Top Stories for Week of April 6, 2020

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CDC makes it official: public should wear face masks.

The CDC is now advocating that everyone should wear a cloth face shield out in public places to protect others in case they are unwittingly infected with the virus. Because there is currently no vaccine nor approved treatment, the agency stressed that the best strategy for preventing illness is still to avoid exposure to the virus. Even asymptomatic people can spread coronavirus to others, the CDC stressed.

During a White House briefing on Friday (April 3, 2020) evening, President Trump underscored the CDC’s advice to Americans who are not clinicians, that they not wear “medical-grade or surgical-grade” masks. These are now in shortage at many hospitals, forcing administrators to adopt desperate strategies to extend supplies. But Trump said he has no plans to follow the recommendation himself to wear a mask in public. “I’m choosing not to do it,” he said at the Friday briefing.

With the precise scope of the nation’s crisis unknown–and with Trump having undercut the new guidance of the Centers for Disease Control and Prevention by immediately declaring that he would not wear a mask himself–it was far from clear how many Americans would embrace the recommendation, though some state and local officials have made a point of doing so. Some health officials feared that people would don masks but loosen their compliance with social distancing guidelines.

The New York Times reported Saturday that at least 276,000 people in the US have tested positive for the virus, and officials believe the number of people who have been infected is far higher. More than 7,000 people have died, including at least 3,565 in New York State. The global death toll also climbed on Saturday (April 4, 2020), passing 59,000. The British government reported 708 deaths–a grim national record for a 24-hour period–while the Spanish authorities said 809 people had died over a day, the country’s lowest toll in a week.

The recommendation for masks in the US followed an intense West Wing debate over several days as a divided Trump administration wrestled with whether to request such a drastic change in Americans’ social behavior. Ultimately, the CDC suggested that people wear what it described as “simple cloth face coverings” when they are in places, like grocery stores and pharmacies, where it might be more challenging to keep away from others.

“It is critical to emphasize that maintaining 6-feet social distancing remains important to slowing the spread of the virus,” the CDC wrote in its recommendation, which it said was partly intended to “help people who may have the virus and do not know it from transmitting it to others.”

But Mr. Trump, in an appearance at the White House on Friday evening, repeatedly described the recommendation as voluntary and made clear that he did not intend to wear a mask.

A small number of US governors are resisting increasingly urgent calls to shut down their states. The pressure on those holdouts in the Midwest and the South has mounted in recent days as fellow governors, public-health experts and even their own citizens urge them to adopt the tougher measures that have been put in place across 41 states and in Washington, D.C. By Friday, nine states had yet to issue formal statewide stay-at-home orders (except for necessities”.

COVID-19 Addenda: 1) FDA approves first coronavirus antibody test in US; 2) Restrictions are slowing coronavirus infections; and 3) Coronavirus can spread one to three days before symptoms appear says CDC study.

The Food and Drug Administration on Thursday approved a new test from Cellex Inc. (Research Triangle Park NC) for coronavirus antibodies, the first for use in the US. Currently available tests are designed to find fragments of viral genes indicating an ongoing infection, says The New York Times. Doctors swab the nose and throat, and amplify any genetic material from the virus found there.

The new test, by contrast, looks for protective antibodies in a finger prick of blood. It tells doctors whether a patient has ever been exposed to the virus and now may have some immunity. That is important for several reasons. People with immunity might be able to venture safely from their homes and help shore up the work force. It may be particularly important for doctors and nurses to know whether they have antibodies. Antibody testing eventually should give scientists a better sense of how widespread the infection is in the population–and help researchers calculate more precisely the death rate.

Harsh measures, including stay-at-home orders and restaurant closures, are contributing to rapid drops in the numbers of fevers–a signal symptom of most coronavirus infections–recorded in states across the country, according to intriguing new data produced by a medical technology firm. At least 248 million Americans in at least 29 states have been told to stay at home. It had seemed nearly impossible for public health officials to know how effective this measure and others have been in slowing the coronavirus.

But the new data offer evidence, in real time, that tight social-distancing restrictions may be working, potentially reducing hospital overcrowding and lowering death rates, experts said. The company, Kinsa Inc. (San Francisco), which produces internet-connected thermometers, first created a national map of fever levels on March 22 and was able to spot the trend within a day. Since then, data from the health departments of New York State and Washington State have buttressed the finding, making it clear that social distancing is saving lives.

And, people infected with the novel coronavirus can transmit the infection one-to-three days before symptoms start to appear, according to a study published by the US Centers for Disease Control and Prevention (CDC). The study, reported by Reuters, which underscored the importance of social distancing to fight the coronavirus outbreak, looked at 243 cases of COVID-19, the illness caused by the coronavirus, reported in Singapore between January 23 and March 16.

It identified seven “clusters” where pre-symptomatic transmission was likely, and in four such groups, where the date of exposure could be determined, pre-symptomatic transmission occurred one-to-three days before symptoms appeared in the source patient. Of the cases in Singapore, 157 were locally acquired and 10 of these were likely transmitted before symptoms started to show. The findings suggest that it might not be enough for people showing symptoms to limit their contact to control the pandemic, the researchers wrote in the CDC’s Morbidity and Mortality Weekly Report, published online last Wednesday.

Blood centers will collect plasma from COVID-19 survivors in endeavor for treatment.

Blood donation centers across the US are ramping up efforts to collect plasma from people who have recovered from COVID-19 in hopes it could be used to save the lives of others infected with the pandemic disease. Under guidelines released last week by the AABB (formerly known as the American Association of Blood Banks), now an international nonprofit agency focused on transfusion medicine and cellular therapies, dozens of community blood centers nationwide could become a key source for the century-old treatment known as convalescent plasma therapy.

The treatment uses blood products taken from people who have recovered from a viral infection and injects them into those still suffering. Kaiser Health News says the experimental practice was used during the devastating 1918 flu, as well as to treat measles in the 1930s. In recent years, plasma therapy has been used to treat victims of Ebola, SARS and H1N1 influenza. Studies suggest that using the plasma had some success in reducing symptoms and death in past outbreaks, but its true efficacy has not been proved in rigorous clinical trials. In the current outbreak, anecdotal evidence from China shows that passive antibody therapy appears to help sick patients fight off COVID-19.

Given there’s no treatment or vaccine for COVID-19, experts say it’s a promising option to try.

“There isn’t anything else out there,” said Dr. Louis Katz, a blood industry expert who is leading the AABB’s working group on convalescent plasma. “There are historical precedents that it may be beneficial and enough early data that it’s safe.”

The new guidelines come a week after the federal Food and Drug Administration authorized the emergency use of convalescent plasma by doctors for individual patients who are critically ill with COVID-19. A few sites in the US, including the New York Blood Center, started collecting plasma the prior week. And a few clinical trials have started testing the use of survivor plasma for COVID-19. The American Red Cross has set up a website to collect information about potential plasma donors. As the AABB and America’s Blood Centers join the effort, the new rollout could expand the practice exponentially, Katz said.

“This is all medicine on the fly, right?” Katz added. “We don’t have the randomized controlled trials. We’re going to do the best we can.”

At community blood centers, plasma will be drawn from donors with lab-confirmed tests showing that they had COVID-19–and that since then have tested negative for it, or that 28 days have passed since they’ve shown symptoms. Donors will be eligible to provide plasma every 28 days, the guidelines say. Several academic laboratories and medical companies are racing to roll out tests that use a pinprick of blood to detect infection-fighting antibodies to the virus.

At first, it may be difficult for some blood centers to access the tests, Katz said. In the meantime, the centers will be allowed to harvest plasma from recovered COVID-19 donors, speed it to “very sick individuals as quickly as possible” and then test for antibody titers, or measurements, later, FDA spokesperson Michael Felberbaum said. That will make a huge difference in the potential volume of convalescent plasma collected, Katz said.

Pelosi creates House committee to oversee economic bailout.

To the chagrin of the White House, Speaker Nancy Pelosi (D-CA) on Thursday announced a new House select committee to oversee the Trump administration’s response to the coronavirus pandemic. On a conference call with reporters, Pelosi said House Majority Whip James Clyburn (D-SC) will lead the panel. She said the committee, which will include Democrats and Republicans, will oversee the Trump administration’s handling of the $2 trillion relief package passed the prior week and the government’s ongoing response to the crisis.

“We face a deadly virus and a battered economy with millions of Americans suddenly out of work,” Pelosi said. “Congress has taken an important step in leading this crisis by passing three bills with over $2 trillion in emergency relief. We need to ensure those dollars are spent carefully and effectively.”

The Speaker said the committee “will root out waste, fraud and abuse” and “protect against price-gouging, profiteering and political favoritism.” It will also try to ensure the US response to the outbreak is “based on the best possible science” and the advice of leading health experts, Pelosi said.

In response to Pelosi’s announcement, White House spokesman Steven Groves said President Donald Trump and the White House coronavirus task force “are committing 100% of their time, energy, and resources to ending the current crisis.” He added that “any attempt to politicize the crisis even before it has ended is dangerous.” On Thursday, House Minority Leader Kevin McCarthy (R-CA) called the panel redundant because of the oversight mechanisms built into the stimulus.

Pelosi announced the panel’s creation on a day the Labor Department reported that a staggering 6.6 million people filed unemployment claims last week as the outbreak ravages the economy. It brings the two-week total to about 10 million, an unprecedented figure as business grinds to a halt to slow COVID-19′s spread around the country. The US has more than 276,000 cases of the disease, the most in the world, according to data compiled by Johns Hopkins University. At least 7,000 deaths have been linked to COVID-19 nationwide.

Congress will not return to Washington until April 20 at the earliest as the pandemic takes a dire toll. Pelosi has called to move forward with another relief bill shortly after lawmakers come back to the Capitol, though Senate Majority Leader Mitch McConnell has said he wants to first see how effective the earlier stimulus money is before making a decision.

The federal government faces a complicated task in quickly handing out the money appropriated to distressed individuals, small businesses, states and corporations. It will execute or help to oversee an estimated $300 billion in direct payments to households, $350 billion in loans to small firms, $500 billion in grants and loans for big business, states and municipalities, and the state distribution of an extra $600 per week in unemployment insurance for workers displaced by the virus. The half-trillion dollar pool of taxpayer money sparked the most concern among Democrats as lawmakers crafted the relief bill. Pelosi at one point called it a “slush fund.” (Ref: CNBC)

Medical Stock Spotlight

Athersys Inc. (Nasdaq:ATHX) led advancing issues, rocketing 47% over the week to $2.88. In an interview last week on Fox News, the Cleveland-based biotech company’s CEO, Gil Van Bokkelen, said that Athersys is currently coordinating with the FDA to implement a large scale study to treat COVID-19. The study will involve several hundred COVID-19 patients that are experiencing acute respiratory distress syndrome, or ARDS. The treatment that Athersys will be using in the COVID-19 large scale study has already been proven in a Phase 2 study, which took years to execute. Based on the results from the Phase 2 study, the FDA awarded fast track status to Athersys’s MultiStem. This was months before the COVID-19 outbreak commenced. MultiStem cell therapy is a patented biologic product that is manufactured from human stem cells obtained from adult bone marrow and consists of a special class of human stem cells that have the ability to express a range of therapeutically-relevant proteins and other factors, as well as from multiple cell types.

Elsewhere, Kiniksa Pharmaceuticals Inc. (Nasdaq:KNSA) surged 43% to $17.91. The company announced “early evidence” of treatment response with mavrilimumab, an investigational fully-human monoclonal antibody, in a treatment protocol in patients with severe coronavirus 2019 pneumonia and hyperinflammation. The objective was to reduce incidence of progression of acute respiratory failure, the need of mechanical ventilation, and the transfer to the intensive care unit. All 6 patients treated with mavrilimumab showed resolution of fever and did not progress to mechanical ventilation. “These data are the first reported evidence of early-treatment response with GM-CSF antagonism in COVID-19,” said John F. Paolini, MD, PhD, Chief Medical Officer of Kiniksa. “By blocking GM-CSF signaling, mavrilimumab works upstream of interleukin-6 and potentially addresses the underlying pathophysiology of the hyperinflammation which may be responsible for the severe pneumonia of COVID-19.” The Hamilton, Bermuda-based company plans to evaluate a Phase 2/3 clinical development program pending regulatory feedback and data from treatment experiences.

And Sorrento Therapeutics Inc. (Nasdaq:SRNE) jumped 37% to $2.48. This has become the norm over the trailing twelve months, as the cancer-pain alleviation specialist has lost over 40% of its value, gained 60% back, before handing most of it back again. The San Diego-based biotech’s stock is down by 27% year-to-date. That hasn’t deterred H.C. Wainwright’s Ram Selvaraju from backing this small-cap name. The analyst recently reiterated a Buy rating on Sorrento and attached a new $24 price target. The figure still implies Sorrento  could add a truly astounding 1,222% to the share price over the next year. Why? The company has responded to the challenge of fighting the coronavirus on several fronts, with a growing pipeline of possible treatments and vaccines. These include STI-6991, an I-Cel COVID-19 cellular vaccine made of replication-deficient human erythroleukemia K562 cells, ACE-MAB ACE-MAB, a proprietary fusion protein and potential treatment of COVID-19, being developed in collaboration with China-based biopharmaceutical company, Mabpharm.

But cannabis producer Tilray Inc. (Nasdaq:TLRY) plummeted 39% to $5.54. Investor anxiety pervades the “pot” industry as another earnings season is just weeks away, where much of the focus will be on sales and profits and how they may change amid the coronavirus pandemic. However, for cannabis companies, there’s something much more important–liquidity. A big problem for many cannabis companies today is that they don’t have access to a lot of it, and they aren’t generating positive cash flow, either. On March 2, Canada’s Tilray released its year-end results. In them, investors saw that the company spent $258.1 million in cash throughout the year to fund its day-to-day operating activities. And this is before any growth or investing activities it would spend on to try to expand its business. Yet that amount of cash burn was already more than the cash and cash equivalent Tilray had on its books as of Dec. 31, 2019–$96.8 million. Tilray finished the previous year with a cash balance of $487.3 million. Therefore, it’s no surprise that in February, investment bank Ello Capital estimated that Tilray had less than four months of liquidity left to keep its operations running.

IPO Sector:

Keros Therapeutics Inc., a Phase 1 biotech developing therapies for blood and musculoskeletal disorders, announced terms for its IPO. The Lexington, MA-based company plans to raise $75 million by offering 5 million shares at a price range of $14 to $16. At the midpoint of the proposed range, Keros Therapeutics would command a fully diluted market value of $290 million. Keros’s lead candidate is KER-050, an engineered ligand trap, designed to increase red blood cell and platelet production in myelodysplastic syndrome and myelofibrosis patients with low blood counts. The Lexington, MA-based company was founded in 2015 and booked $10 million in collaboration revenue for the 12 months ended December 31, 2019. It plans to list on the Nasdaq under the symbol “KROS.” Keros filed confidentially on January 21, 2020. Jefferies, SVB Leerink and Piper Sandler are the joint bookrunners on the deal. It is expected to price this week.

And Zentalis Pharmaceuticals Inc., a Phase 1/2 biotech developing novel small molecule therapies for various cancers, raised $165 million in an upsized IPO by offering 9.2 million shares at $18, the high end of the range of $16 to $18. The New York City-based firm’s lead candidate is ZN-c5, an oral selective estrogen receptor degrader (SERD) in Phase 1/2 development for ER+/HER2- advanced/metastatic breast cancer. Topline data from the first phase should be available in H2. Other pipeline candidates include Phase 1/2-stage ZN-c3 for solid tumors and Phase 1/2-stage ZN-e4 for non-small cell lung cancer (NSCLC). In its prospectus, Zentalis noted the COVID-19 outbreak has had an impact on clinical trials, as enrollment has been delayed and staff has restricted access to the company laboratory.

Zentalis Pharmaceuticals was founded in 2014 and lists on the Nasdaq under the symbol “ZNTL.” Morgan Stanley, Jefferies, SVB Leerink and Guggenheim Securities are the joint bookrunners on the deal. Shares closed the week up 29% at $23.20.

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