Even as the first read on Q1 GDP showed the US economy contracting more than expected, kicking off the first recession some market participants have seen in their adult lives, ostensible good news on the pandemic front stole the proverbial show Wednesday.
Investors clamoring for an excuse to jump aboard as US stocks extend a furious bounce off the March lows, got it in the form of positive results from what Anthony Fauci described as “the first truly high-powered randomized placebo-controlled trial” of Gilead’s remdesivir.
Markets have developed an obsession with the drug, a fixation that backfired last week, when negative news from a Chinese trial was inadvertently leaked by WHO. The Lancet published similarly underwhelming findings, as expected. Fauci called the study “underpowered” and “inadequate” on Wednesday. Gilead also unveiled upbeat results from a separate study, which only added to the good vibes.
Trials are ongoing, and you’re reminded that the drug isn’t approved for anything, anywhere right now.
That said, the study run by the US National Institute of Allergy and Infectious Diseases (i.e., the proximate cause of the market’s pre-Fed euphoria on Wednesday) is potentially the best news yet. “Hospitalized patients with advanced COVID-19 and lung involvement who received remdesivir recovered faster than similar patients who received placebo, according to a preliminary data analysis from a randomized, controlled trial involving 1063 patients, which began on February 21″, a statement from NIH reads.
Some analysts expect remdesivir to be approved quickly for select patients under certain circumstances, if for no other reason than there’s a lack of alternative treatments. Indeed, The New York Times said the FDA will announce emergency use authorization. To wit:
The F.D.A. plans to announce as early as Wednesday an emergency use authorization for remdesivir, an experimental antiviral drug that is being tested in treating patients with Covid-19, the disease caused by the coronavirus, according to a senior administration official.
Ahead of the announcement President Trump and Dr. Anthony S. Fauci, the federal government’s leading infectious diseases scientist, on Wednesday hailed early trial results of the drug, holding out hope that it could help stem the rising death toll.
Meeting with reporters at the White House, Dr. Fauci cautioned that the results of the study overseen by his agency, the National Institute of Allergy and Infectious Disease, still need to be properly peer reviewed but expressed optimism that it could make a difference in speeding up the recovery of some patients infected with the virus.
Amusingly, investors decided Tuesday was a good day to yank nearly a half-billion from the biotech ETF. It was the largest single-day outflow of 2020.
Investors also fled IBB (another biotech ETF, which counts Gilead as its largest position) a day ahead of the upbeat developments.
The latest turn in the remdesivir saga comes as Donald Trump is reportedly working on what Bloomberg describes as a “Manhattan Project-style effort” to speed development of a vaccine.
If you’re wondering whether that effort has a codename and, if so, whether that codename sounds precisely like something Trump would come up with, the answer is yes. According to a pair of sources, the plan is called “Operation Warp Speed” and will marshal the resources of private pharmaceutical companies, government agencies and the Pentagon, in a bid to slash development time by eight months.
Trump, the Department of Health and Human Services says, simply isn’t prepared to resign himself to the timeframe generally associated with the development process for vaccines.
At the risk of lampooning a potentially life-saving endeavor, the specifics come across as wholly laughable, or at least as they’re described by Bloomberg. Consider this short excerpt from the linked article above, for example:
Vaccine development is typically slow and high risk. The project’s goal is to cut out the slow part, the people said. Operation Warp Speed will use government resources to quickly test the world’s most promising experimental vaccines in animals, then launch coordinated human clinical trials to winnow down the candidates.
You almost wonder if Jennifer Jacobs (whose tweets often employ what is clearly deadpan humor when it comes to the administration) is trying to be funny – “the project’s goal is to cut out the slow part”.
And it gets more amusing from there.
“Operation Warp Speed” is expected to cost billions of dollars, the sources said, a financial burden which will fall mostly on the American taxpayer. Or at least that’s the way it sounds. Jacbos says the plan “will almost certainly” end up being wasteful.
In essence, Trump plans to scale up production of potentially useless vaccines. (One trusts any such superfluous inoculations will be disposed of properly, not buried under the South Lawn or dumped in the Potomac in the middle of the night.)
Trump is apparently being enticed by the existence of some six-dozen vaccine candidates globaly, some of which might find their way into the president’s “Warp Speed” program, sources indicated. Part of the Defense department’s role will involve “mak[ing] its animal research resources available” to Trump.
Ultimately, the White House wants 100 million doses of a coronavirus vaccine ready by the end of this year. Fauci has said, on multiple occasions, that a vaccine is at least 12 to 18 months out. Bloomberg’s Jacobs reminds you that Fauci’s timeline is itself highly optimistic.
You can (and should) draw your own conclusions, and I would note that no one (including the president) should be faulted for attempting to save lives. Still, you’d be forgiven for casting a wary eye at a vaccine program run by Donald Trump involving billions of taxpayer dollars, animals and nicknamed “Warp Speed”.
2019: Trump gooses SPX on down days with tweets regarding make-believe progress on the trade war.
2020: Trump gooses SPX on down days with tweets regarding make-believe progress on the vaccine development program.
Remdesivir is a therapeutic not a vaccine. The results were 50% of the patients treated on a 5 day cycle showed meaningful improvement. However, there was no control group given a placebo so there is no way to know how many would have gotten better without any treatment at all. It may be effective but more trials would be necessary to confirm the initial indications of effectiveness. Whatever the case it is hopeful that there may be an effective therapy that significantly reduces the mortality rate, but enthusiasm should be tempered by the reality that it is not a cure or a vaccine. I agree that it was no accident that Gilead’s findings were disclosed right around the time of the GDP print –the bully pulpit has its perks
Well said. And if I’m not mistaken, there has never been an FDA approved vaccine for any virus of the Corona family. But don’t let that get in the way of a good story. I appreciate the potential for Remdesivir to reduce deaths but today’s price action seems to have stemmed from misplaced hope…the last I checked, hope made for a terrible strategy.
More details on the trial data that was released after the generic “hopium” headline. The Gilead study had a placebo control group. The result suggest a moderate but discernible benefit. 8% mortality for those on the drug 11% for those on the placebo. 11 days to recovery on the drug, 15 for the placebo. Will need to do more trials to factor for differences in the demography and the medical histories of the groups which are still relatively small by industry standards and too few to draw broad conclusions beyond “it helps some people” –how many and how much remains unclear.
Then there are the pesky questions about production and distribution –is everyone going to have access the drug regardless of their ability to pay and regardless of the cost of the medication– if and when it becomes widely available?
I read the first coronavirus was identified in 1968. And, there have been no approved vaccines (never mind “FDA approved”, but no approval anywhere) for any coronavirus to-date.
“Vaccine development is typically slow and high risk. The project’s goal is to cut out the slow part, the people said . . ”
Am I the only who appreciates the fact they want to keep the high risk part?
I know. That’s the best part. I can just hear him now: “No, no. I like the risky part. I just want to get rid of the slow. Make it like NASCAR. Extremely risky and extremely fast.”
Except you are really only going around in circles in NASCAR, so extremely risky, extremely fast, but you still end up in the same place – no vaccine.
The way he’s been trotting out corporate leaders around the White House, it won’t be long before we get our “post race” interviews thanking each company between every 3 words.
Oh, and car ran good. Like to thank the task force and the fine folks at Gilead for giving us the performance we needed down the back stretch.
Lots of money in NASCAR, despite the ending where ya started.
Sounds like he learned a lot driving backwards at Daytona, before the torrential downpour.
And it’s only Left hand turns. . .
I will be “safer at home” until I figure out what is going on.
Carefully watching Sweden, South Korea and I really want to understand how things go in Italy with “opening up” before I get too carried away.
Have not read about the wonder drug, yet, but I assume data is being fitted to goose results like, the best results are probably from people without underlying health conditions, who are in mid 30’s or something equally absurd. Any who has every watched drug trials understands that long term qualified data takes years, not weeks. Meanwhile as the virus mutates, Trump can focus on how the current death rate is a Democratic hoax, again!
The remedsivir clinical trial data is decent. The NIAID trial was large, randomized, blinded, placebo controlled, and showed a statistically significant benefit that was modest, or moderate, depending on your point of view. It is consistent with what is known about the GILD trials. The Chinese trials were very underpowered and aborted, but the limited data at least rules out a major positive benefit. So the picture is getting clearer: moderate benefit, extreme unmet need, approval assured, and there will only be enough drug for maybe 140K patients until end of this year at earliest.
I will bet those 140K will all have to swear allegiance to Trump before they get the drug.
From the NY Times:
“…the idea would be to indemnify the major pharmaceutical and biotechnology companies from liability if the vaccines cause sickness or death…”
Cool.
I think they need congress for that step. I think, No more effective way to kill people than to remove all liability for human testing.
“we can’t let the cure be worse than the disease” 1 month later “I don’t care how many lives it costs… cure the disease!” Actual words they wish they could say “humans are worthless, only money matters”.
Author, your last statement struck the most practical of all guidance. I would guess this is as yet an unfunded proposal?