Trading the Next Phase of COVID-19 Variants
More than a year after the start of the COVID-19 pandemic, new variants of the disease pose a threat to those unvaccinated—which is more than 70% of the world.
Few would have predicted that the world would still be grappling with the COVID-19 pandemic during the summer of 2021. Yet here we are.
And unfortunately, it now appears as if a third wave of new caseloads may be surging across the globe.
Looking at historical data, the two previous waves peaked in January 2021, and again in April 2021. But those are only the broad-strokes, because different regions of the world have grappled with varying timelines when it comes to the first, second and third waves of rising caseloads.
The problem at this time appears to revolve around new variants of the original COVID-19 virus—such as the delta and lambda variants—which appear to be more transmissible.
As illustrated below, the first two waves of the pandemic peaked in January and April of 2021, respectively. The first wave peaked at roughly 750,000 new cases per day, while the second wave peaked at about 825,000 cases per day.
New infections dropped to about 300,000 per day in May and June of 2021, but that number has now risen toward 500,000 as of mid-July. Where and when the third wave peaks is anyone’s guess.
The good news, of course, is that the biotechnology sector has been able to equip humanity with effective and safe vaccines to help combat the spread of new variants. But due to the ever-changing nature of the pandemic, it’s not easy to ascertain which vaccines are effective against new variants, and to what degree.
A big question being asked right now is whether a “booster” shot of the vaccine might be suitable for fighting the third wave. In medical terms, a booster dose is the extra administration of a vaccine after an earlier dose. After immunization, a booster injection provides re-exposure to the immunizing antigen.
Pfizer (PFE), in tandem with BioNTech (BNTX) of Germany, recently stated their belief that a booster shot might be recommended within 6 to 12 months of initial immunization. However, public health officials have stated that any official guidelines on boosters will be issued by federal authorities—based on all available scientific data—and not by the corporate sector.
Notably, the country of Israel has already started administering third doses to some of its highest-risk citizens. And the United States government, in consultation with the medical community, is currently considering how to proceed with such guidance.
On July 12, senior public health officials from the U.S. government held a closed-door meeting with lead scientists from Pfizer to further evaluate this question. The results from the meeting weren’t definitive, but did provide some insight on potential next steps.
Basically, the group decided that the best course of action at this time is to focus on vaccinating a higher percentage of the U.S. population. Secondarily, plans are in place to monitor and analyze forthcoming data from ongoing booster studies, as well as to monitor data from regions already administering boosters, like Israel.
According to the New York Times, an infectious disease expert from Emory University—Dr. Carlos del Rio—said after the meeting, “At this point, the most important booster we need is to get [more] people vaccinated.”
Dr. del Rio was of course speaking to the fact that only about 50% of the U.S. population is vaccinated at this time, despite the fact that the country is bursting with vaccine supply. Dr. del Rio added, “Pfizer doesn’t get to decide when we need boosters; the F.D.A., C.D.C. and other regulatory agencies do that.”
Scientists have long hypothesized that a country with an extremely high degree of vaccinated citizens can effectively stop (or drastically slow) the spread of contagious viruses. So-called “herd immunity” occurs when a large portion of a community becomes immune to a disease, making the spread from person to person unlikely. As a result, the whole community becomes protected—not just those who are immunized.
What percentage qualifies as herd immunity? The short answer is, it varies.
The more contagious a disease is, the greater the proportion of the population that needs to be immunized to stop its spread. For example, measles is considered a highly contagious illness. And it’s been estimated that more than 90% of the population must be immune to measles in order to disrupt the chain of transmission.
It’s unknown exactly what percentage of a community needs to be “immune” to stop the transmission of COVID-19, but that figure is likely 80% or greater.
And while just over 50% of the United States is currently vaccinated, only 25% of the total world population has received at least one dose of an approved vaccine. That number plummets when looking at vaccinations in “developing countries,” where less than 1% of the citizens in such countries have received a vaccine.
Considering those global vaccination figures, it’s no surprise that newly mutated variants of COVID-19 are finding a path for transmission.
There’s simply too large a gap between the necessary percentage of vaccinated individuals and the herd immunity goal. This is especially true in disadvantaged economic regions.
Going forward, it appears the primary goal will be to significantly increase the percentage of global citizens that have received a vaccination, and that any push toward “boosters” will take a backseat to that initiative.
That means boosters may not be administered en masse this fall, and instead could be pushed back to spring of 2022—or later.
To trade the names most levered to global vaccination efforts, readers may want to look at companies such as AstraZeneca (AZN), BioNTech (BNTX), Johnson & Johnson (JNJ), Moderna (MRNA), Novavax (NVAX), Ocugen (OCGN) and Pfizer (PFE).
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Sage Anderson is a pseudonym. He’s an experienced trader of equity derivatives and has managed volatility-based portfolios as a former prop trading firm employee. He’s not an employee of Luckbox, tastytrade or any affiliated companies. Readers can direct questions about this blog or other trading-related subjects, to support@luckboxmagazine.com.
