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Novavax gets $1.6B from govt. to develop COVID-19 vaccine

Chief Medical Officer at Osmosis & Former Center for Disease Control and Prevention Epidemic Intelligence Officer Dr. Rishi Desai joins Yahoo Finance’s Zack Guzman to discuss how Novavax was awarded up to $1.6b with the Trump administration's Operation Warp Speed vaccine program.

Video Transcript

ZACK GUZMAN: When we think about what the odds are for a second hit, I want to stress that not all experts will necessarily agree that that's what we're seeing right now in the rising case counts in some states, just Florida and Texas and Arizona.

Some saying that those are very much tied to the rise in cases we saw in New York and what could be worse come fall might that actually be the true second wave. There's a lot to discuss here. And I'm glad to bring back Dr. Rishi Desai, chief medical officer at Osmosis and Former Center for Disease Control and Prevention epidemic intelligence officer.

And Dr. Desai, when we look at this, there are a lot of questions there. We got new data today out of Arizona and Florida, looking at the case counts falling versus their prior seven-day averages. So that might be optimism there to expect that. You can look at Houston data potentially showing a tick lower, that it could maybe signal the peak in Texas as well, though hospitalizations are rising. What's your take on where we head from here and how those states have been handling their own hot spots?

RISHI DESAI: You know, there's a direct relationship between how high the case count goes and what we do in terms of shutting down the economy, closing down congregations of people. So let's say that tomorrow, Texas, Arizona, and Florida start to reopen because they're feeling good, right? Then, of course, it's going to go back up.

If they clamp down harder, it's going to go down. It's a direct proportion. So this whole notion of what we define as a wave, it's a little bit of an academic discussion. What really matters is just look at the graph going up and down and up and down. And that's all that really matters at the end of the day.

And I think if we continue to shut down these states where the hotspots are for long enough, then we'll start to see a flattening in those areas, as we saw the first time. The problem is we, of course, reopened up too quickly. And that's what caused this explosion.

In the fall, of course, you might see another surge as people kind of get fatigued and complacent and tired, and political pressure, et cetera, builds up. So I think it's just a direct proportion of kind of going back up and down and up and down.

ZACK GUZMAN: We talk about states going up and down and up and down. We did get the update here that New York will also require travelers from Delaware, Kansas, and Oklahoma to quarantine for 14 days, added to that list that we've already seen. Now that's 19 states that Governor Cuomo wants travelers to quarantine from.

I mean, is that what we should be expecting as we move forward? A lot of these states that have seen their cases come down just tell travelers, you're going to need to quarantine.

RISHI DESAI: Absolutely. We see this internationally, right? So the countries that have gotten this under control say to other countries, hey, when you come to our country, you're welcome. But, you know, you have to quarantine for a little bit. This same thing is happening in the states. You know, we have 50 states. In some ways, it feels like 50 countries.

And so I think the states that have figured it out and have gotten their cases under control, they're right to control it within their state, keep it down by limiting the number of people that come in from hotspot states. And so we're going to continue to see that. It's going to be 19 today. Maybe it'll be 12 tomorrow if more states get their act together. Maybe it'll be 39 if more states kind of start showing up.

ZACK GUZMAN: Well, hopefully, that won't be the case. Let's talk, though, a little bit about where we are united as states here. And that would be kind of the progress being made on not just the drug treatment front here for patients, but also vaccine research.

Earlier today, we noted that Novavax-- that's a company that's seen its stock price rise more than 2,100% on the year-- notably has not had vaccines approved before, receiving $1.6 billion out of the US government's operation warp speed vaccine program. That was more than the $1.2 billion AstraZeneca got for its own research.

The CEO of that company just sat down with Yahoo Finance's "On the Move" a moment ago to discuss why he thought the government was buying into his company. I just want to play his thoughts and get yours on the other side. Here's what he had to say.

- The near-term data that I think was so appealing to the US government was our primate data, non-human primate data in baboons would show that we made high levels of neutralizing responses. It was safe, and it's scalable. And so that's why the US government felt comfortable making this large of a bet.

ZACK GUZMAN: All right, so there's a lot of data here that we're going to be getting. We get these updates from companies. It takes a while to get peer reviewed data out of these trials and things. And obviously, there's a long way to go from testing in baboons to getting a vaccine distributed to people around the country.

But what's your take on what he's saying there and why the government might be putting $1.6 billion to work in a company that notably has not put a vaccine out to market?

RISHI DESAI: You know, the federal government is making a lot of bets right now. This is their biggest bet. They've made other bets on vaccines as well. The fact that this has worked in mice-- he didn't mention that, but their pre-print publications showed it worked in mice, it worked in baboons-- is definitely inspiring. It's reason for optimism.

But I'll say, you know, obviously, cautious optimism. Baboons are different than humans. And there are many examples of things that work in animals that don't work in humans. And so now that money, that $1.6 billion, is going to be spent on phase three. So it's gone through phase one and phase two. So it's safe. We think it works in animals.

Now the big question-- does it work in humans? And I think we're going to have to look very closely at this data and see, you know, is it really working in humans, and what percent effective is it? Many vaccines are not 100%. I want people to start remembering that. It might be 60% effective.

And if it's 60% effective and you need 60% for herd immunity, that means you need every single human, you know, in the United States to take and volunteer to take that vaccine for us to get to herd immunity. So we have to start really looking at that phase three data closely, because it's how effective is it times how many people are going to take it equals hopefully greater than 60% to get herd immunity.

ZACK GUZMAN: The other question mark here, too, is, is you think about cost and what the overall goals here were supposed to be from the beginning. Obviously, it would be much preferred if we just saw the overall case counts in this country match what we saw across the pond and in Europe when we think about countries that were able to control the spread.

But now that we're here, it's a bit of a scenario where you have so many cases floating around the US. And obviously, as you said, it's a little bit easier to travel here. You've got people coming and going. And obviously, we're not a communist country. We can't impose these lockdowns. We hope that people will quarantine for 14 days when they come back from some of problem states.

But how much does that kind of speak to where we're at now, where we need to put the money in to get these vaccines, versus some other countries out there who might not necessarily need to spend as much to control the spread? Or is it that all countries will need to get there eventually?

RISHI DESAI: Yeah, I think all countries are going to need to get there eventually. Even countries that don't have a lot of disease right now are spending a lot of effort in keeping those case counts down and have a strong public health investment to do that. In the US, right now, many states and counties are saying, look, we just can't do contact tracing. We don't have the person power to pull it off.

And so that means that essentially, we don't really have a functioning public health system at the moment in many states. Which means the only thing we can do is the lockdowns. And I would actually suggest that we can do things that actually do help enforce the lockdown a little bit more stringently than we're doing now.

ZACK GUZMAN: Yeah, and how much-- just lastly, before we let you go, we talked about testing countless times. I mean, contact tracing, the hopes were high there. Based on how testing has gone on, not a lot of people were expecting a lot on that front. But when you look at testing, the US conducting nearly 15 million tests in June. That's three times as many as it had in April.

So we're clearly moving in the right direction. But still, you talk to people anecdotally in a lot of these states. The lines are long to get tests. The lines are long even to wait and see whether or not you're positive after actually getting a test. So what's your take on how testing may have lagged from the get-go here and where we're at today as we sit here on July 7th?

RISHI DESAI: Yeah, the goal should be around a million a day. Just if you want to drop a number in your head, it should be around a million a day. Right now, we're at around 600,000 a day. And you're right. That's way better than what we were doing back in April. That was around 150,000 a day. So we've already gotten fourfold. But we need to go a long distance further.

Now that number, 600,000, it's artificially inflated a couple of ways. One is that when you test a person, you might test them in the nose and in the blood and maybe in the throat. You know what that counts as? That's three tests. That's not three people. So we multiple-- you know, multiply that number of testing. And that's artificial. That's not different people that are being tested.

Additionally, your point, which is a great point, you know, what if you actually get a test today, but you get the result five days from now? Right now is when I'm contagious. It doesn't help me to know I'm positive in five days. And then I kind of secure myself in my home. I've already done the damage. I've already gone and spread it.

So you really need to have that data immediately for it to really count as a test. If you're going to get the data in five days, why even count that one? So these numbers are definitely a little artificially inflated.

ZACK GUZMAN: No, very important to remember there. And if you're going to get the test in five days later, you've got five days to think about how many awkward texts you have to send to people and say, hey, sorry about hanging out with you last Tuesday or whatever.

But Dr. Desai, appreciate you breaking all the data down. Obviously, we got a lot coming through here. But appreciate you giving us your thoughts there.

RISHI DESAI: Thank you.