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As countries race to vaccinate their populations, new COVID-19 variants and vaccine supply concerns are undermining efforts to tackle the pandemic. Anthony Okolie speaks with Tarik Aeta, Healthcare Analyst, TD Asset Management, about where Canada and the rest of the world stand in their vaccination efforts.
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[MUSIC PLAYING]
- Tarik, it's been four months since the COVID vaccine rollout began. Big question is, where do we stand globally? And more importantly, where do we stand in Canada?
- Yeah. So yeah, thanks, Anthony, for having me on. Yeah, so when we last spoke in November, while I was really optimistic on the outlook for the vaccine, my caveat was that the rollout would likely be slow until we hit the summer. And this is exactly what we've seen.
Looking at the big picture, globally, there has been 650 million vaccine doses administered, which is just enough for under 5% of the world population. So there's still a very long way to go. Looking south of the border, the pace is progressing better, with one in three Americans having gotten their first dose. And the US is well on track, now, to complete their vaccination campaign by the end of July.
And more importantly, here at home in Canada, while the pace of vaccinations has been frustratingly slow, that said, we're seeing the pace pick up meaningfully, with now one in six Canadians having received at least one dose. And as we enter the summer months, that pace should pick up quite a bit as a lot of the doses that are currently going to the US under Operation Warp Speed will begin being redirected here to Canada once their vaccination campaign nears completion.
So all in, we should have half of all Canadians vaccinated by the end of June. And by the time we hit September, we should be largely done with the vaccination campaign here in Canada.
- We've already seen multiple vaccines being approved, but looking forward at the next few months, are there any additional key vaccine approvals you'll be keeping your eye on, including any potential boosters for some of the variants?
- Yeah. So when it comes to major vaccine approvals, we've basically seen the bulk of them already at this point, including Pfizer, BioNTech, Moderna, J&J, and AstraZeneca. That said, there are two other vaccine candidates I would watch in the months ahead. This includes both Novavax and Sanofi. And the reason being is that both those manufacturers expect to deliver over a billion doses, if successful.
The first one we'll hear from is Novavax. They've just finished completing their US phase three trial in February. And we can get phase three data from them as early as the end of April. Otherwise, the other really important thing to watch out in the months ahead, as you mentioned, are these new clinical trials that will be testing booster doses that have been optimized to tackle the variants.
So Moderna was the first to begin those trials in March. And what they're doing is slightly changing the mRNA code so the body can more easily detect the South African strain. And the goal here is to eventually create a single vaccine that can protect us against multiple strains at the same time, similar to what we see with the flu shot every year.
And last but not least, the last set of trials I would watch in the months ahead are the pediatric trials for children under 16 years of age. I don't expect anything major here. But this will, nevertheless, be important as we look to fully reopen schools in the fall.
So last week, Pfizer was the first in posting pediatric results for children between 12 and 15 years of age. The vaccine was 100% effective with no safety concerns. The next step would be for Pfizer to expand that trial to cover children between six months and 11 years old. Similarly, Moderna has embarked on similar trials. And we would expect all the other vaccine manufacturers to do the same in the months ahead.
- And globally, here and at home, we're seeing more cases being driven by the COVID-19 variants. What is the latest on the variants? And do you see this as a risk to the vaccine rollout programs?
- Right. So definitely, the data continues to show that the variants are spreading globally. Yeah, here in Ontario, the latest data shows that the variants make up 70% of all new COVID infections. And the UK strain specifically makes up the bulk of that.
When it comes to the variants, there's good and bad news. The bad news is that since January, the data has confirmed that the variants are not only more infectious, but the risk of hospitalization and death is also higher, roughly 30% to 60%, depending on which study you read.
That said, the good news is that the vaccines continue to work very well in preventing severe disease even when it comes to the variants. And we saw that very clearly with the J&J and Novavax data back in January. More recently, we got more proof of that with the recent Pfizer followup data that we got last week, where they haven't seen a single case of severe COVID in South Africa in their original clinical trial group.
So while someone might still get mild symptoms from the South African strain, even after being vaccinated, that said, what is most important is that this first generation of vaccine is still very effective in preventing severe disease and hospitalization. And I'd expect the next generation of boosters will go even a step further and fully protect against mild disease from these variants.
- Now, since last year, you've been fairly confident that by the fall of 2021, we can begin to reopen and things would normalize. Are you still optimistic, given the slow initial rollout?
- Yeah. So today, I'm just as optimistic as I was last year. That said, there's no doubt the next few months will still remain challenging as we go through this current third wave here in Canada. And we will all need to remain vigilant.
That said, the finish line is in clear sight. And all the data points continue to suggest that, by the end of the summer, once vaccine supply improves meaningfully, we'll have those vaccines open up to the broader public. And in very short order after that, I would expect to see society quickly reopen. And COVID should be largely behind us as we enter 2022, at least in Canada.
- And from an investment perspective, where do you see potential investment opportunities in the health care sector at this juncture with economies slowly beginning to reopen?
- Yeah, so when it comes to the health care allocation and our funds, the main way we've been positioning the health care portion for a post pandemic world has been through investments in the medical device industry. And these are the companies that make everything from pacemakers, artificial heart valves, surgical robots, to name a few.
Since March of last year, many of these companies have been hit hard. And that's because when the pandemic began, most hospitals cancelled elective surgeries and procedures to make room for COVID-19 patients. With the COVID-19 vaccine to be widely available by the end of the summer, we should see a really strong recovery in elective surgery, which will benefit the wider medical device industry.
So as we move through the second half of the year, I'd expect sales for the sector not only to return to pre-COVID level, but even exceed pre-COVID levels as the industry works through the large backlog of accumulated elective surgeries. And right now, as things stand, the backlog is estimated at roughly six months globally, and slightly longer here in Canada.
- Tarik, thank you very much for your time.
- Yeah, thanks Anthony.
[MUSIC PLAYING]
- Tarik, it's been four months since the COVID vaccine rollout began. Big question is, where do we stand globally? And more importantly, where do we stand in Canada?
- Yeah. So yeah, thanks, Anthony, for having me on. Yeah, so when we last spoke in November, while I was really optimistic on the outlook for the vaccine, my caveat was that the rollout would likely be slow until we hit the summer. And this is exactly what we've seen.
Looking at the big picture, globally, there has been 650 million vaccine doses administered, which is just enough for under 5% of the world population. So there's still a very long way to go. Looking south of the border, the pace is progressing better, with one in three Americans having gotten their first dose. And the US is well on track, now, to complete their vaccination campaign by the end of July.
And more importantly, here at home in Canada, while the pace of vaccinations has been frustratingly slow, that said, we're seeing the pace pick up meaningfully, with now one in six Canadians having received at least one dose. And as we enter the summer months, that pace should pick up quite a bit as a lot of the doses that are currently going to the US under Operation Warp Speed will begin being redirected here to Canada once their vaccination campaign nears completion.
So all in, we should have half of all Canadians vaccinated by the end of June. And by the time we hit September, we should be largely done with the vaccination campaign here in Canada.
- We've already seen multiple vaccines being approved, but looking forward at the next few months, are there any additional key vaccine approvals you'll be keeping your eye on, including any potential boosters for some of the variants?
- Yeah. So when it comes to major vaccine approvals, we've basically seen the bulk of them already at this point, including Pfizer, BioNTech, Moderna, J&J, and AstraZeneca. That said, there are two other vaccine candidates I would watch in the months ahead. This includes both Novavax and Sanofi. And the reason being is that both those manufacturers expect to deliver over a billion doses, if successful.
The first one we'll hear from is Novavax. They've just finished completing their US phase three trial in February. And we can get phase three data from them as early as the end of April. Otherwise, the other really important thing to watch out in the months ahead, as you mentioned, are these new clinical trials that will be testing booster doses that have been optimized to tackle the variants.
So Moderna was the first to begin those trials in March. And what they're doing is slightly changing the mRNA code so the body can more easily detect the South African strain. And the goal here is to eventually create a single vaccine that can protect us against multiple strains at the same time, similar to what we see with the flu shot every year.
And last but not least, the last set of trials I would watch in the months ahead are the pediatric trials for children under 16 years of age. I don't expect anything major here. But this will, nevertheless, be important as we look to fully reopen schools in the fall.
So last week, Pfizer was the first in posting pediatric results for children between 12 and 15 years of age. The vaccine was 100% effective with no safety concerns. The next step would be for Pfizer to expand that trial to cover children between six months and 11 years old. Similarly, Moderna has embarked on similar trials. And we would expect all the other vaccine manufacturers to do the same in the months ahead.
- And globally, here and at home, we're seeing more cases being driven by the COVID-19 variants. What is the latest on the variants? And do you see this as a risk to the vaccine rollout programs?
- Right. So definitely, the data continues to show that the variants are spreading globally. Yeah, here in Ontario, the latest data shows that the variants make up 70% of all new COVID infections. And the UK strain specifically makes up the bulk of that.
When it comes to the variants, there's good and bad news. The bad news is that since January, the data has confirmed that the variants are not only more infectious, but the risk of hospitalization and death is also higher, roughly 30% to 60%, depending on which study you read.
That said, the good news is that the vaccines continue to work very well in preventing severe disease even when it comes to the variants. And we saw that very clearly with the J&J and Novavax data back in January. More recently, we got more proof of that with the recent Pfizer followup data that we got last week, where they haven't seen a single case of severe COVID in South Africa in their original clinical trial group.
So while someone might still get mild symptoms from the South African strain, even after being vaccinated, that said, what is most important is that this first generation of vaccine is still very effective in preventing severe disease and hospitalization. And I'd expect the next generation of boosters will go even a step further and fully protect against mild disease from these variants.
- Now, since last year, you've been fairly confident that by the fall of 2021, we can begin to reopen and things would normalize. Are you still optimistic, given the slow initial rollout?
- Yeah. So today, I'm just as optimistic as I was last year. That said, there's no doubt the next few months will still remain challenging as we go through this current third wave here in Canada. And we will all need to remain vigilant.
That said, the finish line is in clear sight. And all the data points continue to suggest that, by the end of the summer, once vaccine supply improves meaningfully, we'll have those vaccines open up to the broader public. And in very short order after that, I would expect to see society quickly reopen. And COVID should be largely behind us as we enter 2022, at least in Canada.
- And from an investment perspective, where do you see potential investment opportunities in the health care sector at this juncture with economies slowly beginning to reopen?
- Yeah, so when it comes to the health care allocation and our funds, the main way we've been positioning the health care portion for a post pandemic world has been through investments in the medical device industry. And these are the companies that make everything from pacemakers, artificial heart valves, surgical robots, to name a few.
Since March of last year, many of these companies have been hit hard. And that's because when the pandemic began, most hospitals cancelled elective surgeries and procedures to make room for COVID-19 patients. With the COVID-19 vaccine to be widely available by the end of the summer, we should see a really strong recovery in elective surgery, which will benefit the wider medical device industry.
So as we move through the second half of the year, I'd expect sales for the sector not only to return to pre-COVID level, but even exceed pre-COVID levels as the industry works through the large backlog of accumulated elective surgeries. And right now, as things stand, the backlog is estimated at roughly six months globally, and slightly longer here in Canada.
- Tarik, thank you very much for your time.
- Yeah, thanks Anthony.
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