Jim Vogt is on vacation and hopefully enjoying his well-deserved time off. There have been plenty of recent headlines regarding the Coronavirus (COVID-19) that have moved the market. Let’s dig a little deeper to see where we currently stand, not only with the virus but with possible vaccines and treatments that may help curb the spread of this deadly disease.
In March the market traded down every time a new record number of cases, hospitalizations or deaths was broken. The epicenter of the outbreak moved from China to Italy, and then to the United States. Today the United States continues to be the epicenter of the outbreak worldwide. The epicenter within the United States has moved from New York City and the Northeast to states such as Florida, Texas and Arizona.
In April, the market moved up every other day when a pharmaceutical or biotech company made a statement of a possible treatment or positive data on the hopes of a vaccine. Most of the time the statements included phrases like “may have an effect” or “could start a trial soon”, but the market at the time was looking for any reason to trade up after a sudden and painful drop. Any glimmer of hope was cheered. Today the news on the medical front is not coming as fast and furious as it was then, but positive news is still having a constructive impact on the market.
As of this morning Johns Hopkins Coronavirus Resource Center is reporting there are more than 15 million confirmed cases worldwide. The U.S. has over 4 million of those cases, with one million new cases in just the last two weeks. There have been over 630,000 deaths worldwide, with U.S. making up over 144,000 of those. Since the beginning of July new daily cases worldwide have averaged over 200,000. In the U.S. the seven-day average of new cases has gone from just over 40,000 at the beginning of July to over 60,000 over the past week. These numbers have grown rapidly, but so have testing capabilities. The U.S. is now averaging over 700,000 tests per day. Numerous medical technology and supply companies have ramped up production to make testing more widely available. Laboratories are having trouble keeping up with the number of tests. Delays in getting results are becoming the problem, rather than the number of tests. This could get worse if we see a surge in cases as the flu season starts.
The current number of patients that are hospitalized due to COVID-19 has now matched the high from April. While there are some shortages in the number of beds, especially ICU beds available in some hospitals, most facilities are able to deal with this recent surge. New York and New Jersey were two of the hardest hit states at the start of the pandemic and have not seen a strong resurgence of the virus, although the virus is still spreading in both states, just at a much slower rate. The South and West are now the hotspots. California just surpassed New York as having the most confirmed cases in the country. As Jim Meyer said on Wednesday, you would have been naïve to think that as the economy reopened and access to testing increased, you would not see a surge in new cases.
Vaccines have been in the news lately as companies have gotten their first glimpse of human data, and for the most part it’s been positive. There have now been four companies that have published human data. Moderna published data last week and Pfizer/BioNtech, Oxford/Astrazenaca and Cansino (a Chinese company) all released data earlier this week. Moderna and PFE/BioNtech are mRNA vaccines, which is a new type of vaccine, whereas the Oxford/AZN and Cansino vaccines are nonreplicating vector, which is the more traditional type of vaccine. All four companies reported that their vaccines produced neutralizing antibodies and generated positive T cell responses. It is important to note that the data reported is limited to certain cohorts of these trials. PFE/BioNtech only reported one arm of the trial, Moderna only reported 3 out of 13 arms of their trial, and Oxford/AstraZenaca only reported on about 60 patients out of the 543 that were vaccinated. None of those three trials reported on older patients who happen to be the most vulnerable. Cansino did report on an older cohort, but it was limited as well. All have been relatively safe with normal side effects.
There are other major pharma and biotech companies also working on vaccines, including Johnson & Johnson, Merck and Novavax Inc. to name a few. All of the companies have said they would be able to produce millions of doses quickly, so while supply might be constrained initially, it will not be a major issue in the medium term. The vaccine may require more than one shot as well. One major question that cannot be answered at this time is the durability of any vaccine. Will you need another shot every six-weeks, six months, one year or five years? There are many questions still out there about vaccines. Will one or more of these in trial eventually work? Yes, most likely.
When will a vaccine be available, and how effective will it be are big questions. Remember, the fastest a vaccine has ever been developed that was effective and safe in the long run is four years. Medical technology and the world of science has greatly improved since the 1970’s, but it would still be a very accelerated timeline. Phase III trials and initial doses to front line workers might be in the cards for the fourth quarter or beginning of next year, but widespread vaccines might still be at least a year away.
COVID 19 treatment news dominated the headlines in early April, but has cooled off significantly since then as companies search for a drug or drugs that may help patients. There is no fully approved coronavirus treatment at this time. Emergency use authorization has been issued for remdesivir, a new intravenous antiviral from Gilead. Early results from a large study showed that hospitalized patients who were given remdesivir recovered faster than those who were given a placebo, 11 days versus 15 days. The death rate was also lower for the patients treated with the drug, at 7% versus 12%. There have also been studies on remdesivir that have not been positive, hence it has not been fully approved, and additional studies are taking place.
Many companies have been looking through their portfolio of drugs to see if any may help to treat COVID 19. A trial in the UK recently found dexamethasone, a common steroid that has been around for years, lowered the death rate in hospitalized patients. It was most helpful for patients on a ventilator. Hydroxychloroquine and chloroquine, which are used to treat malaria and autoimmune conditions, were all the rage in April and May, and had been issued emergency use authorization. As more studies were done it was found that there was no certain benefit and the side effects were dangerous, and the emergency use authorization was revoked.
The National Institute of Health recently announced that it was going to start a “flurry” of large studies for possible treatments. Companies have already launched over 1,200 different studies into a treatment. These studies include a range of drugs from antivirals and anti-inflammatory, to HIV drugs to plasma procedures from recovered patients. The scientific world is searching for anything that can help cure this disease.
That still leaves us in a world of uncertainty. The world is making progress. Some of the rising case numbers have begun to roll over. States and countries that were hit hard in the Spring have not seen a major spike in new cases. Social distancing, containment and masks have helped to slow the spread. Science will prevail and the U.S. and the world will get through this eventually.
The one thing I am certain of is that it was nice to have baseball back last night, with the Yankees beating the Nationals and the Dodgers beating the Giants.
Stay safe, wear a mask and have a great weekend.
Daniel Rodan 610-260-2217