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”.