The following is a summary from The Post-Covid Industry Forecast report. To access the full PDF, please click here
We begin our analysis with a brief overview of what is known about the coronavirus, since these medical facts lead to epidemiologist recommendations that result in government actions. All of this is driving changes in consumer behavior.
Our starting point remains that a vaccine is unlikely to be developed. Please note that the Spanish Flu of 1918 didn’t end because of a vaccine; it went away eventually because enough people became immune to it. But unlike the Spanish Flu, Covid-19 will not simply cause a one-time surge of deaths. The need to limit infections from Covid-19 will result in permanent social-distancing regulations that dramatically impact most industries in all countries.
As all of these events evolve, we will update this report every other month to reflect the current medical consensus.
a) Covid Vaccine and Therapeutics
There is an unprecedented effort underway to find the Covid-19 vaccine, with more than 150 vaccine candidates in the pipeline and almost three dozen already in human trials. At least 8 candidate vaccines are in or close to entering Phase 3 trials (large-scale efficacy tests). Click on the link above, and at the end of this report you will see listed all the companies currently involved in the Covid vaccine project.
Unfortunately, there has never been a vaccine created against a coronavirus. Thus, the chances of developing one to SARS-CoV-2 (the virus that causes Covid) is likely less than 50%. If a successful vaccine were to be developed, it would likely take longer than the currently expected timeline.
This report assumes that such a vaccine will not be created. If this assumption turns out to be wrong, then we will need to dramatically modify our industry outlook because we would be on course to return to the pre-Covid world by mid-2021.
Therapeutics to successfully treat Covid are much more likely. Some of the therapeutics target the virus itself (such as Gilead’s Remdesivir), while others are intended to reduce the excessive immune response that ultimately kills a number of patients. The Oxford University finding is of the latter category, with the researchers showing a one-third decline in mortality rates among seriously sick Covid-19 patients after using dexamethasone, a widely available steroid. Convalescent plasma, which recently received the FDA’s emergency use authorization, was already in use as a therapeutic for Covid-19.
At the end of the full report accessible in the link above (pages 20 through 24), we have provided tables that list every announced vaccine and therapeutic candidate, along with the companies developing them and their stage of development.
With a number of other promising agents currently in development, we are confident that successful treatments will be identified, and that the fear of dying from contracting Covid will dramatically lessen, leading to a more robust reopening of the economy.
b) Risk of Death from Covid
Through August 25th, the U.S. has reported 5.8 million cases and 178,326 fatalities, for a fatality rate of 3.1%, which is down from 5.1% in late June.
The fatality rate is likely a lot lower if the actual number of infections is assumed to be a multiple of the ‘reported’ case count, as we had pointed out back in June. We referred then to the CDC Director’s comment that conceded the actual infection rate was likely 10X the reported count.
The fatality rate will likely continue to decline as therapeutics and treatment protocols get more effective. This should help reduce the intense panic felt by those who may be afraid to leave home even after shelter-in-place and social-distancing regulations are lifted.
c) Widespread Low-Cost Covid-19 Testing
Regulatory approval for Abbott Labs’ (ABT - Free Report) 15-minute test has the potential to significantly expand testing capacity, which may play a big role in helping the economy’s reopening. This low-cost test relies on existing lateral-flow technology to detect SARS-Cov-2 antigens in 15 minutes. Abbott plans to ramp up production of the test, reaching 50 million in October.
A host of operators entered the market after the FDA’s emergency-use authorization, with more than 130 tests getting the agency’s green light. Of these tests, the PCR Molecular and antigen tests are used to detect the virus’ initial presence, while serological antibody tests determine immune response to the infection. The aforementioned Abbott test is an antigen based test, while the conventional test that takes a number of days to show results is the PCR Molecular test.
The overall testing capacity has significantly increased, with the current daily testing rate in excess of 620K (in late August), modestly down from the early August peak of more than 800K daily. Cumulatively, the U.S. has conducted more than 74 million tests, more than any other country. The positivity rate (proportion of the tests that are positive or show infection) has steadily come down as well, with the 7-day moving average at 6.2% — down from the summer peak of 8.5% in late-July and early-August.
Current testing capacity is at or close to levels required by epidemiologists to recommend states to start lifting their restrictions.
Table 1 at the end of the full report (click on the link above for access) has listed all the companies involved in developing Covid-19 tests.
d) Contact Tracing and Digital Health Certificates
As we had suspected, smartphone-based contact-tracing applications that were touted at the start of the pandemic as playing a major role in slowing its spread and also serving as ‘digital health certificates’ for ‘gating’ purposes have failed to take off in the U.S. on privacy grounds. Other issues that have hampered widespread adoptions include security glitches and slow program rollouts, but the recently unveiled Abbott test and its associated app (called NAVICA) has the potential to serve as a digital health certificate.
The Google/Apple Covid-tracking app, COVIDWISE, has failed to catch on nationally, Google claims that the application is in use in varying degrees in 20 states and territories covering nearly half of the country’s population.
The app enables an individual to anonymously upload to Google/Apple servers that they have tested Covid-positive. The app then sends alerts to cell phones that were in proximity to that individual, suggesting the individual in proximity to get a Covid test. The app doesn’t tell the alert’s recipient who, when and where the pivotal contact took place. This limitation was by design, to protect the sick person’s privacy, but it nevertheless leaves users less informed.
Contact-tracing applications have been relatively more prevalent and successful in some countries. But a key weakness in any app-based contact tracing approach is the need to have widespread adoption to ensure there is a critical mass of infected and unaffected people’s data in the system.
e) Will Covid Be Seasonal?
The virus’ behavior over the summer months suggests that SARS-CoV-2 (the virus that causes Covid-19) is unlike other coronaviruses that tend to be wintertime infections. That said, scientists are actively researching the virus’ seasonality aspect ahead of the expected fall flu season.
f) How Long Does Immunity Last?
After contracting and recovering from Covid, an individual develops antibodies that should protect from reinfection, but no one knows if this protection will last for months, years or a lifetime.
When people are infected by milder human coronaviruses that cause cold-like symptoms, they remain immune for less than a year. By contrast, the few who were infected by the original SARS virus, which was far more severe, stayed immune for much longer.
The widely publicized recent Hong Kong case of a re-infected patient demonstrates that antibodies developed in response to the first infection likely weakened over time.
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