Health Care Sector Update and Outlook

TRANSCRIPT

Teresa McRoberts (continued): There is a lot to learn still. We've also made tremendous progress on vaccines and therapies and I'll let CJ talk about that. And I think we've learned a lot about who's at risk. I know right now there is a concern about a second wave. I think there's a lot of speculation that for political reasons, there may be a vaccine approved before the election. And you certainly hear Dr. Fauci say things like by the end of the year, there will be no vaccine. So we've made a lot of progress. I'm not sure that they're going to be ready for prime time by then, but I think everybody's really, really trying, and then I’ll let CJ talk for a few minutes about vaccines and therapeutics. CJ Sylvester: I think to Teresa's point it's been rapid progress and although we still don't know a lot about the COVID virus and how to deal with it, the knowledge base of how to generate vaccines or prophylactic antibodies has progressed pretty rapidly. We are on a world record pace for developing probably three or four different vaccines against COVID. I know the timelines these companies have put out is for this summer or in the early fall. That's possible that we'll have data on initial efficacy of these vaccines, but it will take multi thousand patient studies to understand how safe these drugs are, or these vaccines are, and also to understand in an ongoing pandemic how effective they are. protracted than what a lot of the political authorities would like. I do think we may have initial data in the fall. But in terms of supplying billions of doses of a safe vaccine, I think we're probably at least a year away from that. And so I think that kind of frames the way we view the world from an investment standpoint. In the near term, I do think that there are what are called prophylactic antibodies that are being developed by a handful of companies. Those could be administered to frontline health care workers, people that are at high risk of being exposed to COVID. remains to be seen. But again, those prophylactic antibodies are something that you have to get every month. It's not like a vaccine where you could be protected for a year or two years. These prophylactic antibodies would be injections that you'd have to get every single month. And so the capacity there is nowhere near where it would need to be to get us back I think that there will definitely be vaccines. I'm confident that the timeline is probably something a little bit more Those should help keep people from getting severe disease, whether or not they help people recover faster,

to some sort of normalcy in the normal economy.

Dennis Hearns: Teresa, you mentioned the second wave. Now, with most states in some sort of reopening phase, we're starting to see an uptick in infections. Are you concerned about a second wave and the potential to shut down the economy again? Teresa McRoberts: I think I, like everyone, is worried about the second wave. I do think that some of the areas where we're seeing very significant, like in Texas, they didn't really have a first wave. So for them it's kind of a first wave, but I think it's a broader question. Am I concerned about widespread spread of the virus? I am. Clearly there seems to be and it's hard to parse out how much of this came from the reopening and the sort of relief that people saw. They felt that they were allowed to go out and behave normally because I think most people want to behave one way. And at the same time, we had significant amount of protests about social injustice. One of the areas that we keep hearing where hospitals are the hardest hit is the city of Houston, also an area where George Floyd grew up, and so the protests about social injustice and racial injustice were actually very, very large in Houston. It’s a little hard to say that shutting down the economy is necessarily the right thing, unless we're going to ban all those protests, which everyone seems to decide that isn't the case. And I think in general, even in states that are hit very hard and that shut down rapidly, they don't seem to want to go back to the shutdown. They really want to slow the reopenings. Where I am in Florida, they just put in a requirement that you need masks now. I know already up in the New York area, people are now wearing masks. So, I don't think in general people think that shutting down the economy is necessarily the right thing to do, except for possibly very significant hotspots and very controlled areas. Certainly shutting down an entire state because of what's going on in one city is not necessarily the right thing to do. I think people are still trying to figure this out. As you know, we had a lot of excitement in the market; airline stocks and hotels and cruise lines all went up on hopes that we were going to get a smooth reopening and then the cases started picking up. And now the market is having jitters about the whole reopening trade again.

Conference Call 2/8