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Below is an excerpt from a complimentary research note by our Healthcare Team of Tom Tobin, William McMahon, and Justin Venneri. If you are interested for more Healthcare research, check out our Sector Pro Product Health Care Pro. Click HERE to learn more. |
Delta variant is finally causing some friction in an area we expected to be resilient - cancer testing.
We heard twice yesterday, once from NEO directly, and the second time from Guardant's UBS presentation, that within the past two weeks restrictions in COVID hotspots are impacting test volumes.
Compared to the wave of new cases at the end of 4Q20, hospitals are in much better shape nationally, but FL, TX, LA and other low vaccination states are running into trouble.
Key Call Out
Delta variant began spreading in early June and had largely taken over by the end of July, but the impact to cases, hospitalizations, and elective procedure deferrals has been a local phenomenon.
From the daily data updates from CDC Florida's COVID situation has deteriorated alongside Delta variant where the local vaccination rate is 49%.
In Connecticut, where vaccination rates are 64% there appears little to no impact from Delta variant's spread.
Based on first dose vaccinations given, Florida will hit 60% in 2 weeks and begin to close the gap with Connecticut and other high vaccination states.
Behavior in Florida is also changing, where vaccinations per day have picked up to 75K per day from the June lows leaving just another 2 weeks from here to completely close the 5% point gap.
We're assuming Florida case volume peaks in 2 to 4 weeks with the subsequent draw down in hospitalizations to follow through September.
This means medical utilization will be accelerating in late September and into 3Q21 earnings.
We suspect too, that after this wave of COVID, we are unlikely to have another and whatever optimism in on display for 3Q21 gets translated into 2022 estimates. We'll keep this data up to date scanning for the turn.
