February 21, 2021 12:30pm

By Steve Brozak, WBB Securities and Forbes

During today’s G-7 virtual meetings, President Joseph Biden announced the commencement of delivery on $4 Billion in Congressionally approved Covid-19 global aid. These meetings should be viewed as the best hope to begin a real discussion on coordinating plans to defeat the Covid-19 pandemic and rebuild the US and global economies.

While many have focused on how the discussions should be directed at the current plans of increased vaccine production, distribution, and administration, it has been much more. If vaccines are the only means the G-7 uses to combat the deadly virus, their efforts will by definition be too little and too late. While vaccines are important weapons in this war, they cannot guarantee victory. Currently, countries with large populations have limited or no access to vaccines and as such they have predictably become incubators for viral mutation (More than 4,000 variants and counting have been identified). Thus, to combat an increasingly resistant, more transmissible, and more deadly virus we must think about therapeutics, not only treat patients, but to also abate the constant reminder that Covid-19’s is the deadly embodiment of why a predictable tomorrow is the stuff that dreams are made of.


To emphasize this point, the problem with vaccines is that they are being used defensively and in the Covid-19 war as with shooting wars, a fixed defense can never triumph. The example from history is the Maginot Line, a failed static defense employed at the beginning of World War 2. It was a French engineered defensive marvel believed to be impregnable, but it ran only partially along France’s eastern front to protect it from Nazi invasion. Since the defenses ended at the Belgian border, the Germans just bypassed it and attacked the fortifications from behind, ending the Battle for France in 26 days.


Using today’s military terminology, a combined force of tanks, infantry, mobile artillery, and air power is the fundamental military doctrine in all the world’s armies. A similar deployment of combined public health weapons is the only way the war against Covid-19 can be fought. In this war, the weapons are Contact Tracing, Diagnostics, Genomic Identification, Frequently Adapted Vaccines and most importantly Therapeutics.


The following five sections of this article describe some of the crucial medical, economic, and social ways Covid-19 will continue to have impact on all our lives and must be addressed.


1.  Vaccines alone are ineffective in the long-run against Covid-19.

The current drive to vaccinate everyone in the U.S., Canada, and Europe will not protect people or the economy from the ever-evolving SARS-CoV-2 virus. Without accompanying testing, genomic surveillance, and therapeutics, vaccines alone will fail to stop the pandemic.

The legendary hockey player, Wayne Gretzky, said, “Skate to where the puck is going, not where it is.” Today’s vaccines are even worse than aiming for where the virus is because they were designed for where the virus was. Continuous testing and genomic surveillance are essential, so that variants can be identified, and new vaccines/boosters can be developed and distributed before the variants become dominant. In addition, therapeutics are critically essential because no vaccine is 100% effective. They are needed to treat those who get sick and must be treated on an emergent basis. Genomic testing is essential to identify new variants when they appear so public health agencies and vaccine manufacturers can quickly respond to them.

It was only through genomic surveillance of SARS-CoV2-infected blood from patients that investigators were able to identify the more problematic variants in South Africa, the United Kingdom, and Brazil. Initial data suggests that these variants are both more transmissible and more deadly than the original virus. Even more alarming are the reports from Brazilian investigators that the strain they discovered has been associated with re-infection in patients who had recovered from infection by the wild-type SARS-CoV2 virus.

All of this was factored into the South African decision to suspend its Astra-Zeneca vaccine inoculation program because the dominant variant there was resistant to it and a modified vaccine would not be available until Autumn. Moderna is developing of a modified version of its vaccine to neutralize the South African variant with no indication when it will be ready. Similarly, in what I believe will be recognized as a prescient move, Merck discontinued its vaccine program to focus on therapeutics. They understood the critical need for a therapeutic approach to limit death and the accompanying disabling sequelae from Covid-19.


2.  Covid-19 is not influenza.

Published studies from multiple leading international research laboratories make it clear that the SARS-CoV-2 virus causes a systemic disease we know as Covid-19, rather than a localized lung infection. The disease is transmitted throughout a patient’s body by the circulatory system. Along the way, the virus invades and injures the endothelial cells, which line all our blood vessels.  Endothelial cell injury results in inflammation and leads to the generation of minute blood clots or thrombi (hyper-coagulation) that travel throughout the blood stream until they lodge in the smallest blood vessels (capillaries) where they restrict blood flow to virtually every organ system. This condition is known as thrombotic microangiopathy.


The complement system is made up of about 25 proteins that work together to “complement” the action ... [+] ORIGINAL WORK OF THE US FEDERAL GOVERNMENT - PUBLIC DOMAIN


A primary driver of the inflammatory response to endothelial cell injury is the lectin pathway of complement, part of the body’s immune system. Activation of the lectin pathway in Covid-19 has been shown to cause an inflammatory cascade, including the “cytokine storm.” The consequence of lectin pathway activation and thrombotic microangiopathy in Covid-19 can be irreparable damage to the lungs, heart, kidney, liver, brain and other vital organs.

Clinical and nonclinical data now show that lectin pathway inhibition by a therapeutic targeting the key enzyme in the lectin pathway mitigates the Covid-19 related inflammatory response and improves outcomes in critically ill Covid-19 patients.


3.   Covid-19 has been the ultimate capital markets disrupt-er and threatens the world economy.

The Covid-19 pandemic is about to cross 500,000 American deaths and more than two million deaths worldwide. Yet, since it first struck and after an initial, brief collapse of financial markets, they have seemingly defied gravity as they reach record highs. In the first week of February, more than 20 million Americans received unemployment benefits, an additional one million applied for benefits, and many unemployed workers no longer have benefits because they expired.  Food lines not seen in a century are becoming commonplace, businesses are shuttered, bankruptcies are soaring, life savings are being depleted, foreclosures and evictions are rising.

Today’s seemingly robust capital markets are based on a Federal Reserve Interest Rate effectively at zero and the Fed has announced it expects interest rates will remain unchanged for the foreseeable future. Such a prolonged economic strategy offers the grave prospect of an eventual hyper-inflationary environment and by definition will ultimately cease to be effective in forestalling a collapse.

With continuing economic uncertainty, the only positive economic metric left in our service economy is capital market strength. But is it even real strength? An example of how financial markets have become decoupled from financial reality is the abrupt rise and fall of day-trading anomalies like GameStop on platforms like Robinhood fueled by Reddit and other social networking services. Under withering questioning during Thursday’s congressional hearings, the CEO of Robinhood, Vlad Tenev, confronted the accusation that he made up the rules as he went along when he stopped certain trading because his business partners demanded increased collateral. One representative said, “I don’t blame customers for feeling treated unfairly.”

These troubling signs are more than just stock market issues. Economic uncertainty and even of U.S. economic predominance are coming into question. Think about the example of the investment of $1.5 billion in Bitcoin by Tesla and the announcement that it planned to accept Bitcoin as payment for its cars, both happening just a few days before the price of Bitcoin exceeded $50,000. Are these initial indications that the U.S. dollar may not be the fiat currency in the future? Probably not, but time will tell, how many more assaults will take place and what their collective damage could be.


Financial experts and economists have predicted market collapses throughout history, but we are now being visited by greater dislocating events than even before the Great Depression of 1929. Economists, investors, and politicians hope that an end to Covid-19 will rescue the economy before a collapse. But as J.R.R. Tolkien wrote, “false hopes are more dangerous than fears, and they will not keep us warm this winter.”


4.  The world has been turned upside down in many old and new ways.

When Lord Cornwallis surrendered to George Washington’s army at Yorktown, British musicians played “The World Turned Upside Down.” It is an apt anthem for our times. We are experiencing a global inversion as revolutionary as the defeat of the then greatest military force in the world by a band of rebellious colonial soldiers.

The disruption caused by the Covid-19 pandemic has been exacerbated by new forms of social media distortion, which compound the chaos created by the disease. Disinformation and misinformation create alternate truths, divide adherence to health measures along political lines, and lead to the denial of the severity (or even the very existence) of the disease and its life-or-death outcomes. In effect, social media distorts reality to the point that we are asked to distrust both government and science, disbelieve what we see with our own eyes, and deny what is affecting our very lives.


The consequences are not fully predictable, but it is easy enough to understand that if national governments are unable to maintain social, health, and economic stability, nothing good will follow. It would be presumptuous to suggest which entities will evolve to address this need and fill the void, but we should think about what changes are in order.


What can be predicted is the rise of Non-Governmental Organizations (NGOs) that can work cooperatively to fight the virus and support mutual national efforts. Current examples of such organizations are The Coalition for Epidemic Preparedness Innovations (CEPI) and the Bill and Melina Gates Foundation. Given the distrust between national interests and disparities in resources, organizations like these may be the only effective institutions to effectively fight the virus. With no small irony, NGOs, with their financial resources and trans-border memberships, may outperform governments.

Again, the post-Covid-19 future is unpredictable and there is even some doubt that there will be a post-Covid-19 future.

Some credible sources have hypothesized that Covid-19 will never go away and that we will need annual vaccinations, as with the seasonal flu. One thing is for certain, the World War on Covid-19 must be fought on a global scale. To reiterate, if even one region is left without the resources to detect, vaccinate, and treat for Covid-19, then that region will become an incubator for new variants that will likely be even more dangerous than the existing ones. National governments, with their limited perspective that focuses on national well-being over global well-being, are incapable of meeting the challenges posed by Covid-19. A new organization, with global scope and influence is needed to cope with this evolving challenge.


5. Are the Best Years of Our Lives over? And What to expect in 10 years

As we begin the second year of Covid-19, we are still in only the first wave and It should already be understood that this will be a multi-year phenomenon. People are experiencing a litany of stress-induced emotional problems, including anxiety, boredom, disappointment, life dissatisfaction, mistrust, fear of infection, isolation, loneliness mental breakdowns, drug addiction, and suicide.

As reported yesterday, just one year into this pandemic and U.S. life expectancy is a year shorter (It is 2-years for African-Americans and 18-months for Latinos). The longer the pandemic rages, life circumstances could become dire and this can be a challenge for our political and social order. History teaches us that stressed people, who also feel powerless, look for scapegoats, and may turn to violence. In such an environment, despots arise, making unattainable promises and, worst of all, blame minority segments of the population for the dire circumstances. As unrest in our cities and attacks of government facilities have already demonstrated, it can happen here.

As of now, our national discussion centers around “how can we survive the pandemic and when will we return to a “normal” economy and social structure?” The question is fallacious because it focuses on how to endure Covid-19 uninjured. It is inevitable that even the best economies and societies will be, in military jargon, “walking wounded.” The question we should now be asking is, “how can we endure Covid-19 with minimal sustainable economic and social injury?” As Jonas Salk, inventor of the vaccine that defeated the Polio virus said, “What people think of as the moment of discovery is really the discovery of the question." As a nation and as a world, we have not yet begun to ask the right questions about the Covid-19 virus.


President Biden and the G-7 must act to address these realities. They must then take the cause to the G-20, for this war requires enlisting allies from every corner of the globe. Anything less will compromise our chances of victory.