COVID-19 drugs that work

[Mahler9th]

Thanks for posting that jyl. Seems that your finger(s) are a bit on the pulse. My fingers are to some extent on the pulse as well.

If, in part that is part of your profession, and if you have interest, perhaps we can connect offline. I am helping to create a new business and related venture fund here in Norcal, and one of our areas of focus is the future of medicine.

We are just getting started.

Please feel free to send me a PM if you have interest, and we can connect.

[jyl]

The answer is to snort a chicken. No, seriously.

https://www.sciencemag.org/news/2020/11/can-nose-full-chicken-antibodies-ward-coronavirus-infections

I have no idea if this actually makes sense but parts of the biopharma industry are making a decade of advances in one year, driven by Covid. Kind of like how we went into WW2 with Brewster Buffalos and came out with F4U Corsairs.

[jyl]

So, I have been thinking about whether Covid therapeutic drugs still look like a large commercial market and thus an interesting investment area, given the vaccine efficacy data from Pfizer and Moderna. The basic question is if in a year, there will be enough persons getting infected and dying to generate blockbuster=type revenue for an effective Covid drug.

I have a simple model for this, of course, so I plugged in some new assumptions:

- relevant population = 300MM (US population, excluding very young children).

- vaccine efficacy = 90% (in persons vaccinated, vaccine prevents 90% of future serious Covid cases). We don't know if this is what vaccine efficacy in the real world will turn out to be, but seems like a good initial guess based on data known so far. I assume vaccine is redosed as often as needed to maintain the efficacy.

- acquired immunity efficacy = 80% (in persons infected and recovered, natural immune response prevents 80% of future serious Covid cases). I think the efficacy is far higher initially (because confirmed re-infections are so incredibly rare) but there's a lot of concern that naturally immunity will decline over time, so I used 80% rather than rebuild the model to use a high number initially then ramp it down.

- anti vaxer = 30% (30% of population refuses vaccine).

- actual/reported = 5X (for every confirmed Covid case, there are actually 4 more undetected cases that were asymptomatic/very mild - most estimates of this range from 3X to 10X).

- vax start = Dec 2020. This might be optimistic by a month.

- vax/month = 35MM (once vaccination starts, we vaccinate 35MM people/month until all who are not anti vaxers have gotten it.

- infection fatality rate "IFR" = 0.39% (of all actual cases, including undetected ones, the death rate is 0.39%; this excludes young children). It is hard to be confident in a point estimate, but it won't end up mattering too much if that is 1/2X or 2X the correct number. This assumes no new therapeutics.

- number of infected as of end Sept = 36.5MM (the cumulative total number of actual infections since the start of the pandemic, including undetected ones, is about 11% of the total US population). That is roughly inline with most estimates I've seen.

- infection attack rate = 50%/yr (of all not-immune persons in the population, in one year 50% of them will get infected, including undetected cases). This is the hardest assumption to figure out. It has not been that close to that high for 2020 to date, and probably is not that high even now and even in the worst-hit states. But I am assuming that by spring 2021, pretty much all social distancing, masking, restrictions, etc will end, and the whole country will be back to life as before, packing into bars and parties and planes and touching and breathing on each other with absolutely zero precautions. The wisdom of that could be debated, but I think it is going to be reality. So, how fast did the virus spread in early 2021, when there were zero precautions and everyone was not-immune? Incredibly fast. How fast can an exponential curve rise, if no-one bothers to slow it? Incredibly fast. That's why I'm using a high number.

So you can imagine how a simple model would work. Every month 4.17% of the naive population (not vaccinated, not previously infected) gets infected, 4.17% x 10% of the vaccinated population gets infected, 4.17% x 20% of the previously infected population gets infected, and you subtract off the overlapping population. Then apply the IFR to get deaths, update the population numbers and repeat next month.

You can also see all the problems with such a simple model, not to mention the uncertainty around the assumptions. But for my purposes, being "point accurate" doesn't matter, I just want to try different assumptions and figure out what a ballpark range of reasonable scenarios looks like.

Anyway, I'll cut to the chase: I think it is quite reasonable to think that in 2022, the US has 20-40 MM new Covid cases (of which only about 3-8MM are detected), 0.3-0.8 MM hospitalizations, and 70K-180K deaths (that's deaths if there are no effective therapeutics - the fundamental point of this exercise is that there will be effective therapeutics so that actual deaths will be much lower, but you gotta pay for those therapeutics doncha know).

These results are not all that sensitive to the reasonable changes in the assumptions, by the way.

And I now better appreciate why experts are warning that Covid is going to be with us, in some form, for some time.

So, somewhat comforted - yes, it is a venal, morbid sort of comfort - I'm going to keep looking for "Covid drugs that work [for investors]" :-)

[jyl]

Originally Posted by Mahler9th

Thanks for posting that jyl. Seems that your finger(s) are a bit on the pulse. My fingers are to some extent on the pulse as well.

If, in part that is part of your profession, and if you have interest, perhaps we can connect offline. I am helping to create a new business and related venture fund here in Norcal, and one of our areas of focus is the future of medicine.

We are just getting started.

Please feel free to send me a PM if you have interest, and we can connect.

PM'd you

[RWebb]

Buffet just bought 4 big pharmas

[Sooner or later]

He bought stakes in four.

[Mahler9th]

Not everyone is working with OWS, and there are general opportunities related to coronaviruses. See, e.g., https://www.vbivaccines.com/coronavirus/

In September I attended a webinar with CBO of that company along with a Board member of Novavax and the CFO of Emergent Biosolutions.

From a vaccine standpoint, there are apparently myriad global opportunities, and many (perhaps most or all) extend well beyond 2021.

We are just at the beginning of understanding aspects of many possible futures with regard to this somebeetch virus and others (perhaps its cousins) that humankind may encounter.

[jyl]

What I'm struggling with is, how does a new SARS2 vaccine get developed after mid-2021. There will be multiple existing vaccines. Ethically the new vaccine trials will have to be against an existing vaccine. If the existing vaccine is 90% effective, what study size / duration will be needed to show superiority with adequate statistical power? Even if FDA permits non inferiority, will need even bigger trials than the 30-44K phase 3s that PFE and MRNA did. If the infection rate is down a lot in the US, will need even larger trials. Who can pay for a 80-100K subject trial? Okay, you go to a developing country. But AZN is there with its vaccine, that it sublicensed to Serum India and others, and that it committed to sell for the first year at or near cost. Most vaccine markets have only a few players. SARS2 may end up dominated by the few who got approved first: PFE MRNA AZN and maybe JNJ or one other. Speed really was of the essence here. PFE knew that, it signed up BNTX, skipped OWS funding, threw four candidates into the clinic and pulled out all the stops to get one over the finish line. Who cares about the cold chain requirements, they can reformulate after they get on the market. MRNA also knew that. AZN may have been cleverest of all, using sell-at-cost to block other entrants in year 1, then it'll raise prices.

There is a long list of other SARS2 vaccines being developed. I suspect that unless they have huge advantages in administration (inhalation etc), or unless 90% isn't actually 90%, almost all will be abandoned. Maybe JNJ or NVAX sneak in before the door shuts. If they don't get their trials mostly done by early 2021, they may get left in the cold.

That's my cynical take on this.

[jyl]

On the therapeutic side, it seems to me if the patient pool is 500K/yr (hospitalized in the US) then the drug needs to command $10K/patient. Because not every hospitalized patient will get it. 500K x $10,000 x 50% = $2.5BN. Transformative for a small biotech, not for a big pharma. As an investor, I am not sure why one should bet too much on a promising Covid therapeutic under development by, say, GSK or MRK. The same drug in the hands of a small cap company - sure, let's buy the stock.

[Mahler9th]

Seems pretty complex...

How do existing strategies for investments in the vaccine area map to our current situation? And have strategies been evolving over time or have they been pretty stable?

[RWebb]

small cap company won't be able to do a roll out to 4-5 billion monkeys

[jyl]

Originally Posted by Mahler9th

Seems pretty complex...

How do existing strategies for investments in the vaccine area map to our current situation? And have strategies been evolving over time or have they been pretty stable?

I can only speak to the stock investment side.

I've never been too interested in investing in stocks of companies developing vaccines against infectious diseases. Reasons: 1) long development process, 2) low drug price, 3) limited markets. I can't think of a vaccine maker that has been a home run stock, at least not with a short/medium term investment horizon. So my "existing strategy" was to avoid, and that may remain the case.

SARS2 is an anomaly. Maybe the technology used in the SARS2 vaccine programs will speed future vaccine development but absent a pandemic affecting developed countries, I'm not sure 2) and 3) will change.

The only other quasi-vaccine area that I have been interested in is so-called "cancer vaccines". 1) and 3), but most definitely not 2).

[jyl]

Originally Posted by RWebb

small cap company won't be able to do a roll out to 4-5 billion monkeys

But can partner with or be acquired by large cap company . . .

[jyl]

Originally Posted by Sooner or later

He bought stakes in four.

Just in time to get Amazon'ed.

[RWebb]

Originally Posted by jyl

But can partner with or be acquired by large cap company . . .

Exactly. And I hear that is a big part of Buffet's interest in the large caps.

But there has to be more to it, given his long term focus. He must see a future in which small cap R partners with large cap D to get R&D, and/or distribution of future products, either vacines or other pharma products.

Walgreen-Boots, etc. are getting Amazon'ed. The 4 pharmas he bought should be unaffected, since it is the furthest downstream co.s that are hit - retail distribution.

[Mahler9th]

Perhaps some additional "visibility:"

https://www.nytimes.com/2020/11/17/health/coronavirus-vaccine-operation-warp-speed.html?action=click&module=Spotlight&pgtype=Homepage

[jyl]

Originally Posted by RWebb

Exactly. And I hear that is a big part of Buffet's interest in the large caps.

But there has to be more to it, given his long term focus. He must see a future in which small cap R partners with large cap D to get R&D, and/or distribution of future products, either vacines or other pharma products.

Walgreen-Boots, etc. are getting Amazon'ed. The 4 pharmas he bought should be unaffected, since it is the furthest downstream co.s that are hit - retail distribution.

Oh, I am sorry, I misread. I thought Buffett bought pharmacies - wrong. ABBV MRK BMY PFE. That makes more sense. Yeah, big pharma uses small cap as their R&D arm. Not as reliable as hottie pharma sales reps peddling reformulated old drugs, but I guess they have to do what they have to do.

[jyl]

AstraZeneca press released interim data from UK and Brazil phase 3 trials. The data is a little weird, because they used two dosing regimens which produced very different efficacy. Two full doses (full dose to prime, then another full dose to boost) had efficacy 62%. Half dose then full dose had efficacy 90%, but this was in a small subgroup of just 2,741 subjects.

They did not release detailed data or statistical measures, so we don't know how robust those numbers are. The data is based on 131 events (infections) in the first 11,400 trial subjects. The event numbers in the half/full dose group would have been very small (2?). AZN didn't disclose the statistical strength of the claimed 90% efficacy in the half/full dose group - or the 62% efficacy in the full/full group.

Some subjects were in the UK trial, which had some patients on full/full dosing and some on half/full dosing. In the UK trial, subjects were PCR tested weekly, which means they'd be more likely to detect asymptomatic or near-asymptomatic cases. Others were in the Brazil trial, which had all patients on full/full dosing. In the Brazil trial, subjects were tested for infection if they reported symptoms, which means they probably would not detect asymptomatic cases. These different protocols further muddy the waters.

The US phase 3 trial is continuing. It uses the full/full dosing and tests for infection if the subject has symptoms, similar to the Brazil trial. AZN says it is talking to the FDA about changing the US trial to include some half/full dosing.

So all that is pretty confusing and a lot of questions remain. But, here's the good:
- AZN's vaccine is stable for 6+ months in a normal refrigerator
- other than the one case of reported transverse myelitis (about which little has been disclosed), the adverse reactions seem modest
- they expect to make 3 billion doses in 2021
- they have licensed the vaccine to Serum India and other drugmakers who can make more (my est: 1-2 billion doses)
- they have committed to sell the vaccine at cost ($2.50-4.00) during the pandemic (so, for 2021 at least) before potentially raising the price to commercial levels.

There is a good deal of speculation that the reason for the worse efficacy of the full/full dosing is that the subjects acquire immunity to the vector virus (a chimpanzee adenovirus) after the first dose, and that immune response reduces the effect of the second dose. One of the Chinese companies used a human adenovirus as their vector and saw a lot of problem with pre-existing immunity to that vector, in phase 1 or 2 trials I recall they saw antibodies to the SARS2 virus generated in only 50% of trial subjects. China has pushed that vaccine to ph 3 trials anyway. AZN was trying to avoid that problem by using the chimpanzee adenovirus, there's a question if they fully succeeded. Note also that IF the vaccine needs to be re-administered annually, AZN may be out of luck - they may not get the "recurring" business.

It would have been better to see a very high efficacy and less confusing "data" (remember, so far merely a press release). Still, it seems very likely this vaccine will be approved and used and help a lot in controlling the pandemic. It also seems fairly likely that countries who are rich enough to afford the PFE or MRNA vaccines, and got their orders in quickly enough, will want to use more of those and rely less on AZN's vaccine.

I remember, very early in all this, I asked which vaccine people would choose to get if they had a choice. This was many months ago, when only spotty phase 1 data was available. Only one person answered , that was RWebb who said without hesitation that he'd definitely choose one of the mRNA vaccines. I guess that's the actual expertise showing through . . .

We should start talking about the vaccine logistical plans and how to get higher on the vaccine priority list. I'm not saying that I would want to jump the line ahead of grandma, but I'd prefer not to get my shot after the "good stuff" has all run out . . .

[jyl]

Well the AZN vaccine situation is getting more confusing. The half/full dose cohort was not planned, it was an *accident*. In the UK trial, some subjects accidentally got only a half dose at their first shot, this was discovered, and thereafter subsequent doses were the correct and intended full dose. This created a small (2700 approx) group of subjects who got half/full dosing.

AZN says the error was reported to the UK regulator and calls it a serendipitous error that allowed them to discover the supposedly higher efficacy of the half/full dosing. That spin is getting heavily criticized, along with the other weirdnesses that I mentioned in the prior post. I’m not sure how all this will affect the vaccine’s review by the FDA. AZN is disclosing information piecemeal, some publicly, some in private to investors, and the full dataset is presumably yet to be received by the FDA.

Best guess is: this is probably going to be considered a 62% efficacious vaccine, the “90%” efficacy claim for the accidental half/full dose regimen won’t be given much credence until/unless actually confirmed by a large trial, and while the AZN vaccine will probably get approved and used, PFE and MRNA are sitting rather pretty right now and the door has opened a little wider to JNJ NVAX and others. Likely not a big deal in the US which has contracted for enough PFE/MRNA vaccine to pretty much cover the vaccinable (is that a word?) population. Other countries will be reviewing their options.

[Sooner or later]

They are getting raked over the coals.