Speed is Vital in Combating Coronavirus: How Companies in the HTEC Index are Stepping Up
For many healthcare companies, the new coronavirus will likely cause a near-term impact on P&Ls, as hospital purchasing for anything other than ventilators, masks, and tests will be on hold until the crisis is fully managed. Despite near term headwinds, leading healthcare companies are stepping up to help combat the outbreak, and demonstrating their ability to innovate at an unprecedented pace. As an expansion to our recent Coronavirus update, below we highlight companies in the HTEC Index that are developing or enabling breakthrough technology to identify and treat COVID-19. We believe these companies’ rapid responses provide a strong testament to their market leadership.
Genomic science has enabled new coronavirus R&D
Using sequencers made by the genomic market leader Illumina, scientists were able to quickly identify the genomic profile of the COVID-19 virus, which China made publicly available. Establishing this profile was the first step needed to kick-start the development of diagnostic tests and treatment.
Diagnostic companies sprint to make tests widely available
On the diagnostics front, several HTEC companies are innovating. This week Becton Dickinson, a global med-tech and diagnostic company, launched a test to detect SARS-CoV-2, the virus that causes the COVID-19 illness, in partnership with Spain-based CerTech, for use on BD instrumentation across Europe.
The US Department of Health and Human Services (HHS) in partnership with Hologic, another med-tech and diagnostic company, is seeking Emergency Use Authorization (EUA) for a SARS-CoV-2 test that can do 1,000 tests per day in three hours or less. The test is made for use on a Hologic instrument that is already in use around the world and thus allows for quick adoption and scale.
DiaSorin, an Italian diagnostic provider, is launching a small point-of-care testing instrument that can be used in ERs and quarantine areas. This brings the coronavirus test to where the patient is, and reduces turnaround time from what could otherwise take a few days. Through regulatory fast-tracking, the company is targeting availability in Europe in March, and in the US in April.
Swiss-based Roche just received its own EUA in the US and Europe for a coronavirus test to be used on automated instruments, which have a current install base of over 800 instruments worldwide. Depending on the model they own, labs can run between 1400 and 4100 tests per day in three hours. Roche expects to produce millions of tests per month for global availability in areas where approved. The FDA also issued a EUA to Thermo Fisher Scientific, a world leader in diagnostics based in Massachusetts, for its SARS-CoV-2 test, which Thermo expects to ramp to 5 million tests per week by April.
Precision medicine companies explore treatment
There are over 35 programs working on developing treatment or vaccines for COVID-19. HHS has partnered with Regeneron, a leading biotech company, to create a vaccine and treatment for COVID-19. Using its proprietary technology, which has proven successful in past outbreaks like Ebola and MERS, Regeneron aims to make its treatments available by August. This would be an unprecedented pace, as most vaccines take at least 12–18 months.
Telemedicine plays a critical role in getting care to those who need it
Shanghai-based Ping An and US-based Teladoc Health are two virtual care companies providing telemedicine services that enable remote visits between a physician and a patient via the internet. This is essential with lockdowns and escalating infection rates because remote visits also allow patients to stay at home, reducing the risk of further spreading disease in a crowded ER. In fact, Teladoc has already seen a 50% spike in recent patient visits utilization in recent weeks
The current volatility, rapidly changing news, and the rapid pace of innovation are making it increasingly challenging to manage single stock ideas in healthcare. One thing we know for certain is that other chronic illnesses aren’t going away despite the recent outbreak, and neither is the innovation to treat these illnesses. Investors in HTEC will be well-positioned to capture the upside of this innovation for years to come.
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