an interim analysis showed the study was unlikely to meet its primary goal.

AstraZeneca biggest FTSE 100 loser after heart disease drug fails in trial

AstraZeneca is the biggest loser on the FTSE 100 index after a new heart disease drug failed in a late-stage clinical trial.

The shares crashed nearly 10% and are now down 9.2%. This is dragging the FTSE 100 down, which fell 52 points, or 0.5%, to 10,435.

The UK biggest pharmaceutical company said its nerve disease drug Wainua, made in partnership with the Californian biotech Ionis, failed to meet the main goal of reducing cardiovascular deaths and recurring heart problems in a phase three trial.

AstraZeneca said Wainua did not provide a statistically significant benefit on the composite outcome of CV mortality and recurrent CV events.

Sharon Barr, executive vice president of biopharmaceuticals research at the company, said the CARDIO-TTRansform trial was designed to examine the role of Wainua, a gene silencer treatment, on top of today standard of care in reducing recurring cardiovascular events and mortality. Although the trial did not meet its primary objective, we believe the results support greater scientific understanding of treatment approaches for the hundreds of thousands of patients worldwide suffering from this progressive and often fatal condition.

The two companies will analyse the full data set to further understand the results, which will be shared with the scientific community at the European Society of Cardiology Congress in August.

Capita boss admits work on UK civil service pension scheme not good enough amid profit warning

The outsourcing company Capita has warned that failures on the UK civil service pension contract will reduce its annual profit by up to £40m, triggering a sharp drop in its share price.

Its boss Adolfo Hernandez admitted the company work on the pension scheme had not been good enough and vowed to do better.

The shares fell 17% after the profit warning. The UK government has withheld £9.9m in payments, citing missed contractual deadlines and Capita failure to deliver on AI-led technology improvements.

Hernandez, the Capita chief executive said we recognise the service on Civil Service Pension Scheme has not been good enough, we are working closely with the Cabinet Office on all aspects of the scheme, and this remains our number one priority. The wider Group continues to perform robustly, and we are confident in the actions we are taking to build a simpler, more focused Capita.

Capita said it was working through the backlog as quickly as possible, protecting members, and ensuring new cases are processed within contractual service times. Despite the progress made to date, we recognise the service has not been good enough, particularly for members waiting on bereavement, retirement, and quotation cases, and we are sorry for the distress and inconvenience experienced by those members. We now have the processes, automation and technology in place to work through the backlog.

The company admitted that it will incur a number of additional costs this year, including hiring temporary staff and remediation costs. Overall, this will reduce adjusted operating profit impact for 2026 by between £25m and £40m.

The saga piles further pressure on Capita, which provides support services to the government and the private sector, and the UK paymaster general Nick Thomas-Symonds publicly criticised the company.

Capita also added that it had won some new contracts.

Jefferies analyst Mohit Kumar says geopolitical tensions were the main driver of the market yesterday. US and Iran traded fire with US reportedly striking 90 targets in Iran and Iran retaliating with strike on US air bases. Trump later stated that Iran has asked for a continuation of talks, though it is not clear whether the request actually originated from the Iran side. Oil prices have moved sharply higher with US crude close to $74 and Brent close to $79 a barrel.

The renewed tensions show the fragile nature of the truce between US and Iran. In our view, the latest escalation is Iran attempts to control the Strait by attacking ships that try to pass through the Oman side. Iran wants ships to pass through its designated route on the Iran side which would enable it to charge tolls. Any tolls or fee for passage through the Strait would be unacceptable to the West.

Question remains whether this would prove to be a short term escalation or we go back to full scale war. We do not believe that either the US or Iran want to go back to full scale war and the latest escalation is about deciding who controls the strait. Our base case is that cooler heads will prevail and both will go back to the negotiating table. But we think that the Middle East situation is more unstable today than it was before the war. Near term, we think that we will get some version of a deal, even if it is a fudge, that would enable oil to flow. But medium term, tensions may flare up again.

Ipek Ozkardeskaya, senior analyst at the financial group Swissquote, has summed up the flare-up in Middle East tensions, and looked at the implications. Donald Trump declared the ceasefire over, and the US continued bombing Iran last night. Washington also revoked the recent easing of Iranian sanctions, meaning that Iran will not be able to sell the tens of millions of barrels currently at sea, while Tehran said it will launch a large-scale retaliatory operation against US bases across the Gulf region, she notes. Meanwhile, Russia is limiting some energy exports to avoid domestic shortages amid Ukrainian attacks on Russian energy facilities.

What a wonderful world. The latest turn of events in the Middle East has reversed the short-term bearish outlook for oil prices. US crude has risen as much as 13% since last week dip and is now testing the $75 a barrel level to the upside, with an increasing possibility of the barrel reaching and breaching the $80 a barrel mark. Brent crude briefly traded above $80 a barrel yesterday. Both are slightly lower today, but the short-term risks remain tilted to the upside.

But the immediate upside pressure could be less severe than what we saw in the first weeks of the war. First, the market has become accustomed to the tensions and the disruptions in the Strait of Hormuz. The surprise factor is much smaller than it was at the beginning, and the market overreaction is therefore more limited. Second, a number of ships have already transited through the Strait of Hormuz, delivering oil to key markets. A few days ago, Saudi Arabia significantly cut the price of its oil for Asian buyers to ensure that millions of barrels would be absorbed quickly. Third, we have seen the oil market swing from supply shortages to supply surpluses in the blink of an eye over the past three months, meaning that once tensions de-escalate and traffic through Hormuz is restored, oil will continue to flow. And finally, China seemingly has ample reserves and a relatively high pain threshold, as it waited weeks before beginning to replenish its strategic reserves; it is unlikely to rush in if prices rise again.

On the other hand, if tensions persist beyond a few weeks, it will spell trouble. We do not know how much oil China is sitting on or when the situation could become critical that is a real suspense. Second, if Iran starts attacking energy infrastructure across neighbouring Gulf countries, the long-term damage could quickly erase the current supply glut by reducing future supply. Third, global oil reserves were drawn down sharply during the first three months of the war, leaving the market with a much thinner cushion.

Introduction: UK housing market downturn eases but sentiment remains fragile, surveyors say

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The UK housing market remains subdued but the downturn eased last month, while sentiment remains fragile, according to surveyors and estate agents.

They expressed ongoing concerns about the impact of inflation, the cost of living, UK political uncertainty and global conflicts, with some sharing hopes that the recent ceasefire in the Iran war will boost market conditions.

The survey headline house price balance was little changed at -33%, from a revised -34% in May, while price expectations rose to +8% from +6% according to a monthly survey from the Royal Institution of Chartered Surveyors (RICS). The balance subtracts those who say demand fell from those who report it rose.

New buyer enquiries remained negative, with a headline net balance of -29%, but this was a slight improvement on the -34% recorded in the previous two months and marks the least negative reading since February.

Newly agreed sales also remained subdued, with a net balance of -32%, but a small improvement from -35% previously.

Near-term sales expectations improved to -16%, from a recent low of -34% in March. Looking further ahead, respondents expect sales volumes to remain broadly flat over the next twelve months, with a net balance of +1%.

However, new instructions to put properties on the sales market moved further into negative territory, dropping to -23% from -10%, the weakest reading in more than a year. Market appraisals also declined, suggesting the pipeline of homes coming to market may remain limited in the months ahead.

RICS head of market and analysis Tarrant Parsons said June survey results offer some cautious encouragement that the worst of the slowdown in market activity may be beginning to pass, with several key indicators moving in a less negative direction for a second consecutive month. That said, any nascent improvement remains fragile and is now being tested by renewed political uncertainty on the domestic front.

While the Bank of England left interest rates unchanged, uncertainty around the outlook for inflation and borrowing costs continues to weigh on sentiment, even if the recent decline in oil prices is a welcome development.

Until there is greater clarity over both the political backdrop and the path of interest rates, housing market activity is likely to remain relatively subdued in the near term.

In the lettings market, tenant demand picked up, with the headline net balance rising to +18%, the strongest reading since May 2025.

Landlord instructions remained negative at -18%, pointing to continued supply constraints. Against this backdrop, rents are expected to continue rising, with projected rental growth over the next twelve months standing at around 2.5%.

The north of England continues to express more positive sentiment than the south generally.

Dan Stocks, a surveyor in Guildford, said the market is showing tentative signs of stabilisation but buyers remain cautious.