Dear Reader,
I have found it very interesting to look back at last year to see what the media was saying about the pandemic and the pursuit of a vaccine.
I reread an article in The New York Times titled How Long Will a Vaccine Really Take? It was published on April 30, 2020.
Before a single word was written, the article started off with a chart that showed the “Goal” scenario (shown below).
Source: New York Times
The “Goal” as shown on the graph above would be to have a vaccine by August of 2021, which is just a few months from now. This, according to The New York Times, would take a miracle to achieve.
The graph flipped between the “Goal” and the “Typical” timeline for the vaccine. Here is what was positioned as typical:
Source: The New York Times
At the top right, it says November of 2033… At the time the article was published, that represented about thirteen and a half years into the future. Pretty bleak forecast.
The article highlighted one “expert” cell biologist who believed that potential COVID-19 vaccines in the pipeline might be more likely to fail because of the rush through the research phase.
His prediction was that a vaccine wouldn’t be approved until at least 2021 or 2022. And even then, he stated, “This is a very optimistic and relatively low probability.”
The article then highlighted in a chart (shown below) how many years past vaccines required to develop as a way to discredit the aggressive goal established by Operation Warp Speed.
Source: The New York Times
The article went further to state that the production of millions and maybe billions of doses of vaccine was “an undertaking almost unimaginable in scope.”
Another “expert,” who is the head of vaccine manufacturing at a major pharmaceutical company, was quoted with a definitive statement: “The manufacturing task is insurmountable.”
Another “expert” said, “Yeah, it could work”…
But this person went on to clarify that statement, saying, “But in terms of probability of success, what our data says is that there’s a lower chance of approval and the trials take longer.”
The dean of the National School of Tropical Medicine at Baylor College of Medicine accused those who were optimistic of playing to their shareholders.
He said, “These biotechs are putting out all these press announcements… You just need to recognize they’re writing this for their shareholders, not for the purposes of public health.”
In hindsight, we now know that all of this nonsense was completely wrong… and embarrassingly so.
Not only did those working on Operation Warp Speed deliver vaccines, they did so within 2020. All within six months of when this grossly inaccurate article was published.
And aside from the obvious political motivations, the article in the Times completely ignored and left out the facts at the time.
The reality was that the COVID-19 virus had been genetically sequenced in the first quarter of the year, and several companies had already used that information to start designing synthetic vaccines within days of getting a hold of the genetic sequence. At the time the article was published, over a dozen vaccines were already in trials.
Furthermore, we knew then that the manufacturing of synthetic vaccines would be far easier to scale than a vaccine based on a live, attenuated virus.
Even more incredibly, both the release of the Phase 3 clinical trial data and the ultimate emergency use authorization (EUA) were delayed past the elections, likely for political reasons. This came at the cost of thousands of lives. In other words, we could have had approved vaccines several weeks earlier.
At the time, I found the article unbelievable and lacking any credibility. And now, I’m at a loss for words… Other than to say that Operation Warp Speed was the greatest public/private partnership to address a crisis that I have seen in my lifetime.
And it’s the beginning of a true revolution in biotechnology.
Now let’s turn to today’s insights…
A team at the Jenner Institute of Oxford University has developed a malaria vaccine that just demonstrated 77% efficacy in a clinical trial. This is by far the most effective malaria vaccine ever made.
And it meets the World Health Organization’s (WHO) threshold of 75% efficacy to be considered meaningful.
Think about this – more than 400,000 people die every single year from malaria. And this group includes over 200,000 kids with their whole lives in front of them. Yet we haven’t been able to protect them from this one disease.
Now compare that to the threat posed by COVID-19, which we’ve created a mass hysteria around.
COVID-19 poses no serious threat to much of the population and is far less dangerous for school-aged kids than an influenza. And yet many more people die from malaria each year. (Many reported COVID-19 deaths come from those that had COVID-19 some time in the preceding three to six months and, as a result, tested positive with a PCR test.)
Yet very few are talking about malaria because it’s not a threat in the developed world. It is mostly a problem in Africa. Sadly, we’ve lost all sense of proportion with regards to the pandemic.
And that has caused some in the medical community to push for emergency use authorization for this malaria vaccine. That would allow the at-risk population in Africa to get the vaccine before it gains official regulatory approval.
After all, we just did this for COVID-19. Why not also do it for malaria?
Regardless of whether the vaccine gets an EUA, Oxford plans to scale up its clinical trials significantly from here.
This trial consisted of 450 children over the course of 12 months. The next trial will include nearly 5,000 children from four countries in Africa. The hope is that efficacy will remain high in this larger patient population.
This vaccine could be an absolute game changer on a global scale. In fact, the team at Oxford thinks it could quickly reduce malaria deaths to just tens of thousands per year in the first five years.
That’s a dramatic improvement. And it would put us on the path of eliminating malaria deaths entirely in the near future. That’s the goal.
I hope we treat this vaccine just like we did the COVID-19 vaccines. The pandemic proved that the industry can successfully create and distribute vaccines in less than 12 months. It doesn’t take 10 years or more, which has been normal until now.
Either way, this is an amazing development. We’ll certainly keep an eye on this vaccine going forward.
A couple of big moves in the world of CRISPR genetic editing recently caught my eye.
Vertex Pharmaceuticals, a major biotechnology company, just inked two strategic deals around CRISPR within the span of a couple weeks.
Near Future Report subscribers will recognize Vertex’s name… We’re currently up around 40% on this biotech company in our model portfolio.
For the sake of new readers, CRISPR is like software programming for DNA. It allows us to “edit” genetic mutations that cause many diseases. Ultimately, this technology will help us cure all human disease of genetic origin.
And that’s why the big players in biotech are taking notice.
Vertex just announced a new agreement with early stage genetic editing company CRISPR Therapeutics. It pertains to a therapy called CTX001 for the treatment of sickle cell disease and beta thalassemia.
Per the deal, Vertex is paying $900 million up front for the right to 10% of the future revenues generated by CTX001. And Vertex is offering up to $200 million in milestone payments. These will be issued as CTX001 is successfully advanced through the clinical trial process.
There’s a big insight to be gained here.
Vertex paid $900 million for a 10% stake in CTX001. This implies that the therapy itself is worth $9 billion. That’s not the company – that’s just CTX001. Talk about a valuable asset.
And this gives us tremendous insight into how much CRISPR therapies will be worth in the marketplace. CTX001 is worth $9 billion, yet it only addresses two similar blood diseases. There will be many more therapies to come.
In all, the market for CRISPR-based therapies will be well over $1 trillion. There’s a massive opportunity here.
Vertex’s second deal was with another genetic editing company called Obsidian. Vertex made an up front payment of $75 million for another revenue share. And Vertex is offering up to $1.3 billion in milestone payments linked to therapies developed using Obsidian’s technology.
The two companies did not announce what diseases these therapies will focus on. But they did say that they will target “serious” diseases. That suggests they will go after some big targets, which equates to big market opportunities.
And here’s what excites me most about these two deals – they are just the beginning. They let us know that the genie is out of the bottle.
In the biotech industry, we know we have reached an inflection point when the big, established players start making very large bets on a specific technology or approach. That’s what Vertex is doing here.
These are two landmark deals, and they will prompt other major players to follow suit. We’re going to see more big deals happening around CRISPR genetic editing technology in the months to come. I can’t wait.
And if readers want to learn about more of my top picks in this space, go right here for the full story.
We have talked quite a few times now about how Amazon is innovating and experimenting with the bricks-and-mortar shopping experience.
Two years ago, it was the grab-and-go technology that powers Amazon Go stores.
And last year we talked about the “Dash Carts” that automate the checkout process at Amazon’s mid-sized grocery stores.
Well, Amazon just revealed its next move. It’s bringing a palm-scanning payment system to its Whole Foods stores. This is neat.
Whole Foods Palm Scanner
Source: Amazon
This technology allows users to scan their palm and register it with their Amazon account. The technology analyzes the shape and size of the hand, and it can “see” the veins inside. This creates a biometric identifier exclusive to each consumer.
Then, when consumers go to check out at Whole Foods, they can simply hold their palm over the reader and walk out. The purchases are automatically charged to the associated Amazon account.
Longtime subscribers to Exponential Tech Investor may remember this technology.
We invested in a company working on this called Imprivata (IMPR) back in October 2015. As expected, Imprivata was acquired shortly after we bought in. We closed out our position in August 2016 for a 72.7% gain. Not bad for a 10-month holding period.
Here we are nearly six years later, and this kind of palm-scanning technology is finally hitting our grocery stores. It’s amazing it took so long.
Amazon will first roll this out to Whole Foods locations in Seattle. Then it will gradually expand out from there.
Amazon is starting to iterate. The company is experimenting with different types of payment automation systems in its various storefronts: grab-and-go, Dash Carts, and now palm scanners.
No doubt, Amazon is trying to figure out which model is the best when it comes to balancing cost efficiency with providing an excellent experience for consumers. This is something that we need to keep a close eye on.
Obviously, different components go into each payment automation method.
If Amazon determines that one method is superior to the others, that could present a great investment opportunity in the picks-and-shovels companies that supply the key components.
That’s something I’ll be watching very closely.
Regards,
Jeff Brown
Editor, The Bleeding Edge
P.S. While Amazon is using AI to modernize the brick-and-mortar shopping experience, a small, little-known company is using AI to modernize the entire biotechnology industry.
In fact, this convergence of AI and biotech is completely changing the way drug discovery and therapeutic development is done. Up to this point, drug discovery has been a tedious trial-and-error process involving a lot of manual labor. Think white lab coats, beakers, and test tubes.
As a result, it takes the standard pharmaceutical company 3.5 years on average to discover a new drug. And in total, it takes an average of 12–15 years to get a therapy from the discovery phase to regulatory approval.
This process costs an estimated average of $2.6 billion. That’s how much a legacy biotech company needs to get just a single therapy approved.
Well, that’s all about to change.
AI can quickly and cheaply screen a database of existing drugs to determine which ones have a reasonable probability of being effective against other disease targets. That takes much of the guesswork out.
And it saves millions of dollars and valuable years in the process.
So this convergence of AI and biotechnology is going to completely reshape the industry. The drug discovery and development processes are going to become far more efficient. And we’ll see an explosion of new treatments for cancer and other diseases that plague humanity.
Of course, that also spells opportunity for savvy tech investors.
For more on this story and the small-cap company at the center of this convergence of technologies, I invite readers to check out my latest presentation right here.
Like what you’re reading? Send your thoughts to feedback@brownstoneresearch.com.
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The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
