Coronavirus

Covid-19 case mortality data from ICE facilities and the knuckleheads thing

September 17, 2020

United States Immigration and Customs Enforcement — the dastardly ICE, for those of you left-scrolling from home — has a surprisingly detailed Covid-19 dashboard (Tab 4). Notwithstanding our obsession with such things, we had not seen it before clicking through a link in an otherwise irrelevant Vox post.

The upshot is that ICE has been testing the heck out of the detainees in its facilities. As of September 11, there are only 20,138 detainees in ICE facilities (down from an average of >50,000 in 2019), and ICE has administered more than 35,000 Covid-19 tests. Recognizing that people cycle through these facilities at varying rates, it is safe to assume that ICE has tested a solid majority of its detainees during the last six months, and possibly the vast majority.

The agency has found 5,810 cases of Covid-19, for a “positivity rate” from testing at an ugly 16.6%. That is the sort of rate that gets journalists screaming at governors, fun banned, and schools firmly virtual.

But only 6 detainees have died of the Covid. That is a case-fatality ratio of… 0.1%. Compare that number to the observed case fatality rates in various countries, which are massively higher. The Covid-19 case fatality rate in ICE detention centers is right in line with the seasonal flu. That made us curious.

There might be several explanations for this. ICE facilities might have excellent health care. Well, maybe, but that would be a narrative-buster of the first order. Indeed, a recent whistleblower has contended that at least one ICE facility has under-reported Covid-19 cases, which would suggest an even lower case-fatality rate than indicated by the dashboard.

Perhaps ICE is under-counting Covid-19 deaths. Again, anything is possible, but the official ICE tally is qualified by a footnote which, again, points the other way: “Detainee deaths” includes detainees who have died after testing positive for COVID-19 while in ICE custody; COVID-19 may not be the official cause of death. That seems like a risk of overcounting, rather than undercounting.

Perhaps ICE detainees are in excellent health in general, and thereby better able to resist disease. The American Medical Association would not agree with that theory, but what do they know? Coastal elite experts, probably.

What about the demographics of the ICE detainee population? Those figures are hard to come by — ICE apparently does not provide them — but an outfit called Freedom for Immigrants came up with data on the age distribution of detainees in 2019 that provides at least a clue:

Through the same link, there seems to be data that says that the median age of people deported from ICE facilities is 30. By comparison, the median age in the United States is about 38. The population in ICE facilities, therefore, is almost certainly significantly younger than the United States in general.

Furthermore, eyeballing that chart above, the ICE facilities seem to have very few people over the age of 70, which represents the preponderance of Covid-19 fatalities in the general US population.

We lack both the inclination and the data crunching skills to line up the ICE fatalities against the US population case fatality rates, and in any case that is a fool’s errand, because (i) we don’t know the ages of the six ICE detainees who have died of Covid-19 to date, and (ii) it is obvious that most ICE detainees have been tested for Covid-19 while perhaps a quarter of Americans have been even now. We can say this, though, looking at the CDC data: As of a couple of days ago, only 1802 Americans under the age of 35 had died of Covid-19, out of 182,095 total dead for whom data had been collected. That’s out of 79,890 deaths from all-causes in the under-35 population of 149,554,018 during the same time.

In other words, if you are under 35 you had a 0.053% chance of dying of anything in the last six months or so, and a 0.0012% chance of dying of Covid-19. Your chances of dying of anything were 44 times your chances of dying of Covid-19.

Under 35ers may be anti-social — there’s a surprise — but they are not knuckleheads, no matter what Phil Murphy says. At least insofar as they have accurately assessed their own risk from Covid-19. From the very legitimate point of view of somebody under the age of 35, the policy and social responses to the pandemic have come at enormous cost in both fun and opportunity for virtually no direct benefit. To the extent that young people are trying to slow the spread of Covid-19 — and a great many of them are — they are sacrificing themselves to save the most vulnerable in our society.

From that perspective, willing or not, today’s young are the new greatest generation, not knuckleheads.

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Ugliness

Nikola Corporation, and how not to deal with short sellers

September 11, 2020

The shares of Nikola Corporation (NASDAQ: NKLA), thought to be a Tesla (NASDAQ: TSLA) killer, shot up a couple of days ago on news that Nikola had cut a deal with General Motors. This was very painful for the many speculators who had sold Nikola stock short.

Yesterday, Hindenberg Research — a simply spectacular name for a short-side research firm — published a scathing and, it must be said, hilarious report with an awesome title: “Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America.” There’s a lot of great stuff in there, for those of you who enjoy that sort of thing. Nikola’s founder, Trevor Milton, comes in for some, er, arresting allegations. The authors make him sound like the Elizabeth Holmes of his industry, for those of you who chortled over the Theranos saga.

Regardless, Nikola responded this morning with a press release that purports to “refute” Hindenberg’s rather detailed allegations. It actually does no such thing, other than to deny them wholesale and to announce that the company had purchased the services of the big law firm Kirkland & Ellis LLP. Nikola also promises to “bring the actions of the activist short-seller, together with evidence and documentation, to the attention of the U.S. Securities and Exchange Commission.”

Oooh. Hindenberg must be quaking in its Cole Haans.

This is, of course, the worst possible response to a short attack. In addition to activating the Streisand Effect, Nikola and poor Trevor — we refer to these electric car dudes by their first name, apparently — have only persuaded the normal reader that the short claims must be true, or substantially so.

So what should Nikola have done? Well, we have some experience in this realm, including a first response, 25 years ago, along the lines of the Nikola “refutation” and the retention of a scary law firm. Driven as it was by the founder’s ego and our own youth and inexperience, the Nikola approach didn’t work, and it only made the public relations problem worse.

Our advice to companies under short attack consists of the following precepts:

  • Never let them see you sweat, because they will think they are on to something. The company’s line at all times should be “we will prove our value by executing and delivering on our commitments.”
  • Respond to alleged facts with factual responses in an appropriate forum after considered deliberation.
  • Skip the big legal threats. The First Amendment protects analytical research, and short sellers usually write their reports with a smooth sophistication that sustains their 1A defense.
  • The board should consider hiring Big Law not to threaten, but to do an “independent investigation” of the allegations, and promise transparency.
  • Finally, remember that the only people who absolutely must buy your stock some day are short sellers. The smart executive smiles and answers their questions just as if they were supportive longs. Calm execution and confident humility will rattle the shorts back.

Of course, this excellent advice — trust us, we’re right — is not even slightly useful if your company actually is a steaming pile of fraud.

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Coronavirus

The Sturgis “super spreader” kerfuffle and what it says about contact tracing

September 9, 2020

Nothing irritates the Covid-era chattering classes more than redneck mask deniers, so you damn well knew that the annual Sturgis motorcycle rally was going to attract Karens in the professoriate like, well, bikers to Sturgis. Faster than seems possible, a German think tank called the IZA Institute of Labor Economics pumped out a 63 page study, which we may read some day, that purports to show that 266,000 cases of Covid-19 stem from that rally. The study looked at anonymized cellphone location data, tracked the Sturgis migration and subsequent diaspora, and then calculated excess cases in the parts of the country to which the bikers dispersed. The study also estimates that all those Sturgis cases will end up costing more than $12 billion to clean up.

Here’s the more accessible write-up from The Hill for those of you who are as disinclined to read 63 pages as we are.

We have our doubts about cellphone location data studies — the University of Texas epidemiologists have been relying on such data for their own projections, which have been systematically overstated — but that is not the point of this post. Rather, we were riveted by this tidbit:

Health officials have linked at least one death to the rally: a male biker in his 60s with underlying conditions. At least 260 cases in 11 states have been officially connected to the rally by government officials.

Wait, what? Our many thousands of contact tracers have found a grand total of 260 cases, notwithstanding the headlined projection of 266,000 cases?

We respectfully suggest that either the IZA Institute of Labor Economics cellphone study is wildly wrong — by three orders of magnitude, seemingly — or our many thousands of contact tracers are a complete waste of time and money.

If you can think of a third explanation, please suggest it in the comments.

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Austin controversies Coronavirus

Modeling panic in Austin

September 1, 2020

We do not have the data science skills to answer a question that troubles us, to wit the extent to which epidemiological models have over-estimated risk of Covid-19 and thereby influenced suppressionist responses from politicians. We can, however, peek at a couple of proximate examples and ask a few questions.

In Austin, the celebrated University of Texas epidemiologists have effectively driven the local policy response to the pandemic, because what politician in this town can say “I don’t believe everything UT scientists say?” Not gonna happen, no way, no how. We do not always, or even frequently, agree with Austin’s Mayor Steve Adler, but our unqualified commitment to intellectual honesty compels us to feel his pain. In this “we believe science and definitely Hook ’em” town, Adler’s got to do what the UT epidemiologists recommend whether or not he privately worries that they might be wrong.

The main page for the UT projections is here. Anybody can scroll around and look at current projections for cases, hospitalizations, and deaths from Covid-19 over time. There also seems to be the archived data necessary to see past projections, but that requires the aforementioned data science skills we do not have in our otherwise vast armamentarium.

We do, however, have a few examples of historical predictions that make us worry that the UT disease forecasters have pushed Mayor Adler and Texas Governor Abbott toward pandemic response policies that were and are more restrictive than necessary or healthy.

On March 24 the team at UT presented this report to the Austin City Council and other learned local officials. On page four one finds a summary of the forecast for the key metrics we were all worried about in late March lined up with the policy response:

The “Austin-Round Rock MCA” includes Travis, Williamson, Hays, Caldwell, and Bastrop counties in central Texas. As of August 17, the aggregate deaths attributed to Covid-19 in those counties over five months was 581 (link) out of a population of roughly 2.2 million (for those of you keeping track at home, that is roughly 9 days of all-cause deaths for a typical US population of 2.2 million). Given that the death estimates in the bottom row of the table above are median projections at various levels of social distancing since March 23, one might conclude that the five counties in question have done a rather extraordinary job of social distancing, having reduced aggregate human interaction by between 75% and 90%.

Then again, one might be an idiot.

We do not believe that outside of a few highly compliant affluent neighborhoods in Austin itself the regional population has reduced its interaction by anything close to 75%, much less 90%, in the last five months. Any late-spring tour of Williamson County (“Wilco” is the second largest in the metro area with more than 500,000 residents) revealed virtually no mask game until the mandate and very little regard for the hazards of the disease or the case counts over which the media obsess. This is not just our impression, but the observation of our astute scientist daughter, who lives in Wilco and has been known to vent to her father on the topic.

Then there is Austin proper. Beginning in late May and for weeks thereafter, Austin hosted massive public demonstrations, which were masked up but not much distanced and naturally flowed in to the reopened bars. Grabbing a few beers after screaming at cops in 95 degrees is, actually, completely understandable and predictable. We were there. We saw no end of cute young people with neo-Marxist signs and colorful hair packing in to our favorite craft breweries after (actually) mostly peaceful demonstrations.

And never mind the insouciant youth in the parks. Egads.

Yet we are to believe that Austin and its environs have been 75-90% socially distant?

Not a chance on God’s green earth.

Now, you might say we should cut the UT team a break, insofar as nobody knew much about SARS-CoV-2 in the third week of March. Fair enough. So how has the UT team done more recently?

On August 10, we captured UT’s death projections for the State of Texas on August 31.

As of August 10, the UT epidemiologists projected that 23,460 Texans will have died from Covid-19 by August 31, within a range of 20,665 to 26,726.

Oops.

To be completely fair, the actual August 31 number will probably rise by 100-200 as the death certificates for the last few days trickle in, but UT still will have overshot its three week forecast for Texas by 80%.

What about more recently? We also grabbed an August 18 screenshot.

Once the UT team got within a two week window, they did hit the forecast range. Giving them full credit for late death certificates they hoisted their chin above “Min Projected” 12,602 deaths. We cannot resist noting, however, that the UT scientists gave themselves a massive 64% difference between that the high end of their range (20,672) and the low end (12,602) a mere 13 days out. Plenty of us dashboard doomscrollers could have hit the side of that barn without all that UT computing power.

Believe science, indeed.

Now, notwithstanding the fun we have had with this post, the serious point is not to castigate these epidemiologists or epidemiologists in general. No doubt they are working hard to improve their forecasts, and indeed they are contributing importantly to the policy debate. However, the demands from the media and the political left to “believe science” ought not actually mean “believe models.” Because many models, including the models much relied upon to inform pandemic response policies, are wildly wrong even when developed by the actual best people.

Models of anything, unleavened with judgment forged in honest and open debate, are not “science” at all. Unfortunately, we have of late had very little honest and open debate, and that is a huge problem.

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Coronavirus

Covid-19 policy: Assertions and provocations

August 29, 2020

Our last post tackled various of the paradoxes embedded in the development of a Covid-19 vaccine, which in reductionist form come down to these two points:

  • Setting everything equal, vaccine trial sponsors will be able to unblind their Phase 3 clinical trials and see if their vaccine is effective sooner if disease is spreading rapidly in the population in which they are studying their vaccine than if it is not. In other words, more cases now gets us the vaccine faster.
  • Setting everything equal, vaccines that are less effective will get to a data “readout,” as the biotech folks say, faster than vaccines that are more effective. (The reasons for this are complicated and highly qualified, but the short version is that trials will be structured to read out when a set number of infection cases are registered, in the aggregate, in both the vaccine and placebo arms of the trial. If a vaccine is super effective, the vast majority of the requisite infections for a readout will have to come from the placebo arm. If it is less effective, there will also be a fair number of infections in the vaccine arm — even if still fewer than in the placebo arm — and those will help generate the requisite number of cases for the readout faster.)

With that background in mind, our love for the ironic and our fellow man leads to a number of assertions and provocations.

Assertion: Because Covid-19 is just not that dangerous for most people who get it, Americans are distancing, avoiding family and social life, staying out of crowded indoor places (meaning most fun places, plus church), and wearing masks only because they expect a technological solution — either a vaccine or a reliable treatment — in a matter of months rather than years. Vaccines have gotten by far the most attention, including from both the president and Dr. Anthony Fauci, so Americans are more focused on them than potential transforming therapies. So, it is only the prospect of a near-term vaccine that is sustaining all this social distancing, at least for the many people who are not at high risk of mortality or permanent consequences of Covid-19, or have not been scared in to thinking they are.

Provocation: Looked at this way, the Trump Administration’s Operation Warp Speed is the most important government policy sustaining American compliance, because it dangles the possibility of a near term vaccine. It, er, trumps all the bleatings of all the governors and mayors and scientists, which would not keep Americans away from each other and out of the bars — “Covideasies” would definitely become a thing — for very long if we did not expect a vaccine for, say, the usual 5-10 years.

Assertion: Donald Trump and Anthony Fauci have been more consistently aligned on the prospects for a near-term vaccine than on many, if not most, other issues. We believe that is because Fauci understands that hope for a vaccine is sustaining American social distancing. He probably also actually believes we will get a vaccine quickly, which certainly helps, but scientific reticence and regard for his own reputation might ordinarily restrain him from making aggressive Trump-esque predictions. We propose that Fauci has made those predictions because he believes that believing in a quick vaccine will help fight the disease now.

Assertion: As has been pointed out elsewhere, in the United States we have a profound division, aligned in large part by political tribe, about the purpose of social distancing, rules that shut businesses, and mask mandates. One camp, aligned with the left, believes that public policy ought to work almost without qualification toward the suppression of Covid-19 cases. This “disease suppressionist” camp believes that disease suppression is a necessary precondition to confident social and economic engagement. It further believes that disease suppression is sustainable for a long time via a regime of “testing and tracing,” whereby we test for the disease incessantly, and trace the contacts of people who test positive, presumably to isolate them.

The other camp, aligned with the right, are “flatten-the-curvists,” and believe that the point of social distancing during this pandemic, at least, is only to protect the capacity of the healthcare system to treat both Covid-19 cases and the usual diseases and injuries. The curvists do not support reducing cases of Covid-19 as an end in itself, believing both that “testing and tracing” will not work in the United States because people do not trust government and will not cooperate, and also that most people will in any case be infected eventually at little or no consequence before a vaccine becomes widely available. The curvists look forward to the day when enough people have had the disease or are otherwise immune that the chances that a still-susceptible person gets the disease in any encounter become very small. This is not the same as “herd immunity,” which is a mathematical concept, but the idea is that once infection has spread significantly in a population the number of new cases will dramatically decline regardless of government policy. A leading thoughtful articulation of this position is here. It is a long read, but worth your time.

Provocation: Disease suppressionists want to stamp out community spread of the disease over the long term, but if their policy were implemented and successful in the United States there would be no chance for vaccine Phase 3 trials to read out on anything like the promised schedule. If the political support for disease suppression is in part predicated on the hope for a vaccine sooner than the usual 3-5 years, then disease suppression is an inherently self-defeating policy because it delays vaccine trials.

When we have pointed this out to suppressionists in friendly social media interlocution, they have usually asked whether we could suppress cases in the United States and sponsor vaccine trials in other countries, such as Brazil, that have allowed Covid-19 to spread wildly. While such free-riding on developing world misery might deliver vaccine data quickly, it carries with it a host of practical and moral questions. Among them, would Americans then have the same claim on the first doses of the vaccine, either morally or lawfully? And — sometimes we crack ourselves up — do these mostly left-wing suppressionists who advocate doing vaccine trials elsewhere have a good justification for their rank neo-colonialism?

No, actually that is a real question.

Assertion: If you need spreading disease to conduct an adequate vaccine trial, how is China, which claims to have suppressed the Wuhan virus virtually out of existence, conducting vaccine trials? Partly via the aforementioned neo-colonialism:

Ironically, China is not in a position to test the vaccines on the required scale at home because it’s been so successful at containing the spread of the virus within its borders…

…China has already confirmed it is involved in official, advanced trials of a vaccine on thousands of people in countries including the UAE, Peru and Argentina.

This, however, is the seriously Commie part:

Then there’s unpublicised trials. In what appears to be linked to the emergency powers vaccination experiments, and not the official phase three trials, a group of Chinese miners were refused entry to Papua New Guinea recently after their employer revealed it was using them for vaccine trials.

Some 48 workers were injected in early August, according to a statement from the Chinese state-owned company that runs the mine in the Pacific islands nation.

The PNG authorities were concerned they’d been kept in the dark and that some of the workers may have tested positive for Covid-19.

Now, we are not against running clinical trials in special situations, such as on the employees on the insides of mines. Meat-packing plants or college campuses might be good places to recruit for vaccine trials. However, one might not be faulted for wondering, you know, out loud, whether such imperialist running dog niceties as informed consent mean anything at all when the employees in question work for a business owned by a police state.

Provocation: As the linked article makes clear, the Chinese are very interested in using their vaccine for their virus for geopolitical gain. We’ll say it: We guess that in addition to taking “volunteers” from state enterprises, the Chinese are conducting “challenge trials,” in which vaccine trial subjects are deliberately exposed to the disease. Challenge trials are rarely ethical in running dog countries, but we doubt that a Chinese institutional review board would have many qualms about approving them to speed a Covid-19 vaccine program that is an important project of the state.

Hey, wait a minute! Concentration camps are famously useful for human experimentation. How convenient that China has a few.

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Coronavirus Freedom ain't free

A Covid-19 vaccine paradox and a few related speculations

August 8, 2020

To the extent we are all waiting for a vaccine to let us “get back to normal” — whatever “normal” is for a traumatized and transformed world — we will wait much longer if we do “too good” a job controlling the spread of Covid-19 now. This fact leads to a number of interesting and troubling speculations, of which more below after some background.

Earlier this week we received a report from one of the Wall Street analysts (Michael Yee at Jefferies) who covers Moderna, Inc. (NASDAQ: MRNA), the developer of one of the front-running vaccines for the prevention of Covid-19. It came by email and has no public link, so we shall provide a fair use reproduction of its key point, which is that the pace of the clinical trials to ascertain the safety and effectiveness of the various vaccines for Covid-19 depend highly on the rate of infection.

Big Picture: With MRNA’s recent initiation of the Phase III, we’ve fielded many investor questions as to (1) the different enrollment and infection scenarios and (2) various timing at which we could see data. Based on a statistical model and range of scenarios, we think fast enrollment and above-average infection rate in hot spots will drive a good chance (70%) we could see MRNA data by Oct/Nov. We think PFE/BNTX [Pfizer’s program – Ed.] will be similar if not earlier into September due to global enrollment and other minor details (shorter 3-wk dosing regimen) and AZN [AstraZeneca’s program – Ed.] may be Fall w/ more EU based enrollment and infection rate sensitivities.

Perhaps a short bit on vaccine trials would be useful. Basically, the trial sponsor rounds up thousands of volunteers who are at theoretical risk to catch the disease being studied, in this case Covid-19. These volunteers receive either the vaccine candidate or a placebo, and nobody — neither the volunteers, nor the people administering the injections or taking care of the patients — knows who got which. The study has a “statistical plan” — essentially, the scientific hypothesis being tested in the experiment — that depends on a certain number of people getting the infection over a certain period of time. Once you have hit that number of new infections, plus a few more to be on the safe side, you crack the code and figure out whether the volunteers who got the placebo had a greater propensity to be infected than the volunteers who got the vaccine candidate. If so by a statistically significant difference, voila! You’ve got yourself a vaccine.

Therefore, the faster the disease is spreading, the faster you will get to the “end point” of the trial. You would not conduct a Covid-19 trial in New Zealand or most European countries right now, but Mississippi might make sense.

Yee’s model, which includes such things as assumptions about infection spread under a “bear case” (low rates of infection, which would be good for the people not getting sick but delay the data readout for the Moderna trial and therefore bad for Moderna’s stockholders and “getting back to normal”) to a “bull case” (the reverse), suggests that we could see an “interim” readout — some statistical plans allow for an early peek at a subset of the patients — under a high infection scenario as early as late October 2020 and final analysis by Thanksgiving.

If, however, we break the back of the virus and infections decline dramatically, Yee’s model delays a readout — an essential predicate for FDA approval, even on an emergency basis — until March 24, 2021.

As we all have learned, five extra months of this shitshow comes at a huge cost, not just economically but emotionally, socially, and culturally.

Nobody planned it this way, but the spread of the infection in the United States right now (as opposed to earlier in the year when there were no vaccine candidates in Phase 3 trials) has the potential to be of enormous value to those parts of the country which have already been through their big spike. Because science. Let that sink in, Andrew Cuomo.

All of this arouses interesting political thoughts which will please nobody. President Trump’s fortunes may depend on infections declining substantially. There is at least some evidence that Trump’s poll results are correlated with daily infections in the United States. At the same time, though, he and his team have made all sorts of rosy predictions about the speed with which a vaccine may be available.

Going out on a limb here, but it doesn’t seem as though either Trump or the reporters bathing him in snark every day realize that a fast track to a vaccine depends on a high rate of infection somewhere in the United States. We have not seen anybody on the left or in the press accuse Trump of promoting infections to speed the vaccine trials. We find it difficult to believe that in the current climate that accusation would not surface, at least as a “some critics say” smear, had anybody thought of it. And, for that matter, neither has Trump raised the faster vaccine timeline as a silver lining of the high infections, which one could easily see him doing. When that tweet comes, you read it here first!

One can also imagine that the arc of infections will let through a vaccine — say, Moderna’s — that is not the best ultimate vaccine, and then delay or prevent other vaccines that might be better. No vaccine will be effective on everyone (which is why a Covid-19 vaccine will provoke complex political and social questions). Yee imagines that Moderna’s vaccine might range from 50% effective to 90% effective, so we don’t really know anything other than that no vaccine works on everyone. Well, a 50% effective vaccine first out of the gate would be a lot better than nothing, and it could easily happen. Why? Because the lower the effectiveness of the vaccine the faster the clinical trial will experience the required number of infections to hit the end point and final readout!

But that will drive another paradox: What if the first approved vaccine drives infections to the point where it takes forever to prove the effectiveness of subsequent superior vaccines, but not so low as to move us to “herd immunity”? That would suck, because it would make it politically much harder to require universal vaccination, which will be essential if we are going to protect people whose immune systems do not generate resistance to Covid-19 even after vaccination.

But that’s a whole ‘nother thing.

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Coronavirus Yellow Journalism

A short note on the Moderna vaccine flap

May 20, 2020

Last night, various of my social media interlocutors shared this opinion piece from the Washington Post, which chided biotech fave Moderna for releasing early data from its Phase 1 trial studying its Covid-19 vaccine candidate. We wrote about Moderna’s announcement on Monday morning.

The gist of the WaPo piece is that “the rush to share scientific progress in combating covid-19” is undermining faith in medicine and science. Further,

Private companies, governments and research institutes are holding news conferences to report potential breakthroughs that cannot be verified. The results are always favorable, but the full data on which the announcements are based are not immediately available for critical review. This is “publication by press release,” and it’s damaging trust in the fundamental methods of science and medicine at a time when we need it most.

The most recent example is Moderna’s claim Monday of favorable results in its vaccine trial, which it announced without revealing any of the underlying data. The announcement added billions of dollars to the value of the company, with its shares jumping almost 20 percent. Many analysts believe it contributed to a 900-point gain in the Dow Jones industrial average.

Regarding this, we have a few observations.

First, a quibble, but a relevant one. Moderna is not a “private” company as Americans use the term. It is a public company, meaning that the public owns its shares, and as such Moderna has the duty to make public “material” information. There is flexibility in the timing of such announcements, and biotech companies often wait until a medical meeting of specialists in the field to release early data in a “poster” (which isn’t peer reviewed or reviewed at all), but the established fact of the massive reaction in the stock price — and indeed the entire stock market — is powerful evidence that the information is “super material” and ought to have been disclosed forthwith, as Moderna did. We were trained in our youth as a securities lawyer and spent many years advising companies as to their obligations, and can easily imagine that we would have advised Moderna to get its interim data out quickly.

Second, Moderna’s announcement was standard operating procedure in biotech — an industry we know more than a little about — and might well have happened whether or not Covid-19 were the subject. For better or worse, biotech companies are assessed by investors on the basis of “catalysts,” which are upcoming events that are expected to drive the stock price. Since such companies are in constant need of capital since they rarely actually become profitable themselves, they are routinely and as a matter of course quick to publish clinical data that might act as a catalyst. Again, completely normal. So normal that Moderna raised money on the news, as anyone familiar with the industry would have expected it to do.

Third, there is a significant short interest in Moderna, more than 22 million shares as of April 30, the most recent date for which data are available. Measuring the price gain in the stock between April 30 and last night, the shorts took it in the shorts to the tune of almost $800 million in losses. We suspect that some of the media pushback we are seeing today (and especially this piece from Stat) have been promoted by investors betting that Moderna’s stock will decline. Again, completely normal in biotech.

Fourth, regardless of the small number of patients in the Moderna data reported Monday, we know more than we knew on Sunday night. The prospects for a successful vaccine have increased, even if still far from certain. Given that the world has sacrificed trillions of dollars worth of wealth to fight Covid-19, and will sacrifice trillions more, a risk-adjusted net decrease in the estimated time to a vaccine of only a few days would easily justify a big jump in the stock market.

Have faith. There are more than 100 vaccine candidates, and at least 10 that are credible and reasonably far along, all things considered. Both Moderna’s announcement and the criticism of it are completely routine in biotech, and in that we also ought to take some comfort.

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Coronavirus

Vaccine news you can use

May 18, 2020

Moderna, Inc. today announced outstanding early data for its Covid-19 vaccine candidate, in a trial led by the National Institute of Allergy and Infectious Diseases (most Americans will recognize NIAID as Dr. Anthony Fauci’s agency), which is part of the National Institutes of Health. Key points from the press release follow, with some plain English translation.

Dose dependent increases in immunogenicity were seen across the three dose levels, and between prime and boost within the 25 µg and 100 µg dose levels. All participants ages 18-55 (n=15 per cohort) across all three dose levels seroconverted by day 15 after a single dose. At day 43, two weeks following the second dose, at the 25 µg dose level (n=15), levels of binding antibodies were at the levels seen in convalescent sera (blood samples from people who have recovered from COVID-19) tested in the same assay. At day 43, at the 100 µg dose level (n=10), levels of binding antibodies significantly exceeded the levels seen in convalescent sera. Samples are not yet available for remaining participants.

At this time, neutralizing antibody data are available only for the first four participants in each of the 25 µg and 100 µg dose level cohorts. Consistent with the binding antibody data, mRNA-1273 vaccination elicited neutralizing antibodies in all eight of these participants, as measured by plaque reduction neutralization (PRNT) assays against live SARS-CoV-2. The levels of neutralizing antibodies at day 43 were at or above levels generally seen in convalescent sera.

Translation: The trial is looking for the best dose, and tested three dose levels on 15 patients each, for a total of 45 patients, two administrations of vaccine for each. Every patient developed some antibodies within two weeks of the first dose. Eight patients progressed to 43 days, which is two weeks after the second dose, and all 8 developed antibodies at or higher than levels seen in patients who have recovered from Covid-19.

The vaccine candidate was generally safe and well-tolerated, and a Phase 3 trial (the trial designed to prove safety and effectiveness to statistical significance, which is needed for regulatory approval) will begin in July.

For those of you for whom hope is a strategy, which is most of us, this news is very good.

The prospects for a vaccine against Covid-19 are very good, hedging about the durability of immunity notwithstanding. There are more than 100 other programs working on Covid-19 vaccines around the world, and tremendous pressure, including geopolitical competition, to get to the finish line first.

Following, a fair use excerpt from a Wells Fargo analytical report on vaccine programs (sadly, no link):

Summary. This is the inaugural issue of our Covid-19 Vaccine Tracking Report. In this report, we are tracking a select set of vaccine candidates targeting the novel coronavirus designated SARS-CoV-2. These candidates must meet three criteria: (a) currently in human
clinical trials, or with imminent starts, (b) sufficient capitalization to
carry through multiple R&D stages, and (c) partnerships or
manufacturing plans to credibly release substantial quantities of
vaccine within the next year.

Current Situation. Well over a hundred Covid-19 vaccine candidates
are in various stages of research and development. These vaccine
candidates target the SARS-CoV-2 virus, typically one or more aspects
of that virus’s spike (S) protein. Virtually every vaccine type that has
ever succeeded with some other pathogen (e.g., inactivated, subunit,
vectored) or is viewed as promising new technology (e.g., DNA, mRNA) is being explored. Our three criteria lead us to track ten vaccine candidates being developed by BioNTech, CanSino, Inovio, Johnson & Johnson, Moderna, Novavax, Sanofi, Sinopharm, Sinovac, and the University of Oxford (alphabetically by sponsor)….

Timing: We anticipate that positive data at end of phase 2 trials could
be sufficient to trigger EUA [Emergency Use Authorization] status with national regulators. Based on public statements to date, this could be as soon as late 2020 for several of the candidates. At present, JNJ and SNY project later trial starts and thus later EUA decision points. Presumably, those two companies are assessing how to compress their own development timelines. Once products are distributed under EUA status, some of the highest risk populations can be offered some degree of protection. Meanwhile, data collection will continue, even as distribution broadens, to build the evidence base that would warrant full reviews and approvals from FDA, EMA, and their counterparts
around the world.

For whom: We expect initial supplies of Covid-19 vaccines to be focused on people at highest risk of infection or essential to community function. Some of these will be occupational groups (e.g., healthcare workers, first responders, grocery-store workers, schoolteachers). Others will be social groups (e.g., nursing-home residents, seniors, communities with high attack rates). Starting points for prioritizing vaccine distribution will be similar to those used in previous vaccine shortages (e.g., influenza vaccine in 2004 and 2009)….

Assessment of Production Capacity. Ideally, to assess leading manufacturers’ plans for Covid-19 vaccine production capacity, each company would describe a common set of production goals and corresponding dates. For example, doses to be produced through December 2020, as well as goals for doses per month to be released in June 2021 and in December 2021. In reality, the companies’ public statements provide varying levels of detail, tempered by uncertainties inherent to technology transfer, industrial scale-up, facility repurposing or construction, dosing requirements not yet settled, regulatory approvals, and related factors. A major source of uncertainty will be resolved for each candidate once the human dose is set for the phase-3 trials of vaccine efficacy. The quantity of protein per dose bears directly on how many doses can be produced from any given manufacturing asset (e.g., fermenter).

Bold emphasis added.

The very last point provides some important context for the Moderna trial discussed at the top of the post. Why not just go for the highest safe dose to get the most robust antibody levels? Because that will slow down production and delay vaccination for millions of people. The dose determination needs to be optimized, not for profits — although we certainly expect some ignorant sniping in that direction once the popular press starts focusing on dosing decisions — but to maximize the number of people who can get the vaccine, even if some of those people will not develop antibody levels that confer perfect immunity. Whether there is a magical dose level for any safe and effective vaccine that reliably confers immunity and allows for grillions of doses very quickly remains to be seen.

Stay tuned.

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Coronavirus

The Seven Horsemen of the Apocalypse

May 16, 2020

In dramatic lore (and great sportswriting), the Four Horsemen are Famine, Pestilence, Destruction, and Death. In St. John’s original construct, “War” stands in for Destruction. We prefer Destruction, because it captures the many types of war not imagined in Biblical times.

This morning we reread the first paragraph of Barbara Tuchman’s classic work on the worst century in Western history, A Distant Mirror: The Calamitous 14th Century, reproduced below. Tuchman proposed seven horsemen:

Plague, war, taxes, brigandage, bad government, insurrection, and schism. Broadly defined, we’ve got six of them running around the United States right now. “Brigandage,” which involves unemployed soldiers gallivanting around the countryside looting the undefended and disarmed locals, is common in the world but has not been a feature of American life since the years following our Civil War, no matter how you might characterize gun rights demonstrations of recent moment or the violent crime of the ’60s to the ’90s.

Plague? Check. Not literally “plague,” of course, which is a specific disease with a precise cause and an effective remedy, but plague in the sense that people who do not consort with medievalists or infectious disease experts use the word.

War? Nineteen years and running. We even confess to having supported those wars once upon a time, which is more than most people will admit. My guess is that nobody will care so much about terrorism now, so maybe we should generally withdraw and let all those people resume killing each other. But what about “Destruction”? We have made a policy decision (which we admit we supported, for a while) to destroy our material well-being to save lives from plague, and there are those who argue that we need a good deal more destruction still. Maybe that policy choice is yet the most cost effective — we won’t know for several years which choices were best — but all Americans, including especially the WFH overclass, ought to have the courage to call it by its name: Destruction.

Taxes? They are coming hard. Beautiful taxes like you’ve never seen before, in every American jurisdiction.

Bad government? No matter who you are, you have your favorite examples. As we have pointed out, everybody agrees that there have been massive failures of government in the United States. One’s opinion as to the cause of those failures is a Rorschach test for one’s pre-pandemic predilections.

Insurrection? We are closer than we have been for some time. Google “defies.” We have hair salon owners defying judges, mayors defying governors, and governors defying the president, all of which seems weirdly reasonable under the circumstances. Nobody is shooting yet, but we are one out-of-proportion bad judgment enforcement action away from another Ruby Ridge or Waco. Brace yourself for the “national conversation” about that.

Schism? The Papal Schism of the 14th century was so scary because each pope excommunicated the followers of the other. When one believes that this life is the misery one must endure for immortal paradise, excommunication is the equivalent of killing one of Tolkien’s Elves. The loss of immortality is a tragedy greater than mere mortal death, because the sacrifice is so great. Our schism today, which involves profound contempt verging on unqualified hatred for people who have a different vision of the meaning of the United States, destroys the purpose of our country, unique in the world, that moved our extraordinary ancestors to overcome challenges vastly more difficult than Covid-19. That is, or would have been to many Americans of old, a tragedy greater than mere mortal death.

The most profound sentence in Tuchman’s first paragraph may, unfortunately, be the last: “All but plague itself arose from conditions that existed prior to the Black Death and continued after the period of plague was over.”

Let us hope that history does not repeat itself.

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Austin controversies Austin politics Coronavirus Yellow Journalism

Atrocious reporting, Austin edition

May 14, 2020

“Atrocious” is perhaps a bit strong, but headlines don’t count, right? Is that not one of the defenses erected by “journalism” fan-boys to protect click-baiting sensationalism by the media?

We saw two very locavore Austin stories in the last day that got our goat. First, Austin broadcaster KUT reported that “Austin Public Health’s Preliminary Data Shows Construction One Of Top Industries For COVID-19 Cases.” The inside baseball here is that Austin’s mayor, Steve Adler, banned construction, except for “affordable housing,” in his first shelter-in-place order. We derided Adler’s order in this regard, and were delighted when the Governor Abbott big-footed it a few days later.

Among the happy few on Austin’s political right, word spread that the city, irritated as it was to have been stomped on by the State of Texas, started testing the workers at construction sites in the hope of finding a hot mess of cases, all of which leads back to the KUT story, which reports vaguely, to wit:

Austin Public Health officials say they’re still crunching the numbers, but their investigations so far show construction joins long-term care facilities, health care and grocery stores as the industries hit hardest locally by COVID-19. The officials say they are still working to determine exactly how many cases have originated and spread from construction sites.

Never mind that this strikes us as the flimsiest reed upon which to hang the construction industry. The article and its redoubtable author, Jennifer Stayton, does not appear to say, or even ask, whether any of those construction workers, or their families, are among the minuscule number of people in Central Texas actually hospitalized with the Covid. Why not? If they don’t end up in the hospital, then who cares? Or did we not hear the number because construction workers, who are outside working hard under the Texas sun all day, are young, fit, not fat, and have strong lungs and plenty of Vitamin D circulating in their systems? Is it possible that not one of them have ended up in our hospitals?

Yes, it is possible. That would, in fact, be the single most relevant question. But neither Ms. Slayton nor the Austin public health bureaucracy is ‘fessing up, or even recording that the question was asked and not answered.

Then there is this sub-headline from Austin Patch: “2 weeks after Abbott directed the state economy to reopen, 7 more in Travis County have died and the illness count grows by 117 in 2 days.” Yeah, well, if you believe the WHO, which people who gun for Texas Governor Greg Abbott are oriented to do, “[a]mong patients who have died, the time from symptom onset to outcome ranges from 2-8 weeks.” So, yeah, Abbott’s reopening order had nothing to do with most, if not all, of those deaths.

It would be so refreshing if reporters, especially local reporters, would spend a few minutes with the search engine of their choice before throwing gasoline on the social fire.

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