OVERVIEW
In the final week of December, we were able to speak with the Chair of Immunology & Molecular Biology at one of the nation’s top academic institutions about topics ranging from the new B.1.1.7 strain of SARS-CoV-2 to “post-COVID syndrome” and expectations for a recovery in 2021. There are a lot of moving pieces, but we believe that the combination of pent up demand for care that has been delayed or avoided, rising acuity (inclusive of uncertainty around monitoring/treating "COVID long-haulers"/post-COVID-19 syndrome), and rising immunity as the vaccines are administered, will be a powerful driver in 2021. If correct, the impact will be positive for some ($GDRX as visits drive prescriptions, Vision & Dental care, $AMN on the staffing side, and those that benefit from an uptick in procedure volume like $JNJ), and a headwind for others (possibly managed care if reserves are not sufficient, or the labs if/when COVID19 testing volume slows). Here are a handful of highlights from our discussion:
- The mutations we've seen to date are unlikely to allow SARS-Cov-2 to evade the approved mRNA vaccines (and AstraZeneca’s/Oxford's, which is approved in the UK).
- There's huge pent-up demand for care/visits but our contact thinks it’ll be a slower ramp. Just over 2MM people had been vaccinated at the time of our call, and he was "very worried" about both spread over the holidays AND "long COVID-19"/"post-COVID-19 Recovery Syndrome."
- January is likely to be the worst month, then the curve will come down by mid-1Q21, as social measures and vaccinations overwhelm COVID-19, finally.
- Convalescent plasma studies show evidence of inflammation long after COVID-19 symptoms recede - "the ambers are still smoldering” for some patients. We have no idea what all the consequences will be, but with 18MM+ confirmed cases, a low or mid-single-digit % of people with residual issues like myocarditis, pulmonary distress, or mental/psych developments, could lead to increased utilization for a very large number of Americans.
- The big tech advancement is our new ability to make new vaccines rapidly – our contact has confidence in the science, and while he’s not front-line, he “cannot wait to get the vaccine.”
CALL NOTES
Background information:
- Our contact is a professor of medicine and chair of molecular biology and immunology at a large academic institution. His experience researching how microbes - bacteria, fungi, and viruses - cause disease and how our immune systems defend us spans decades.
What are your thoughts on the “unmet demand” that’s accruing due to reopening efforts and people deferring care? The hospitals are telling us that acuity is exceptionally high…
- That’s true. The “second peak” this past summer was due to things loosening up. We saw an increase in elective procedures, etc. Now, California is shut down, again. There is a huge pent up demand, but I don’t think it’ll come back suddenly. It will be a slow ramp.
- We’re two weeks into the vaccine w/ ~2MM doses administered. This is going to take time.
What are your thoughts on COVID “long haulers”/post-COVID syndrome?
- I’m very worried about this - a fundamental error being made by people saying, “Let’s get to herd immunity.”
- Convalescent plasma studies show evidence of inflammation in the blood months after a COVID-19 infection/recovery – signatures of autoimmune conditions. If you have the flu, there’s a big fire, and the ambers, so to speak, cool off quickly. With COVID-19, in some people, there’s “smoldering” for an extended period, and we have no idea what the consequences are.
- People have different symptomatology – persistent inflammation in various organ systems, memory loss, and now we’re hearing of other chronic things (mental/psych issues most recently). I worry that we’re not dealing with the chronic issues well – it’s like post-Lyme disease or chronic fatigue. The U.S. system is good at point solutions. Patients saying, “I don’t feel right” are an issue because of the inability to deal with chronic symptoms when those symptoms differ from patient-to-patient.
What are you watching for? What’s your outlook for cases/1Q21?
- As of now, there are over 18MM confirmed cases of COVID-19 – if 5% of those people experience chronic issues, we’ll be dealing with a lot of people. I watch the case counts closely because the progression is understood: new cases -> hospitalizations 2 weeks later -> deaths 3-4 weeks later.
- I think January will likely be the worst month (the virus doesn’t care if you want to visit family – it wants to spread), but then by late January/early February, I think the curve comes down. We’ll be past the major holidays, the weather starts to improve, and the vaccines kick in. I’m very optimistic about the back half of the first quarter and year.
Ok, but if we take 5% of 50MM people, that’s a big increase in the hospitalization rate, right?
- Yes, we have to think about the layer of higher acuity as care comes back – it could last for 2-3 years.
- There are other things going on that are harder to quantify. The friction of going to get care, for example. Family members not being able to go into a facility with a patient, etc. The efficiency of the system is compromised in ways that are not comparable to a year ago.
- People delayed care for multiple reasons, and then a large population will continue to have symptoms. Take someone waiting for a colonoscopy – the diagnostic workup that goes with that could lead to questions/uncertainty about what to do. That’s why I think the best example could be post-Lyme. These are large medical consumers that just “don’t feel well” – they are usually on tons of tons of antibiotics.
The psychosis story is scary – do you think that’s real?
- When people complain of a problem, I always take it as real. This disease begins as a respiratory one, but there’s mounting evidence that it’s systemic and impacts the lining of vessels (kidneys, heart, brain, etc.). This is why vaccination is so important – the disease is very unpredictable, and the risk of death is not zero.
- The numbers are well-worked out. We know we need to vaccinate somewhere between 70-85% of the population and control infections – as we add in immunity, the spread ends.
What else can you tell us about the cardiac, pulmonary, and neurological risks?
- It’s a systemic disease, primarily in the lungs, and that’s what kills you. But as mentioned, the other organs – myocarditis (heart) and renal issues are concerning. Persistent inflammation is a problem. Now the psychosis? All these areas result in big time medical consumption. The consequence of myocarditis -> congestive heart failure. Patients will require monitoring to varying degrees.
- We don’t have enough data, yet. It’s novel – we’ve only known [SARS-CoV-2] for one year.
What’s your take on the new strain/mutation seen in the UK that’s spreading?
- The virus will change. It’s an expected result and will continue to happen as long as it’s running through humans.
- Fortunately, this is RNA and not Hepatitis C or HIV. It looks like the new variant has a small number of amino acid changes – the spike protein elicits antibodies for immunity. The vaccines elicit for the whole thing. If the mutant changes 18 of them, we still have the others. I expect when the vaccines are tested, they’ll be effective vs. the new strain because PFE and MRNA cover the entire length of the protein.
- It is possible that the vaccines lose some power.
Thoughts on traditional vs. mRNA vaccines?
- I think the vaccines from JNJ or AZN/Oxford will be effective. There are differences vs. mRNA, of course. But there’s a lot of redundancy in there (giving the whole protein).
- Another thing - making vaccines is relatively easy now. The mRNA can just be “typed up” once you know the strain of the flu, for example. The days of growing billions of eggs for flu and gambling on the strain(s) are over.
What do you make of the advancements in protein folding (Google AI – DeepMind)?
- I think it’s remarkably good news. The idea that pure computation can lead to protein folding… it’s a problem that has defied a solution. I would like to see more examples. One thing I worry about: not all proteins fold by the same rules. But it worked for one, and that is a big breakthrough.
- The great importance of it is the ability to go from instruction to the shape (we have massive linear information from DNA). If true, it’s revolutionary because you can change mutation in the instructions and see how it changes the system.
Any closing thoughts you would like to share? Anything we didn’t cover?
- Every pandemic is horrible, but humanity always does better after the pandemics. In 1918, people didn’t know what was killing them. That was terrible, but the modern public health systems came out of it in Europe, which has made a huge (+) difference for health.
- The big tech advancement is our ability to make vaccines rapidly. That’s very powerful. The next best use of mRNA could be cancer, which it was originally for, but there are many potential applications.
- A big question is why people aren’t accepting the science? At the heart of the problem, our brains didn’t evolve to deal with probabilistic events.
- Also, an area of good news is the maintenance/stability of the supply lines. I’m not worried about syringes. Getting the mRNA into the lipid seems to be the tricky part. You need the lipids to assemble the right way – experience/know-how is needed – it’s like the formula for Coca-Cola.
- I’m not front-line, but I cannot wait to get the vaccine.
Please reach out to with any feedback or inquiries, questions for future field checks, or requests for underlying data.
Thomas Tobin
Managing Director
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