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Hi, My name is Jing He and I’m a biotech analyst at Gabelli Funds. Today I’d like share our recent thoughts on COVID 19 outbreak, as the number of cases has ramped up significantly in the past few days. There have been over 16,000 people diagnosed in the US, with over 200 deaths. States with the most cases including New York and California have required non-essential business to work from home and restricted social gatherings. We have already seen pressure on hospital capacity in New York.
The question we have heard most from investors is – when do we expect to see the peak? In epicenters like New York, we believe it is likely to take 6 weeks to peak at late April or early May, and another 6 weeks to see numbers come down significantly at late June.
We believe economic activities will be re-introduced in step wise fashion starting from small groups, while large group gatherings will be on hold for a longer period of time. Other parts of the country that are mildly impacted would likely recover faster.
In terms of treatment, chloroquine, a generic malaria drug is likely to be used off-label in US hospitals. Chloroquine is widely used in China in severe patients due to low cost and availability. The efficacy was shown in small studies but there is no clear evidence on reduction in hospital stay or mortality benefit. The dose required to treat COVID19 would be higher than malaria, leading to potential toxicity issues. While we believe it should be used in epicenters as there is no approved treatment, the improvement is not dramatic enough to warrant changes in the public health measures in place for now.
Other antiviral drugs such as AbbVie’s Kaletra also showed benefit of reducing ICU stay in small studies in China, but improvement in mortality remains in question. We continue to believe Gilead’s remdesivir is the most likely drug to have meaningful impact on reduction in hospital stay time, or even show morality benefit. We expect to see data from China in 1-2 weeks and fast tracked approval by the FDA if the results are positive.
