Why Institutional Investors May Be Bullish on the Omicron COVID Variant
Posted on 12/10/2021
Public health officials are keeping a watchful eye on South Africa on how the omicron coronavirus (COVID / SARS-CoV-2) variant is impacting the local population with regard to hospitalization levels. South Africa has a far less “fully-vaccinated” COVID rate compared to the U.S., U.K., and Western Europe populations. Early data suggests that omicron variant is more transmissible than the globally dominant delta variant. This new variant that is spreading is undermining the current COVID mRNA gene therapies. Pfizer-BioNTech divulged results from an initial lab study which showed that the effectiveness of the initial two-dose mRNA COVID shot series fell significantly against omicron variant, but that a booster shot restored some level of protection. The omicron variant is likely to replace delta variants of COVID in areas in which delta already spread through. Omicron variant has around 3x the number of spike protein mutations compared to past variants. To make matters more complicated, the ability of the COVID-19 vaccines to prevent severe illness and hospitalization wanes over time, a CDC study finds from data assembled from February 2021 to September 2021. This confirms other studies conducted by pharma companies and health agencies globally. This study was performed before the omicron variant was discovered. Current COVID-19 vaccines (either mRNA or viral vectors) are based on the original Wuhan spike sequence. It is true that some people may develop COVID-19 after being vaccinated as these are called breakthrough infections.
Not All Bad News
What should investors be more worried about – the public policy health response of various governments and potential lockdowns, or the actual death rates of the omicron variant which anecdotally appears to be less lethal than the other COVID variants. It appears the omicron variant causes less severe illness and death vs. earlier COVID variants. All indications are that it omicron variant is more transmissible, but with milder symptoms. The COVID variant could be more like a regular flu versus the more deadlier variants of alpha and beta, which the current COVID shots were created for. For investors, this could mean governments may back off from a future lockdown approach, which has stirred civil protests globally and damaged economies.
Future lockdowns in Western economies would likely prompt prolonged or more accommodative monetary policy, pushing up inflation even more, while causing a growing population of people not working. As the virus makes it way through populations, recovered people from COVID typically acquire natural immunity, which is a basic scientific principle that is widely accepted. Coupled with people either voluntarily, coerced, or forced to take the COVID shots, the likelihood of deaths stemming from current COVID variants could be less, which in turn could be used as a push back for future population lockdowns.
Tail Risk Scenarios – Deadlier COVID Variants and the ADE Scenario
The two key viral risk scenarios would be a deadlier COVID variant that is very transmissible, or if the mRNA vaccines, which are being widely distributed, could somehow produce a scenario known as antibody-dependent enhancement (ADE) of virus infection. So far the mainline medical community has not found evidence or disclosed evidence publicly that the COVID-19 vaccines can cause ADE. For some viruses, ADE of infection has become a great concern to disease control by vaccination.
In some rare cases, a vaccine may cause your body to make antibodies that don’t neutralize the virus, leading to ADE. For example, respiratory syncytial virus (RSV) is a common virus that infects the respiratory tract. It generally leads to mild cold-like symptoms. A 1960s RSV vaccine study from showed that the RSV vaccine being studied failed to prevent RSV infection. Instead, it caused infections to become worse. In fact, 80% of children who got infected after receiving the RSV vaccine had to be hospitalized. This is compared to 5% of children with RSV who didn’t get the vaccine. Currently, there’s no U.S. FDA-approved vaccine for RSV. Some vaccines, like the inactivated measles vaccine, were found to cause ADE. Over time, scientists developed another form of the measles vaccine. Instead of an inactivated virus, it contained a weakened live virus, which doesn’t cause ADE. Measles is a highly contagious virus that can lead to serious complications such as pneumonia, encephalitis (brain swelling), and death.
Why did we bring up ADE for the COVID shots as a tail risk scenario. A study published on August 9, 2021, in the Journal of Infection, called “Infection-enhancing anti-SARS-CoV-2 antibodies recognize both the original Wuhan/D614G strain and Delta variants. A potential risk for mass vaccination?” highlights potential risks of ADE in the current COVID vaccine lineups. The abstract ends, “In conclusion, ADE may occur in people receiving vaccines based on the original Wuhan strain spike sequence (either mRNA or viral vectors) and then exposed to a Delta variant. Although this potential risk has been cleverly anticipated before the massive use of Covid-19 vaccines6, the ability of SARS-CoV-2 antibodies to mediate infection enhancement in vivo has never been formally demonstrated. However, although the results obtained so far have been rather reassuring1, to the best of our knowledge ADE of Delta variants has not been specifically assessed. Since our data indicate that Delta variants are especially well recognized by infection enhancing antibodies targeting the NTD, the possibility of ADE should be further investigated as it may represent a potential risk for mass vaccination during the current Delta variant pandemic. In this respect, second generation vaccines7 with spike protein formulations lacking structurally-conserved ADE-related epitopes should be considered.”
LINK: https://www.journalofinfection.com/article/S0163-4453(21)00392-3/fulltext
