Unlike some countries that have “flattened the curve,” the U.S. is experiencing a sharp rise in COVID-19 cases. In this video – part of a series on the scientific and investment implications of COVID-19 – Biotech Analyst Agustin Mohedas explains why the U.S. trajectory has diverged, noting how the outbreak’s dynamics are changing and what that could mean for the next phase of the pandemic.

Key Takeaways

• COVID-19 case numbers are rising in the U.S., even as many other countries have successfully “flattened the curve.” One reason may be a lack of coordinated response to the disease in the U.S. and the decision to reopen economies despite comparatively high active case counts.
• That said, hospitalization rates have declined as the average age of the newly infected skews younger. In addition, doctors and nurses now have better knowledge of how to treat the disease, helping survivability rates.
• Large infection numbers could also make it easier for drug makers to find enough patients for testing potential vaccines, some of which are moving into late-stage clinical trials.

View Transcript

Michael McNurney: Hi and welcome to Janus Henderson’s continuing series on the COVID crisis. My name is Michael McNurney. Today, I am joined by Agustin Mohedas, and we are going to talk about the progress of the disease, particularly in the United States, as well as some of the developments on the therapies and the vaccines that are being developed to treat COVID-19.

Agustin, in many parts of the world we are seeing them get a handle on this disease and being able to flatten the curve. However, here in the United States we have seen a much different scenario. Can you just give us an update on what is happening here in the United States?

Agustin Mohedas: So, in the U.S. we had seen kind of a flattening of the curve through basically May and early June, where we had flattened the curve, but at a much higher level than the corresponding countries in the European Union, for example. And we had mentioned this on previous calls about the divergence of the USA and that has really now been made very clear as cases have been accelerating, particularly throughout the Sun Belt region. And since basically the last week of June, we’ve now been averaging between 40,000 and 50,000 new daily cases per day. And that does seem to appear to be accelerating.

Now the one bright spot in all of this is that the deaths have not ticked up, and we’ve actually been at fewer than 1,000 deaths per day since early June. And that trend continues to go lower. So, for example, with a lot more availability of testing, we’re catching cases earlier in their disease progression.

Secondly, the number of positive cases has tended to skew towards people that are less than 50 years old. And as we know, COVID-19 is much less deadly in the younger population. So, we’re seeing people that are younger social distance less, but they’re not being hospitalized at nearly the same rate as those who are over 50 years of age.

And then finally, those people that are over 50 years of age are just sheltering in place or social distancing in a much more responsible manner for fear of catching the disease.

McNurney: Agustin, is one of the contributing factors to the lower death rate just our experience and our evolving knowledge on the disease and how to treat it?

Mohedas: Yes, definitely. So, as doctors and physicians and nurses have gotten more experienced treating patients with COVID, they’ve learned when to use ventilation appropriately. We’ve now learned that steroids have a mortality benefit when given during the inflammatory component of the disease. And we also have remdesivir from Gilead [Sciences] available as a direct-acting antiviral against COVID-19. And so that combination has enabled kind of this disease to be more treatable, more survivable, and that’s certainly contributing to the lower death rate.

McNurney: Now one of the things that we’ve talked about before is the fact that many regions have treated this disease differently, and we’ve already seen cases where they’ve really been able to largely stamp out this disease. Is it just because they began their measures to curtail the spread of the disease earlier or are there different dynamics at play that have caused the spike here in the U.S.?

Mohedas: Yes, I think the dynamics that have occurred is that the response in the U.S. was largely a state-by-state decision-making process. And so, some states did a better job than others, and we’re seeing those effects today. Additionally, states that reopened always reopened with an active case count that was substantially higher than when places like South Korea reduced some of their social distancing measures. And so, we always had a much more active epidemic in the U.S., and you know, naturally, as we reduced social distancing, we’ve seen cases rise again.

McNurney: You know, your insights have been very valuable, and we found that you’ve been remarkably accurate in terms of being able to model the progress of this disease. Can you tell us how your modeling predicts perhaps [how] things look going forward, especially here in the United States?

Mohedas: I used to model the U.S. to follow a similar trajectory as Europe because, largely, we were doing things that were in line with what the Europeans were doing. But now, since the U.S. has really diverged in a much more meaningful way from Europe, we can no longer use that as a guide. And so, what I’ve done in my most recent update to the model is basically looked at the last time we were able to really start flattening the curve, which was late April through early June time frame. If we were able to repeat that, if we were able to reduce the case growth by a similar amount, because we have so many more active cases today than we did then, that still means that we would probably get to about 100,000 new cases per day by the end of August or early September.

And so that’s really quite the thing that I’m quite concerned about is that the acceleration in states like Texas and Florida and Arizona is so significant that if those states don’t really start implementing measures akin to what New Jersey, New York, Massachusetts did in April and May, we could really start seeing a continued acceleration in the number of new daily cases and it could really get out of hand quite easily and quite quickly.

McNurney: I think the great hope here is that, eventually, we do get a vaccine for this disease, and I know just recently we’ve gotten some results in terms of some of the mRNA vaccines that are under development. Maybe you can give us an update there as well.

Mohedas: Yes, so we had really some of the first phase 1 data come out from one of the vaccine candidates that’s being developed in collaboration by Pfizer and BioNTech. They had phase 1 data in healthy volunteers that showed a very high level of antibodies generated by their two-dose mRNA-based vaccine. So, mRNA technology is a new way of generating vaccines that basically uses the body as the factory for producing the proteins that you want to immunize against.

The level of neutralizing antibodies generated by this vaccine was two to three times higher than those generated with the actual infection itself. So that actually bodes really well for this vaccine as it will move on to phase 3 later this summer.

McNurney: As some of these companies go to research a vaccine, I would assume the greater population of infections here in the United States actually serves them with a very good population to conduct some of their testing. Is that true?

Mohedas: Yes, that’s one of the ironic benefits of the U.S. having basically a second wave is that the vaccine companies which are, many of them are in the U.S., will have a much better population in which to test the vaccine. And so, places like Florida, Nevada, Tennessee, Arizona, South Carolina that are all experiencing increased number of cases, these will be great places to enroll the tens of thousands of patients that will be needed to test all of these different vaccine candidates. And so ironically, the current situation in the U.S. is good for vaccine development.

McNurney: Now even if we do get a therapy or a vaccine for this disease, I would assume that ramping up the production of that vaccine would be difficult. Any news on that front in terms of being able to get enough of a vaccine to be meaningful?

Mohedas: Yes, so all of these countries have been working on manufacturing actually since the spring. And so the manufacturing scale-up is underway and companies like Pfizer, BioNTech, Moderna, GSK [GlaxoSmithKline], J&J and others claim that they’ll have hundreds of millions of doses available in 2021, and potentially tens of millions of doses available by the end of this year so that we can start administering the vaccine to healthcare workers, people on the frontline and people at highest risk.

But since we have so many vaccines under development, probably we’re going to have two or three or maybe more that generate positive phase 3 data, and so we’ll have a lot of capacity available at least here in the United States and, you know, hopefully for the rest of the world as well.

McNurney: Well, Agustin, I appreciate all the insights. I think it’s remarkable information and really does help us make better investment decisions. Thanks, Agustin. Appreciate the time.

Mohedas: Yes, you’re welcome. Thanks, Mike.

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