Knowledge. Shared Blog

May 2020

COVID-19: Understanding the Science & Investment Implications (Part IV)

The search for an effective COVID-19 treatment is gaining momentum, with public and private entities partnering to speed the process. In this fourth installment of a video series on the scientific and investment implications of COVID-19, Portfolio Manager and Research Analyst Dan Lyons explains the latest drug developments, as well as whether the U.S. can meet aggressive testing goals to reopen the economy.

Key Takeaways

  • The number of COVID-19 tests being done in the U.S. falls far short of what experts say is needed to safely reopen the economy. But one company says it can produce five million tests weekly, suggesting widescale testing may be possible.
  • One drug being studied as a treatment for COVID-19, remdesivir, recently delivered positive clinical trial results. Although not a cure-all, the drug could be an important first step toward curtailing the global pandemic.
  • Currently, 70 to 90 different vaccine programs are underway, with the private and public sectors partnering to accelerate research efforts and scale manufacturing.

View Transcript

Michael McNurney: Hi, welcome to Janus Henderson’s ongoing series on the COVID crisis. My name is Michael McNurney, and today, I’m joined by Dan Lyons, who is a Ph.D. in immunology and is going to discuss with us today some of the ongoing issues with COVID and, in particular, the ways that we find an opportunity to get back to a more normalized environment. Dan, welcome.

Dan Lyons: Thanks for having me.

McNurney: Yes Dan, I think the first thing that we want to touch on is, we’ve been hearing a lot, and I think that there’s a very broad discrepancy in terms of the number of tests that are required in order for us to feel like we have good insight into the disease. What is that range? And then also, we’ve heard the president make some bold statements about our testing capabilities here in the United States. What really are our testing capabilities right now?

Lyons: So just to start off, where we are today, you know, we’re seeing roughly 250,000 to 300,000 tests being run in the United States today, and what we’re seeing across countries that have been really successful at stamping out COVID has been a very high testing rate, places like Korea and Germany. And so, there’s been a wide range of estimates out there in terms of where we need to get to for daily testing. You know, Scott Gottlieb, former director of the FDA [Food and Drug Administration], has put out a roadmap that would say maybe 750,000 tests a day would be sufficient to comfortably reopen the economy. More recently, another group has put out a broader range starting out at 5 million tests a day up to 20 million tests a day, a group from Harvard.

So, there’s a wide range of estimates out there and you know, can we even get close to that? I actually think we can meaningfully scale up our testing in the country. One of the companies I work on is Thermo Fisher [Scientific], and they’ve said that they can currently make five million tests on a weekly basis, and they’re just one of several providers. So, I think we’re going to see a lot more test kits produced in the coming weeks. And then we’re going to try to get through some of the other bottlenecks, which have been getting enough operators in the right places, getting the instruments in the right position and making sure that there’s access to all the testing supplies necessary to broaden out a range of testing.

McNurney: So, Dan, we talked that testing is the first step and being able to get a handle on this disease, but in order for us to really reopen the economy, for us to get back to a more normalized environment, we need either a vaccine or we need a therapy. Can you walk us through the different modalities that are being developed and then where some of the most promising treatments are today?

Lyons: Yes, just having tests is clearly not enough. You need to know there’s some good therapies out there, and there has been progress made on that front. So, the first area that I would go over would be antiviral therapies. And the most prominent among these is from a company, Gilead [Sciences]. They have an IV therapy, which has to be given in the hospital called remdesivir. And that therapy has, so far, been tested mostly in moderate and severe patients that are hospitalized. There’s been mixed data, but recently, we’ve actually had some positive trial results that have come out. A U.S. study from the National Institutes of Health has released some preliminary data that shows in hospitalized patients with COVID a significant reduction in the days in the hospital for patients that were given remdesivir. In fact, it went down by 30% from 15 days on average to 11 days. The study also showed a trend towards an improvement in mortality, going from 11% mortality without remdesivir to roughly 8% while on therapy.

So that’s a meaningful benefit. It’s not a home run. Not everyone is going to be cured by this therapy, but it’s a really important benefit to the hospital system because all of a sudden, you’ve created 30% more capacity in your hospitals and you’ve also saved a good number of lives.

McNurney: So, Dan, if this isn’t the answer, if antivirals aren’t the solution, I know you’ve talked about therapeutic antibodies as maybe something that you have a little bit, that maybe has some promise. Can you tell us more about that?

Lyons: Yes, there’s a range of other therapies that can then be added on top of remdesivir, and I expect remdesivir probably to become the standard of care among severe patients, and the roughly several hundred thousand doses that Gilead currently has available [will] probably be prioritized, at first, for patients with comorbidities or elderly patients that are at the highest risk of mortality.

But we feel they need more options, and so there’s several things that are being tested. One that I’m really excited about, and I think is probably the most promising, would be therapeutic antibodies. And this area has a long history, actually, going back to other viral infections from the past, including SARS, MERS and other viral infections. And where the idea comes from is something called convalescent plasma, and this is where you basically take patients that have recovered from a viral illness; you can take their blood and separate out the plasma and then concentrate those, the antibodies within the plasma, and then take that fraction and put it back into patients with severe disease.

McNurney: Let’s maybe shift our focus to vaccines. Are there any vaccines that show any promise at this point, or is it too early to tell?

Lyons: What we’ve heard so far is that there’s roughly 70 to 90 different vaccine programs in development today. So as a starting point, I feel some degree of comfort, just from the scale of the effort. There’s five different modalities that are being tested, all of which have some promising evidence that they could provide a real vaccine. As a starting point, we’ve learned a ton over the last several decades for work in vaccines in some related viruses like SARS, MERS and Ebola. And a lot of these modalities have been tested exactly in those diseases. They can be translated into how to best design a vaccine against COVID.

McNurney: Now, Dan, we’ve talked about maybe the biggest obstacle is actually producing vaccines in enough quantities to be effective. So, are there programs under way to help that development?

Lyons: We’re seeing companies already stepping up to this. J&J, for example, has said they’re already building a massive medical capacity at risk, hoping to be at a capacity of a billion doses per year by the end of 2021, with that ramping over the course of the year.

But we’re also seeing a lot of both private and public efforts. One example would be Project [Operation] Warp Speed, which the Trump administration has talked about, which basically, the goal being to create a Manhattan-like project for vaccine development in the U.S. And the goal of this would be to streamline the development process through use of master protocols that all companies could follow to make vaccine development more efficient.

McNurney: The question on everybody’s mind is when. And you know, I know that’s a very difficult thing to predict, but do we have any sort of sense for timelines?

Lyons: Yes, so [Director of the National Institute of Allergy and Infectious Diseases] Tony Fauci has pretty consistently been saying, you know, 12 to 18 months is the most accelerated path you can imagine for vaccine development. However, this Warp Speed effort is trying to challenge that and basically, what they’ve said is, [they] hope to shorten the timeframe by up to eight months. That’s a very ambitious goal, and there’s a lot that has to be done. But some of the timelines that have been put out there by the companies are also similarly really aggressive.

McNurney: Thank you very much, Dan.

Lyons: Thanks a lot.

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