Page 4 - ISQ UK Aprl 2020

INVESTMENT STRATEGY QUARTERLY

Chris Meekins, Director, Health Care Policy
Analyst, Equity Research Development of drugs to treat the disease and

The outbreak of a novel coronavirus (COVID-19), initially in China vaccines to prevent contraction of the disease
and then around the world, creates concerns over its economic has begun.
impact. According to the Centers for Disease Control (CDC),
"Coronaviruses are common throughout the world. Seven and took other steps that helped to initially limit the spread. The
different coronaviruses, that scientists know of, can infect people government did make one major mistake. The CDC initially sent
and make them sick. Some human coronaviruses were identified out faulty diagnostic tests to state and local labs and took weeks to
many years ago, and some have been identified recently. Human get functional tests out. In addition, the CDC limited which
coronaviruses commonly cause mild to moderate illness in individuals could actually get tested. As a result, community
people worldwide." This newest coronavirus likely began near the transmission went unnoticed for weeks and the virus went
city of Wuhan, China and then became widespread in an animal unchecked. The government eventually got tests out to key leaders,
market in the city. The virus quickly reached epidemic levels and but it was too late to prevent significant spread in the US.
began to spread outside of the region. For the vast majority of
patients, symptoms are mild or moderate and are similar to the Development of drugs to treat the disease and vaccines to prevent
common cold or influenza. For a smaller percentage, contraction of the disease has begun. Under ideal conditions,
hospitalisation is required and, for about 1%, death occurs. vaccines take around two years to be developed. For therapeutics,
Individuals with the worst symptoms tend to be older and have the hope is a drug that already exists can be re-purposed to treat
other contributing factors like smoking, asthma, diabetes, and this disease, which could be used in weeks. If an existing drug will
similar respiratory issues. Though many scientific questions not work, a new therapeutic will need to be developed, which
about the virus remain unanswered and some of the information likely could take two years.
may change, it appears the reproduction rate of the virus (when The COVID-19 outbreak will likely impact the 2020 elections. At its
mitigation measures are not taken) is two to three, meaning each core, the American public expects its president to be the
infected person infects another two to three people.
"Protector in Chief." That usually focuses on national security
As cases spread around the globe, governments had to choose (protection from war or terrorist attacks) and economic security
how to try to limit the spread. In the US, the government put in (protection of jobs), but now it may include health security. Given
place travel restrictions from areas most impacted by the virus, the widespread outbreak, Americans who previously felt
quarantined individuals returning from other nations that may be protected by the previous administration may now consider a
infected, funded clinical trials of new therapeutics and vaccines, different candidate.

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