New Chinese Covid Variants Could Drastically Affect the Stock Market in 2023

Today, several countries announced that starting soon they would be giving Covid-19 tests to people flying in from China.

They’re doing this for several reasons but mostly because China isn’t sharing their Covid-19. Cases, severity, variants, nothing. There are 1.4 billion people living in China, and experts estimate that around 800 million people could be infected in the next few months.

Every time the virus infects someone there’s a dice roll. Each dice roll has a chance of creating a new variant of concern. Thus far there have been five variants of concern. Alpha, Beta, Gamma, Delta, and Omicron. According to the WHO has only been 651 million confirmed Covid-19 cases. If you go by that number, then we can expect a variant of concern for every 130 million dice rolls. Since the number of confirmed cases is surely lower than the number of actual cases (asymptomatic, people not getting tested, etc) then we can probably double that number. Let’s say there have been 1.3 billion Covid-19 cases. That means a variant of concern can be expected to emerge after 260 million cases. If 800 million people in China get Covid, then we can reasonably expect around three variants of concern to emerge from China. (Even if you play with the numbers, we’re still probably looking at one or two VOCs)

Why does this happen?

It is not uncommon for viruses to undergo genetic changes as they replicate and spread, and the SARS-CoV-2 virus that causes Covid-19 is no exception. When a virus replicates, it is possible for errors to occur in its genetic material, which can lead to the emergence of new viral variants. These variants can differ in their biological properties, such as how easily they are transmitted or how severe the disease they cause is.

Since Covid-19 is now spreading unchecked in China, it is possible that new viral variants could emerge and spread. This could happen because the virus would have more opportunities to replicate and mutate within a large, susceptible population. It is possible for a viral variant to emerge that is more transmissible or more severe than previous versions of the virus. If such a variant were to spread, it could have significant public health consequences, including a greater burden on healthcare systems and potentially higher mortality rates.

What does this mean for the economy?

If a new variant emerges that is as infectious as Omicron, and as deadly or more deadly than Delta, it could have a massive impact on certain stocks and companies. The Covid-19 pandemic has had a significant economic impact, and many companies and industries have been negatively affected by measures such as lockdowns and restrictions on travel and gatherings. If a new variant of the virus were to emerge and cause a resurgence of the pandemic, it could lead to a renewed need for measures such as lockdowns, which could further disrupt businesses and industries.

Okay but who comes out ahead?

Some companies and industries could benefit from a resurgence of the pandemic. For example, companies that produce personal protective equipment (PPE) or other products related to the pandemic response could see an increase in demand. Additionally, companies involved in the production and distribution of Covid-19 vaccines and treatments could also potentially benefit if a new variant of the virus were to emerge.

New variants could mean new Covid-19 funding for research

Most people are tired of getting jabbed in the arm and would love an oral or nasal vaccine. Pfizer, Moderna, and BioNTech stand to benefit the most from a new variant which would require a new vaccine. Covid-19 vaccine sales peaked around $65 billion/year but have since fallen off a cliff. The demand for a newer and better vaccine could spur innovation in this space.

Last May, Bill Gates said: “We’re still at risk of this pandemic generating a variant that would be even more transmissive and even more fatal. It’s not likely, I don’t want to be a voice of doom and gloom, but it’s way above a 5% risk that this pandemic, we haven’t even seen the worst of it.”

This was back when China was still implementing its zero Covid strategy. Now that China is letting it rip, that 5% might be more like 10 or 15%.

It’s a depressing but simple calculation. More infections mean more opportunities for the virus to mutate. And now an extra 1.4 billion hosts just became available.

Even if a doomsday variant does emerge, all might not be lost

BioNTech is currently doing research with Matinas BioPharma. If you’re unfamiliar with Matinas, I don’t blame you. It’s a tiny company that hardly ever makes the headlines. It has an old and stale website, and the management never markets itself or tries to get people excited in the stock. But even if Matinas is being run by a bunch of boring old farts, it doesn’t mean the science isn’t exciting.

The Covid-19 vaccine you received was packed in a syringe. Inside the syringe were lipid nanoparticles (LNPs). Inside the LNPs was your vaccine. Lipid nanoparticles are a drug delivery system used by many companies, although it’s a bit contested now as to who owns the patents.

Matinas has developed a new drug delivery system called lipid nano-crystals (LNCs). These have been proven to allow the oral delivery of amphotericin B, a highly toxic drug that normally requires an intravenous injection.

BioNTech and Matinas have been working together since April 11th 2022, to see if LNCs can be used to package mRNA. This would allow for oral delivery of the next generation of vaccines.

There are several potential advantages to an oral vaccine compared to a traditional injectable vaccine. One is that oral vaccines are easier to administer. They do not require trained healthcare personnel or specialized equipment, such as needles and syringes. This can make oral vaccines more accessible and convenient, particularly in resource-limited settings or for populations that may be hesitant to receive injections.

Oral vaccines may also be more effective at inducing an immune response in certain populations, such as young children or older adults. This is because a large portion of your immune system is in the gastrointestinal tract, where an oral vaccine would be absorbed. This is different from the immune system in the muscles or skin, where an injectable vaccine is typically administered. (LNCs were specifically designed to survive in the GI tract.)

Additionally, oral vaccines may be more stable and easier to transport than injectable vaccines, which often require intense refrigeration. This can make oral vaccines more suitable for use in areas with limited storage and transportation infrastructure.

So, given that China is letting Covid-19 rip through its population, it has become a near certainty that we will see a new variant of concern in 2023. Hopefully BioNTech and Matinas can figure out how to make a better vaccine and save us all from another lockdown. Thanks for reading and don’t forget to follow us on Twitter.