Dear Reader,
During the last few days we’ve had two exciting developments in our fight to return to our pre-pandemic lives. Two seemingly unrelated announcements have just vaulted us much closer to a return to normal.
On Friday night, the Food and Drug Administration (FDA) announced its approval of a COVID-19 test called T-Detect.
What makes the test unique is that it is the first COVID-19 test to determine if one has cellular immunity to COVID-19. To put it another way, it helps us verify if we had COVID-19 anytime in the past or not.
As we discussed last week, PCR tests are grossly inaccurate. The majority of “positive” tests are false positives. In other words, a positive result doesn’t indicate that we are infected with a live virus or that we are infectious.
And antibody tests, while accurate, tend to only capture a short period of time (i.e., a matter of months). Antibodies, which our bodies produce to fight off viruses, don’t remain in our blood forever. And they tend to dissipate over a few weeks or months. Therefore, if we had COVID-19 a year ago, our antibody test would most likely be negative.
And that’s why the cellular immunity test is so valuable. We will be able to understand at an individual level if we had COVID-19 any time during the pandemic.
And we’ll also be able to conduct population studies to identify what percentage of the population has already had and recovered from COVID-19. This informs how close we are to herd immunity.
And this morning, the Centers for Disease Control and Prevention (CDC) announced that “fully vaccinated” people can meet freely in private settings with other fully vaccinated people without wearing masks. The CDC went further by stating that vaccinated people can meet with other non-vaccinated people from a single household who are at low risk without wearing masks or practicing social distancing.
But here is where it gets absurd…
The CDC says that fully vaccinated people should still wear masks and distance in public. That directive contradicts its own guidance. And it is absolutely absurd.
Early scientific research out of Israel – which hosts a very aggressive vaccination program – has already shown that the Pfizer/BioNTech vaccine has dramatically reduced both asymptomatic and symptomatic cases by 89.4% and 93.7%, respectively.
For those who have been vaccinated, it is extremely unlikely for them to ever become infected and infectious with COVID-19. The risk has been mitigated, and there is little scientific justification for imposing restrictions of any kind.
So why in the heck would anyone who has either already had COVID-19 or has been vaccinated for COVID-19 suffer any further restrictions? It’s illogical, irrational, and downright stupid.
And we can consider this… 90.4 million doses have already been given in the U.S. That’s now more than 2 million doses a day. This is fantastic news for anyone who is in an “at risk” category. These people have the chance to receive the vaccine if they want it.
This is why Montana, North Dakota, Iowa, Texas, Mississippi, and Alabama have dropped (or will do so in a matter of days) their mask mandates. And Idaho, South Dakota, Nebraska, Missouri, Oklahoma, Arizona, Alaska, Tennessee, Georgia, South Carolina, and Florida do not now require masks.
The current administration referred to the Texas decision to remove restrictions as “Neanderthal thinking.” From my perspective, Texas and the other states are making logical, rational decisions based on the actual scientific research that has been published over the last nine months.
I’d say that’s pretty smart.
Now let’s turn to today’s insights…
We’ll start off today with an exciting development in biotechnology.
A team out of Yale has developed the world’s first vaccine that can immunize people against malaria. This is an incredible breakthrough.
As I’m sure readers know, malaria is a disease transmitted through mosquito bites. What many readers may not know is how big of an epidemic malaria really is.
There were an estimated 229 million cases of malaria worldwide in 2019 – mostly in developing countries.
And roughly 409,000 people died as a result of contracting malaria over the same period. Even more heartbreaking, children under the age of five accounted for 274,000 of these deaths. That’s 67%.
With so many cases and so many people dying each year, how can it be that we are just now getting the first vaccine for malaria?
Well, malaria has been a tricky problem to solve.
This disease is caused by a parasite called Plasmodium malariae. And these parasites contain a protein that inhibits the growth of T cells, which are important to our immune systems.
Our bodies develop T cells to fight off any virus or pathogen. But the Plasmodium parasites stop us from producing T cells. That’s why malaria has been so hard to tackle.
Until now.
The team at Yale utilized an RNA-based platform to develop the vaccine. This approach essentially side-steps the Plasmodium parasitic protozoans and enables our bodies to produce T cells like normal. That helps us build immunity.
This is the most promising approach to malaria yet. And it has proven to be very effective in mouse models. The next step is to expand into human clinical trials.
To that end, the team at Yale is partnering with a team at Oxford University. This is the same team that helped advance what is now known as the AstraZeneca COVID-19 vaccine through the human clinical trial process. That was instrumental in the vaccine getting emergency use authorization in Europe.
So this is a logical partnership for the advancement of this new malaria vaccine. I will certainly be watching this closely as it progresses into human testing.
What’s more, the team at Yale indicated that their malaria vaccine would not be expensive to produce. It will be easy to scale up manufacturing of the vaccine. And that will enable mass distribution in those countries that are most impacted.
So we are talking about a world-changing development here. This vaccine could protect hundreds of millions of people from malaria each year, saving hundreds of thousands of lives annually in the process – especially children.
I should also point out that this is all thanks to the rise of RNA therapeutics.
As we have discussed before, the success Moderna and BioNTech displayed in using mRNA technology to rapidly develop their COVID-19 vaccines has been a shot in the arm for the entire industry.
Their success demonstrated that biotech companies are now just as much “tech” as they are “bio.” They can innovate and iterate on the fly, just like the world’s best tech companies.
And this has led to billions of dollars pouring into the industry to finance new therapeutic development – especially new RNA therapies.
We are at the beginning of a massive, multiyear trend here.
I have said before that the 2020s will be the decade of biotech. And I am confident that RNA will be the hottest area of biotech in 2021.
Skydio is a U.S.-based drone company that I have been tracking for about five years now. In fact, I had an opportunity to invest in Skydio’s Series B funding round back in 2018… but I passed on it.
At the time, Skydio was producing consumer-grade drones for sports and outdoor enthusiasts. The idea was that the drones would sync with a tracker that people would wear on their wrists.
Then they could do activities like mountain biking in the woods or skiing down a massive slope. And the drone would follow them from the air, recording their every move and avoiding any obstacles.
Skydio Drone
Source: TechCrunch
This was certainly an interesting concept and very cool technology. But I passed on the deal because I didn’t think that there would ever be a big enough market for this to make it an appealing long-term investment.
Well, it turns out my investment thesis was correct. But because Skydio’s tracking and obstacle-avoidance technology is so good, the company was able to pivot to the enterprise marketplace. This is an area that I am very interested in. When investing in early stage startups, these kinds of major pivots happen a lot.
Skydio is now developing drones to perform tasks for large companies. Things like infrastructure inspection, security monitoring, and aerial imaging services. There is a major market for these services.
Let’s add Skydio to our early stage watchlist.
And that’s evidenced by the fact that Skydio just raised $170 million in a venture capital round led by Andreessen Horowitz. This raise values the company at a cool $1 billion, making Skydio the first U.S. drone company in history to become a unicorn. Had I invested, I would have been up about 5x on my original capital right now…
Sometimes we miss some, but I’m really happy the company made the pivot.
At the same time, Skydio’s biggest competitor, China-based DJI, has been banned from the United States. Two investigative reports determined that the software app used to control DJI drones was collecting a large amount of personal data from both the drone and the smartphones using the apps.
The data being collected had nothing to do with improving the functionality of the drone itself. Yet it was being sent back to company headquarters in mainland China for analysis. This was a gross violation of U.S. privacy laws, which is why the U.S. government banned DJI last year.
With DJI out of the picture, Skydio is now the most valuable private drone company in the enterprise space domestically. That’s creating a lot of momentum for Skydio. And that means we need to watch this company closely going forward.
Enterprise drone services are going to be a hot market in the coming years. And the top companies in the space will make incredible investment targets at the right valuation. At Brownstone Research, we’ll be ready to strike.
Facebook just settled a six-year class-action lawsuit in which it was accused of violating the Illinois Biometric Information Privacy Act (BIPA). This act was designed to prevent companies from gathering and using biometric data without consumer consent… which is exactly what Facebook did.
Years ago, Facebook rolled out a photo-tagging feature called “Tag Suggestions.” Readers may be familiar with it. The feature used facial markers to identify everyone in the pictures posted to the platform, even if the person wasn’t tagged. Then it prompted users to “tag” those people to confirm their identities.
I imagine most users didn’t think twice about doing this. But behind the scenes, Facebook used this information to create what may be the largest biometric database in the U.S. And it did this without ever asking for consent.
We don’t actually know how many people Facebook collected biometric data from. 1.6 million people participated in the class-action lawsuit, but this is likely a tiny fraction of the total number of people that used the feature. It is a safe bet that at least tens of millions more were impacted and don’t know it.
Facebook just settled this class-action suit for $650 million, essentially admitting its guilt.
The monetary amount won’t mean much to Facebook. It currently sits on cash and short-term investments totaling nearly $62 billion. And those 1.6 million people involved will receive just a few hundred bucks each in compensation.
The problem with these kinds of class-action lawsuits is that, the more people that join the lawsuit, the less the actual payout is per person.
Still, this is a big win for consumer privacy. We will see other class-action lawsuits follow. And that could be a deterrent for companies like Facebook and Google. Both companies possess software that has the ability to collect biometric data without consent.
So I’m happy with this outcome. It’s not going to stop the invasive data surveillance and information collection taking place, but at least it is a small win for our privacy. And hopefully, it will give pause to companies that are thinking about similar practices in the future.
Regards,
Jeff Brown
Editor, The Bleeding Edge
P.S. As I mentioned on Friday, a “final countdown” phase has begun… and it’s opening up an incredible opportunity for investors.
It’s all happening in a small subsector of tech stocks with a unique feature. They come with a “timer” attached.
And thanks to the federal government, when that timer ticks down to zero, the share price can skyrocket hundreds… even thousands… of percent in a matter of weeks or just days. That’s why I call these “Timed Stocks.”
And thanks to a convergence of seemingly unrelated forces, Timed Stock profits are getting bigger… they’re happening faster… and they’re happening more often than ever before.
That’s why I’m hosting an event we are calling Timed Stocks: Final Countdown on March 18 at 8 p.m. ET.
There, I’ll share all about what makes these Timed Stocks so profitable. And I will show how attendees can be poised to profit when the timer on my top Timed Stock goes off. Just go right here to reserve your spot.
Regards,
Jeff Brown
Editor, The Bleeding Edge
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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.
