The Road Less Traveled in Biotech: Abe Ceesay on The Long Run

Today’s guest on The Long Run is Abe Ceesay.

He’s the CEO of Cambridge, Mass.-based Tiburio Therapeutics.

Abe Ceesay, CEO, Tiburio Therapeutics

The company is developing a couple of drug candidates for rare neuroendocrine tumors. It raised $31 million in a Series A financing in January 2019 from NEA, Lundbeckford Ventures, Longitude Capital, and Alexandria Real Estate Equities.

Abe is in his early 40s, and has gotten to this point as a first-time CEO through a pretty unusual journey by biotech standards. He didn’t go to medical school, or get a PhD. He didn’t really know what he wanted to do for a while after graduating from college. He learned about biotech, fixed his gaze on the amazing things happening around Kendall Square, and basically worked his tail off to get in the door as an intern at Genzyme.

Abe thrived in a series of roles at that pioneering biotech company, and that experience propelled him to where he is today.

Abe also happens to be African American. His life experience, especially his youth, is quite different from most people who end up occupying the corner office at biotech companies.

He’s thoughtful and open in this conversation. I think Abe is an inspiring person, and I’m thankful that he willing to come on the show, and reflect a bit on how the industry can create more space for people from diverse backgrounds who don’t always get the opportunity, but who do have something substantial to contribute if given a chance.

Please join me and Abe Ceesay on The Long Run.


Barring Foreign Talent Is An Assault on Biotech Innovation

John Maraganore, CEO, Alnylam; immediate past chair, BIO

As a first generation American (John Maraganore) and a proud immigrant (Jeremy Levin), we’re appalled by the relentless, short-sighted assaults by this Administration on legal immigration.

The latest attempt specifically aims to limit, and potentially shut down, immigration to America of the world’s best and brightest minds.

This is precisely the time we need these bright minds.

Jeremy Levin, CEO, Ovid Therapeutics; chairman, BIO

Thankfully, in light of a suit brought by MIT and Harvard, the Administration dropped its proposal that would have prohibited international students holding F-1 visas from staying in the United States if they were taking their classes online, as most students will be doing come fall.

Many international students are in the biological sciences and in medical schools. With COVID-19 spiraling out of control here, there is no good reason to limit the entry of international students and workers. There are good reasons to welcome them and their creative problem-solving skills.

Actions that prevent the best and the brightest students, scientists and technologists from coming to America are an assault on American innovation. These corrosive attacks are coming at an increasing pace. The threat to international students came just weeks after the Administration proposed restrictions on new H1-B worker visas. Officials claimed that the impact of such actions, when combined with extended restrictions on new green cards, would bar as many as 525,000 foreign workers from the country for the remainder of the year.

These workers are needed to do critically valuable work, including helping our country better respond to COVID-19.

These anti-immigrant directives, one after another, are like waves striking a shore; they relentlessly erode the competitiveness of many sectors dependent on driving innovation, including America’s biotechnology sector.

For decades, the U.S. biotech industry was envied around the world for its success in attracting brilliant minds from abroad who sought to advance their education and careers here. The formula for success is rather simple. The generous support of US taxpayers for the National Institutes of Health, the farsighted establishment of excellent research institutions that compete for those federal grants, and a dynamic entrepreneurial economy that translates scientific discoveries into medicines are all part of what have combined to make the US the world leader in biomedicine.

All of it begins with people.

The people drawn to be part of this amazing enterprise as young students – immigrants who came here, began to fulfill their career potential, settled down and started families here – they are the ones who helped make our country the most powerful producer of novel medicines, vaccines, diagnostics and innovations in environmental, industrial and agricultural biotechnology.

Just over half of the 69,000 biomedical researchers in the United States are foreign-born. Of the Nobel Prizes in medicine awarded between 1960 and 2019, nearly half were awarded to immigrants who came to the United States to study and work. International students represent over 20 percent of all STEM degrees at American universities and 44 percent of PhDs.

Many of these graduates gain skills here in the US and then go home to save lives and contribute in their own countries. But the majority choose to stay here: The National Science Foundation reported that nearly three out of four foreign doctorate recipients were still in the United States 10 years after receiving their degrees.

CEOs born outside the U.S. now lead some of the most important biotechnology companies racing to find treatment and vaccines for COVID-19. Research suggests that immigrants are overrepresented compared to the general population as founders of biotech firms, and are more likely to start companies focused on human therapeutics.

Raising barriers now against inventors and scientists places obstacles in front of what our industry can accomplish – and make no mistake, our industry is key to restoring normalcy through new treatments, prophylaxis and vaccines for COVID-19.

The virtual “Go Away” sign we’ve posted in the form of immigration restrictions means scientific researchers, biomedical entrepreneurs, IT experts, doctors and nurses will find someplace else to study and then contribute to the nation that educated them.

We cannot afford to drive them away. Our competitive advantage as a country rests in large part on our ability to continue to attract the best and brightest immigrants.

Diverse perspectives enrich problem solving and lead to scientific breakthroughs. Every time we further restrict immigration or turn away foreign students, we put America and Americans at risk.  

Instead, we need to welcome and encourage the best and the brightest to come to the USA.  This is a great nation and with them we will retain and enhance our leadership.

Over the past decade, eight top pharmaceutical companies alone have received H-1B approvals for over 3,300 scientists. We’d like to double that, not reduce it. Rather than putting hurdles in front of foreign students, we’d like to welcome them with grants and loans to help them pay for the cost of American higher education.

Rather than giving in to short-sighted policies, we’d like to build upon America’s remarkable scientific achievements and vision of a nation that welcomes immigrants to our shores.

In his final speech as President, Ronald Reagan issued a warning:

“If we ever close the door to new Americans, our leadership in the world would soon be lost.”

It isn’t only the future prosperity of our nation that is at stake. It is our lives, the lives of our children and importantly America’s leadership of the world.

John Maraganore is the CEO of Alnylam Pharmaceuticals and immediate past chair of BIO; Jeremy Levin is the CEO of Ovid Therapeutics and the chairman of BIO.


Clinical Trials: High-Value Attack Surface For Pharmatech Entrepreneurs

David Shaywitz

There’s an emerging sense among early stage investors that there are profound opportunities at the intersection of healthcare and technology, and no shortage of white papers from consultants and venture groups addressing this topic.

Consultant white papers tend to be focused on the inevitability of “digital transformation,” emphasize the $X billion dollar opportunity, and argue that if large organizations don’t want to get further behind their peers, these are the steps they need to take, right now.  

Basically: carrot, stick, call-to-action.

VC white papers in this space are often written by tech investors seeking to take their talents to the giant pool of money they assume awaits them in healthcare. Having seen the impact of emerging technologies on other industries, they are keen to coax benighted healthcare services and biopharmaceutical companies into a brilliant, tech-enabled future. 

These vision documents typically reveal a sophisticated understanding of digital technologies, but a generalized, somewhat broad-brush, somewhat naïve, somewhat condescending view of the industry they’re proposing to either serve or disrupt (ideally one, then the other).

Enticed by what many see as a huge greenfield opportunity, more and more tech VCs seem to be taking a serious run at healthtech, as manifest in a series of dedicated investments.  

Most life-science VC firms, on the other hand, seem content, as one leading Boston-based life-science VC partner told me, “to stick close to our knitting.”

In part, this may reflect the remarkable contemporary explosion of life-science innovation, largely independent of digital/data technologies. Given the range of approaches now viewed as viable involving cell therapies, gene therapies, and “multi-specific” drugs, I can appreciate (and have also seen, first-hand) how many life-science investors feel they have their hands full just sorting through this embarrassment of intellectual riches.

Even so, some venture investors with established health credibility clearly are embracing the pharma/tech interface. 

By far, the most compelling expression of this I’ve encountered so far was a recent white paper from Bessemer Venture Partners, based in Boston and California. (Disclosure: I have no relationship with the group.)

One of the oldest venture firms around, and known for their arrestingly candid anti-portfolio (missed opportunities), Bessemer has historically pursued investments in both technology and health, including both healthcare services and life sciences. Recently, at least, their focus seems to be on the former — but I may be biased by the entrepreneurs featured on “A Healthy Dose,” a fantastic podcast co-hosted by Bessemer partner Stephen Kraus and focused on companies at the interface of healthcare services and technology.  

The recent white paper reveals an insightful view (which is to say, one with which I largely agree) of the promising, emerging interface between tech and pharma.

The whole piece is worth a read, but there are a few highlights that seem particularly noteworthy.

Their central thesis is that the “greatest entrepreneurial opportunities live across the clinical trials value chain.” They acknowledge the activity in other areas (such as “drug discovery engines” — where so much of the AI-in-pharma buzz seems to reside — and digital therapeutics – think of Akili’s EndeavorRX, described by the FDA (the FDA!) as “the first game-based digital therapeutic to improve attention function in children with ADHD.” 

In identifying clinical trials as an especially promising area, Bessemer echoes the thinking of pharma leaders like J&J head of data science Najat Khan and others, who consistently emphasize the outsized importance of finding ways to make clinical trials faster, better, and ultimately cheaper using technology. 

The Bessemer team also clearly recognizes some of the key adoption hurdles emerging technologies face in pharma. These include both the general challenges of introducing change (overcoming institutional inertia, or perhaps, more accurately, lack of inertia) as well as the more specific challenges of bringing novel digital clinical trial tools and approaches into a highly regulated environment. Uncertainty around FDA acceptance of these approaches, the authors suggest, remains among the most significant hurdles.

Within clinical trials, the Bessemer team sees five somewhat distinct areas of opportunity:

  1. Decentralized clinical trials
  2. Patient recruitment
  3. Remote patient monitoring
  4. Virtual control arms and real-world evidence platforms
  5. Supply chain optimization

While these represented areas of interest pre-COVID-19, the pandemic has clearly thrown into sharp relief both the value and need for the intensification of investment in these areas.

In their analysis, Bessemer astutely identifies key distinctions and value drivers. For example, within decentralized trials, they wisely distinguish between approaches that basically enable trials at home (like Science37), approaches that emphasize the increased inclusion of community doctors to “diversify the pool of principal investigators” (i.e. expand beyond typical academic honchos from leading centers), and platforms that seek to integrate existing silos. 

I also applaud their recognition of the central importance of patient recruitment – a central preoccupation of nearly every single person involved in clinical drug development in biopharma. This is likely to be a point of increasing emphasis as companies explicitly recognize the need to diversify clinical trials to enroll people who historically been underrepresented in the research enterprise.

Bessemer also appreciates that the ubiquity of consumer digital devices doesn’t mean the data generated by these wearables are suitable for use in clinical trials – often, they are not of high enough consistency or quality to be considered “regulatory grade.” One interesting opportunity suggested by Bessemer involves developing regulatory-grade tools on top of these devices.

Not surprisingly, I was especially interested in the discussion of real world evidence, and again, the Bessemer team seemed to capture so much of the nuance. 

For example, they distinguish between “traditional” (as much as anything in this fairly new market segment can be considered “traditional”) uses of real-world data to support so-called HEOR (health economics and outcomes research) activities, generally related to reimbursement, and emerging uses. 

Of particular interest: the use of virtual/synthetic control arms, which under some circumstances can help support regulatory approval; reportedly, it was this capability that prompted Roche’s $2 billion acquisition of Flatiron Health. 

Bessemer also notes that many startups are concentrating (at least initially) on oncology data, while some are emphasizing other areas, like ophthalmology (Verana), rare disease (RDMD), neurological illness (Blackfynn), and mental health (Holomusk).  Even here, some focus on extracting value from existing data sources, while others are trying to create “novel and differentiated data sets.”

Finally, Bessemer highlights the opportunities in “supply chain optimization,” and in particular, the need to “connect various stakeholders to improve upon manufacturing execution systems.” 

Here, my improvised reaction was “yes, and….” As we’ve repeatedly heard from Novartis and others, there are huge opportunities to drive unsexy but critically important operational efficiencies throughout pharma, and tools that can catalyze this will be critically important.

Bessemer also highlighted several subtle strategic points that were especially insightful. One example: emphasizing the value of close collaboration with the FDA, not only in seeking specific approval, but, at a deeper level, in helping the agency evolve its policy, as it seeks to define where it needs to go in the future. 

This seems exactly right; agency leaders including former Commissioner Scott Gottlieb and current Deputy Director Amy Abernethy have explicitly recognized the rapid evolution of this area, and have acknowledged the need to find a way to incorporate the opportunities afforded by new technology while remaining laser-focused on the FDA’s underlying commitment to ensuring public safety. By engaging in this policy discovery process, entrepreneurs can support their own companies while also helping the agency achieve this shared long-term goal.

One area that I might have explicitly emphasized as well is the need to similarly engage with biopharma partners; successful pharmatech (as Bessemer calls this space – I like the term) entrepreneurs will appreciate the need, especially initially, to deeply engage with and learn from pharma partners, so the technology the startup is developing is aimed squarely at a critical problem the pharma company faces. 

Companies skilled at enterprise sales (Palantir comes to mind) are especially good at burrowing in really intensively, to surface the most suitable problems to effectively address. 

My advice to pharmatech entrepreneurs: 

Startups afforded the opportunity to work with pharma partners would do well to use their time searching for and constantly refining what they could be doing, not just pitching and pushing what they’re already doing.  

At the same time – and this is something Bessemer explicitly emphasizes, in the context of platform-as-a-service offerings, and may be true more generally – entrepreneurs must balance the ability to deliver highly bespoke solutions with the goal of developing “scalable platforms that can be deployed quickly and generate predictable recurring revenue.” 

Successful examples of this, I’d argue, include Veeva in biopharma, and Epic in healthcare. The traction of Epic, in particular, highlights the value of even highly-customized solutions, provided they are viewed (at least by those paying for them, and hopefully — though perhaps not in Epic’s case — by those using them) as delivering exceptional value to the client as well.

Bottom Line

There are tremendous opportunities in pharmatech for entrepreneurs who understand not only the potential of emerging technologies but also the business needs – and organizational dynamics – of contemporary biopharma organizations. The almost unimaginably high costs and exceptional complexity of clinical drug development represents an attractive, high-value attack surface, where the utility of effective solutions can be rapidly, palpably appreciated.


Standing With Fauci, Positive Moderna Vaccine Data, and Blueprint’s Megadeal

Luke Timmerman, founder & editor, Timmerman Report

Last week in these pages, I wrote a full-throated defense of Tony Fauci.

A few days later, the White House sadly started doing what it so often does. It embarked on a dirty tricks smear campaign against someone who speaks inconvenient truth to the public.

Peter Navarro, who doesn’t know what he’s talking about when it comes to public health or epidemiology or virology, published a rather unconvincing 269-word hit piece against Dr. Fauci in USA Today.

This scurrilous attack backfired, as predicted. I continue to stand in defense of Dr. Fauci, and continue to stand in defense of science itself as the best method we have for understanding the world.

On this, we cannot yield.

We are the world’s No. 1 biomedical superpower, thanks to decades of public-spirited investments that people of both parties have supported since the end of World War II. Now we are the absolute worst in the world in caring for our citizens and protecting our country from the COVID-19 scourge. It’s July 17 and we still have no national testing strategy.

We’re racking up 75,000 cases a day, and the numbers keep going in the wrong direction.

We are now starting to see refrigerated trucks parked outside hospitals in hotspots of Texas and Arizona, to keep the dead bodies from decomposing as they stack up faster than the funeral industry can handle. It’s time to place bulk orders of body bags.

It didn’t have to be this way, more than 4.5 months after COVID-19 officially arrived on US soil. We didn’t have to suffer this badly.

This catastrophe has nothing to do with our scientific abilities, and everything to do with our divisions, our cynicism, our polluted information ecosystem, and our dark political moment.

The only choice is for people to stay vigilant. Masks, distancing, and hand-washing are what we have to reduce the toll of suffering and death. Remdesivir may be helpful for some in the hospital, dexamethasone looks to be quite encouraging for severe hospitalized patients, and therapeutic antibodies and vaccines look promising.

There’s a path out of this mess, if we can muster the patience and empathy for our fellow citizens who have given in to despair. How else can you explain people defending the Administration as “doing the best it can” after reading this chilling piece by Gov. Larry Hogan of Maryland, a Republican?   

Our country can do much, much better. We will.

Dr. Fauci is tough as nails. He has no office to run for. He will not be distracted. He’ll keep his eye on what matters – real-time science-based advice that saves lives.

Crucially, in America, civil servants like him can’t be fired by some political hack.

He’s not going anywhere. He’s standing firm.

So must we.


Cambridge, Mass.-based Moderna, the developer of the mRNA vaccine candidate for COVID-19, said it passed Phase I with a safe vaccine candidate. All 45 volunteers developed neutralizing antibodies against the SARS-CoV-2 virus. The mean titers – the average concentration of these important antibodies in the blood – was higher than what’s typically seen in convalescent plasma from recovering COVID-19 patients. This detailed Phase I report – much more clear than the premature company press release from May 18 — was published in the New England Journal of Medicine. Based on the findings, Moderna is moving ahead with Phase III development, with the 100-microgram dose. The still-early findings can now be compared roughly against the Pfizer / BioNTech vaccine candidate. Pfizer CEO Albert Bourla, in an interview with TIME magazine, repeated his bullish belief in his company’s vaccine program.

The labs, test sites, and recruiting infrastructure for HIV vaccine trials represent a massive public investment in the US since the 1980s. Now, a huge effort has gone into turning this aircraft carrier in the direction it must go – toward COVID-19 vaccine studies that can enroll tens of thousands of subjects at the drop of a hat. Read the Washington Post article on this effort spearheaded by the NIH. I will be interviewing Larry Corey, the principal investigator of the HIV Vaccine Trials Network at Fred Hutch and a key architect of the COVID-19 vaccine trial initiative, today (July 17) at the Life Science Innovation Northwest virtual conference.

The Oxford University team, partnered with AstraZeneca, tells The Guardian it hopes to move ahead with the controversial decision to run human challenge studies. For the unfamiliar, this is a study where subjects get the experimental vaccine, and then get directly exposed to the SARS-CoV-2 virus to see if the vaccine offers direct protection from getting sick. Researchers have generally shied away from this design, as there’s a chance of someone becoming deathly ill from the virus, with little in the therapeutic toolkit to rescue them in that event. Young people perceived to be at lower risk will be the ones enrolling. If the gamble pays off, it could give strong evidence of effectiveness in a short study and with fewer people necessary for statistical power.


San Diego-based Equillium said its partner in India, Biocon, ran a study that showed hospitalized patients with ARDS from COVID-19 had a significantly better rate of survival in a small study of 20 patients on itolizumab, compared with 10 patients randomly assigned to best supportive care. The drug is thought to work against cytokine storms, by inhibiting the activity and trafficking of pathogenic T cells that release pro-inflammatory cytokines. The drug is also being tested for uncontrolled asthma and lupus nephritis.

Gilead issued a press release with a retrospective – not a gold-standard prospective, randomized, controlled study — which suggested remdesivir improves survival rates for patients with severe COVID-19.

Hydroxychloroquine didn’t work for hospitalized COVID-19 patients, according to the investigators in the UK on the RECOVERY trial. Separately, researchers in Spain reported it didn’t help people with mild cases.


Public Health

  • CDC Calls on Americans to Wear Masks to Prevent COVID-19 Spread. July 14. (CDC Statement)


  • This Startup Might Finally Cure Sickle Cell After a Century of Racist Neglect. Forbes. July 10. (Katie Jennings)
  • Tony Fauci: We Are Living in the Perfect Storm. Financial Times. July 10. (Hannah Kuchler)
  • Some Say We’re Doomed. But Science and Public Spending Have Saved Us from Worse Pandemics. NYT. July 15. (Donald McNeil Jr.)
  • How a Struggling Company Won a $1.6 Billion Coronavirus Vaccine Contract. NYT. (Katie Thomas and Megan Twohey)
  • A Second Coronavirus Death Surge is Coming. The Atlantic. July 15. (Alexis Madrigal)
  • What’s Ailing an Amazon Health Venture? The Information. July 16. (Paris Martineau)

The Worst of Times, and Best of Times (for some)

  • The Record-Breaking Funding Tsunami of 1H2020. LifeSciVC. July 15. (Bruce Booth)
  • UnitedHealth Shatters Quarterly Profit Record with $6.6 Billion. Axios. July 16. (Bob Herman)


  • Rapid Isolation and Profiling of a Diverse Panel of Human Monoclonal Antibodies Targeting the SARS-CoV-2 Spike Protein. Nature Medicine. July 10. (Seth Zost et al)
  • Reconstruction of Full Transmission Dynamics of COVID-19 in Wuhan, China. Nature. July 10. (Xingjie Hao et al)
  • SARS-CoV-2 Specific T-cell Immunity in Cases of COVID-19 and SARS and Uninfected Controls. Nature. July 15. (Nina Le Bert et al)
  • Evaluation of 6 Commercial Mid to High Volume Antibody and 6 Point of Care Lateral Flow Assays for Detection of SARS-CoV-2 Antibodies. Journal of Clinical Microbiology. July 14. (Carmen Charlton et al)

Patient Access

  • From Houston to Miami, Hospitals Running Short of Remdesivir for COVID-19 Patients. STAT. July 10. (Eric Boodman)


  • How to Reopen Schools. What the Science and Other Countries Teach Us. NYT. July 11. (Pam Belluck et al)


Cambridge, Mass.-based Relay Therapeutics raised $400 million in an IPO priced at $20 a share. The computational drug discovery company boomed on first-day trading to close at $35.05 a share. (Listen to CEO Sanjiv Patel on The Long Run podcast, Jan. 2020, and TR coverage from December 2018).

South San Francisco-based Nkarta Therapeutics, the developer of engineered Natural Killer cell therapies for cancer, raised $252 million in an IPO at $18 a share. It closed yesterday at $36.35 a share – a $1.1 billion valuation. (See Nkarta in Stacy Lawrence’s TR article from May on how engineering techniques from CAR-T are being brought to other cell therapies).

San Diego-based Poseida Therapeutics raised $224 million in an IPO at $16 a share. The company is working on genetic engineering for cell and gene therapies.

Waltham, Mass.-based Adagio Therapeutics was founded with $50 million in a Series A financing. It’s a spinout from Adimab, the antibody discovery shop founded by Tillman Gerngross. Adagio is turning its antibody discovery expertise toward neutralizing antibodies against SARS-CoV-2, SARS-CoV-1, and other related bat coronaviruses that virologists are watching.

Philadelphia-based Imvax raised $112 million in a Series C financing to advance its personalized neoantigen based therapy for glioblastoma and other solid tumors.


Cambridge, Mass.-based Dewpoint Therapeutics, the company developing biomolecular condensates for drug discovery, formed a collaboration with Merck to work on a new treatment approach to HIV. (See TR profile of Dewpoint’s “membraneless organelles” by Asher Mullard, April 2019).

Cambridge, Mass.-based Blueprint Medicines struck a partnership with Genentech to develop and market pralsetinib for patients with RET-altered cancers. Blueprint is getting $675 million in upfront cash, $100 million upfront equity investment, and retains 50-50 commercial rights to US profits.

Personnel File

Cambridge, Mass.-based Scholar Rock said Tony Kingsley is replacing Nagesh Mahanthappa as CEO. Nagesh has been CEO since 2012, and took the company public among other achievements. Kingsley was previously CEO of Taris Bio.

C4 Therapeutics, a protein degradation drug discovery company, hired William McKee and Jolie Siegel as chief financial officer and chief legal officer, respectively.

Arkuda Therapeutics added Pascale Witz to its board of directors.

Ribon Therapeutics named Jodie Morrison as chair of its board of directors.

Racial Equity

MassBio, the trade group in Cambridge, Mass. led by CEO Robert Coughlin, issued an Open Letter to executives, outlining specific things the industry pledges to do to fight back against the centuries of injustice against African Americans in this country. See the letter, and the many prominent people who have signed it.

Some people apparently don’t think white privilege exists. They might want to read this piece on Professionalism 101 for Black Physicians, by Duaa AbdelHameid in the New England Journal of Medicine.

Ken Frazier, CEO of Merck, had some strong words for America’s power elite in the wake of George Floyd’s killing. But his own son has had some barbed comments about whether it’s all just talk. Read Ken’s thoughts about this moment of reckoning in Harvard Business Review. See excerpt below tweeted by Meg Tirrell of CNBC.


Do We Need Models Anymore?

Ruth Etzioni, Full Member, Division of Public Health Sciences, Fred Hutch Cancer Center

Long ago, in the early days of the pandemic, models were everywhere in the news.

As our lives were upended and everything became uncertain, models were there to provide some predictability in the face of the unknown.

Never mind that predictions varied wildly – between models, and even within the same model at different time points. The models agreed that this was going to be bad (though at the time it was hard to believe).

They scared us, and we listened.

This is a story about models and how they help guide us as we navigate the coronavirus crisis. But it is also about guidance itself – and where to look for it.

The early models that predicted the course of the pandemic were almost uniformly epidemiologic or SEIR (Susceptible-Exposed-Infected-Recovered) compartmental models.

SEIR compartmental models envision disease as progressing through the SEIR phases and they keep track of how many people are in each phase at a given time. By using data about how long it takes to become infectious after exposure, and then how long it takes to show symptoms and making a few other assumptions, they estimate R0, the number of people a person with the virus infects, and then extrapolate into the future on the basis of this number.  An effective R0 below one means the epidemic is shrinking rather than growing. A key goal of public health is to bring the R0 below this threshold number.

In Seattle, where I live, an SEIR compartmental model was developed by the Institute for Disease Modeling.  The IDM is a research institute within the Bill & Melinda Gates Foundation, but is distinct from the Institute for Health Metrics and Evaluation at the University of Washington.

The Institute for Disease Modeling showed that the effective R0 had been reduced from around 3 in February — an alarming sign of a fast-spreading epidemic — to a much more manageable R0 of around 0.6 on April 15.

At that point in mid-April, with states under various stay-at-home orders, the talk was all about re-opening. We were banding together to flatten the curve, and we were making progress. People wanted to know: When would it be safe to emerge from lockdown, and go back to something more normal? 

Here, models became useful too. With their compartmental model, the IDM modelers could project how the infection’s trajectory would change if activity and contact resumed at different levels and dates. One projection might assume reopening beginning on May 15, another might assume Memorial Day weekend, and so on. Different levels of activity could be captured by setting the effective R0 to the value estimated at different times in the past.

The IDM models from that decisive moment in mid-April made it clear that re-opening before May 15 would not be advisable. Re-opening at a later date might be OK so long as activities of daily life and the number of human contacts people have each day or week did not increase to pre-pandemic normal levels.

What increases in activity were sustainable and what could we do to keep a lid on R0? Could we re-open restaurants and bars? What size gatherings could be allowed? How about schools?

More complicated questions such as these call for a different type of model.

Agent-based models are more realistic models that simulate individuals within entire populations, interacting in home, work, and community settings. These models are driven by huge databases that describe population mobility and contact patterns, often gathered from GPS-enabled smartphone devices. With this information, modelers can tweak activity and contact in ways that are much more detailed than the SEIR models.

In principle, agent-based models can overcome a key deficiency of compartmental models – what we refer to as their mass action nature. Mass action means exactly that – compartmental models generally do not capture the heterogeneity in population contact and behavior – the superspreading events like choir practices, meat packing plants, long-term care facilities and large parties. They most often smooth everything out to one average rate of transmission. In principle, agent-based models can do better by zeroing in more clearly on the links between our behaviors and viral spread.

Agent-based models are rare because they are so data- and labor intensive to build. The IDM’s COVASIM is an agent-based model that has been deployed to explore questions about how much contact tracing might be needed to keep the lid on things in King County, home of Seattle and about 2.2 million people in Western Washington. COVASIM is now being harnessed to address school reopenings.

One thing is already clear: school reopenings must be considered in the context of the ambient level of infection in the community. If the virus is not firmly under control in the surrounding community — with R0 confidently driven down to a safe level — we can’t even begin to think about reopening schools.

But there are many things that agent-based models can’t do. They don’t have a detailed map of the land; they don’t capture all the meat-packing plants, long-term care facilities or fraternity houses that are potential hotspots. They don’t tell us whether we should open restaurants at 25% or 50% capacity or at all. They don’t tell us about behavior in bars change as the night goes on. They don’t provide some of this fine-grained detail down at the local level, complete with straight lines between cause and effect, that many officials would like to have at their fingertips when making policy decisions.

This is where I pause and ask myself: Do we really need models?

At an individual level, my take is – no, not like we did in the early days of the outbreak. We don’t need models to make the decisions that will help to keep us safe and keep infections in our community under control. There are basically two words here for those who can, supported by tons of virology data, epidemiologic data, and stories from around the world: NO GATHERING.

That means no getting together with others outside of your household for any length of time without facemasks and without distance. Every online search for “COVID outbreak at _,” – fill in the blank – church service, choir practice, extended family gathering, wedding, funeral, restaurant or bars, will turn up tons of stories. Try it.

We know what causes the virus to spread – being indoors in close contact with people over a sustained period of time. We need to avoid these opportunities to get sick or make others sick. And we need to find ways to protect those who can’t avoid them: our essential employees, our food processing workers, our supermarket clerks, our healthcare teams including their non-medical support staff, our undertakers, our dentists and dental hygienists, and our bus drivers. It’s a no-brainer. We don’t need models. The global experience is our guide at this point, more than four months after we became aware of the COVID-19 in the US.

But at a policy level, models are still important despite their limitations.

Without models, we end up with policies that move too fast and are guaranteed to increase the effective R0 way beyond sustainable levels. Reopening policies that permit gathering in restaurants, bars and religious services also send a signal that we are out of the woods, and can give people a false sense of security to organize their own large private events and get togethers that would only add to the danger.

With models, we can hope to develop evidence to support policies that may be unpopular, such as mandating face masks indoors, closing bars, or disallowing religious services. We can project how many lives a statewide mask mandate might save. We can quantify the size of gatherings that can be sustained, rather than get by on guesswork. We can zero in on the ambient effective R0 that will allow schools to reopen and work towards achieving it and sustaining it.

In the end, we do need models. But we also have enough data in hand to know what to do. We must stop looking for an authority and take responsibility. If we don’t, en masse, then we don’t need models to tell us it’s going to get a whole lot worse in the coming weeks and months.


Playing the Long Game for Antibiotic R&D

Ankit Mahadevia, CEO, Spero Therapeutics

This week’s unveiling of the AMR Action Fund, a $1 billion public/private consortium anchored by 23 pharmaceutical companies to support the development and commercialization of antibiotics, is a welcome development in the fight against antimicrobial resistant infections.  

The money is important, but it was very encouraging to see the leadership of major pharmaceutical companies — Pfizer, Merck, and Eli Lilly, as examples among them — personally devoting their time and attention at an event shining the spotlight on infectious disease research. Increasing long-term commitment to the antibiotic business in a meaningful way starts with a renewed, full-throated endorsement from the corporate top.

This effort, if executed well, has the potential to accelerate the scope and scale of research and development that is critical to a long-term strategy against bacterial threats. A $1B investment is meaningful. Big Pharma and biotech can further this mission by supporting academic labs and early stage companies with creative ideas to cast a wider net, and support these projects for the long-term time horizons that are required.

We can also advocate together for a sustainable reimbursement solution so that antibiotic developers know they have a chance at being adequately rewarded for the risks they take for a wider range of applications than is currently feasible.

Taking a long-term view, here are a few humble thoughts on how best to apply this new momentum in service of a robust ecosystem:  

Continue to focus on sustainable, pragmatic approaches

The focus for antibacterial drug developers has to be on sustainable pipeline investments. While $1B is a lot of money, the late stage programs that this fund may support will need to stand on their own feet for us to get to where we want to be as an ecosystem.

Further, a scattered collection of small-scale bets that support work for a year or two will not be enough. We have to build viable businesses — i.e. companies that a range of investors see a reason to invest in for many years — as a starting point. It’s not enough to wait for Congress or private insurers or healthcare provider networks to create new rules for the road, so we can have a viable antibiotic R&D business model. 

I wrote at length here on Timmerman Report in April about the hallmarks of sustainable pipelines for this strategically important area of the biotech industry:

For the time being with the system we have, it’s our responsibility as antibiotic developers to do the following:

  1. Prioritize medicines that focus on diseases not addressed by competing generic or branded medicines,  
  2. Emphasize the medicines that can help the most people today and
  3. In the US, pursue reimbursement at least in part outside of the hospital fixed diagnosis-related group (DRG) payment system — under the current system, this means at least some outpatient focus for the pipeline.

Further, we should focus on developing our treatments with real urgency, and not allow ourselves to get bogged down in too much regulatory or operational complexity. In this case, speed enhances sustainability.

Sustainability can’t be emphasized enough. Bacteria continue to develop resistance. We need to have a steady, productive R&D engine to keep turning out potent new antibacterials if we want to keep up in the fight.  

Extend investment into earlier stage innovation

The focus of the AMR Fund is an area of great need – ensuring that medications with clinical merit have the resources to make their way to patients as they approach approval. There is an opportunity to take this commitment one step further and use the resources available to further accelerate the early stage research that makes future weapons against bacteria possible.   

Our colleagues at the CARB-X and REPAIR funds (Full Disclosure: Spero has received investment from both groups) are doing wonderful work advancing dozens of early stage technologies towards translation and early clinical development; there are still more good ideas than there are resources.

The scale and longer time horizon of Big Pharma would be an excellent complement to ensure we are advancing a diversity of good ideas to combat the broad and unpredictable threat of infection. We applaud our colleagues at Roche, Pfizer, and Merck that continue to make investments in this field whether in collaboration or in-house. There is an opportunity to build further on these efforts. 

Use the megaphone with one voice

Along with a commitment to the AMR Fund, these same pharma companies emphasized their commitment to advocating for the structural reform necessary to tackle a broader set of infectious threats. 

Now that a broader subset of our industry has more skin in the infectious disease game, there is a tremendous opportunity for a unified voice to catalyze a pragmatic solution to the (primarily US) reimbursement system that stifles antibacterial innovation. 

In years past, this has been seen a niche issue – someone else’s problem. Within our ecosystem to date, at times we have fragmented in our support of different initiatives in part depending on how they affected each of us individually. This new momentum, and the newly unified approach among Big Pharma players, is an opportunity to band together around a solution that has the best chance to make it to the finish line. 

Our view at Spero is that the best type of incentive is the one that passes; it is highly unlikely that every drug developer will be an equal beneficiary of any solution. Our hope is that this new, broader coalition can play the long game with a stronger, unified voice in Washington to make one of the several workable solutions under discussion into a reality.  

This era of COVID-19 and the AMR Fund have demonstrated the best that Pharma and biotech can offer society. This industry is willing and able to move quickly against the biggest challenges facing humanity. This AMR Action Fund is an extension of this; while COVID-19 was largely unforeseen, we can see the AMR issue coming. We should use this time wisely to get ahead of the curve.

The AMR Fund has given our collective mission new momentum; it is now up to us as drug developers to make the right pipeline choices, to execute, and continue to work together.

My thanks to the Spero team, Tim Hunt, Aleks Engel from the Novo REPAIR Fund, and Kevin Outterson from CARB-X for their thoughtful critiques, policy understanding, and commentary


Can Novartis Digitally Transform Clinical Development?

David Shaywitz

In 2018, Dr. Vas Narasimhan, newly-installed as CEO, told the Wall Street Journal he saw Novartis as “a focused medicines company that’s powered by data science and digital technologies.” 

Since then, Novartis has tried to grow into this ambition, embracing the concept of digital transformation perhaps more conspicuously than any other large pharma. 

It’s not easy, as Narasimhan himself acknowledged one year in, when he discussed with refreshing candor his early efforts, and shared some of the hurdles and disappointments he encountered.

Now, Narasimhan, together with colleague Luca Finelli (a 15-year veteran of the company, with experience in modeling and analytics), have published a paper in Clinical Pharmacology and Therapeutics outlining Novartis’s initial effort to apply their data science mindset to global clinical development, an area they saw as a particularly attractive opportunity. (Narasimhan isn’t alone; at a recent NewYorkBIO webinar, J&J’s newly-appointed Chief Data Science Officer, Najat Khan, similarly emphasized the value of focusing on clinical development.)

Vas Narasimhan, CEO, Novartis

The choice isn’t — or shouldn’t be — a particular surprise: clinical development represents a huge slug of pharma’s total R&D expenditure, the operational complexity seems ripe for digital refinement, and the effect of any improvement should be appreciated relatively quickly by the organization; these contrast with potential digital upgrades on the research side, which could take far longer to prove themselves.

Novartis also made a deliberate (and prudent) decision at the outset to focus on operational data, specifically, rather than patient-data; the authors point out that because such data are “fundamentally of non-human origin,” they aren’t subject to the various data protection and privacy regulations that can introduce additional layers of complexity to data analysis – especially when such data are sourced globally.

The basic idea was to turn decades of clinical trial operational experience into something that could be represented digitally and understood broadly, so that lessons could be extracted and applied going forward. Historically (and in fact, not so historically, as this is generally what happens today in most companies), “summarizing the status of just one study” requires “a strenuous review of many spreadsheets to obtain first the country, then the regional, and finally the global overview.” These data, the authors explain, come “from different systems through manual, one-time extractions, at different time points, and often following different assumption and rules.”

Novartis’s aspiration was to turn “tedious, time-consuming tasks that can often take days or even weeks to complete manually” into something more enlightened and efficient, using the rich operational data that already exist. 

For example, the authors say, “historical trial management data indicate exactly how successful each medical center was at recruiting patients, for each investigational drug, past data shows how well clinical drug supply followed the initial plans, and finance data can tell the entire spend story behind a development program.”

In other words: armed with the requisite data, the company should be able to figure out how to select better clinical trial sites, improve the management of their drug supply, and estimate more accurately the true cost of developing a proposed medicine.

They aspired to build a data and analytics platform to achieve this goal (and were aided, apparently, by a McKinsey-owned analytics company called QuantumBlack). The initial challenge they faced was wrangling the relevant operational data. This was an especially difficult task since these data tended to be “locked into silos,” residing “in multiple internal dedicated system,” from which “extraction…is difficult, and requires time-consuming manual efforts that only IT personnel with special access rights can execute.” As they aptly summarize, the “operational data landscapes emerge as very fragmented.” 

A key issue, they discovered, was that most operational data were “not generated with the intention of doing analytics. It typically just supports temporary tasks and transitions.” Thus, “one of the monumental efforts…has been ‘connecting’ and ‘curating’ that data so that it could be seamlessly utilized across the operational landscape. This involved re-processing decades of data from a variety of systems, each with other formats and identifiers – getting the data ready for analytics was at the foundation for our digital transformation.”

As they wryly observe – referencing a previous piece I wrote – “the amount of work required to bring all the data from different sources together to an analyzable format is largely underestimated in the public excitement about AI and machine learning.”

Novartis’s vision for this platform – called “Nerve Live” – encompassed multiple areas, from clinical trial operations to financial modeling, each envisioned as essentially an “app,” intended to deliver “intuitive user experiences, elegantly combining advanced analytics with well thought out application design and the right data context.” 

The first app developed was an AI application designed to predict the “timing of ‘end of enrollment’ across > 300 studies simultaneous and through intuitive visualizations, allowed for root cause analysis down to single site activities…” According to the authors, a total of eight apps have now been developed, tackling topics from resource requirements to cost forecasts to patient enrollment predictions.

Naturally (like AstraZeneca, discussed here), Novartis also has a large “mission-control”-like room with a trial dashboard, the “SENSE Insights Center,” of which they seem especially proud.

I was especially interested in the discussion of “enablers” – essentially “key success factors” (assuming you accept the premise that this effort has been successful – we’ll come back to this). In addition to the inevitable citation of “senior leadership sponsorship,” they highlight the role of team composition and of the iterative approach they used, which I suspect were both critically important.

The key individual drivers of this process seemed to be the “product owners,” charged with leading all aspects of product development. 

While this model emulates the approach used by both tech companies and pharma clinical development teams, the secret sauce seems to be the traits and experiences required of these product owners, a “mixed set of core competencies” that “are not easy to find in a single individual.”

These include expertise in data science, business, user needs, learning agility, project management, design thinking, and experience with what’s known as “Agile” product development. 

Oh, and one more thing: “owners also need to know well how to navigate our IT process governance….”  I suspect this last item — figuring out how to productively engage with incumbent IT — was particularly important.

Another critical aspect seems to have been the iterative approach, where the initial work seemed to focus on just one app, with the idea that palpable success with this could enhance subsequent buy-in. 

Predictably, the most difficult challenges, according to the authors, involved not technology but rather “people, behaviors, and the change required for the transformation to succeed.”

Did it succeed? When they finally get to what seems like a critical question, the authors hedge – big time.

“Although we are just starting to assess systematically the benefit of the program,” they write, “initial projects indicate that productivity gains in the order of 10% are already achievable across the portfolio of activities.”

Translation: it’s not clear — yet — that the juice has been worth the squeeze.

My Takeaways:

I actually found this article to be enormously inspiring, representing what seems like a bold and ambitious vision, pursued intelligently.

I was pleased, though hardly surprised, to see the initial focus on operational data and palpable goals – two strategic elements I’ve long championed. I recognize the importance of identifying the right talent to lead these teams, though I can imagine, as Dr. Amy Abernethy, Principal Deputy Commissioner at the FDA, emphasized at a recent conference, that these qualities can and typically do reside in a group of people, and the real skill required might not be the multiple core competencies the authors aspirationally list, but rather the ability to elicit these from a well-chosen team.

That said, the critical importance of organizational savvy — alluded to discretely in the article — cannot be understated, as the work of Stanford’s Jeffrey Pfeffer has so clearly and painfully highlighted.

Finally, what of the results? If you’re a skeptic, you may look at all this, and probably say, “Surprise, surprise – another CEO shows up with his pet project, enabled by an army of consultants, lots of money is spent, lots of ink is spilt, and for what?” This is even how many critics view the efforts around precision medicine. The first rule of holes, they say, is to stop digging.

But I am encouraged. Emerging digital and data technologies offer pharma companies a critically important opportunity to do their critically important work better and, hopefully, cheaper. For incumbent companies, change is notoriously hard, and it’s always appealing to make cosmetic adjustments but to continue with business as usual as long as possible. And in fairness, it’s not always easy to know the right time to adopt a new technology and mindset; it’s possible Novartis is still too early, and the approaches available to companies in five or fifteen years will be so much better and so much cheaper that Novartis will feel foolish for choosing to be (in the context of the industry) an early adopter. 

But I think Novartis is doing something very smart. By embracing this change, they are learning about the talent and competencies that future success will require, and their employees are starting to think in a way that seems crucial for the industry going forward, gaining valuable experience that is likely to be in high demand over the next decade. 

I’m also not worried about the limited results apparently demonstrated to date; this is the nature of technology adoption – you need to figure out how to use it, and there’s what W. Brian Arthur has called a “mutual adaption” that’s required between technology and domain. I can envision the process Novartis is going through will ultimately lead to more efficient studies that are better for company and patients alike. 

What we’re seeing is the difficult work of a much-needed industry makeover. Good on Novartis for ambitiously taking on this challenge.

(Disclosure: I do not have a personal or business relationship with Novartis.)


The Remdesivir Pricing Letter Gilead Should Have Written

Peter Kolchinsky, managing partner, RA Capital

Dear America,

We’ve decided to grossly underprice remdesivir.

Hundreds of thousands of COVID-19 patients in America, and even more around the world, need our drug. But the US insurance system is corrupt and heartless. It has demonstrated that it will go to great lengths to prevent patients from getting appropriate, physician-prescribed treatments. You know their tricks: high deductibles, high copays, lengthy prior authorization forms, phone calls unreturned, surprise bills for patients.

Sadly, these barriers are common practice. So we decided to underprice remdesivir to get around the barriers, and make it as fast and easy as possible for all patients to quickly get this much-needed medicine.

In normal times, we drug developers have plenty of time to devise a counterstrategy. Development of new therapies typically takes years. That long lead time enables us to make the case for the value of our innovation and its proper use, and to plan our strategy for negotiating with insurers to lower barriers to accessing treatment. Knowing they often won’t, we usually also have time to set up patient assistance programs that help patients afford the out-of-pocket costs demanded by their insurance plans.

With remdesivir, amidst the COVID-19 pandemic, we don’t have that time. So, we have opted to undercut the value of our innovation to get the therapy to as many patients as possible as soon as possible.

The price we settled on is $2,340 for a five-day course for governments in the developed world, and for the US Department of Veterans Affairs and the US government’s Indian Health Services. U.S. private insurers, in addition to Medicare and Medicaid, will pay $3,120. At this price there’s really no excuse for a private insurance plan or Medicare to put up barriers (though it somehow still won’t come as a shock if they try).

Having to combat insurers’ bureaucracy with our own counter-bureaucracy wastes society’s and our company’s resources. But our insurance system has succumbed to pathological bloat and learned to feed off the bureaucracy. It has learned to extort a profit stream from all drugs, regardless of how expensive they are, to pad their own incomes.

These insurance companies invent nothing and gaslight America into thinking they are doing favors for patients. Why do insurers require that doctors seek prior authorization to confirm that a medicine is medically necessary for a patient and then, after granting authorization, still demand high copayments that many patients cannot afford?

They will say they are trying to prevent over-utilization. They will claim that is the purpose of this “skin in the game.” But really, they are trying to prevent appropriate utilization. That is not insurance. That is disgusting.

Today, we cannot play these games. COVID-19 has filled our hospitals and ravaged our economy. So, we will eat this one. In addition to all the doses of remdesivir we have donated, we are pricing remdesivir at a fraction of what we know America tacitly recognizes it is worth.

Think about how much the US has already sacrificed to save millions of lives from COVID-19. The country has spent $6 trillion dollars to save what would likely have been about two to three million lives lost if the virus had been allowed to run rampant. That comes to about ~$2M-$3M per life. Remdesivir trials have demonstrated that the drug plausibly cuts mortality by ~30% and saves the life of one person for every ~30 who are treated.

The US has demonstrated that it values each life saved from COVID-19 at $2 million or more, so should be willing to spend more than $60,000 on a course of remdesivir. At $20,000, remdesivir would be an extraordinary bargain, leaving plenty of margin for error if it turns out that the drug is less effective than so far shown in trials.

Political organizations like ICER will ignore this logic. But ICER is backed by a billionaire who thinks that people would do a better job of curing their kids’ sickle cell disease and cystic fibrosis if only they had more skin in the game. That is a particularly insidious form of libertarianism better understood as “You’re free to die of treatable diseases I’d just as soon not pay to solve, because I’m rich and those diseases don’t affect me.”

Americans disagree, as evidenced by the tremendous sacrifices so many have made to save lives.

And yet, we’re charging only $2,340-$3,120 for remdesivir. That does not mean we agree that the benefit remdesivir offers is only worth $3,120. Far from it – our price is about 20-fold less than it is worth just based on its odds of saving lives. And remdesivir’s clinical trials also show it can probably cut the length of hospital stays for COVID-19 patients by an average of four days. In the US, that means about $12,000 in savings per patient. [Clarification: 5:51 pm PT July 14. An earlier version said remdesivir clinical trials show it cuts average length of hospital stays by an average of four days. It has been amended to say “it probably can cut” the length of hospital stays by an average of four days.–LT]

Given how expensive drug development is, how can we afford to underprice our innovation? Fortunately, Gilead remains profitable enough from our past successes that we can deeply discount remdesivir to ensure that all patients get access quickly.

Since Gilead is the biotech adult in the room, let me be clear to the scores of younger, unprofitable, scrappy biotechs out there fighting COVID-19: do as we say, not as we do … for everyone’s sake.

Most small biotechs are supported by investors (which include teachers’ and firefighters’ pension funds, not just billionaires). Their drugs may combine with remdesivir to save even more lives or may even displace remdesivir altogether. Most of those companies cannot afford to underprice their drugs, and they should not.

If investors thought that those companies would have to follow our example, they could very well decide to invest elsewhere. Without the promise of an adequate financial return, these companies would be entirely reliant on government funding. If that seems like a good idea, then you have not spent any time in either industry or the NIH. The government cannot keep up with the thriving, creative innovation engine that private capital has made possible. The NIH funds basic science, yet the drug industry funds the extremely expensive clinical trials and drug development required to turn ideas into products, investing well over $100 billion each year.

That’s not to take away anything from taxpayers. Nothing would be possible without taxpayers.  Gilead is able to be the successful company it is because of US roads, the rule of law, public schools, a science-based FDA, and yes, even some taxpayer subsidies for projects like repurposing remdesivir for COVID-19 after it originally fell short as an Ebola medicine. But all of that government support, necessary as it is, isn’t sufficient to actually create remdesivir.

American taxpayers have elevated private enterprise to Mount Everest’s base camp, already a great height. And yet, taxpayers do not fund the climb to the peak. That’s achieved by the market offering incentives to those who succeed. Without taxpayer support for the foundation on which the biomedical innovation industry exists, there would be no innovation. But without adequate returns for private funding of development, there would be no products.

With profits of only 10-12% of all drug industry revenues, taxpayers would have to spend about 90% of what society spends now to preserve the drug industry as a tax-funded non-profit. Of course, those profits also incentivize talented scientists. Good luck retaining those brilliant people when other for-profit sectors offer them a piece of their profits through valuable stock. As it is, software, real estate, and finance have higher profit margins than the drug industry, so they can entice a lot of talent away.

We will all get more video games and financial instruments, but fewer medicines.

You might think that pharma could cut its sales and marketing budgets, but how will the world know about a useful new drug if nobody spends the time educating physicians and patients about it? Sure, there’s some fat here and there in our industry, and shareholders are constantly pushing companies like ours to find it and cut it. But there isn’t room for us to cut prices by as much as we have cut remdesivir’s if we want to continue to support and incentivize the level of innovation we have today.

So, treat remdesivir as a special case, please. Were all companies obliged to follow our example, the drug industry would become a high-risk/low-reward proposition. Investors would flee, academia would prove itself unequal to the task of developing drugs, and our drug armamentarium would be frozen in its current state. Our kids would have healthcare no better than ours.

The remdesivir case warns us about what is wrong with America’s insurance system. We need insurance reform so that health insurance does what it is supposed to do – pool the risk over large populations of people, so that healthy people are paying the bills for those who are sick. All of us and those we love will become patients at some point, so it’s in society’s interest to ensure fair and equal access to care.

There is no time to fix the systemic problems with US health insurance this week, or this month, so we are expediently making this pricing concession right now. But we urge all other drug companies not to follow our example.

If you invent a drug that advances our standard of care, it is imperative for the preservation of innovation that you confidently charge a price that will generate a return for you and your shareholders and incentivize others to risk their time and money to climb even higher. Congress should anticipate these breakthroughs in the coming months and be prepared to acknowledge their value. Better that America spend tens of billions on medicines that let everyone live normal lives than trillions countering economic depression as everyone hides from a viral terror.

Peter Kolchinsky, a biotechnology investor and scientist, is Managing Partner of RA Capital Management, L.P., and author of The Great American Drug Deal. He is not affiliated with Gilead in any way, RA Capital Management does not currently have a position in Gilead, and this letter represents his own views and is not actually intended to represent Gilead’s views.


Writing in the Language of DNA: Kevin Ness on The Long Run

Today’s guest on The Long Run is Kevin Ness.

He’s the CEO of Boulder, CO-based Inscripta.

This is a startup that calls itself the “digital genome engineering company.”

Kevin Ness, CEO, Inscripta

The aspiration, which Inscripta described in a statement last December, was to create:

The world’s first fully automated benchtop instrument for genome-scale engineering. Consisting of an instrument, consumables, software, and assays, it enables scientists to create libraries of millions of precisely engineered single cells in one experiment through a fully automated workflow.

Instead of reading DNA, it’s allowing scientists to write in the language of life.

The company raised $125 million in a Series D financing last December, bringing its private fundraising total at the time to about $260 million. Venrock, Foresite, JS Capital Management Oak, and Paladin Capital Group are among its backers.

In this episode, I asked Kevin to speak at some length about his life story, his path in mechanical engineering, and how useful that background became once he started learning about the big questions in biology. We talk about the company in the latter part of the episode.

Now, please join me and Kevin Ness on The Long Run.


Q&A with Regeneron SVP David Weinreich on Therapeutic Neutralizing Antibodies

Kshithija (KJ) Mulam, correspondent, Timmerman Report

Public discussion about the role of biotech and pharma in the pandemic tends to focus on one of two areas.

Vaccines are the great hope, and occupy center stage. Gilead’s remdesivir has captured considerable attention, largely by being the first approved drug for COVID-19, despite offering a limited benefit for hospitalized patients.

Off in the periphery of the public mind is an entire category of pharmaceutical intervention that many scientists believe has decent odds to pay off this fall – likely several months before a vaccine would arrive in the best-case scenario.

We’re talking today about therapeutic neutralizing antibodies. Several companies – Regeneron Pharmaceuticals, Eli Lilly, VIR Biotechnology, and Amgen among the leaders – have been sprinting ahead with recombinant antibodies that have shown an ability to neutralize the SARS-CoV-2 virus and which can be made and scaled up rather quickly. These treatments should, in theory, be able to knock down active infections in COVID-19 patients, and potentially could provide temporary prophylaxis (at least a month or two) for high-risk populations in need of protection, such as healthcare workers.

These kinds of antibodies play to the strength of the biotech industry. They can be manufactured at large scale. They should be amenable to repeat dosing. Since these treatments aren’t meant to provide long-lasting immunity like a vaccine, they can also be tested in rigorous studies that can quickly provide important answers – like whether the antibody or antibody cocktail immediately wipes out the virus, and whether it is safe.

The public isn’t focused on this particular battlefront at the moment, but therapeutic antibodies could provide an essential “bridge to a vaccine” as some in public health and industry hope.

To discuss the state of therapeutic antibody development, Timmerman Report correspondent Kshithija (KJ) Mulam spoke June 24 with David Weinreich of Regeneron Pharmaceuticals. He’s the company’s senior vice president of global clinical development.

Timmerman Report: Can you tell me a little bit about Regeneron’s antibody cocktail for COVID-19 and how it’s supposed to prevent viral escape?

David Weinreich: So in order for the virus, any virus to get into the cell, it has to have a protein on the surface that interacts with a receptor or protein on the cell surface in the host, in the human. In this case, that allows the virus to get in and ultimately destroy the cell, cause inflammation, replicate, make more viruses and so forth. For coronavirus, the protein is called spike. If you were to block the spike protein from interacting with the receptor on the human cell, you could prevent the virus from causing infection. You essentially block the cycle of the virus getting into the cell, replicating, causing damage, cell dies, more virus gets out. You break that cycle.

David Weinreich, SVP, global clinical development, Regeneron Pharmaceuticals

That protein is made up of a lot of amino acids. Some of them are more critical than others. Some of them are at parts of the protein that are not relevant to interacting with the receptor on the human cell. Some are critically involved in interacting with the cell. You want to interfere at a critical interaction between the protein in the virus and the protein on the human cell.

Small changes in the structure or the amino acids of the protein may or may not inhibit the ability for the protein on the virus to interact with the protein on the cell. But if they’re in the right spot, they may block the antibody from binding to the spike protein anymore. It all depends on where they are.

When we constructed our cocktail, we found two spots that are non-competing. That means the two antibodies do not fight for the same binding site on spike. Both of them independently inhibit the ability for the spike protein to bind to the human cell. So they’re non-competing, neutralizing anti-spike antibodies.

Why is that important? If you have one antibody, wherever it binds to that spike protein, you may get a subtle alteration in the protein structure and mutation that prevents that antibody from binding to the spike protein and neutralizing it.But it doesn’t prevent the spike protein from working by binding to the receptor on the human cell and causing infection. That’s the worry.

So then the next question is, is it a real worry? We’ve done this, we’ve created antibodies against a number of viruses. This isn’t our first time creating a cocktail. We have experience with a Regeneron antibody that targets respiratory factors — the respiratory syncytial virus (RSV). This is a virus that affects essentially premature babies and causes a pretty debilitating lung infection, and in that case, we did not use a cocktail: it was one antibody. And what we learned from our Phase III study, which failed, was that in in the time in which we ran that trial, a minor variant of a minor strain of the RSV virus that had a point mutation right at the spot where [the Regeneron antibody candidate]  bound. That prohibited the binding of our antibody, so it didn’t work. And in the end, it happened to be a very prevalent variant, when we were running our trials, and the entire study failed.

Is this going to happen within human treatments to treat coronavirus? And the short answer is, we don’t know. We personally don’t want to take the risk, because what we don’t want to have happen is escape variants being generated. This is kind of the same idea of how do you treat really resistant infections like tuberculosis? You don’t treat them with one drug. You treat them with a cocktail. HIV? You treat them with a cocktail. And we’re following that same pattern. And there’s a variety of scientific reasons that we think it’s a better way to go so long as the antibodies are non-competing, and both neutralizing. Our cocktail has been designed specifically to achieve that.

TR: What is the clinical trial going to look like, and what are the parameters of evaluation, or the expected endpoints going to look like in the future?

DW: We’re going to run multiple clinical trials. The two therapeutic intervention trials are ongoing. What I mean by that is these are individuals who already have contracted the coronavirus. We take a swab from their nose, and we put it into a PCR machine, and it turns out positive, so we know they have the disease. Those trials were initiated last week [week of June 15]. We’re still in startup, but they’re going incredibly well, and we’re interested in a number of different potential endpoints.

You have to evaluate safety. We know a lot about our antibodies. We have structured our antibodies in a very controlled fashion, that one Regeneron antibody and the next Regeneron antibody share a lot of similarities from cell lines, to what the structure looks like, and so forth, except for the business end of what it’s actually binding to. While we haven’t had a problem with an antibody in the past, you never know until you’ve actually tested it in humans. So, the first thing is we have to make sure that there’s no untoward safety issues.

The second is we want to know whether or not we alter the viral kinetics of an infection that a patient presents at the hospital or at the doctor’s office. They’re positive. We can essentially tell how much virus is floating around, kind of like a viral load, although it’s measured by how many times the polymerase chain reaction machine has to cycle before it turns positive. The fewer times it cycles, the more virus there was, so lower numbers are higher viral types we can test over time. So that’s the control arm.

And you’ll generate a curve of essentially viral load versus time. We would expect that giving a large dose of our monoclonal antibody will dramatically alter that viral kinetics curve. It’s the reason why vaccines don’t instantaneously work. The first 10 or 14 days, you really don’t have a lot of coverage. It isn’t until the body’s  immune system finally builds up that you have an immune response. When you give a big intravenous dose of our antibodies, you essentially have coverage that circulates through the body. You know, minutes, two hours,  we would expect there to be a difference in the viral kinetics curve. We’re exploring that.

Finally, you would expect that the patient’s symptoms would either get better or not get as worse. In one of our trials, we’re taking patients who are already hospitalized, who already need supplemental oxygen. And we’re evaluating whether or not the patients get off oxygen faster and whether they improve in a second study. Patients don’t have to have symptoms. They’re positive for the virus, but they don’t have symptoms. So here we’re measuring whether or not they develop symptoms, whether or not they have to rush to medical care, where they have to get admitted to the hospital. So the clinical parameters are slightly different, but we’re looking for better clinical outcomes.

In addition to that, we’re also looking at studies in prophylaxis. Here it’s people who are not positive with coronavirus. They’re PCR negative. The question is, because of their particular circumstance, they might be at a very high likelihood for developing coronavirus.The first trial  we’re going to be kicking off is in a household context.

So imagine this. Your significant other comes down with cough and fever, goes to the doctor. They test you. Your significant other is positive for coronavirus. But you don’t have a lot of symptoms. You’re not going to go into the hospital. They’re going to send you home. Call the doctor if it gets worse and self-quarantine. But in your household, you have your significant other, and let’s say, a couple college-age kids, so your household has four or five other people potentially there or intermingling with you. They’re not positive, butwell, they’re at very high risk for developing coronavirus unless you happen to live in 20,000 square feet, and you can send the person to  the pool house, which is not the case for the vast majority of people. In that case, what we’re asking is, can you take the household contacts who are not positive, but there is a household contact who is positive? Can you give it to the people who are negative and prevent them from converting to become positive? And in that case, the primary endpoint is whether or not they turn PCR positive by the virology test.

Now, we’re also evaluating whether or not if they turn positive, do they develop symptoms? But our goal is to show that you prevent the transmission from infected individual to a household contact, and that proves the point that you can block transmission generally. That study is going to start in a couple weeks.  For a number of reasons, it had to be slightly delayed. There are a number of other variations of this prophylaxis theme that we’ve been talking about, and we’re still contemplating exactly how to do this, such as can you do this in health care workers or can you do it in nursing homes? Every study brings its own operational challenge. We’re trying to get this done as quickly as possible; we think the quickest way to get this answer is the household contact study, so we’re prioritizing that.

All of this is a bridge to the definitive thing. We hope that there’s a real vaccine – those trials are kicking off. Those are going to be very large trials. They may take some time. But if we can deliver a therapeutic that prevents the bad outcome, that’s a win that helps you reopen the world while we wait for the vaccine.

TR: You mentioned that the cocktail has a neutralizing approach, and I know that there are companies working on single neutralizing antibody approaches. So what exactly are the pros and cons of going with a single neutralizing antibody versus multiple neutralizing antibodies?

DW: The risk is escape. So the risk is that a variant strain of this virus that has a mutation that renders it immune to a single antibody then becomes the dominant strain that’s out there. And this has already happened. There’s a slightly different variant that is out there. I believe it’s in Scotland. We’ll double check that. Compared to what’s here in the United States, it’s a little bit different. This is classic selection pressure. If you have a variant out there that is immune to your therapeutic, it will grow to become more of a dominant strain. And then your therapeutic is worthless.

If you have a cocktail in order for that to happen, so long as both antibodies are not competing and both neutralizing, you would have to simultaneously have two mutations in two different places in the viral protein at the same time for that to happen. That is exponentially less likely. It’s never zero. But it is a far more rare event. It’s the reason why in our Ebola cocktail, Regeneron EV3 against Ebola virus, we actually have three antibodies. Not one. Not even two. Because that virus is obviously incredibly deadly. It kills very, very quickly, and it also can mutate. So in this particular case, we went with three. We actually contemplated whether or not to go with more than two antibodies for coronavirus. It turns out that the spike protein isn’t all that large. And we could find multiple pairs of antibodies that met our criteria. They had to neutralize. They had to prevent the spike protein from binding to be receptor on the human cell and not compete. But we just couldn’t squeeze a third antibody in there. It always wound up competing with one of the other antibodies. And then it doesn’t add anything to the cocktail.

TR: There are other related programs that Regeneron has, and one is an IL-6 inhibitor Kevzara for fighting cytokine storms. What’s the latest on that program?

DW: There’s sort of three components to this. The first was, is there something on the shelf that you could potentially use? The second is the passive vaccination with an antibody, and then the third is a real vaccine. So really Kevzara, our IL-6 receptor antagonist, fell into bucket one. This was an off-the-shelf. We already had it. It’s already approved for rheumatoid arthritis. We saw some encouraging data from a single arm study coming out of China for a competitor molecule that is very, very similar. And we decided that this was worth testing in a rigorous fashion. We’ve already announced that the independent data monitoring committee made us make some alterations to the Kevzara study for safety reasons. And we stopped treating patients with so-called severe disease, which means that they’re in the hospital, but they’re on relatively low flow oxygen. The study is still ongoing in patients who are on a ventilator, who were on a ventilator when it initiated. We will have data this month from that part of the trial. And we still plan on having data this month in June.

TR: How scalable do you think Regeneron’s COVID-19 efforts are to a larger platform nationally?

DW: I’ll admit I’m a little biased, but I think they’re incredibly important. We have a proven track record for helping neutralizing antibodies for viral infections. We didn’t decide to get into coronavirus just for the sake of ‘everybody’s talking about it.’ We had already been in antibodies against viral diseases long before anybody knew about coronavirus. So we had the platform, the capability, the know-how to do this. We’re taking all of our learnings on how to get these trials up and running rapidly and get them recruited. And we have the manufacturing capability to scale this quite extensively. Now, I will admit we can’t treat everybody in the U.S., let alone everybody in the world. If this works, we would certainly need manufacturing support from other companies to be able to produce enough antibody to treat the world or at least big chunks of the world. I will say, without going into any details, we are having those conversations.

TR: So what do you think are strong contenders, I guess, in the industry beyond Regeneron in terms of therapeutic antibody production?

DW: This isn’t your typical situation where multiple companies are competing to develop an antibody for a target for some disease, and you know where one is trying to win over the other. This is different. The world needs something to work. And if it isn’t ours, then I want it to be somebody else’s, because we need something as a bridge to the vaccines, and I’m rooting for them. We are rooting for the vaccine companies too. We’re in this because we really believe, given our track record of doing this several other times, for RSV, MERS, Ebola. We have a track record. I have very high hopes that this is going to be the next one that works. We think we have a very strong track record that ours should work. But if it doesn’t, somebody else has to be there to save the world, whether it’s Lilly or Amgen or any one of these other companies. The only caveat, the only thing that sits in the back of my head, I just hope we don’t have so many people who just want to be in this because it’s become a political hot potato that everybody wants to participate, that everybody’s running their own clinical trials, and then no one actually gets enough data to prove whether or not their cocktail works. I don’t think we’re there. But that is the one thing that is a theoretical problem.

TR: Where do you see gaps maybe in industry efforts to create therapies for COVID-19, either production-wise or ideologically?

DW: I don’t think we have many gaps. I think that there are enough companies trying variations of a theme. We’ve got a lot of diversity in approaches. If something works, I think as a world we are going to have a production issue. The antibody doses you need, the milligrams of an antibody that we think you have to give are pretty sizable. Regeneron has a lot of manufacturing capacity, but it’s not enough. It’s going to require collaboration for whatever works to provide enough doses globally.

TR: Do you think that therapeutic antibody efforts are a long-term viable solution to COVID-19 ?

DW: I do not. I think there are a short-term bridge and then a long-term safety net.  What do I mean by that? We would be better off if we had a vaccine like the pneumococcal vaccine, or even a regular old influenza vaccine. If it were good enough, that would generally prevent infection. It’s more economical. It’s more scalable. However, until that happens, the antibodies can be developed faster than the vaccines. It’s a good bridge until those are available. But then even after the vaccine becomes available, despite getting a vaccine, an individual patient may still develop the disease. If they do develop the disease, they have the possibility of transmitting the disease. And not everybody may get vaccinated for one reason or another. I think in the long term, an antibody cocktail, if it works, can fill that gap of patients who still develop the disease despite having been vaccinated, those who haven’t been vaccinated and get the disease. Because you have to remember, a vaccine takes time. If you become positive, and you haven’t gotten the vaccine, it’s too late to give the vaccine. Then you would have to intervene with a therapeutic antibody. So I see a long-term role, but it’s a smaller role once the vaccines have demonstrated efficacy. It’s a much bigger role early. That’s perfectly fine with us. We recognize that this is a bridge to an active vaccine. And that’s why we’re investing a lot of time and energy to try and develop this cocktail.


Leadership, Strategy and Capabilities: How We Are Losing The Fight Against the Virus

Otello Stampacchia, founder, Omega Funds (illustration by Praveen Tipirneni)

“The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence” –Charles Bukowski

The quote above is presented with more than a hint of self-deprecating irony (I did spend some formative years in the UK). Indeed, I am often told I am a little bit too confident in my opinions.

Now, with that disclaimer out of the way…

On May 26, I penned a (quite pessimistic) editorial for Timmerman Report.

I wrote:

“We are going to see a continuous, substantial increase of infections and fatalities in the US starting (very, very roughly) early / late July, if not sooner. Quite likely, by August / September, we are going to revisit the peaks of daily confirmed infections and fatalities we saw in April”.

It turns out I wasn’t pessimistic enough.

As I write again a month later, on June 26, the US just recorded total confirmed cases above 2.5 million (https://www.worldometers.info/coronavirus/country/us/ : please refer to that site for any statistics reported below, unless otherwise stated), as well as over 126,000 deaths. I am not sure this includes the revisions the state of NJ just posted (with an incremental ~2,000 deaths). As discussed in a previous article, fatalities in pandemics are often undercounted.

Nevertheless, this is a tragic situation, and a very different trajectory from other western countries.

COVID-19 in the 10 Most Affected Countries (Confirmed Cases / Day)

Source: Johns Hopkins University Coronavirus Resource Center

Over the past month, the US has seen 800,000 new cases, and 24,000 more deaths. On May 26, US positive tests numbers were ~1.7m and ~102,000 fatalities. For about three weeks, the numbers, while grim, appeared on a daily basis to be trending in the right direction. There was a measurable reduction in overall hospitalizations and fatalities in the US: this was the result of a combination of drastic (and effective) lockdown measures (and citizens compliance with distancing measures) in the hardest / earlier hit regions (NY and New York City above all, and NJ, MA, CT, RI).

Those *inevitable* measures brought temporary, partial control of the pandemic in those regions. Those locations can now, tentatively, and carefully, try to re-open their economies in stages. And be mindful that the virus has not gone away “magically” and that people need to continue to be vigilant and responsible.

However, the uncontrolled spread in the remainder of the country means the proverbial cat is now truly out of the bag. And it is not going to get back in there, either.

Suffice it to say that the 7-day moving average (which smooths out weekend reporting issues) has now reached >34,000 cases/day and it is likely to increase quite a lot in the coming days, now that the trendline is on an inexorable, dramatic upswing (see Florida below). The previous 7-day average peak was ~32,000/day back on April 10. April 29 represented the highest single-day peak of confirmed daily cases until now, with ~39,000 positives (and a very significant decrease in numbers in the following days).

However, yesterday (June 25 for those of you losing track of time) surpassed 40,000 confirmed cases (the highest number of cases in a single day, ever), and almost every day this week has shown confirmed cases above 30,000. I expect today to be much higher. This is not good.

I would like to tackle some commonly heard objections to my message of doom, before reverting to dwelling on the main article topic later on.

OBJECTION No. 1: This is nothing: cases are going up simply because we are testing more! You are such a worrywart! Why do you want to ruin my vacation??

I do not want to ruin your vacation, but, no.

While it is accurate that testing capacity has increased substantially (see www.covidtracking.com for a comprehensive picture on tests, confirmed cases, hospitalizations, and patient outcomes) in the US, to roughly 500k tests performed daily, the percentage of people resulting positive on tests has very substantially increased (we are now roughly at 7-8% positives, vs ~5% only 10 days ago).

So, the percentage of the US population being infected is increasing, and quite rapidly (this should be expected: this is a very contagious virus). It is particularly concerning to see substantial increases in positive rates in populous US states such as California, Texas, Florida (see below in the answer to Objection No. 3).

In the past week alone, Florida’s daily new case count has gone from 3,822 last Friday, to 5,511 on Wednesday, to an astonishing 8,942 today. If you think this is not going to result in a substantial increase in hospitalizations and eventually a massive death toll, I would love to receive a healthy helping of whatever it is that you are smoking.

And, please, before you even ask: we are a long way away from reaching “herd immunity” for the entire population.

OBJECTION No. 2: The virus is simply infecting more of us young people: we are not like those old geezers (insert any proclamation of young invincibility of your choice here)! Worse case scenario, I will take generic steroids once I am getting intubated, I heard it works! (exasperated sigh). As George Bernard Shaw eloquently said, “youth is wasted on the young”… Trying, however, to be more constructive (if not altogether convincing to people who are somehow refractory to reason), here are some counterfactuals:

  1. As Sharon Begley (@sxbegle) wrote today in STAT News, and as reported in a huge variety of published scientific literature, COVID-19 attacks a variety of organs, ranging from the (obvious) lungs to kidneys, heart & cardiovascular apparatus, brain / CNS, and others. Let’s please also not forget that this is a new virus, and that we still do not know much about its long-term effects. There are clear and increasing reports showing that even young, apparently asymptomatic / mildly symptomatic people who recovered from the infection have possibly long-term effects such as reduced lung capacity, potential systemic / long lasting inflammation, and increase in diabetes risk. The US population already is relatively unhealthy to start with, so we really can’t afford to have an exceedingly long tail of co-morbidities plaguing us for years after this pandemic… Is that drink at the bar or that pizza really that important? (Note: a good pizza is indeed very important to me, as an Italian, but, you know, priorities).
  2. The virus spreading uncontrolled amongst the population, even if only in the strata that believe themselves “not at risk”, increases dramatically the likelihood of reaching much more at-risk demographics. Especially since we do not have a proper contact tracing and isolation set of protocols in place (or at all, actually) across the country.
  3. It is true (and great news indeed) that some initial hopeful results are emerging from medical research: the publication of the (robust AND randomized) UK RECOVERY trial results (just published on June 22, after topline data announced on June 18), confirms that oral or IV dexamethasone (a cheap, generic steroid) significantly reduced the 28-day mortality rate among hospitalized patients receiving invasive mechanical ventilation or oxygen (but it didn’t provide a benefit to more moderate patients who weren’t receiving respiratory support). So, yes, dexamethasone (and not other steroids, for those of you who buff up at the gym) appears to save the lives of about one out of every three patients being intubated, and about one out of every five patients who need oxygen support for breathing. BUT, that means the rest of the patients still die. Do the math, and wear a mask.

OBJECTION No. 3: The number of US deaths has not gone back up! It was down recently. Why are you worrying? I want to go to the beach bar with my buddies!

First of all, I would like to make the (perhaps silly) argument that, even if we manage to maintain fatalities at the current rough run rate of 3,500-4,200 per week on average, this is still a disaster that should be cause for immense concern. In four short months, this pandemic has already cost the US more fatalities than WWI and Vietnam. And we are a long way from being safe.

I would also like to remind readers (at least those of you with a sense and perspective of history) that the US altered the planet’s geopolitical landscape following a horrific terrorist attack in 2001 that caused ~3,200 casualties: those interventions, performed at immense subsequent cost to the country (in both blood and trillions of dollars of treasure), were never questioned.

Why are we not taking this deadly pandemic as seriously, with a comprehensive strategy and a plan?

That aside, I agree that, SO FAR, fatality rates are not (yet) increasing dramatically across the entire country. However, it is important to remember a few things:

  1. As discussed here in Timmerman Report on Mar. 18, fatality increases lag ~2-4 weeks behind hospitalization increases, which themselves lag ~2-4 weeks behind increases in number of infections. And there are now at least 5 US states reporting substantial increases in hospitalizations. I am particularly concerned about Texas and Florida, since they have some very large / dense cities: as we learned (or should have) from New York (and Milan, Paris, London, and Wuhan before that…), highly populated, dense urban centers are the first and most highly affected, since it is easier for the infection to spread to the most vulnerable population segments there. We are beginning to see alarm bells ringing from hospitals in Houston, the fourth-largest city in the US behind New York, Los Angeles and Chicago.
  2. Current week-on-week growth in fatalities are actually already extremely concerning in Alabama (120% growth), Kansas (100%), South Carolina (57%) and Arizona (56%). I do hope we do not re-enact the tragedy that befell New York, this time across multiple locations across in the country, but we are heading inexorably there without any meaningful course correction. Texas has (I think) decided to stop messing with itself. As I write, Texas Gov. Greg Abbott announced closing of bars and limiting gatherings, in a further rollback of its reopening plans. So, there is hope. But: I cannot but look with regret and sadness to the fact that no lessons were learned here, from other countries and from the lives and livelihoods lost. American Exceptionalism (seen today through an “it can’t happen here” attitude) can sometimes be a very dangerous pre-existing conviction indeed, especially against a virus who only obeys an evolutionary, biological imperative and does not care what you think you know.

Now that those pesky objections are out of the way, let’s look a bit across the pond, again, to the country in Europe that was hit early and hard (yes, of course it is Italy (eyeroll).

How are they doing? Can we apply any additional lessons from there to here?

As can be seen in https://www.worldometers.info/coronavirus/country/italy/, Italy seems to have turned the corner: the number of daily new cases seems to have stabilized around 100-200 per day now, from a horrific peak of more than 6,000/day in mid-late March. The number of fatalities has also decreased to low double digit (20-40) / day from a peak of almost 1,000/day at the end of March.

Now, I do not know what you think of my native country, apart from the obvious facts that the food, the art and the people are amazing. But I do hope we did not give you the mistaken impression that we are organizational geniuses with an extremely efficient government and an obedient and compliant population, also excelling in biotech and pharma R&D. Because, and I am sorry to burst your bubble here, nothing could be further from the truth. Trust me.

However, what the country’s government did realize early on (never too soon, but soon enough) was that the pandemic’s exponential growth rate and high infectivity was the enemy. They locked down initially a few affected villages / small cities in early March, then Lombardy a few days later, and then entire country on March 9 (See Mar. 10 Timmerman Report article).

Even with that, the effects in Lombardy were catastrophic, as we all know.

One thing you might not know, is that there were very, very few cases outside of Lombardy. The lockdown basically pre-empted the spread to the rest of the country. Not fast enough to prevent more than 30,000 deaths. But it could have been a lot worse. And local, regional and national governments ALL ALIGNED in providing clear, simple, unequivocal communication to the population: Stay At Home. (See May 26 Timmerman Report about clear messaging).

There is now an entire comedy art form / meme unwittingly created by the videos of (especially southern Italian) mayors *screaming* to their constituents to take the lock down and social distancing seriously: go to this video and have a laugh. Trust me it is funnier in Italian. But they saved lives by shutting down, *at the same time*, the entire country.

Many grave, in some cases fatal, mistakes were made. Of course,  they did not know better, and human nature is what it is, sadly. Early on, elderly patients were first admitted to hospitals upon suspicion of infection and then brought back to their retirement homes. That unwittingly spread the infection in the most vulnerable demographics.

In late February and early March, industry lobbyists forced the government to wait a few additional days before imposing the lock down, costing many more lives (sound familiar?). Local government officials, in Milano and the Lombardia region, mocked openly the curfews and lockdowns early on, spreading an “insouciant” attitude (sound familiar?). Also, remdesivir was not available, hospitals were severely lacking in PPEs and other essential equipment and instruments, and so on.

This is far from over. As summer arrives, and people relax their precautions and behaviors, as families reunite after months of separation, there is a risk, even a likelihood, that the infection will regain a foothold. My mom in Italy went to the hairdresser the other day, and I almost had an apoplectic fit when I heard.

I hope we in the US avoid what is currently happening in Iran, where cases started to rise again around May 2: fatalities initially did not increase (cue the usual crowd of pundits mentioning “young people are getting infected so nothing bad is going to happen”). However, if you go to https://www.worldometers.info/coronavirus/country/iran/, you will see deaths starting to pick up again ~3 weeks following case increases. But, by starting from a low base, there is the possibility of containing a second wave.

Back to the US: how do we then look forward to the future? What is our strategy to get out of this mess? Is there a strategy??

As J.L. Gaddis discusses (extremely eloquently) in his wonderful book “On Grand Strategy”: strategy is the alignment of aspirations and capabilities. That alignment often requires mastering the arts of logistics, communication, as well as leadership.

If I, the Persian emperor, want to conquer Greece, and invade it with a massive army, I better make sure my supply lines are adequate to the task of feeding my army, and that I have navy captains that know the local waters before engaging enemy fleets (you should really read the book). Otherwise, a not-quite-united country of basically goat herders can wipe out a force 10-20x bigger.

What are our aspirations? That part *should* be easy: going back, safely, as soon as possible and with minimal loss of life, to a “normal” living environment.

What are our capabilities? Well, that part *should* also be very easy. This is, after all, the richest, strongest, most technologically advanced nation on earth. We just sent a new (reusable!) manned rocket to the International Space Station! We have the largest representation of leading biotech and pharmaceutical research, in truly incredible innovation clusters like Boston, NYC, SF, etc. Yet the US has consistently lagged on testing (see chart below).

We should be able to test, trace, isolate infected individuals, make sure our hospitals have plenty of spare capacity and equipment to contain potential surges, and have a corresponding research and manufacturing plan to both develop treatments / vaccines and ensure they can be delivered in the safest way and shortest possible delay to the greatest share of the population.

As also discussed in Gaddis’ book, achieving this alignment does have some essential, mandatory requirements: an earnest and frank assessment of capabilities needed to then achieve your objectives, and a leadership who can then execute and create new capabilities when needed.

And there’s the rub.

To wrap this up:

  1. I no longer believe the US is going to be able to test, trace and isolate its way back to “normal”, whatever that is. For one, the virus is by now endemic in pretty much every state and very likely in too many communities to be able to “contain it”. The genie is out of the bottle, cat out of the bag, horses / barn door, etc etc. You see my point. Too late for that.  
  2. The government policy of basically abandoning each individual state to its own fate has resulted in a patchwork of inconsistent (and often incoherent) measures: amongst other nefarious consequences, a chunk of the population has therefore seriously underestimated the seriousness of the pandemic. It is now exceedingly difficult to “re-educate” that population to implement healthier behaviors (masks, social distancing, etc.). I will spare any commentary on the absurdity of each state government having to basically figure out from scratch what to communicate, how to fight a pandemic, purchase PPE and diagnostic equipment, hire / consult with experienced virologists / epidemiologists in a time-sensitive crisis, build (again from scratch) a test / trace / isolate infrastructure, etc. etc. Insane does not even begin to describe it. Perhaps NY, MA, CA, WA and a few other large, knowledge-intensive and resource-rich states can do that (but why should they re-invent the wheel every time?). But the Dakotas? Wyoming? Montana? Kansas? The coronavirus task force did its first public briefing today after two months. Do they believe the virus just magically “reappeared” out of thin air? I am not sure my frustration is showing at all here?
  3. We still have a few months (at a minimum) before additional pharmaceutical interventions could show efficacy and then become available in order to make a meaningful difference on severity and fatality: we need that time and those interventions to help us “manage” while we pray for a safe and effective vaccine. We have to limit the damage until then.

So, what are we left with? Not much, without some clear leadership. But, we should try. The alternative is too hard to bear. Some extremely common-sensical suggestions below.

  1. Impose mandatory mask wearing in ALL public spaces. Impose fines for violators. Ban large (or medium-size) gatherings. You might find it shocking, but America led the world during the 1918 flu pandemic (please, do not call it “Spanish” flu, it actually started in Kansas and spread was facilitated by WWI troop deployments…) in imposing mandatory mask wearing with fines and jail terms for people not complying. Forget the debate about individual liberties etc.: your individual “liberty” to not wear a mask should stop when you are threatening the entire community’s welfare.
  2. Keep higher-risk populations as isolated as possible, with particular care for nursing homes, long-term care facilities, prisons, meatpacking plants and other highly-dense populations.
  3. Step up manufacturing of PPE and (for the love of all that is holy), sort out viral testing *at speed* and scale, and serological testing at a sufficient accuracy to make a difference. This is absolutely necessary for the months ahead (see below).
  4. Prepare for the autumn. I am not sure what the fall’s flu season will look like, but we need to be able to differentiate between different respiratory infections so that COVID-19 patients can be screened and isolated. Train an army of contact tracers properly and across the entire country. Employ / train the legions of unemployed in the service, hospitality and airline industry to provide that essential service. Make sure everybody in the country receives a pneumococcal vaccine and a flu vaccine as soon as it becomes available.

I closed my Mar. 10 article with the words: “We have no time to lose. And may the fates look upon us with mercy”.

We lost 16 weeks.

The fates, like the virus, do not seem to care.

It is up to us.

Follow Otello Stampacchia on Twitter: @OtelloVC

This article expresses the personal views and perspectives of the author. The views and perspectives expressed here do not necessarily represent the views or perspectives of Omega Fund Management, LLC or any officer, director, partner, member, manager or employee of Omega Fund Management, LLC or any of its affiliated entities.