mloub

thanks for this. however, I dont see 1. as being a big problem. everyone with RA that is successfully treated by biologics (millions of people) get injections or self inject every week or two weeks, with delivery of medicine in cold packs and keeping medicine in fridges. this is no big deal. as well, the manufacture of these biologics is a difficult process, but not so difficult so as to prevent pumping out millions of doses. as you say, this dosing would have to be repeated, but I could see this as being a complement to various other therapies/vaccines being worked on...assuming that this is not a big scam Agreed, Humira is a great drug. But all the issues I outlined in (1) means it costs about $3,000 per month. That might work for a relatively rare disease affecting less than one percent of the population, but scaling it would be very hard. The typical vaccine on the other hand costs less than $100 per dose. With Ebola, it was the vaccine that turned the tide, not these biologics. The Ebola vaccine is 97.5% effective at a fraction of the cost. More importantly it prevents the disease. The Ebola biologics only treat you after you get it. https://www.statnews.com/2019/04/12/the-data-are-clear-ebola-vaccine-shows-very-impressive-performance-in-outbreak/ All of which is moot, because Sorrento's "treatment" is only effective at blocking binding in cell cultures. It has not been tested in Humans and there is a long way to go to prove its efficacy. You'd think we would have learned to reserve judgement after Chloroquine, and Remdesivir, but why not. Everyone is desparate, let's add $2bn in market cap to this textbook pump and dump name. M.

Yeah, this is on the face of it bunk. Here are the reasons why: 1) An antibody is a protein that is unstable. (For a great analogue, take a look at Humira, an antibody that is used to treat inflammatory diseases like Crohns). Because it is unstable, it needs to be refrigerated, has a short shelf-life, and needs to be injected (it can't survive the digestive system) frequently as its effect wears off. 2) Antibodies that you inject are ultimately cleared by your body and so they only have a temporary effect (think weeks) versus a vaccine which confers active immunity for years. Antibodies are used as a treatment, for example, when someone who is not immune to tetanus is exposed to it. They get the antibody to get them over the acute exposure. Then the body clears the antibodies and then they are back to square one, only in the meantime hopefully the antibodies gave them some short term protection. Now people generally know when they are exposed to Tetatnus - "Doc I just stepped on a rusty nail!" - but Covid-19 exposure is often invisible. How do we make sure the right people get the antibody in time? 3) Antibodies are very hard to produce at scale. You essentially have to set up these bioreactors of genetically altered cells that spit out these antibodies. It is very finicky and any contamination at any step in the process destroys the whole line. Think of the clean rooms for manufacturing microprocessors, only harder. 4) This antibody has not been tested on humans yet, apparently. (Should have listed this as point 1). This is not a small deal. Antibodies bind to proteins and either gum up how those proteins work (like Humira) or help target them for destruction by the immune system. There is a lot that can go wrong between seeing this binding effect in a lab culture and having it work as expected in a human. There are a limited number of proteins in a lab culture, in a human there are all sorts of proteins hanging around that can screw things up. "There's many a slip 'twixt the cup and the lip". These guys aren't even in the same room as the lip yet. So with 1-4, I would be very wary of promotional claims like this - "Given the very effective data that we've seen, how potent this antibody is, we are very confident this could actually work out". But you know, hucksters be huckstering. M.

This is an important question, and there is an answer which hopefully will be useful in thinking about this even if it is imprecise. If we think about R0, it is the measure of how infectious a virus is in a population of people who are fully susceptible to it. We know Covid-19 has a high R0 (about 2.5). But the rate of spread in the "real world" is a bit different, because not every host is fully susceptible, especially if we assume that those who have gotten Covid-19 and survived are likely immune (or at least, partially immune), which while unproven would be a safe assumption given past experience. So when can we declare this thing over? When the rate of immune hosts (those who have developed natural immunity after recovering, or those that have received a vaccine, when one becomes available) is high enough to limit the rate of spread to a manageable level. Call this a real-world adjusted R0. That is why many smart folks are warning that this won't be over until we have a vaccine. I would just add to that, or until enough folks have been infected and recovered. Here's to hoping the vaccine comes first. M. Edit: Just to add a more positive thought. We don't necessarily have to exist in a state of lock down until the vaccine arrives. Once we have brought the level of current infection down to a more manageable level through the current lockdowns, we can then shift back to a surveillance, tracking and quarantine model to fight off any local outbreaks. Something which could have saved us all this grief if it was done successfully in February/early March.

I mean could we ever really know if the bullet killed the man, or if he happened to die from complications of hypertension just as the bullet entered his skull? Causation can be tricky after all, and we should study it further before deciding conclusively! M. Nope, no debate at all. The bullet killed the guy. But, the question is how much quality of life the guy gave up due to the bullet? Was it a day, a month, a year, a decade of quality of life? And this is the point that Eric and I made about two weeks ago about Covid-19 mortality. If you look at the existing mortality rates of people by age, and then if you look at the Covid-19 mortality rates by age, you can observe something basic. If you are sick enough that you need medical attention and you are actually clinically diagnosed with Covid, you seem to incur about 2 or 3 years of incremental mortality risk, ignoring pre-existing co-morbidities. So, as Eric noted, if you are 40 right now and you are formally diagnosed with Covid, it's more or less like worrying about whether you'll make it to 42 in the absence of Covid. And it's roughly the same deal if you are 80. If you catch covid at 80 and it's bad enough that you are tested and formally diagnosed, your risk of dying is more or less the same as your risk of whether you make it to 82 or 83. So, no debate at all about what ends up killing the guy, but lots of room to reflect upon what exactly he "lost" due to the illness. SJ This is a fair and rational point. And from a population perspective losing a large proportion of folks who are already at the later stages of their lives is, as you say, not a huge loss in terms of life-years. But we should also consider the retail side of things. When those 80 year olds, who likely would have died in the next 1-3 years, all die in a short span, it causes bedlam. Each of their families will bring them in, want them treated, want them ventilated. Even more so for the 60 year olds and the 70 year olds with pre-existing conditions. The strain those cases cause is real. And from my experience, folks don't tend to take an actuarial view of their own mortality. When they or their family members are the ones gravely ill, they almost always want everything done that could possibly extend their lives. The truth is almost all our healthcare capacity is already going to treat folks between 60-80 who have pre-existing conditions. Most healthcare expenditures a person incurs are in the last years of their life. While a respiratory virus that disproportionately killed the young would be more damaging economically, C19, which mainly harms those over 60, still has the capacity to bring our healthcare system to its knees. That is the cause for concern, in my eyes. M.

That was a really good post. I have had a conference I was to be at in early July Cancelled. It was to have 30000 - 50000 in attendance. July... think about that for a minute. Hundreds of full time jobs for months eliminated. Multiply that across the globe out to July and August now. Even if Covid were bought under control tonight, it would take months for the economy to recover. And it doesn't matter what the public is told in terms of social distancing, the damage is done. It doesn't matter if a President says everything opens back up in three weeks, he will be ignored. The 24 hour news cycle will keep feeding the hysteria whether it is justifiable or not. The economy and the markets are going way down. Last week was just a head fake. Eventually, some semblance or normalcy will assert itself either due to better treatment, protections, or an outright vaccination, but it will still take months to recover after that. And Elon Musk should stick to his circle of competence, which is building great companies, with exciting vision, not opining on public health. Agreed re: Musk. Here's his latest unsupported tweet claiming many doctors are not treating patients because they are afraid of getting or transmitting C19 - https://twitter.com/elonmusk/status/1244034540995137536 While ofcourse the opposite is happening as thousands of doctors of all specialties, and some in retirement, volunteer to come forward and help in the pandemic - https://bit.ly/2JqyFnC Musk seems hellbent on destroying any goodwill he has earned with Tesla and SpaceX by shooting his mouth off on C19. I have to say, his poor judgement on this topic - one where I feel slightly more knowledgealbe because of my training - makes me wonder what other terrible choices he is making in other domains that I am not as equipped to notice. M.

I mean could we ever really know if the bullet killed the man, or if he happened to die from complications of hypertension just as the bullet entered his skull? Causation can be tricky after all, and we should study it further before deciding conclusively! M.

Agreed. It would be nice to see this study reproduced by othe researchers not related to Prof. Didier Raoult. I believe the CDC is currently studying these treatments in NY, so if there is any promise, we should know soon enough. M.

Yeah, I think the people that have this view are basically misunderstanding five things: [*]Exponential growth [*]It takes weeks between infection and hospitalization and death [*]Hospitals are not infinitely expandable--if enough people come in, hospitals run out of resources [*]If you're in the ICU with this, you are likely in there for weeks [*]That without ventilators, the death rate increases dramatically Everyone I've seen who's taken a "there's no problem" position seems to have basically missed at least one of these points. In that post, he's certainly completely misunderstanding points 1 and 2. He'll probably miss points 3, 4, and 5, but hasn't got to that point yet, because he's so busy missing 1 and 2. If only I had read this earlier it would have saved me so much grief. Great summary! I want to turn this into a printed cue card and just give it to folks when we discuss covid-19 with the appropriate misunderstandings checked off. I don't know what I'll do with all the time I'll save! M.

Well, to be fair to Musk, while cause of death can indeed be reasonably determined, Italy isn't doing it (or at the very least, their statisticians aren't). For some mysterious reason, any death in Italy that ever tested positive for covid-19 is reported as a covid-19 death in their statistics regardless of anything else. Source: quite a few, but for example https://www.acc.org/latest-in-cardiology/ten-points-to-remember/2020/03/24/15/33/case-fatality-rate-and-characteristics Covid-19 (SARS-CoV-2) is a severe respiratory virus whose closest analogue is the 2003 SARS (SARS-Cov). That argument by Musk is a red herring, and he knows it. Every death in Italy will have an official death certificate completed by the pronouncing physician where they will record a cause of death. The statisticians may be using covid-19 infection status as a proxy because it will take time to compile all the paper death certificates. I will bet almost anything that when they do compile the official paper records - you know after they've finished dealing with this pandemic - the numbers between laboratory reported infection status and cause of death will be remarkably similar. It's telling that Musk, who has down-played Covid-19, and then latched on to a questionable study about chloroquine and azithromycin says his conversations with Bill Gates, the person who years ago warned we should prepare for a global pandemic, were "underwhelming" - https://twitter.com/elonmusk/status/1229568241552502784 M.

The second doctor is a boob. He is making some very interesting logical errors. Firstly, he claims, without proof that covid-19 is widespread - at some points he conflates covid-19 with other strains of coronavirus, which he says represent 10-17% of common colds, and then uses that conflation to claim that covid-19 is probably as widespread as the common cold. Then he takes the unfounded leap that if covid-19 is so widespread, maybe we are mis-attributing mortality. Someone who dies and tests positive with covid-19, according to this guys faulty logic, may have died from something else. Musk made a similar dubious argument regarding the Italy death data on twitter, arguing since the dead often had other underlying conditions, maybe it was those conditions that resulted in their death and not covid-19. This line of reasoning lacks even the most basic understanding of pathology and causation. If an elderly person with heart disease, for example, died and tested positive for covid-19, the cause of death can be reasonably determined. Covid-19 infection serious enough to cause death presents with a severe ground-glass pattern pneumonia, decreased oxygenation, fever, increased white blood cell count (and a myriad of other objective measurements) that are NOT present in a cardiac death. To disingeniously claim that we can not tell the difference is so ignorant of the basic facts it would be laughable in any other circumstance. M. I’m not claiming the validity of eithers arguments. Simply saying it’s interesting to see differing opinions. Hence the (fwiw). What were your thoughts on the first? I know. I appreciate you posting it. It's helpful to see the divergent view points. The first guy is using numbers that don't correlate with anything I've read from any other reputable sources, and of course does not cite his sources. I would not consider him a reliable source either. They're both trying to reassure folks. An understandable impulse, but one not supported by verifiable facts. For example, his assertion that 99.5% of cases are asymptomatic. Where does that assertion come from? M.

I know some have complained that this thread has gone off the rails and is of little or no value from an investment perspective. Let me share some thoughts that hopefully have some investment merit, along with my level of conviction. 1) We are in the bottom of the third as far as this pandemic is concerned (High Conviction). This pandemic still has a long way to run - maybe 3-6 months (maybe longer), and the worst in terms of headlines and quarantines is in front of us, imho, not behind us. It is clear now that the response has been botched, especially in the United States, and what comes next is likely to have a deep and lasting impact on our collective psyches and the economy. Even now, before the infection rate has peaked, hospitals across the country are running low on personal protective equipment for their health staff. As supplies run out, and HCWs are forced to improvise, the infection rate among them will soar. This will weaken our capacity to care for infected patients even further. Our mortality rate in North America will likely track somewher between Italy and China's, but I would guess closer to Italy. Those who are comforted by the low mortality rate are celebrating too soon. Once the healthcare system starts to creak under the strain, and the new infections of the past weak start weakening their hosts the mortality rates will go up significantly; 2) The effects of the pandemic on unemployment, consumer spending, and credit will be long lasting (Medium Conviction). Just because case rates start to fall in the spring/summer doesn't mean we will be economically out of the woods. If we look at the number of folks who will be financially wrecked by this pandemic - service workers, small business owners, uber drivers, hair stylists, plumbers, construction works,... - it is not a stretch to say that the impact will likely be as large as the GFC, if not larger. Those who think everyone will pick up where they left off, and the damage will be minimal need to think more about human behaviour, and the typical household's balance sheet. So actionable investment insights: 1) It's not too late for Cash or Hedges - There is a lot of talk of lifting hedges and starting to buy out there. In my opinion, that talk is premature. If you are the sort of person who is inclined to hedge or buy long-dated puts in the first place, there are still opportunities to do so out there. For example, Shopify (SHOP) trades at a 48B market Cap ($46B EV) currently and is about 20% off of it's all time highs, even though it had operating losses of $141m in 2019 (and as far as I can tell, has never turned a profit). In fact, operating losses in 2019 increased by 53.5%, while revenue increased by 47%, a modern 2020 business miracle, which of course explains why the market has wisely priced it at 30.5x its 2019 Sales even in the middle of the worst global pandemic in living memory. 2) Wait to make new investments, or if you just can't help yourself, buy Berkshire - If you think all the bad news re: covid-19 is already priced into the market, refer to SHOP above. The vast majority of the market seems to believe the worst is behind us and happy days will be here again very soon. I would not be inclined to jump in to hotels, airlines, cruise lines or any of the battered names until we have more clarity on covid-19's course. Prices remain too high if you assume we are entering a recession or even just reverting to mean valuations. Of course there maybe some truly under-valued gems out there, but I would stress test even these ideas against a very bleak potential demand situation. And, ofcourse, YMMV. TL;DR - We still have along way to go before this thing is over. M. Edited: SHOP is 20% off of it's all time highs

The second doctor is a boob. He is making some very interesting logical errors. Firstly, he claims, without proof that covid-19 is widespread - at some points he conflates covid-19 with other strains of coronavirus, which he says represent 10-17% of common colds, and then uses that conflation to claim that covid-19 is probably as widespread as the common cold. Then he takes the unfounded leap that if covid-19 is so widespread, maybe we are mis-attributing mortality. Someone who dies and tests positive with covid-19, according to this guys faulty logic, may have died from something else. Musk made a similar dubious argument regarding the Italy death data on twitter, arguing since the dead often had other underlying conditions, maybe it was those conditions that resulted in their death and not covid-19. This line of reasoning lacks even the most basic understanding of pathology and causation. If an elderly person with heart disease, for example, died and tested positive for covid-19, the cause of death can be reasonably determined. Covid-19 infection serious enough to cause death presents with a severe ground-glass pattern pneumonia, decreased oxygenation, fever, increased white blood cell count (and a myriad of other objective measurements) that are NOT present in a cardiac death. To disingeniously claim that we can not tell the difference is so ignorant of the basic facts it would be laughable in any other circumstance. M.

Looks like they have it in WA https://www.npr.org/2020/03/08/813486500/coronavirus-drive-through-testing-centers Well its not available in New York. Where can we source them? NY will need about 40 million of them. This is a bit of a red herring. The nasal swabs just pick up epithelial sells, mucus and whatever else is around and put them in a fixative medium - the red stuff. You can run any PCR test you want on those swabs, there is nothing magical about the swabs. And we have the PCR tests ready to go. That is what Dr. Chu in Seattle did on her pre-existing Flu nasal swabs, and how she identified the 17-year old with the community acquired case that gave officials there a head start in tracking down the community spread. I know we may not have an FDA approved, clinically validated nasal kit for covid-19, but we are past that aren't we? If it is scientifically sound, we should use it now. And to be clear I don't advocate testing all 75 million people, just the ones with Upper respiratory tract infections not explained by another diagnosis. In case of asymptomatic spread, I'm not sure we can do much about that, nor should we focus on it, until we know more about its prevelance. Current sources are conflicting on whether it plays a role at all. Hopefully, social distancing and general precautions can help deal with that. M.

There are actually 4,284 reported deaths as of yesterday.. So in about 3 days the number of deaths went up by 42.8%, give or take. So if we just let this thing run it's course and focus on the flu, what do you project the number of deaths will be in 30 days? 60 days? (Coronaviruses handle the heat better than the flu, after all). M. who knows how fast it is spreading with mortal effect, though we know your 42.8% figure is wrong since you calculated with such false precision ignoring the more than qualifier. dont use data in this argument since the data proves this is a covid-19 panic given the far greater incidence and mortality for flu. data is not your friend in this argument. you are just supporting a panic thesis, and you seem to have a lot of company From the article you referenced: "The death rate from seasonal flu is typically around 0.1% in the U.S., according to The New York Times. The death rate for COVID-19 appears to be higher than that of the flu. In the study published Feb. 18 in the China CDC Weekly, researchers found a death rate from COVID-19 to be around 2.3% in mainland China. Another study of about 1,100 hospitalized patients in China, published Feb. 28 in the New England Journal of Medicine, found that the overall death rate was slightly lower, around 1.4%." So, the death rate from the flu is 0.1% and for COVID-19 anywhere from 1.4%-2.3%. I know these sound like small numbers. But that is a 14-23x higher death rate than the flu. I'm not sure we should be running a natural experiment to see how long it would take covid-19 to overtake the seasonal flu in terms of absolute deaths, but reasonable people can disagree. M.

There are actually 4,284 reported deaths as of yesterday.. So in about 3 days the number of deaths went up by 42.8%, give or take. So if we just let this thing run it's course and focus on the flu, what do you project the number of deaths will be in 30 days? 60 days? (Coronaviruses handle the heat better than the flu, after all). M.