COVID-19: Spread, Treatment, and Vaccines

Published on February 27, 2020

On Tuesday, a senior US health official warned that a broader spread of the COVID-19 disease in the United States was a matter of “when,” and not “if,” and painted a sobering picture of what daily activity and community patterns might look like once that were to happen.

The extent and ultimate spread of the disease in the US and its impact on economic activity is still clearly unknowable, but we would note that a similar summary assessment of the high transmission risk of the disease to US shores was also made independently by Dr. Sarah Zaidi in two reports produced last week exclusively for SGH Macro Advisors (SGH 2/21/20, “COVID-19 Update: The Global Spread”, and originally in SGH 2/18/20, “COVID-19”).

Subsequent to those reports, we have fielded numerous questions from clients along two broad lines; first, why the virus has not manifested itself more broadly yet in the United States, and second, what the current state of play is on potential treatments and vaccines.

Dr. Zaidi has addressed both of those critical questions below.

As always, we include a brief disclaimer that the views expressed below are entirely Dr. Zaidi’s personal best efforts analysis and assessment of the subject, and that SGH has played no role in producing the content of the below report. Any entities or firms mentioned in the vaccine development segment are for informational purposes alone, and in no way constitute investment advice. Any edits by SGH have been made solely for purposes of grammar and flow, except for some lines that have been italicized by SGH for emphasis.

COVID-19: Spread, Treatment, and Vaccines

February 26, 2020

Dr. Sarah Zaidi, Sc.D., M.Sc.


Novel Coronavirus 2019 (n-CoV19) was the initial name given the virus.

SARS-CoV2 is the scientific name for n-CoV19, as it belongs to the same Betacoronavirus genus and has genetic similarity to SARS-CoV, which caused the SARS outbreak in 2003.

COVID-19 is the name given the disease caused by SARS-CoV2.

Update February 26, 2020 – The U.S. Numbers

The total number of cases of COVID-19 has to date surpassed 80,000 with 50 countries now reporting infections. While the majority of cases remain concentrated in China, significant outbreaks in South Korea, Italy, Iran, and the cruise ship Diamond Princess suggest the window of opportunity to contain the virus is rapidly closing.

The emergence of cases with no relevant travel history or contact with another infected person points towards community spread of the novel coronavirus, and may just be the tip of the iceberg.

The mathematical models for COVID-19, based on the reproduction rate of 2 to 3 infections per infected case, suggest that at least 2/3 of infections are as yet undetected.

Experts are particularly concerned about the small number of U.S. cases of COVID-19. That most likely reflects limited testing of a very narrow group of the population that includes people who display respiratory symptoms, and those who have recently traveled to China or have had close contact with an infected person.

As of yesterday (Feb. 26) only 445 people had been tested for the virus in the U.S. (not including people who returned on evacuation flights), compared with 35,000 in South Korea.  Furthermore, only five state health departments — in California, Illinois, Nebraska, Nevada, and Tennessee — can run diagnostic tests outside of the Center for Disease Control (CDC) in Atlanta.

Coronavirus testing kits have not been widely distributed to hospitals or public health labs, making detection of new cases that much more difficult. Most places need to send samples to Atlanta and cannot conduct the tests for COVID-19 diagnosis on site. Furthermore, even though both public and private institutions are working to set up testing centers, they need to get approval either from the CDC for the current test or file an application for new testing protocol with the Food and Drug Administration. Both processes can be difficult and time consuming.

Currently, in the U.S. there are 59 known cases of COVID-19, including 47 brought back from abroad by the State Department. Of the remaining cases, at least 3 include person-to-person transmission.

The ‘contain and kill’ strategy of cordoning off large geographic areas and putting infected patients, and those suspected to be at risk, appears to be failing in reducing transmission and points to the urgent need for countries to transition from containment to “mitigation.”

In mitigation mode, countries will need to put out good public health information such as improved personal hygiene, put into place ‘social distancing measures’ such as canceling public gatherings, closing schools, amongst others, and make early diagnoses.  Amid the uncertainty of its eventual spread, European Union countries have been the first to recognize the importance of mitigation over panic, and have agreed not to close their borders with Italy.

As of today, there is no treatment, but several potential vaccines and therapies are in the pipeline.

However, as Dr. Anthony Fauci, Director of the U.S. National Institute of Allergy and Infectious Diseases, has pointed out, even with ‘rocket speed’ efforts to forge ahead, it would take about year and a-half to complete trials, scale up production, and make a vaccine widely available to the public.

Below is a summary of current vaccines and treatments under development.

Vaccines and Treatment Currently in the Pipeline:

  1. A team of scientists at the Hong Kong University of Science and Technology (HKUST) has identified a set of potential leads for guiding experimental efforts towards vaccine development based on SARS-CoV derived B cell and T cell epitopes (part of the molecule to which an antibody attaches itself). Immune therapies targeting these epitopes may potentially offer protection against COVID-19. It is not clear, however, who is taking up these findings to develop treatment or a vaccine.
  2. Novavax, Inc. has created COVID-19 vaccine candidates using its proprietary recombinant protein nanoparticle technology platform that generates antigens derived from the coronavirus spike (S) proteins. The company intends to utilize its proprietary Matrix-MTM adjuvant with its COVID-19 vaccine candidate to enhance the immune response. Novavax has experience in adjuvants formulations based on Matrix-M in Ebola. They also worked on developing vaccine candidates for MERS and SARS. Phase 1 clinical testing should begin in May or June.
  3. Moderna Therapeutics has developed and shipped the first batch of vaccines based on mRNA technology to be tested on humans as early as April. The Cambridge, MA, based company in a collaboration with the National Institute of Allergy and Infectious Diseases (NIAID) created the vaccine 42 days after the Chinese shared the genetic sequence of COVID-19. The vaccine is based on a new genetic method which does not require growing a huge amount of the virus but instead packs messenger RNA (mRNA), the genetic material that comes from DNA and makes proteins. The vaccine is based on coding for the right coronavirus protein which then gets injected into the body. Immune cells in the lymph nodes can then process that mRNA and start making the protein for other immune cells to recognize and mark the virus for destruction. The president of Moderna refers to the vaccine as working like a software program in the body, which uses the body’s own defensive mechanisms to generate a response. However, it is not clear how this vaccine would work in people who are immune compromised as their bodies have trouble producing an immune response.
  4. The National Institutes of Health (NIH) are also testing an antiviral drug called remdesivir that had been developed for Ebola for treatment (minimizing the viral content in the body). Remdesivir, owned by Gilead Sciences Inc., is a broad-spectrum antiviral treatment and showed promise in animal models for treating MERS and SARS. The drug is for treating COVID-19 and will be tested on a volunteer patient who tested positive and was on the Diamond Princess. Other positive patients from the ship who have been hospitalized will also be part of the study, which is being led by a team at the University of Nebraska Medical Center. The case-control clinical trial will randomly assign volunteers to receive intravenously either the drug (200 mg) or a placebo for 10 days, and they will have blood tests and nose and throat swabs taken every two days. The aim is to see if the drug shows some efficacy in keeping blood levels of SARS-CoV2 from growing. The study is currently in the recruitment stage with a start date of 21 February and completion date of 1 April 2023. It intends to enrol 394 participants. Clinical Trial Identification Number: NCT04280705.
  5. The University of Queensland (UQ) has fast-tracked research and created their first vaccine candidate to be moved quickly into further development before clinical testing. They have used molecular clamp technology to engineer a vaccine candidate that could be more readily recognized by the immune system using epitopes. While the work in the lab shows feasibility, the next challenge is to produce the vaccine on a larger scale needed for additional testing. UQ has used the molecular clamp approach to produce FluQuadriTM (Sanofi Pasteur) for influenza and further with Ebola, rVSV-ZEBOV (Merck). The molecular clamp vaccines tend to be heat stable with no loss in antigenicity after two weeks at 37 degrees Centigrade.
  6. The Coalition for Epidemic Preparedness (CEPI) is involved in supporting three of these initiatives (Moderna, Novavax, and UQ). Even with these promising developments it would take at least 3 to 6 months to test vaccines and then another 3 months to manufacture. The concern with these public/private initiatives will be accessibility to these vaccines and related costs such as pricing.
  7. It should also be noted that China is the biggest producer of active pharmaceutical ingredients (APIs). It is not clear at this time whether this will affect vaccine production. However, it will impact access to medical drugs and supplies. The World Health Organization (WHO) has already raised alarm bells on medical supply chains, noting that stockpiles are depleting rapidly as the demand for personal protective equipment has risen 100 times higher than usual.
Back to list