Equity
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ISSUE 89 | ᖺ᭶᪥༗ᚋ('7TOPof ⤒῭෌㛤
MIND᪂ᆺࢥࣟࢼ࢘࢖ࣝࢫឤᰁ⑕㸦&29,'㸧ࡢᑐᛂ⟇ࡀዌຌࡋ࡚ୡ⏺ⓗ࡟ឤᰁ⪅ࡢቑຍ࣮࣌ࢫࡣ᫂ࡽ࠿࡟㕌໬ࡋ࡚࠸ࡿࡀࠊྠ᫬࡟ࡇ࠺ࡋࡓᑐ⟇ࡢ⤒῭ⓗ࡞௦ൾࡣ⭾ࡽࡴ୍᪉࡛࠶ࡿࠋࡇࡢࡓࡵࠊ࠸ࡃࡘ࠿ࡢᅜࡣ⤒῭άືࡢ෌㛤࡟ྥࡅࡓࣉࣛࣥ
ࢆᶍ⣴ࡋ࡚࠾ࡾࠊ࡞࠿࡟ࡣࡍ࡛࡟ᐇ㊶ࡋ࡚࠸ࡿᅜࡶ࠶ࡿࠋࡋ࠿ࡋࠊ᪂ᆺࢥࣟࢼ
࢘࢖ࣝࢫ࡟ᑐࡍࡿ㞟ᅋච␿࠶ࡿ࠸ࡣ࣡ࢡࢳࣥࡀᏑᅾࡋ࡞࠸≧ἣ࡛ࡣࠊ⤒῭෌㛤ࡣឤᰁࡢ➨Ἴࡢࣜࢫࢡࢆ㧗ࡵࡿࡇ࡜࡟࡞ࡿࠋࡇ࠺ࡋࡓⅬࢆ㋃ࡲ࠼ࡿ࡜ࠊᏳ඲࡞⤒῭෌㛤࡜ࡣ࡝ࡢࡼ࠺࡞ࡶࡢ࡞ࡢ࠿ࠊࡑࢀࢆᐇ⌧ࡍࡿࡓࡵࡢ≧ἣࡣ༑ศᩚࡗ࡚
࠸ࡿࡢ࠿ࠊࡲࡓ⤒῭άືࡢ෌㛤ᚋࠊ࡝ࡢࡃࡽ࠸⤒࡚ࡤᐇ㝿࡟ᬒẼࡣᅇ᚟ࡍࡿࡢ
࠿ࡀ┠ୗࡢࠕ᭱኱ࡢ㛵ᚰ஦㸦7RSRI0LQG㸧࡛ࠖ࠶ࡿࠋࡇࢀࡽࡢⅬ࡟ࡘ࠸࡚ࠊ࣌
ࣥࢩࣝ࣋ࢽ࢔኱Ꮫࡢࢮ࣭࢚࣐࢟ࢽ࢚ࣗࣝ༤ኈࠊࢹ࣮ࣗࢡ኱Ꮫࡢ࣐࣮ࢡ࣭࣐ࢡࣞ
ࣛࣥ༤ኈ࠾ࡼࡧࣁ࣮ࣂ࣮ࢻ኱Ꮫࡢࣂ࣮࣭ࣜࣈ࣮࣒ࣝ༤ኈࡢேࡢᑓ㛛ᐙ࡟⪺࠸ࡓࠋࡉࡽ࡟ࠊ⤒῭άືࢆ෌㛤ࡋ࡚࠸ࡿ୰ᅜࡢࡇࢀࡲ࡛ࡢ⤒⦋࠿ࡽᚓࡽࢀࡿᩍカࢆ㋃ࡲ࠼ࠊ⡿⤒῭ࡢᅇ᚟ࡢ㐨➽࡟㛵ࡍࡿᙜ♫⮬㌟ࡢぢゎࡶ⤂௓ࡍࡿࠋࡲࡓࠊຠ
ᯝⓗ࡞᳨ᰝไᗘࠊ἞⒪࠶ࡿ࠸ࡣ&29,'࣡ࢡࢳࣥࡢᬑཬࡀᐇ⌧ࡋ࡚ึࡵ࡚᏶඲࡞ᙧ࡛ࡢ⤒῭ࡢṇᖖ໬ࡀྍ⬟࡟࡞ࡿ࡜⪃࠼ࡽࢀࡿ࡞࠿ࠊ⌧ᅾࠊࡇࢀࡽࡢほⅬ࡛ᐇ㝿࡟࡝ࡢ᫬Ⅼ࡟࠶ࡿࡢ࠿࡟ࡘ࠸࡚ࡶ⪃ᐹࡍࡿࠋ“┠ḟࠕࡇࢀࡣ౪⤥ࢧ࢖ࢻ࡛ࡣ࡞ࡃ㟂せࢧ࢖ࢻࡢ㸦⤒῭㸧ၥ㢟࡛࠶ INTERVIEWS WITH:
ࡿࡇ࡜ࢆ♧၀ࡍࡿドᕥࡀᏑᅾࡋࠊࡑࡢሙྜࠊࣞࢫࢺࣛࣥࡸࢩ
Dr. Zeke Emanuel, Vice Provost for Global Initiatives,ࣙࢵࣉࡢႠᴗࢆ෌㛤ࡋࡓࡔࡅ࡛ࡣၥ㢟ࡣゎỴࡉࢀ࡞࠸ࠋࠖ
University of Pennsylvaniaࢮ࣭࢚࣐࢟ࢽ࢚ࣗࣝ༤ኈ

ࠕࡇࢀࡲ࡛࡟᫂ࡽ࠿࡟࡞ࡗ࡚࠸ࡿࢹ࣮ࢱࡣࠊ኱ከᩘࡢ⡿ᅜ
ேࡀ&29,'࡟ᑐࡍࡿච␿ࢆᣢࡗ࡚࠸࡞࠸ࡇ࡜ࢆ♧၀ࡋ࡚࠸ࡿࠋࡇࡢࡇ࡜ࡣࠊ௬࡟ṇࡋࡃᑟධࡉࢀࡓ࡜ࡋ࡚ࡶࠊᢠయ᳨ᰝࡣ⤒῭෌㛤࡟ྥࡅࡓ୺せ࡞ゎỴ⟇࡟ࡣ࡞ࡽ࡞࠸ࡇ࡜ࢆ
ព࿡ࡍࡿࠋࠖ
࣐࣮ࢡ࣭࣐ࢡࣞࣛࣥ༤ኈࠕ⤒῭෌㛤ࢆᶍ⣴ࡍࡿ࡟࠶ࡓࡗ࡚㘽࡜࡞ࡿࡢࡣࠊ⑕≧ࡢ࡞࠸ேࠎࡢ᳨ᰝࡢ኱ᖜ࡞ᨵၿ࡛࠶ࡿ͐⤖ᒁࡢ࡜ࡇࢁࠊ࠸ࡘࡶ
ࡢࣇ࣮ࣞࢬࡢ⧞ࡾ㏉ࡋ࡟࡞ࡿ㸸᳨ᰝࠊ᳨ᰝࠊ᳨ᰝࠋ᳨ᰝࢆ
⾜࠺ࡇ࡜࡟ᑾࡁࡿࠋࠖ

“ࣂ࣮࣭ࣜࣈ࣮࣒ࣝ༤ኈ

࢔ࣜࢯ࣭ࣥࢿ࣮ࢨࣥ | allison.nathan@gs.com

Dr. Mark McClellan, Director of the Duke-Margolis Center for Health
Policy, Duke University
Dr. Barry Bloom, Professor, T. H. Chan School of Public Health,Harvard University
REOPENING THE US ECONOMYDavid Choi and David Mericle, GS US Economics Research
CHINA’S ROADMAP: WHAT IS/ISN’T APPLICABLE
Hui Shan, GS China Economics Research
Q&A ON TESTING, TREATMENTS AND VACCINES
Salveen Richter, GS US Biotechnology Equity Research
CONTROL MEASURE EFFICACY AND REOPENING
Daan Struyven and Isabella Rosenberg, GS Economics Research
TESTING: A VITAL PART OF THE STORY
Michael Cahill, GS Markets Research㺔㺼㺪㺼㺶㺒㺷࣭㺶㺪㺽㺢㺻࣭㺔㺼㺷㺪㺼㺸㺐㺛 | gabe.liptongalbraith@gs.com 㺚㺼㺈㺤㺎࣭㺖㺼㺶㺯㺨㺼㺎㺖㺼 | jenny.grimberg@gs.com

˟˷˞̇˥˛˸˿˧ˋ˷́ƌʾ̂̈ʒ˿̋ɫʐ˾˭ǑȬ˛ʶˮ̃̀ ɁȁɁ̆ʯɗ̄AC̉ȔǴ˛ʛƶʖʌ˵˖ˈ̉
ˆ̋ɮ̋Ʈʐ˵ʝɺʖʌ̇̊¯G̋ʝɺʖʌ̊˸˼̇www.gs.com/research/hedge.html ̉ɰɠˮ˴˺˭ˬ˸̂̀

The Goldman Sachs Group, Inc.

Issue 89

Top of Mind

El

経済再開
広範にわたる休業、ソーシャル・ディスタンシング、その他の緩和措置の効果で、欧米では COVID-19 の感染拡大に鈍化の兆しが見られる一方、これらの措置による経済的な打撃がますま
す顕著となっている結果、多くの国が経済再開を模索し始めており、一部にはすでに経済活動を再開している国もある。実際、中国本土に続いて、デンマーク、オーストリア、ドイツがすでに段階的な経済活動の再開に着手している。また、米国では先にトランプ政権が経済再開ガイドラインを発表しており、一部の州は独自の経済再開計画を導入し始めている（7～8 ペー
ジを参照）。

当社中国シニアエコノミストのヒュイ・シャンは、中国の経済再開が米国をはじめ諸外国にとって有効なロードマップを提供することになるのかどうかを検証した。その結果、経済再開に際して中国が直面した感染再拡大のリスク、まだら模様の景気回復といったいくつかの課題は、（基本的に）他の国にも共通すると考えられる。しかし、中国が経済再開を概して成功させている背景にあるいくつかの重要な要因、例えば監視技術を駆使したウイルスの感染拡大の厳重な監視と管理、工場や企業に対する中央政府による圧力と支援などは、他の国には当てはまらない可能性がある。

しかし、COVID-19 に対する集団免疫やワクチンが存在しない限り－いずれも近く実現する可能性は低い－経済再開は感染の第 2 波を招くリスクが大きい。このため、安全な経済再開とはどのようなものなのか、それを実現するための状況は十分整っているのか、また経済活動の再開後、どのくらい経てば実際に景気は回復するのかが目下の「最大の関心事（Top of Mind）」である。

さらにエマニュエル博士は、近々経済活動を「再開」しても、経済的な浮揚効果はそれほど得られない可能性があると警告する。
博士は、現時点の経済的な打撃は休業、すなわち供給サイドの問題によるというよりも、公衆衛生に対する不安、すなわち需要サ
イドの問題を反映したものである可能性が高いと強調する。米国
をはじめ各国がこうした不安を和らげることになる盤石な検査体制と感染経路の追跡システムを確立しない限り、入り口に「営業中」の看板を吊るしただけではこの問題は解決されない。

各国のロックダウン（都市封鎖）状況
当社の実効ロックダウン指数（ELI）；指数
100
90
80
70
60
50
40
30

China
United States
Germany
Italy
United Kingdom
Japan
Singapore
India

20
10

2/7
2/10
2/13
2/16
2/19
2/22
2/25
2/28
3/2
3/5
3/8
3/11
3/14
3/17
3/20
3/23
3/26
3/29
4/1
4/4
4/7
4/10
4/13
4/16
4/19
4/22

0

出所 : オックスフォード大学、グーグル、ゴールドマン・サックス証券投資調査部 . (詳細はこちらを参照 )そこで、ペンシルベニア大学グローバル・イニシアチブ副学部長で、オバマ政権下で医療政策顧問を務めたゼキ・エマニュエ
ル博士、デューク大学デューク・マルゴリス・ヘルスケア政策センター長で、G・W・ブッシュ政権下で FDA 長官を務めたマーク・マクレラン博士およびハーバード大学公衆衛生大学院教授のバリー・ブルーム博士の 3 人の専門家に取材した。安全な経済再開のためには米国内の大半の地域における感染状況の一段の改善が必須であること（さらにそれをどのようにして判断するかが重要）、経済活動を再開するのであれば段階的にすべきであること（密接な接触を伴う非必須とされる事業活動の再開と重症化リスクの大きい人々の保護策の緩和は先送りする）、
安全な再開のためには検査の拡大と感染経路の解明が不可欠であること（いずれも、パンデミックの進行過程のどの段階にあるかをより的確に判断するとともに、感染の再燃を防止/抑止するために不可欠な無症状感染者の特定・隔離を可能にするため）で、3 者の見解は一致している。
当社エコノミストのダーン・ストライブンとイザベラ・ローゼ
ンバーグによる詳細にわたる分析はこうした見方を裏付けており、公的なウイルス防止策は感染拡大の抑制に非常に大きな効果を有し、こうした対策を早計に見さかいなく緩和すると感染拡大の第 2 波を引き起こすリスクが高まることが確認された。
また、当社ストラテジストのマイケル・カーヒルは、確かな情報に基づく経済再開計画の策定に欠くことのできない感染状況のより正確な把握に不可欠な検査の規模とその制約について理解することがいかに重要であるかを解説している。
Goldman Sachs Global Investment Research

以上を理由に、当社米国エコノミストのデビッド・チョイとデビッド・メリクルは米国の経済再開のペースについて慎重な見方をとるが、米国企業による大量のレイオフの大半はこれまでのところ一時的な性格のものとなっているの兆候も見られる。
総じて、当社エコノミストの基本的な見方に変更はなく、5 月
から米国の成長率は緩やかに回復し始め、2Q の極めて低い水準
からとは言え 3Q には前期比年率＋19％、4Q には同＋12％の成長を記録し、2020 年通年の成長率は－6.0％になると予想する。
もっとも、COVID-19 の集団免疫の形成、あるいは効果的な治療
薬、ひいてはワクチンの開発が実現すれば、当然のことながら経済の正常化に向けた重要な転換点が訪れることになろう。そこで、ブルーム博士ならびに当社の米国バイオテクノロジー・
セクター主任アナリストのサルヴィーン・リヒターに、その実現に不可欠な要件と現在どの段階にあるのかについて聞いた。
ブルーム博士は、集団免疫を近く獲得できる可能性は低いと考える理由を説明するとともに、そもそも COVID-19 に対する免疫の持続期間が依然としてわかっていないと指摘する。さらにブルーム博士は、ワクチンが開発されるのは早くても 1 年半後と見ている。しかし、明るい材料もある。博士によれば、それでもこのワクチン開発スケジュールはワクチン開発技術の画期的な進歩（詳細については原文 22 ページを参照）が貢献して記録的なスピードであることを強調しており、また今後開発されるワクチンの有効性において新型コロナウイルスの変異が問題になることもないと考える。さらに博士は、ワクチンの開発よりもはるかに早い時期－早ければ今秋－に有効な治療薬が開発されると確信している。現時点で最も有望な治療薬とワクチン、さらに開発の成否を知る手がかりとして向こう数週間および数ヵ月にわたって注目すべき点について、リヒターが解説する。

Allison Nathan, Editor
Email: allison.nathan@gs.com
Tel:
212-357-7504
Goldman Sachs and Co. LLC

2

Issue 89

Top of Mind

Interview with Dr. Zeke EmanuelEl

Dr. Zeke Emanuel is Vice Provost for Global Initiatives at the University of Pennsylvania, co-host of
the Endeavor Content podcast “Making the Call”, and former Health Policy Adviser in the Obama
White House. Below, he argues that the problem with the economy may be demand driven, and so
reopening states without a testing regime that boosts public confidence may not solve the issue.
The views stated herein are those of the interviewee and do not necessarily reflect those of Goldman Sachs.
Allison Nathan: The Trump
Administration recently rolled out aplan for reopening the US. Where
does the plan get it right, and where
does it fall short?
Dr. Zeke Emanuel: The plan gets
three important things right. First, thatthe reopening must be phased.
Second, that different kinds ofnonessential businesses should reopen at different stages
depending on the risk they pose in terms of spreading thecoronavirus. And third, that vulnerable populations, such as
people living in senior facilities, should be particularly protected,
with visits to these facilities only permitted in the late phase ofreopening and with strict hygiene protocols.
But the plan gets many things wrong. One is the trigger forreopening. The guidelines suggest a trigger of 14 days of
declines in cases and sufficient hospital capacity. While hospital
capacity seems right, I think the absolute level of infection is amore appropriate trigger. That’s because you could still have ahigh transmission rate even as the number of cases declines,
which is, in fact, what we are seeing in many places rightnow—basically, a plateau in cases with only a very slow decline.
You can’t have a very high transmission rate and reopen, so thetrigger should be a low rate of infection, at around 20 new
cases per million of the population.
The second problem is the grouping of heterogeneous
businesses—including restaurants, sporting events andreligious services—under “large venues” that can reopen withstrict physical distancing protocols in the earliest phase. The
problem is that these venues pose very different risks to the
spread of the virus. In a restaurant, you can remove half thetables, space them out, and have people wear face masks
when they’re not eating. At sporting events, even if seating isspaced out, people inevitably will be crammed together at theentry gate, concession stands, and bathrooms, and cheering
will certainly spew all sorts of droplets into the air; nobody getsup and shouts across a restaurant. So I think that’s a bad
mistake. The guidelines also make no mention of how to handle
flare-ups of COVID-19 in the community once it starts toreopen. And finally, the plan is a failure when it comes totesting—the linchpin in any effort to reopen the economy.
Allison Nathan: On testing, how short are we of what weneed to safely reopen, and how can we overcome thisshortfall?
Dr. Zeke Emanuel: The reported numbers suggest US testingis hovering around 150k tests per day. The minimum number ofrequired tests I’ve seen is about 500k a day, which seems tocome from CDC guidelines that we should test people who are
symptomatic. But even this minimum number of required tests
Goldman Sachs Global Investment Researchis still not enough, because just testing people with symptoms
is the wrong approach. The big issue in reopening the economy
is the extent to which it could accelerate transmission of thevirus. And to get a handle on transmission, you need to focus
on a bunch of core groups, but two in particular. One is frontline
people who have a lot of contact with others, including
healthcare workers, grocery workers, policemen, and first
responders. Those people must be tested regularly, like every
week. If you just add up those groups, that’s 7 million people,
or 1 million tests a day.
The other group of people that must be tested in order toprevent potential flare-ups are people who are asymptomaticand could spread the virus to many other people, so-calledsuper spreaders. We’ve seen the damage these superspreaders can inflict in the outbreaks at the Smithfield meat
processing plant in South Dakota and the Biogen meeting in
Boston. By definition, you can’t find those asymptomatic people
when you are only testing people with symptoms. So you needto find them by tracking contacts of symptomatic people, which
requires technology, and by conducting frequent tests on arandom sample of the community. When all is said and done,
we estimate that all of this testing required to safely reopen theeconomy amounts to about 2 million tests per day—so we arevery far short of what we need. How do we address thisshortfall? To start, we need an acknowledgment of thisshortfall. And then we need a very strict game plan, probably
led by a single, competent leader.
Allison Nathan: The administration has suggested thatsome of the numbers on testing could be misleading
because more testing is being done by private labs. Could
we have less of a testing shortfall in reality than we think?
Dr. Zeke Emanuel: Maybe. But, first of all, the fact that reliabledata on testing—as well as other basic COVID-19 metrics—isn’t
available is plain incompetence. This is knowable data that wemust have to be able to efficiently move forward on reopening,
treatment and other fronts. And, second, it’s very unlikely thatthree or four times the number of reported tests—the minimum
amount required—are going uncounted, let alone the 15 times
more tests we think we really need. This is especially the caseas labs like Quest Diagnostics are laying off people because
testing outside of COVID-19 is down; I doubt Quest would be
reducing their workforce if they were doing excessive testing.
Allison Nathan: What do you make of the fact that somestates, like Georgia, have already begun to reopen?
Dr. Zeke Emanuel: It’s strange because there’s no evidence
that Georgia has met any of the criteria to reopen at all—letalone businesses like tattoo parlors and salons, which areamong the places already permitted to reopen. Intimate contact
is difficult to avoid at these types of businesses so it will be
hard not to end up with a spread situation.
3

Top of Mind

Issue 89

El

Allison Nathan: Given that, is it really the right decision todefer reopening decisions to states?
Dr. Zeke Emanuel: Whether or not it’s “right” is irrelevant;that’s the American system, and changing it would likely require
a constitutional battle. The President obviously has a lot of
persuasive power, and Congress can adjust laws and provide
different incentives, but this power resides with the states.
Allison Nathan: Driving the push to reopen is the massive
hit to the economy. But will states just “reopening”
necessarily solve our economic woes?
Dr. Zeke Emanuel: No. Many people seem to assume that the
problem with the economy is a supply side one—namely, that
non-essential businesses are closed. So once we reopen them,everyone will come rushing back and spend money. That may
not be true. Despite the recent protests against the shutdowns,
polling data shows that a large number of people are hesitant toreturn to work and reengage in the community because ofhealth fears. This is consistent with data that suggests thatmany people reduced their mobility even before shelter-in-placeand similar orders were implemented. So the evidence
suggests that this may be a demand side problem, not a supply
side one, which won’t be solved by just opening up a restaurant
or a salon. Solving it before we have effective treatments or avaccine will instead require an effective testing regime so thatpeople can have confidence that when they go to restaurants orother businesses, they won’t get sick.
Allison Nathan: Is there anywhere in the US where you
think people should feel more confident at this point?
Dr. Zeke Emanuel: I honestly haven’t looked at all the data forevery state, but if you look at the major places, it’s clear thatwe’ve made serious advances in places like Seattle and the San
Francisco area, where decision makers acted very early andconcertedly to slow the spread. But even in those places where
we are seeing positive signs in the disease trajectory, it’s still
too early at this point to feel comfortable. Very few places have
met the threshold of the low absolute transmission rate that I
mentioned earlier.
Allison Nathan: Once we do meet the criteria to start aphased reopening, what should reopen first?
Dr. Zeke Emanuel: Nonessential businesses like some offices,
factories and restaurants, where temperatures can be taken,
physical distancing can be achieved and masks can be worn area good place to start. Reopening of schools and summer camps
can also start early given that, at least so far, young people haveexperienced low rates of infection and only very rare cases ofserious infection. That should happen on a voluntary basis,though, given the risk that children could bring the diseasehome to vulnerable people in the household. Denmark has
recently reopened elementary schools, so we can learn fromtheir experience. Non-essential businesses that require more
intimate contact or where such contact is difficult to avoid—

Goldman Sachs Global Investment Researchranging, as I said, from salons to sporting events—should comelater in the sequencing. And at the far end of it should come arelaxation of protections around vulnerable populations, likeelderly people living in senior facilities.
Allison Nathan: Once we do open up, under what
conditions should policymakers re-impose mitigation
measures?
Dr. Zeke Emanuel: Even a slight uptick in new cases should
prompt action. It’s critical for the public to understand that the
number of cases you see today reflects what happened 14 ormore days ago. So if you’re seeing an increase today, thatmeans the virus has already been spreading in the community
for two or more weeks, and exponential increases are not far
behind. For that reason, you don’t want to wait for that
exponential growth to show up in the numbers before reimposing some restrictions. At the beginning of this thing, we
waited until we saw exponential growth to do anything, and wewere too late. That’s why it’s essential to monitor the situation
very closely on a daily basis through a careful testing regime
and to quickly employ contact tracing to keep each and every
new case from spreading further.
Allison Nathan: Given that, how likely is it that we see aperiod of start-stop economic activity over the next 18
months, or more, until we actually get a vaccine?
Dr. Zeke Emanuel: That depends upon responses. We’ve
learned over the last six weeks that our response matters. We
can materially change the course of this illness. If we actuallyadhere to physical distancing guidelines, don’t overcrowd
restaurants and stores, diligently wear face masks and wash
our hands, can we skate through a phased reopening with noresurgence? No; Singapore’s experience with resurgencesuggests that’s unlikely. But could we have only one or two, ormaybe three isolated resurgences over the next 18 months?
Yes, I think that’s possible if the population is adherent.
Allison Nathan: Overall, how do you weigh the health risk
versus the economic risk in thinking about the right way toreopen?
Dr. Zeke Emanuel: The whole point of a phased reopening is tominimize both these risks to the extent possible; we’ll neverget rid of either risk until we have a vaccine. Like everyone else,
it pains me to see 26 million people unemployed and food lines
longer than we’ve ever seen before. That’s outrageous, and wemust do everything we can to provide sufficient support for
those people during this period. But data from the 1918
pandemic and other models show that places that intervened
earlier and more aggressively had faster economic growth after
the pandemic. And, again, if the problem in our economy isdemand driven, as the evidence suggests it is, you can reopen
every business, but the economy won’t come back until people
feel confident that they can go out or send their kids to schoolat low—albeit not zero—risk. So we need to recognize thatpsychology and respond to it.

4Issue 89

Top of Mind

Interview with Dr. Mark McClellan
El

Dr. Mark McClellan is the Robert J. Margolis Professor of Business, Medicine, and Policy andfounding Director of the Duke-Margolis Center for Health Policy at Duke University. Previously,
he served as FDA Commissioner in the George W. Bush White House. Below, he argues that wewill have to rely on diagnostic testing and an efficient tracing system to safely reopen.
The views stated herein are those of the interviewee and do not necessarily reflect those of Goldman Sachs.
Allison Nathan: Where do the Trump
Administration’s guidelines forreopening get it right, and where dothey fall short?
Dr. Mark McClellan: The guidelines
cover the key topics that states need tobe thinking about as they contemplate
reopening: the trends in cases in theirregion, their healthcare capacity, andthe importance of testing and tracing capacity so that when
there are new outbreaks, especially in high-risk places like seniorfacilities, there's enough capacity in place to detect thoseoutbreaks early. They were also right to recommend a phased
reopening that takes incremental steps, or, as Dr. Deborah Birx,
a key health adviser to the administration, likes to say, “moves
the dimmer switch” a little bit at a time to make sure that there
are no adverse effects. So the framework is generally good.
But I would emphasize that these are high level guidelines. And
for states to execute successfully, there are a whole host of
specifics that they need to fill in: how to get sufficient testing
capacity in place and increase it if necessary; what kinds ofbusinesses should reopen when; and what people should expect
in terms of wearing face masks and other behavior that will marka “new normal” as we reopen amid the ongoing COVID-19
threat. States are right now working quickly and intensively on allof those issues in order to turn the administration’s framework
into a specific implementation strategy for reopening.
Allison Nathan: We’ve heard the argument that seeing asustained decline in cases is not sufficient to reopen; youactually need to see a low rate of infection. What do you
make of that distinction?
Dr. Mark McClellan: Some hard-hit states, and the country ingeneral, have done a tremendous job of flattening the curve. But
we’re now seeing cases in a number of states plateauing or only
gradually declining, and some of those states are considering
reopening. If they reopen without seeing further declines incases, their level of cases should be low enough that theirhealthcare system won’t be overwhelmed if there is a surge
from that level in the event of an outbreak. So both declines incases and the level of cases are important factors in determining
whether states are ready to safely reopen.
Allison Nathan: Do we need more PCR testing capacity in
the US before we can safely reopen, and what are theremaining hurdles for ramping up such capacity?
Dr. Mark McClellan: PCR testing detects the presence of thevirus in the body, and more such testing is obviously better. In
particular, further improvements in testing technology thatwould allow for more regular testing of asymptomatic
populations would certainly help as we move into more
Goldman Sachs Global Investment Researchadvanced stages of reopening. But for now, the priorities fortesting include people with symptoms, close contacts of people
who have tested positive and those in higher-risk settings, likehealthcare workers and people in assisted living facilities. We
are approaching, if not already at, the level of testing capacitythat could enable that level of ongoing surveillance. And I thinkthat the increased testing capacity required as states start toreopen—on the order of two million tests per week—isachievable in the coming weeks.
But the challenge is not just having tests available. The challenge
is getting the tests along with the associated materials, such as
the swabs required to administer them and the reagentsrequired to run them, to the states and localities where they’reneeded. And it's not just a question of having enough tests andequipment, but also of having the systems, logistics, andsituational awareness in each state and region to ensure that
positive results are acted on quickly enough through contact
tracing and quarantining to be effective in containing further
spread. This is the current version of the challenge we faced lastmonth in providing sufficient hospital, ventilator and personal
protective equipment capacity as cases surged in hard-hit areas;
we're now similarly trying to ramp up the availability of testing
and contact tracing capacity locally. Different states and regions
are at uneven levels in achieving sufficient capacity, but we're
definitely making substantial progress.
Allison Nathan: How important will antibody testing be interms of safely reopening?
Dr. Mark McClellan: Antibody testing will likely play a significant
role in the future. It can be potentially helpful in identifying
individuals who have immunity, and therefore don't need to takethe same kind of precautions as others to avoid the risk ofcontracting or transmitting the virus. But the science is not there
yet, on two dimensions. First, we're still in the process ofunderstanding what antibody responses mean in terms ofproviding immunity to the virus. This is a new virus, and even in
the earliest hit areas, people have only been convalescent forseveral months or so. So studies are just now underway to really
understand what levels of antibody response can provide theconfidence that someone won’t contract or transmit the disease,and for how long. Hopefully, we will start to have better answers
to these questions in a matter of weeks, but it takes time to see
how immunity evolves.
The second problem is the reliability of the available tests. The
antibodies to the COVID-19 coronavirus are in some ways similar
to the antibodies to other coronaviruses. So some tests havecross-reactivity, and may suggest that someone is immune
when they're really not. There may also be problems with false
negatives. Many of the tests that are on the US market now
were approved for emergency use to assist in support of5

Top of Mind

Issue 89Eldiagnosis and tracking of patient progress—not for determining
immunity—and studies on their performance are mixed. So
more testing on the reliability and accuracy of these tests isneeded, which can be done with a concerted effort in a matterof weeks. I think it is important to conduct this validation to
make sure we understand the science and put it to good use.
In the meantime, antibody tests can also give us an idea of how
much exposure different communities around the country have
had to COVID-19. Some of the early tests conducted with thisgoal suggest a significantly higher prevalence of COVID-19
exposure than positive PCR tests would suggest—on the orderof perhaps 5 or 10 times as many cases. But I’d caution thateven if exposure and immunity to COVID-19 is more widespreadthan originally thought, we're still talking about a small fraction—
5-10%—of the population. So the data so far suggests that thevast majority of Americans are not immune to COVID-19. And
that means that antibody tests, even when we do get themright, won’t be a primary solution as we reopen. If we’re goingto reopen businesses broadly in an environment where mostpeople are not immune, we’ll have to rely heavily on PCR tests
to do so safely, probably until we get a vaccine.
Allison Nathan: What more—if anything—should the federal
government be doing to help states safely reopen?
Dr. Mark McClellan: The federal government could be doing
more on several fronts. On antibody testing, it could do more to
support the science that will help us understand what antibody
results in people exposed to COVID-19 really mean for their
future immunity. On PCR testing, it can continue to take steps to
add to the stock of swabs and reagents that are available, andhelp distribute them more efficiently to areas where they areneeded the most. It could also offer incentives to companies tohelp speed up innovation in diagnostic testing that could makesuch tests more convenient, such as enabling point-of-care
testing, or tests that can be done by spitting into a cup insteadof using a nasal swab. And it could do more to support states
and localities in their efforts to contain the virus, both in terms offunding as well as guidance on best practices in areas likesharing data on test results. This could substantially help withstate and local efforts to conduct contact tracing, testing andquarantining exposed individuals in a timely manner.
Allison Nathan: What should come first, middle and last in asafe, phased reopening of states?
Dr. Mark McClellan: Again, the notion of dialing up the dimmer
gradually with a pause for a few weeks at each step is important
to make sure that we're not getting into conditions of lesscontrolled spread. Initial steps might include reopening moreretail businesses under conditions that look a lot like those for
essential businesses today, with masks, frequent cleaning andhandwashing being the new normal and establishments
operating way below their full capacity to support physicaldistancing. Earlier steps might also include reopening daycare,preschool and school programs in some fashion because that's
so important for the well-being of children and for supporting the
economic recovery. But we'd want to go more slowly withactivities and businesses that involve people gathering closer
together, such as bars and larger social events. And we’ll needextra steps for people who are at higher risk, such as older
Goldman Sachs Global Investment Research

individuals, and people with serious co-morbidity conditions.
I would expect the rules and best practices for such people—
and perhaps people living with them that could expose them tothe virus—to look different than for others in society.
Allison Nathan: Given all of this, are any states now readyto reopen—let alone places like Georgia and Oklahoma
where businesses like salons are leading the way?
Dr. Mark McClellan: I think we're getting there. The states thathave begun to reopen so far have definitely done so on the earlyside. But reopening should depend on local conditions, withsome areas far closer to meeting the necessary conditions thanothers. That said, it’s critical that as any state starts to reopen, allbusinesses, and especially places like salons, take substantial
steps to protect against transmission, such as wearing masks,
frequent cleaning and disinfection between clients and spacingout clients in facilities. Reopening these types of businesses isimportant, but should be undertaken thoughtfully and in alimited, incremental fashion so that if we do see an increase incases, we can quickly detect that and slow down, pause or
maybe pull back on reopening.
Allison Nathan: What should prompt the re-imposition of
lockdown measures?
Dr. Mark McClellan: Any early indications of uncontained
spread should prompt a reconsideration of these measures.
Even with continued restrictions, there will be outbreaks. So it
will be critical to detect them early. And if we observe an uptick
in cases or even an uptick in risk factors for cases that seem toreflect a weakness or flaw in our reopening process, we should
quickly take at least incremental steps towards pausing orreversing course. We're going to learn a lot more in the weeks
ahead, starting with the states that are reopening first.
Hopefully, those will show that there are ways to reopen while
containing the spread, but we're definitely not out of the woods
yet. We need a very high level of vigilance in order to pull backon reopening before the pandemic gets out of control again.
Allison Nathan: On vaccines, it seems that the much-talked
about 12-18-month timeframe for a COVID-19 vaccine would
be unprecedented. But is there more that the FDA could andshould be doing to speed this up?
Dr. Mark McClellan: Regulatory and scientific communities
around the world have come together to agree on efficient andappropriate standards for the clinical development of vaccines.
This development takes time because you need a strong
understanding of safety, since vaccines are given to people who
are otherwise healthy, and of what will provoke immunity. The
bigger challenges are going to be carrying out clinical testing
when the virus may not be really active in many areas of theworld later this year, as well as ramping up manufacturing
capacity to the necessary scale. Encouragingly, some companies
have taken on significant financial risk by pre-committing tosubstantial manufacturing capacity in the US. Ideally, that model
will be extended around the world so that if and when a vaccine
is shown to be clinically effective, there will be no delay in verylarge scale distribution of it to people who would benefit. At
every phase of a pandemic, it's all about planning for surge
capacity, which always seems to limit our ability to respond.
That must be a top-level issue for all countries today.
6Goldman Sachs Global Investment Research

E
U
R
O
P
E

A
S
I
A

30-Mar

22-Feb

South
Korea

Italy

29-Feb

9-Mar

20-FebJapan

France27-Apr

23-FebSingapore

14-Apr

6-Apr

27-Apr28-JanChina

28-Feb

17-Feb

25-JanCountry

IcelandDate oflargestincreasein cases*Datereached 1
confirmed
case permillion

Virus outlook

1.4-2%

14.4K(0.25%)

165K(0.25%)

1.8K(0.5%)

199K(0.3%)

10.7K(0.2%)

0.9%

13.5%

2-3%

1%

0.1-0.2%-

82.8K(0.01%)

14.2K(0.01%)% ofpop
testedConfirmed
cases(as % of
pop)

78

-

88

44

48

77

47

GS
Effective
Lockdown
Index**(0-100)• All schools willremain closed
throughout the country
until at least
September % of pop
tested• Some shops have been allowed to reopen, such as book andstationary stores• "Phase Two" reopening scheduled for May 4, including factory
restarts, construction activity and partial easing of social
distancing measures• Bars and restaurants not expected to reopen for dine-in service
until June 1• Gradual reopening
from May 11, withprimary schools firstthen middle and highschools• Universities closed
until September• Schools have started
to reopen exclusively
via virtual learning• Move to online
learning tiered withtimeline of students'
return dependent onage• Many non-essential businesses are open
• Extended extensive social distancing measures through May 6• Recommend citizens postpone all non-essential gatherings oractivity• National lockdown extended until May 11• Current plan calls for a very gradual reopening of factories andshops after May 11• Cafes, restaurants, bars, cinemas, and theatre to remain closedwith a decision on reopening expected by end-May/early June

• Schools have beenclosed in Tokyo andother major cities sinceMarch• After expansion ofstate of emergency,
most prefectures
closed state schools
after mid-April• No nationwide lockdown, but "state of emergency" expanded toentire country allowing governors to request businesses close• Closures non-compulsory, but many prefectures have asked
amusement and cultural facilities to close, as well as non-essential
sections of shopping centers• Tokyo requests restaurants close at 8pm and stop serving alcohol
at 7pm• Government expected to provide an update in early May• Primary schools haveremained open
• Universities /secondary
schools to reopen withlimitations May 4G
Index*• All schools to adopt
home-based learning
through at least
May 4increase incases*• Targeted measures appeared successful initially, butgovernment imposed "circuit breaker"' lockdown on April 7 after
surge in new cases• Larger gatherings limited to 50 people, instead of previous 20
person limit, and service providers such as salons and dentists
allowed to reopen as of May 4• No formal closure of offices, bars, restaurants and shops• Schools have started
to reopen in many
provinces, withcolleges and highschools doing so more
quickly

Schools• Lockdown ended in Wuhan on April 8• Most businesses throughout the country have resumed
operations• Some service sector businesses, such as movie theatres,
remain shuttered• Large scale public events are still discouraged

Non-essential businesses

Economic reopening plans• Wearing masks will bemandatory in certain settings• Government expects
700,000 tests to be carriedout per week by May 11• Robust testing regime has
led to testing of more than
13% of the population andisolation of asymptomatic
carriers• Government is working to
introduce a contact tracing
app to help heath officials
stem the spread of the virus• The government has
instituted a rigorous contact
tracing system, in whicharound 80% of new
infections are linked totransmission source• The northern prefecture
Hokkaido recently re-imposed
previously relaxed restrictions
after experiencing a second
wave of infections• Government has mostly
relied on citizens' adoption ofvoluntary social distancing• Moved from a targeted
approach to broad-based
controls after a surge in casesin recent weeks• The government has
instituted required use oflarge-scale health code app
to limit contagion spread

Notes

Top of Mind
Issue 89

El

Reopening rundown7

Goldman Sachs Global Investment Research

A
M
E
R
I
C
A
S

E
U
R
O
P
E

13-Apr

3-Mar

7-Mar

Austria

DenmarkUS

20-Mar7-Apr

29-Feb

Spain

Mexico31-Mar

1-Mar

Germany

26-Apr

27-Apr

6-Apr

1-Mar

Sweden17-Mar

6-Apr

29-FebCountry

Brazil

27-AprDatereached 1
confirmed
case permillionDate oflargestincreaseincases*

Virus outlook

-

0.05%

15.5K
(0.01%)

1.5%

2.5%

2.5%

2%

2.5%

0.9%

% of
pop
tested

67.4K(0.03%)

987K(0.3%)

8.6K(0.15%)

15.2K(0.2%)

229K(0.5%)

158K(0.2%)

18.9K(0.2%)

Confirmed
cases (as %of pop)

75

56

57

64

69

84

59

43

GS
Effective
Lockdown
Index**(0-100)Schools• Schools for children up to
16 remain open
• High schools anduniversities closed• Schools scheduled toreopen gradually startingMay 4in cases*• Nationwide school
closures to continue until
September, apart fromexceptional cases• Students in their final year
set to return to classes on
May 4• All other schools scheduled
to reopen starting May 18• First country in Europe toreopen primary schools on
April 15
• Schools for 6th grade andup expected to reopen May
10 at the earliest pop• All states have closed
schools at least temporarily,
with 43 ordering or
recommending they remain
shuttered for the remainderof the school year

• No federal policy onschool closure, but schools
across all 27 states areregistered as closed due topolicies implemented by
local governments Non• All schools closed until atleast May 17• More affected regions
only to return on June 1

Non-essential businesses• Government has imposed ban on public gatherings of morethan 50 people• No formal closure of offices, bars, restaurants and shops• Large scale public events are still discouraged• Small steps to reopen shops and small businesses starting
April 20• Bars, cafes, restaurants, cinemas and concert venues
remain closed• Unlike other countries in Europe, Germany never closed its
factories, though some factories have shut down voluntarily• Four-phase relaxation of lockdown measures to begin May 4
with small shops allowed to reopen for appointments, withvarying implementation across provinces• Bars and restaurants allowed to reopen May 11 at 1/3 capacity• Final phase of reopening expected to happen at the end ofJune at the earliest• Small stores have reopened, with limits to capacity• All other stores are set to reopen on May 2• Restaurants, hotels, and churches expected to reopen May 15• Large gatherings prohibited until end-June• Some businesses, including barber shops and salons,
allowed to reopen as of April 20• Shopping centers, sports clubs, libraries and churches toopen May 10 at the earliest• Bars, restaurants, cafes and barbershops will remain closed• Large public events prohibited until Sept
• Federal government recommends gradual, phased approachfor states• Most states including New York, Texas, Florida and California
have extended lockdown measures into May or not yet set atimeline for reopening• Some states, including Georgia, Colorado, Alaska, andOklahoma, among others, have reopened or begun to reopenbusinesses• Due to recommendations from the federal government, somegovernors are easing the lockdown and allowing areas to reopen• Most states retain restrictions on stores, public events andpublic transportation• Sao Paulo plans gradual reopening starting May 10• All non-essential businesses and activities suspended until
at least April 30

Economic reopening plans• Very limited testing so
far – 60k tests conducted(~0.05% of the
population) as of April 26• No tools yet developed
for contact tracing• Extent of current
testing regimes varies
by state, withcumulative tests
covering about 4% of
the population in NY,
around 1.5% in FL andCA and 1% in TX• Government hassuggested any uptick in
the number of cases
could be followed by there-imposition of
restrictions• National curfew
extended through endApril, with restrictions
loosened every two to
three weeks based on
available data

• Movement withinprovinces set to ease inphase 2 starting May 11,
but restrictions on travel
between provinces toremain in place• Masks required on
public transit and in
most shops• National leaders set tomeet May 6 to reassess
lockdown measures• Mostly relying on
guidelines for citizens tolimit public travel andadopt social distancing
measuresNotes

Top of Mind
Issue 89El

Note: all virus data as of April 27, 2020; *date of largest increase based on 7-day centred moving average of confirmed cases; ** the GS effective lockdown index combines in equal weight a"virus policy" measure based on the stringency of jurisdictions' respective lockdowns and a "policy effect" measure based on mobility data as detailed in Asia Economics Analyst: Lockdown
Lexicon, April 20, 2020; for testing figures, there are substantial differences across countries in terms of the units, whether or not all labs are included, the extent to which negative and pending
tests are included and other aspects.
Source: JHU CSSE, Our World in Data, various national governments and health agencies, various news sources, University of Oxford (covidtracker.bsg.ox.ac.uk), Goldman Sachs GIR.

8

Issue 89

Top of Mind

China’s roadmap: What is/isn’t applicableEl

Hui Shan argues that China’s roadmap
suggests reasons to be both optimistic andcautious about global economic reopening
In late January, mainland China shut down its economy in aneffort to slow the spread of COVID-19, almost two months
before other major economies. The social distancing andactivity control measures China implemented to contain thevirus were similar to those that have since been imposed inother countries. With most businesses and factories inmainland China now reopened, even if not at full capacity, its
experience provides a valuable roadmap for what the recovery
may look like when such measures are lifted elsewhere.
However, because of fundamental differences in institutional
structure and cultural norms, while some of the features ofChina’s reopening are applicable elsewhere, others may not be.

two major cities in the province subsequently decided topostpone the planned reopening of schools. Overall, China’s
experience suggests that the risk of a potential second
infection wave is real even for countries that have madeprogress in slowing viral spread, and local controls may persist,or even strengthen, after national controls are removed.

Imported cases main focus in mainland China and Taiwan
Share of imported cases in new confirmed cases, 7-day average
100

China (Mainland)
Taiwan
Korea
Singapore

80

60

40

20

What’s applicableFeature #1: A real risk of a second wave: Newly confirmed
cases of coronavirus in mainland China peaked in the first halfof February, approximately two weeks after activity shutdowns,
and new case growth fell to near zero for multiple consecutive
days in early March. But this hasn't meant that social distancing
measures can be lifted altogether, especially given the risk ofresurgence as the virus continues to spread rapidly around theworld. Indeed, China’s recent experience is a testament to thatfact. Despite the relaxation of national control measures,
Beijing, Shanghai and Guangzhou, which are destination cities
for direct international flights, had to add further flight
restrictions after they saw imported cases rise in late March.

Some restrictions re-imposed due to imported cases
New confirmed cases per day, number of cases
200
180

Beijing, Shanghai, Guangdong

160

Heilongjiang, Inner Mongolia

120
#1

#2

#3

1-Mar

8-Mar

15-Mar22-Mar29-Mar

5-Apr

Source: CEIC, NHC, MHLW, KCDC, MOH Singapore, DOH Hong Kong, GS GIR.

Feature #2: An uneven economic recovery: Social distancing
and activity control measures to combat COVID-19 havesignificantly impacted economic growth according to our highfrequency trackers and official statistics, with Q1 GDP falling by
6.8% yoy, the first negative year-over-year growth in decades.
In late February, about 10 days after the number of new cases
peaked in China, the government called for a “differentiated”
approach to restarting the economy: in places where the virus
situation remained pressing, the focus would remain on virus
control measures; in low-risk areas, by contrast, local
governments would shift their attention to economic recovery.
Our estimates using our equity analysts’ data suggest that
overall activity in China improved sharply from -30% yoy in
February to -12% yoy in March. But the recovery has been
uneven across sectors of the economy. Construction activity,for example, climbed from 40% below last year’s level inFebruary to 85% by the second week of April. Cultural, sports
and entertainment industries, however, remain at only 15%
their 2019 levels.

140

100

0
23-Feb

#4

80
60
40

An uneven recovery across industries

20

Chinese activity recovery, percent of 2019 level0
16-Jan140

31-Jan15-Feb

1-Mar

16-Mar31-MarFebruary
March (Week ending Mar.20)
Latest (Week ending Apr.10)

15-Apr120

Note: #1: Mar. 7, More than 20 provinces downgraded their alert levels and eased
travel and transportation restrictions#2: Mar. 16, Ministry of Culture and Tourism reports 30% of tourism destinations
nationwide have resumed operation#3: Mar. 26, International flights reduced to one flight per country per week foreach airline; Mar. 27, all cinemas ordered to close after previously being allowed
to reopen#4: Apr. 3, Heilongjiang province starts testing all incoming travelers
Source: CEIC, Goldman Sachs Global Investment Research.

By the week of March 29-April 4, international flights had fallen
to 1.2% of the pre-outbreak level, according to the Ministry ofTransportation. More recently, after the number of imported
cases increased sharply in Heilongjiang province that borders
Russia, the province started to test all incoming travelers, andGoldman Sachs Global Investment Research

100
80
60
40
20
0
Overall

Mining Manufact- Utilities Construct-Transport- Hotel,
uring
ion
ation
catering

Secondary industryRealestateCulture,sports,entertainment

Tertiary industry

Source: Goldman Sachs Global Investment Research.

9

Issue 89

Top of Mind

El

Official statistics paint a similarly uneven picture: industrial
production was down only 1.1% yoy in March, but retail sales
were still 15.8% below year-ago levels. While this shouldn't
come as a surprise, it does provide an important insight—it iseasier to turn a machine back on than to convince people to go
to restaurants and theaters during a global pandemic.

has helped contain the virus, but may not be available oraccepted elsewhere.

“Health code” used in the city of Hangzhou

Feature #3: New/accelerating trends emerging from thechanged world: While it is still early to draw firm conclusions
at this stage, a few features of the recovery process in China
are worth highlighting.
• First, moving online. While the shift from brick-and-mortar
malls to online shops was already ongoing before the viraloutbreak, COVID-19 and the ensuing social distancing
measures have accelerated this trend. Official statistics showthat online retail sales of goods increased 11% yoy in March,
in stark contrast to the 13% decline for offline sales.
• Second, high-end outperforming. The negative economic
impacts of COVID-19 have likely fallen disproportionately on
the lower-income population, as the hardest hit service
industries also tend to have more lower-wage jobs. For highincome households, social distancing reduces expenditure
without hurting income much, which raises their savings andpurchasing power. In the automobile market, for example,
sales of high-end brands led the recovery in March while themass market lagged, according to our auto analysts.
• Third, industry consolidation: The pressure on corporate cash
flow has been more intense on leveraged companies andsmall companies during the coronacrisis. By comparison,large enterprises that are not liquidity-constrained should bebetter positioned to weather the downturn. Our property
analysts have pointed out a trend toward industry
consolidation in their coverage space, and it may be
happening in other industries too.
• Fourth, temporary release of pent-up demand. A popular local
tourist site that opened for free during the Qing Ming festival
in early April attracted many visitors, and there have been
anecdotes of consumers waiting in line outside of certain
recently reopened restaurants. While the severe economic
downturn caused by the outbreak suggests such pent-up
demand is unlikely to be widespread and sustainable, it iscertainly possible to see it temporarily in select industries
after shutdown policies are removed.
What’s not applicableFeature #4: Extensive use of surveillance technology andbig data in controlling the virus: While China’s experience incontaining the virus has been encouraging, it is worth notingthat some of the tools at policymakers’ disposal may not be
available in other countries. For example, citizens are required
to show a health clearance code on their phones to accesspublic transportation and facilities. People with a green code
can move freely, those with a yellow code are quarantined for
7 days before being granted a green code, and a red code
requires a quarantine for 14 days. Surveillance technology andbig data allow the Chinese government to monitor individual
movements and employ broad-based contact tracing, which

Goldman Sachs Global Investment Research

Source: City of Hangzhou.

Feature # 5: Centralized government pressure/support forrestarting: Although Chinese industrial activity recovered fairly
quickly once restarts began, other countries might experience aslower process. We note the top-down nature of the Chinese
economy and the fact that the government pushed hard for the
resumption of work in March, especially in the industrial sector,
contributed to the speed of the recovery.
Local governments, for example, helped to coordinate therestart of upstream and downstream companies in the same
sector to avoid reopening factories without sufficient input
materials from suppliers or orders from downstream
customers. To speed up the return of migrant workers without
increasing the risk of spreading the virus, the Ministry of
Human Resources and Social Security launched a program tohelp these workers transit the country and migrant workers can
submit forms expressing their need to travel via mobile phone.
Reasons for both hope and caution
China’s roadmap suggests reasons to be both optimistic andcautious about economic reopening elsewhere in coming
weeks and months. While China has certainly shown progressin restarting parts of its economy, the recovery has been
uneven across sectors and involved setbacks requiring the reimposition of previously relaxed control measures. At the sametime, some of the key features of China’s reopening successare unlikely to be applicable in other parts of the world,
including Western Europe and the US.

Hui Shan, Senior China Economist
Email:
Tel:hui.shan@gs.com+852 2978-6634

Goldman Sachs (Asia) LLC

10

Issue 89

Top of Mind

Interview with Dr. Barry Bloom
El

Dr. Barry Bloom is the Joan L. and Julius H. Jacobson Research Professor of Public Health at theHarvard T.H. Chan School of Public Health. Below, he argues that testing is the key to knowing where
we are in the COVID-19 pandemic and determining how to reopen economies safely.
The views stated herein are those of the interviewee and do not necessarily reflect those of Goldman Sachs.
Allison Nathan: Is there enoughevidence to conclude that social
distancing measures are flattening
the epidemic curve and mitigating
the spread of the virus?
Dr. Barry Bloom: You know social
distancing is having an impact when
there are fewer people going tohospitals. That doesn't tell you thatfewer people are being infected, but it does say that we are
spreading out the infections, which should help protect thehospital system from becoming overrun. That's why flattening
the epidemic curve is so important. And we are indeed seeingsome signs that the pace of hospitalizations is slowing in some
hot spots like New York, which is good news.
But without further interventions, just using social distancing to
spread out infections leaves you with more people susceptible
to getting the disease in the future. In other words, social
distancing not only slows the pace of infections, but also thedevelopment of immunity. That said, in places with lots oftesting, such as mainland China, Korea and Hong Kong, thedata suggest that the imposition of social distancing measures
did change the course of the epidemic. But it’s hard to know ifthat is the case in the US given the more limited testing so far.
Allison Nathan: Given this limited amount of testing, is it
possible to tell where the US is in this pandemic, which
seems key to making informed decisions on reopening?
Dr. Barry Bloom: No. Although testing in the US has ramped
up substantially over the past month, right now it is almost
entirely restricted to testing for the presence of the virus—socalled PCR testing—in people who are sick. But if you reallywant to know where the epidemic is—and feel confident thatyou are on top of controlling it—you have to look for virus
spread within the community, among people who don’t seem
sick but could be asymptomatic spreaders of the disease.
Some people like Nobel Laureate Paul Romer have therefore
suggested that the answer is to test everybody for the virus,
which would require something like 30 million tests per week.
But, these tests are non-trivial to conduct and analyze, and sono one that I know believes that is a realistic strategy.
That said, there are other ways to get a sense of community
spread, such as conducting random testing of a sample of thecommunity, which is already happening in other countries, andto a very limited extent in parts of the US. You don't have to do
30 million tests a day to have a sample that tells you if 1% or
30% of a population is infected. Alternatively, instead of testingfor the presence of the virus, you can test for the presence ofantibodies, which would indicate whether or not an individual
has had the infection in the past and may be immune. That
serological testing is just beginning to come online, but should
Goldman Sachs Global Investment Researchbe easier to conduct, and, if scientifically validated, could
perhaps even be self-conducted at home before long.
The key point is that we must do a lot better on testing people
in the community who are not symptomatic as we contemplate
reopening so we have a better sense of how vulnerable thepopulation still is to infection, a better chance of containing the
spread from asymptomatic carriers, and a greater ability todetermine, if it is shown that antibodies are protective, who issafer to send back into the community. I return to my favorite
refrain: the key is testing, testing, testing.
Allison Nathan: What else would you need to see before
you believe it’s safe to start opening up economies again?
Dr. Barry Bloom: Ideally, reopening would not begin until two
to four weeks after the expected number of cases directly
generated by a single case in a susceptible population becomesless than one. That means that the number of new cases is not
only slowing, but is actually declining so that the epidemic is on
track to fade out in that area. We've got to know that the curveis on the way down because if it's just flat, it could pop up
again in a second. Second, hospitals must have adequate
capability to care for all acutely ill patients in the event that wesee possible flare-ups. If the cases are declining and the rate oftransmission is pointing to less than one, I don’t think that will
be a difficult condition to meet.
Allison Nathan: How crucial is contact tracing, and how far
away is the US from having a robust system in place?
Dr. Barry Bloom: The US does not have the proper contact
tracing infrastructure in place at this point, but innovations arebeing tested. For example, the state of Massachusetts is rightnow experimenting with large-scale contact tracing, which
entails an army of 1,000 people calling 20, 30, 40 people a day
who have been in contact with a person recently identified as
COVID-19 positive, informing them of their health risk, andadvising them to self-quarantine. Alternatively, Apple and
Google have announced their intention to develop automatedcontact tracing using cell phone numbers similar to what has
been effectively employed in parts of Asia but ideally in a lessintrusive, more anonymized way. We don’t know if any ofthese experiments will succeed, but it’s crucial we try thembecause we must be able to quickly pounce on flare-ups if wehave any hope of avoiding a second wave.
Allison Nathan: You said that the ability to test for
antibodies would be useful. But does the presence ofantibodies guarantee immunity?
Dr. Barry Bloom: At this point, it’s absolutely unclear whether
having antibodies to this virus protects against reinfection, and,
if it does, for how long. The antibodies to common cold
coronaviruses are very short-lived, typically not lasting for morethan a year or so. Measles antibodies provide protection for life.
11Top of Mind

Issue 89El

SARS antibodies seem to be somewhere in between. We
won’t know where COVID-19 antibodies fall on this spectrum
until good serological tests in studies on people who haverecovered are completed, which I hope will be sometime by
the end of the summer. But my experience from a lifetime
working in immunology leads to me to expect that most people
who recover and have antibodies to the right target antigen
would have at least a couple of years of protection. And thatwould be enormously valuable.
Allison Nathan: What is herd immunity and how likely is it
to play a role in ending this pandemic?
Dr. Barry Bloom: Herd immunity is simply the point whenenough people within a population are immune to a disease
that there is broad resistance to its continued spread. But I
prefer the term community protection, for two reasons. The
main reason is that herd immunity doesn’t mean that people
who haven’t been infected are immune; instead, immunity ofothers protects people who are susceptible. The calculations
are that about 60-70% of the population would have to haveprotective antibodies to make it unlikely that if someone
susceptible went into a room, they would be infected, because
the chances that other people in that room are infected would
be so low. And the second reason I don’t like the term is I thinkreferring to people like cattle is demeaning.

between drugs and vaccines is that drugs are given to sickpeople while vaccines are given to healthy ones, so we must
be as sure as humanly possible that they are safe. And this isespecially tricky for coronaviruses because data for similarviruses suggest that if you produce antibodies that do notneutralize the virus, they could actually enhance the infection,
which is any drug company’s worst nightmare. Finally, oncecompanies develop the vaccine and test it for safety andefficacy, they have to build the capacity to produce billions ofdoses a year, and it will take time to approach this global scale.
All that said, whatever timeline we end up seeing for thesevaccines will be faster than anyone could possibly haveconceived until recently given that companies are now using
revolutionary “platforms” in the development of vaccines.
These platforms can substitute almost instantly the proteinfrom this virus into an existing vaccine, or just the genetic
codes of that protein, into a lipid particle that can effectively
deliver it into people. This would be vastly more efficient thanthe prior process that painstakingly developed an individual
vaccine for a single virus. So I'm confident that we will see
COVID-19 vaccines in record-short time, even if we wish it
were sooner.
Allison Nathan: How concerned are you that the disease
will mutate, making any vaccine eventually ineffective?

As we have discussed, without much greater testing of the
population as a whole, we have no way of knowing how close
we are to achieving community protection. What we do know
is that limited testing in Europe has found antibodies present ina relatively low percentage of the population—on the order of
8-10%. In a just-completed study in hard-hit New York state,
the percent of positives was modestly higher, at 14%. But thatstill means that an awful lot of susceptible people could be
exposed as the community reopens.

Dr. Barry Bloom: We can expect any virus to mutate, but I am
not concerned that such mutation will render a vaccine
ineffective. This particular virus binds to one receptor inpeople’s lung epithelial cells, so the goal of most vaccines is to
produce antibodies that will instead bind to the virus or
receptor, so that the virus can’t infect. And if the virus thenmutates its binding domain to elude the antibody, it will lose
the ability to get into a cell effectively, or at all. I’m therefore
hopeful that mutation won’t initially be the major problem here.

Allison Nathan: So how likely is a second wave in the fall,especially as we start to reopen in coming weeks?

Allison Nathan: What’s the likelihood that we get an
effective treatment of the disease before we get a vaccine?

Dr. Barry Bloom: The likelihood that the population we release
into the community will be highly susceptible, and that people
will be mobile—coming and going from other places—suggeststhat outbreaks will be likely. The 1918 influenza, which is still
the best model for this epidemic in my view, came in threewaves, with the second peak in the fall being the worst one.
Our epidemiological modelers at the Harvard School of Public
Health believe that in the absence of herd immunity in the
population, as you ease social distancing, you'll get a bounce
back, as has occurred in Singapore and Hong Kong. And thiswould require re-imposing some restrictions. We have to beprepared for this virus to return in the fall.

Dr. Barry Bloom: I’m optimistic that we will have relatively
effective therapeutic interventions sooner than vaccines. The
FDA website lists 440 clinical trials either planned or underway
for COVID-19, which is astonishing since for many diseases
there are fewer than a dozen. These interventions fall into two
major categories—ones that target the virus and ones thattarget the immune response—the so-called cytokine storm—that appears to be what ultimately kills people.

Allison Nathan: How far away from a vaccine are we, andwhy does getting a vaccine take so long?
Dr. Barry Bloom: Testing candidate vaccines is likely to requireat least 18 months or more for many reasons. First, vaccine
developers must identify antibodies that react to proteinsparticular to this coronavirus and not to the coronaviruses thatcause common colds or SARS or MERS. Second, they need tounderstand which of the antibodies that react to thiscoronavirus are actually protective, as not all will be. Third,
vaccines must be thoroughly tested for safety; the difference
Goldman Sachs Global Investment Research

On the former, two existing drugs have shown particularpromise in preliminary COVID-19 studies—remdesivir andfavipiravir, but we won’t know their true effectiveness until
results of randomized trials are in, which will happen as early as
May. Many other drugs and novel therapeutic interventions
also look promising like the use of plasma from recovered
donors and monoclonal antibodies that neutralize the virus. In
the second approach, several drugs are now being tested toaddress the overactive immune response to the virus and theultimate organ failure that it can produce. I think progress islikely to be made in relatively short order in this area as well.
So, I'm pretty hopeful that at least some useful treatments will
be developed this year—and potentially as early as this fall.

12Issue 89

Top of Mind

Reopening the US economy
El

David Choi and David Mericle discuss what
US reopening might look like, and implications
for the pace of the US economic recovery
The US is now largely in lockdown mode and social distancing
has increased nationwide. Our US Lockdown Index—ameasure of the GDP-weighted share of the country that has
shut down schools, closed non-essential businesses, andissued stay-at-home orders—has now reached 86%, and virus
fears and lockdown orders have led to much greater social
distancing, with roughly 50% declines in the share of timespent at workplaces and retail stores and a 25% increase intime spent at home. But with the daily number of new
confirmed virus cases plateauing, discussion is turning to theplan for reopening.

Most of US is in lockdown and social distancing has risenStatewide activity declines vs. pre-COVID, GDP-weighted, % change

100

US Lockdown Index

75

Retail & Recreation Activity

50

Workplace Activity
Residential Activity

25

met across most of the US today. We expect that the speed ofreopening will vary across the country depending on local
conditions as well as different perspectives on the tradeoff ofhealth versus economic risks between states.
But while state and local governments may pursue reopening
at different speeds, it is important to emphasize that most of
the increase in social distancing in the US has been a voluntary
reaction to virus fears, not a response to government lockdownorders, and the public will have to be persuaded that any planfor partial reopening is safe. 1
0F

With this in mind, we see two possible approaches to the orderof reopening. An optimal approach might start with activities
whose reopening offers maximum economic benefit for a given“cost” of virus risk, with total permitted activity constrained toa level that keeps virus spread under control. For example,
economic activity that can be conducted nearly as well fromhome and therefore doesn’t generate much “cost” inexchange for less health risk would come later in the reopening
order. However, measuring this might be difficult in practice, as
would actually implementing it given that the private economy
would not necessarily arrive at that approach on its own
because of incomplete information about virus risk and a failureof businesses and individuals to account for the virustransmission externalities of their own activities.

Source: National Governors Association, IMHE, Google, Goldman Sachs GIR.

Reopening might instead proceed from the safest activities tothe most dangerous, as people initially limit their out-of-homeactivities to those with the least risk of infection. Absent strong
government intervention, the actual path of reopening is likely
to fall somewhere in between these two approaches. And, as
reopening begins, we see many possible adjustments to office
and factory work arrangements, commercial activity, and social
life can help to reduce the risk of virus spread.

What will reopening look like?

Reopening will require changes to commercial and social life

0
-25
-50
-75
3/01 3/05 3/09 3/13 3/17 3/21 3/25 3/29 4/02 4/06

Several countries have already started the process of gradually
reopening their economies from virus lockdowns or haveannounced plans to start soon, and such plans provide a
glimpse of what reopening might look like in the US. They offer
three key lessons for the US. First, initial reopening timelines
often prove too optimistic, with most changes to initial plans so
far instead moving toward more stringent restrictions andlonger lockdowns. Second, reopening plans should be gradualand conservative. Third, recovery is quicker in manufacturing
than in consumer services.
Indeed, absent a vaccine, scalable treatment breakthrough, ordevelopment of herd immunity—all of which are unlikely in thenear term—reopening in the US will also have to remain
gradual to avoid a second wave of virus spread. Given the tightbalancing act between reopening and controlling the virus
spread, we see a few prerequisites for reopening: further
declines in confirmed new infections, some excess capacity in
hospital systems, greater ability to test large numbers ofpeople quickly, and the ability to trace and quarantine those
who have come into contact with infected people in order tocontrol future outbreaks. These goals look generally achievablein the US in coming months, although substantial uncertainty
remains given that at least some if not all of them are not being

1

Prerequisites
for reopening

Slower pace of new cases/hospitals not overstretched
Ability to test large numbers quickly
Ability to trace and quarantine infected people

Adjustments
to permit
gradualreopening

Wider use of masks
Frequent handwashing, disinfecting, deep cleaning
Contact tracing/quarantining following breakouts
Restore lockdowns if cases rebound too quickly
Encourage those older/at-risk to limit time in public
International and/or domestic travel restrictions
Increase to-go offerings and cashless transactions
Bring back workers who are immune
Maintain distancing measures/gathering limitations
Limit allowable capacity in public spaces
Stagger employee shifts and lunchtimes
Surveillance systems and temperature checks
Use tech/data to identify areas of concern
State-by-state, starting in areas with less cases

Ways toaccelerate
reopening

Therapeutic or preventative treatments
Vaccine/antibody testingFavorable seasonal effects
Wider immunity than previously thought

Source: Goldman Sachs Global Investment Research.

See Blake Taylor, “Measuring Lockdown: State Orders, Economic Activity, and Social Distancing Across the US,” US Economics Analyst, 12 Apr 2020.

Goldman Sachs Global Investment Research

13Issue 89

Top of MindEl

Adjustments such as the use of masks, hand-washing, more
frequent deep cleaning, routine health checks, maintaining
physical distancing, and limitations on gatherings might apply tomost areas of public life. Reduced density could be achieved
through staggered shifts at work sites or lower capacity limits
on public transit or at restaurants and other commercial andcultural locations. Life might reopen to a different degree fordifferent groups, with those who are immune returning first,
while those most at risk continue to limit social interactions
until a vaccine is available.
The economic recovery: A scenario analysis
As states and localities begin to reopen in the coming weeks
and months, we strongly expect the economy to begin to
recover from the current bottom in activity. While longer-lasting
economic damage that delays the recovery is possible, so far
the news has been mostly reassuring. On the labor market
side, most layoffs have been temporary, meaning that mostemployer-employee relationships remain intact. On thebusiness side, there has been no major uptick in bankruptcies
so far. Admittedly, it is still very early to know how bothconcerns will evolve in coming months.
The quarterly growth path largely depends on three key factors:
the depth of the peak decline, the length of lockdown, and the
speed of recovery during the reopening process. We estimate
a 25% peak hit in April to manufacturing, a 30% hit toconstruction, a 60% hit to brokerage fees and home
improvements, and a 14% hit to consumer services. We
assume that the recovery starts in May and June and thereafter
proceeds at a gradual pace, with the manufacturing andconstruction drag fading by 15% each month, and the dragfrom services activity fading by 12.5% each month.

We see both upside and downside risks to our baseline path
Coronavirus hit to the level of US real GDP, %Our baseline forecast for GDP growth puts the quarterly
annualized pace at -8% in Q1, -34% in Q2, +19% in Q3, and+12% in Q4. This implies 2020 growth of -6.0% on an annual
average basis and -5.2% on a Q4/Q4 basis. In addition to ourbaseline scenario, we also consider several upside anddownside scenarios. An upside scenario could involve greater
progress on treatment, much slower viral spread in warmer
weather, or more effective adaptation that makes social
distancing measures less economically costly. A widely
available vaccine would likely lead to an even sharper recoveryof economic activity, but appears unlikely in the near future. A
downside scenario could involve a slower decline in thenumber of new infections, longer lockdowns, a second wave of
infections that results in an oscillation between easing andtightening restrictions, larger second-round income effects, andmore persistent avoidance of face-to-face interactions.
Specifically, we consider an upside case with a 7% peak hit toactivity (vs. 13% in our baseline) and a downside case withboth a 20% peak hit to activity and a lockdown that lasts for 6
months.
In an even broader range of scenarios that vary the peak hit to
growth, length of lockdown and speed of recovery, the worst
case scenario would result in a double-digit hit to 2020 growth.
But perhaps even more striking, the most optimistic scenariothat would see a relatively small peak hit to activity, a 1-2month lockdown, and a faster recovery would suggest 2020
growth of -2.8%, which would still be the lowest full-year pacesince 1946. While we see both upside and downside risks toour baseline path, risks to our 2020 growth forecasts are
skewed to the downside.

2020 growth largely depends on the peak decline, the lengthof lockdowns, and the speed of recovery
2020 full-year GDP growth, %0Upper range corresponds to faster recovery with virus
hits decaying at 25% monthly pace for manufacturing
and construction and 20% for services

3
0

-2
-4

-3
-6

-6

-8

-9
-12
-15
-18

UpsideBaseline
Downside

Lower range corresponds to very slow recovery
with the virus hits decaying at 5% monthly pace
for manufacturing, construction, services-21

3 month lockdown-12

6 month lockdown-14

2020 QoQ AR

2020 YoY

Q1 Q2 Q3 Q4

Q1

Deep hit, 6 molockdown-7 -53 20 20-0.3 -18.0 -14.6 -11.1

Baseline peakhit

-8 -34 19 12-0.6 -10.9 -7.4

-7 -20 11-0.3

Small hit

Q2

Q3

2020

Scenario

Q4

Full-year
-11.0

-5.2

-6.0

-4.1 -3.0

-3.4

Slow

Base

Fast

Larger Peak GDP Decline(-20%)

Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec.
Note: This is relative to a counterfactual of 1.75% potential growth; solid lines
show an upside scenario (7% peak growth hit), our baseline (13& peak growthhit), and downside scenario (20% peak growth hit, 6 month lockdown) under ourbaseline speed of recovery.

1-2 month lockdown

-10

Slow

Base

Fast

Baseline Peak GDP
Decline (-13%)

Slow

Base

Fast

Smaller Peak GDP Decline(-7%)

Note: Slow, base, and fast correspond to the expected speed of economic recovery;
shaded bar represents our 2020 full-year growth forecast assuming a baseline peakdecline in GDP, a baseline speed of recovery, and a 1-2-month full lockdown.
Source: Goldman Sachs Global Investment Research.

David Choi, Senior US Economist
Email:
Tel:david.choi@gs.com+1 212-357-6224

Goldman Sachs and Co. LLC

David Mericle, Chief US Economist
7-6.1

Note: Chart is implied quarterly growth rates, assuming baseline recovery speed.
Source: Goldman Sachs Global Investment Research.
Goldman Sachs Global Investment Research

Email:
Tel:david.mericle@gs.com+1 212 357-2619

Goldman Sachs and Co. LLC

14

Issue 89

Top of Mind

Testing: a vital part of the story
El

Michael Cahill argues that confirmed casecounts only tell half the story; testing practices
are key to getting the whole picture
Many investors are keenly focused on metrics, such as thedaily percentage change in confirmed cases, to gauge how theoutbreak is progressing. But this really only tells half of thestory. Without knowing more about the “denominator” of theequation—the number of tests being conducted, and on
whom—it is hard to get a sense of the real trend of the virus.
And the denominator itself faces its own set of challenges thatfurther muddy the picture.

for much of April by our count, with the positive hit rate ofthose tests remarkably stable around 20%. So it appears thatthe number of cases confirmed in the US each day is still
somewhat a function of the number of tests performed.

Differences in testing complicate cross-country comparisons% of population tested (x-axis); % of tests with positive result (y-axis)

35

Korea

30

US

Italy

Japan

UK

Confirmed case count in US
is still a function of number oftests performed

25
20

The fog of data

15

The New York City area and the Lombardy region in Italy—
which are among the hardest hit regions—offer a clear exampleof how growth in the confirmed case count can be misleading.
For two weeks straight at the end of March and beginning ofApril, the number of tests conducted in the City was fairly
constant—with a little over 8k tests per day on average—and
between 50 and 60% of them came back positive. By
definition, this produced a steady increase in the number ofconfirmed cases.

10

But the high positivity rate—a function of the fact that only the“sickest of the sick” people were being tested—was a clear
signal that the actual outbreak was much larger in size. At thesame time, the constant pace of testing suggested that theavailability of testing itself was a constraint. A similar patternoccurred in Lombardy, which averaged close to a 50% hit rateover a 10-day stretch in mid-March. So in both regions, thesmall variations in daily cases were mostly just a function of thenumber of tests completed, not a change in overall conditions.

France

5
0
0.0

0.3

0.6

0.9

1.2

1.5

1.8

2.1

2.4

2.7

Source: National Health Ministries, US State Health Dept., Goldman Sachs GIR.

US testing plateaus while positive hit rate has stabilized
thousands of tests (lhs); % of tests with positive result (rhs)

New tests (lhs)250

Postive test result (rhs)

30
25

200

20
150
15
100
10
50

5

Growth in confirmed case counts can be misleading% of population tested (x-axis); % of tests with positive result (y-axis)

003/24 3/27 3/30 4/02 4/05 4/08 4/11 4/14 4/17 4/20 4/23

60

US

NYC

NY

NJ

Lombardy

Italy

50

Source: State Health Departments, Goldman Sachs Global Investment Research.

From beginning to end

40
30

High rate of positive
tests indicates theactual outbreak wasmuch larger in size

20
10
0
0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Source: National Health Ministries, US State Health Dept., Goldman Sachs GIR.

Cross-country comparisons and capacity constraints
Differences in testing regimes also complicate cross-country(and state) comparisons. For example, at its peak in early
March, South Korea confirmed about 5.5k cases over a ten-day
period—but they ran over 125k tests. By comparison, the UK(which has a bigger population) has only recently matched thatpace of testing, with over 50k confirmed cases during thattime. And in the US, testing started off slowly before picking
up, but then plateaued to around 150k people tested per day
Goldman Sachs Global Investment Research

Public health officials have stressed the importance of testing
through each stage of the “curve.” In the beginning, it isinstrumental for proper containment. In the middle, it isnecessary to assess the true scope of the issue. US and WHO
officials have said that jurisdictions should aim for about a 910% positivity rate on all tests to ensure they have a good
sense of the scale. And afterwards, a well-tested population
can establish a benchmark for antibody testing with fewer false
positives. In the meantime, market participants should keep an
eye on the “denominator” to get a better sense of the real
trends as well as to understand its own limitations.

Michael Cahill, Senior Currency Strategist
Email:
Tel:michael.e.cahill@gs.com+44 20 7552-8314

Goldman Sachs International

15

Issue 89

Top of Mind

Control measure efficacy and reopening
El

Daan Struyven and Isabella Rosenberg look at
the impact of control measures on viral spread
As coronavirus case growth appears to have leveled off
globally, several countries, including the US and some inWestern Europe, are beginning to relax lockdown measuresinitially intended to control the spread of the virus. However,this relaxation has increased concerns about a potential second
wave of infections on the view that the recent improvement
mainly reflects the impact of stringent virus control measures.
Therefore, the efficacy of various virus control measures is a
key question for the economic and market outlook. To answer
this question, we use policy information, social distancing
measures, and other variables from US states and othercountries to explain the growth in coronavirus cases.
Bending the curve: from lockdowns to public hygiene
Our analysis yields three main results. First, at both the US
state level—using our GS lockdown index—and the country
level—using Oxford University researchers’ government
response stringency index—public virus control measures havea large, negative impact on infection growth. Lockdowns havebeen followed by significantly lower growth in infections, evenwhen we control for other factors, such as population density,
income inequality, and temperature.
That said, we find that in the US, actual social distancing
behavior—based on data from Google’s Community Mobility
Reports—is an even more important driver of case growth thanpolicy-imposed lockdowns. Intuitively, this is probably because
the public’s actual, practiced social distancing is also strongly
influenced by non-policy factors, including fear of contracting
the virus or spreading it to others. Indeed, we find that the
number of state cases better explains social distancing thanlockdown orders, suggesting public confidence will play animportant role for the resumption of economic activity.
Controlling for policy and social distancing, we also find that
population density and income inequality have significantly
positive relationships with infections. 2
1F

Confirmed cases a key driver of social distancing behavior
Variation in US social distancing index explained by factor, R-squared
90
80
70
60
50
40

Regions with SARS experience have relied more on
testing/contact tracing than on movement restrictions
Statistical significance of SARS in explaining regional-level policy mix, T-stat
4
3
2
1
0
-1
-2
-3
-4
-5
Contact
Tracing

Testing
Framework

SchoolClosing

Restrict. on Intl. Travel
Intl.
Control
Movement

CancelPublicEventsClose
PublicTransp.

Workplace
Closing

Note: includes geographies with at least 200 SARS confirmed cases in 2002-2003;
Canada, Mainland China, Hong Kong, Singapore and Taiwan.
Source: Goldman Sachs Global Investment Research.

Third, we find that countries with stronger self-reported
handwashing practices have experienced lower case growth.
Moreover, “big data” measures, such as Google searches,indicate a sharp recent rise in global attention to handwashing,masks and face touching, which has coincided with a larger
drop in case growth in recent weeks in the US and globally thanwe can otherwise explain. This suggests that global attention toand likely learning about prevention has risen sharply.
Concerns confirmed
Overall, our analysis confirms two main concerns as we movetowards reopening the economy. First, our finding that public
virus control measures have a large, negative impact on
infections highlights the significant risk of a second wave if
policy or distancing behavior are eased prematurely andindiscriminately. Second, a successful reopening strategy islikely to require a sharp increase in testing and contact tracingfrom current levels in the US and other countries, as well as
low-cost public hygiene measures, including campaigns for
handwashing, masks, and gloves.

Daan Struyven, Senior US and Global Economist

30

Email:
Tel:

20
10
0
GS Lockdown Index

Confirmed Cases Per Million

Note: The GS Lockdown index is a GS measure of the stringency of US state-level
lockdowns based on governor-ordered school closures, stay-at-home orders and theclosure of non-essential businesses.
Source: Goldman Sachs Global Investment Research.

2

Second, our cross-regional analysis reveals that even after
controlling for policy restrictions and social distancing, Asian
regions have experienced systematically lower growth in cases,
especially those that experienced a SARS outbreak in 2003.
Regions that experienced SARS have also relied more heavily
on testing and contact tracing—and less on school closures andrestrictions on internal movement—to mitigate and control the
spread of the virus relative to other regions.

daan.struyven@gs.com
212 357-4172

Goldman Sachs and Co. LLC

Isabella Rosenberg, Global FX and EM Strategy
Email:
Tel:isabella.rosenberg@gs.com
212 357-7628

Goldman Sachs and Co. LLC

This could reflect that lower-income households in more unequal regions often have less access to affordable or spacious housing, safe transportation, paid sick leave,or other health prevention measures.

Goldman Sachs Global Investment Research16Issue 89

Top of Mind

Q&A on testing, treatments and vaccinesEl

Salveen Richter, GS lead analyst for the US Biotechnology sector, answers key
questions on where we are on US testing, treatments and vaccines for COVID-19
Q: What are the different ways that healthcare companies are tackling COVID-19?
A: As the impact of the COVID-19 pandemic on the global economy and modern-day society continues to unfold, diagnostics(testing for infection), treatments (to treat symptoms of COVID-19) and prophylactic vaccines (to prevent infection of SARS-CoV2—the virus that causes COVID-19) are being developed. There are primarily two types of diagnostic tests: molecular andserological. While molecular tests quantify the presence of viral infection (implies infection), serological tests detect the presenceof antibodies to coronavirus in the blood (implies immunity). Of the ~49 diagnostic tests approved by the FDA under its
emergency use authorization (EUA), over 80% are molecular. However, as state and federal policy makers begin to think about restarting the economy, serology tests with high specificity are becoming a focus.
On the therapy side, there are two broad groups for COVID-19—prophylactic vaccines and treatment. Prophylactic vaccines areintended to provide protection from infection and confer immunity in people who have not been exposed to COVID-19, while
treatments address the different symptoms associated with COVID-19, such as acute respiratory distress syndrome (ARDS).
According to the Milken Institute COVID-19 tracker, there were over 250 therapies in the pipeline as of April 27, with 96 of thesebeing vaccines and 55 antibodies. We note that according to the WHO, there are 89 vaccines currently in the pipeline, seven ofwhich are in clinical development.
Q: What progress have we made in ramping up diagnostic testing capacity in the US and globally, and where are we still
falling short?
A: The global capacity for molecular diagnostic testing of COVID-19 is now at ~30 million tests per month. While the current
testing capacity is not sufficient to meet the entire demand on a population basis, we note an improvement in testing in the US
over the past few weeks according to the COVID Tracking Project, from a total of 866 tests as of March 4 to 4.7 million tests as ofApril 23—largely driven by the FDA’s flexibility towards labs and manufacturers in this time of crisis. We expect the FDA’s
decision to implement its EUA (emergency use authorization) on in vitro diagnostics for the detection and/or diagnosis of COVID19 will continue to accelerate testing efforts. The FDA emergency use guidelines relax the standards that allow tests to beavailable, in part by expediting review timelines to as little as one day and allowing labs to begin testing prior to FDA review of thevalidation data.
But while the increase in available tests represents meaningful progress compared to the past couple of weeks, the availability ofresources, including swab samples and trained professionals to collect these samples, and testing turnaround times continue tohinder the widespread scale up and availability of testing. Errors in the tests themselves, such as false negatives, present anadditional hurdle for diagnosing COVID-19. As capacity for testing increases, it will be key to delineate between testing for thepresence/absence of the actual infection, where there was meaningful progress in March, and testing for immunity generation,
which will be relevant going forward.
Q: What is the status of antibody testing, and when can we expect to see a ramp up of such testing in the US?
A: Serological testing (i.e. presence of antibodies) can provide insight into herd immunity (the resistance to the spread of disease
within a population resulting from a sufficiently high proportion of individuals immune to the disease), which is important because
once approximately >60% of the population is immune to the virus, a "next wave" of infections stemming from the same versionof the virus is unlikely. Several companies are developing antibody tests to measure the markers of an immune response to
COVID-19, namely immunoglobulin M (IgM) and immunoglobulin G (IgG) antibodies. IgM antibodies are the first to appear in
response to the initial exposure of a viral infection, and they begin to fade after the infection ends. As the body clears theinfection, there is an increase in IgG antibodies, which provide long-term immunity. Thus, COVID-19 IgM antibodies may indicate
more recent exposure to the virus, and the detection of COVID-19 IgG antibodies may indicate a later stage of infection. In orderto determine the stage of infection, it is therefore critically important to have a highly specific test that identifies the specificantibody present rather than a highly sensitive test that quantifies levels of the antibody. To that end, we highlight two serologicaltests: Abbott’s, which has a specificity and sensitivity of 99.6% and 86.4%, respectively, and Roche’s, which has a specificity andsensitivity of >99% and >95%, respectively.
Goldman Sachs Global Investment Research

17Top of Mind

Issue 89

El

Based on the different proposed plans for the path forward in the US, we estimate the country would need an estimated 50 to
100 million antibody tests per month. In the US, Abbott committed to shipping 4 million tests in April, ramping to 20 million tests
in June, and notes that its testing instruments can run up to 100 to 200 tests per hour. Roche is currently working with the FDA
for an EUA on its tests, and plans to reach a capacity of 100 million tests per month by June, with a goal to ramp up further
towards year-end. According to Roche, its instruments can run up to 300 tests per hour, depending on the analyzer used.
Q: What are the most promising types of treatments for active cases being developed right now, and what is a realistic
timeframe for having an effective treatment widely available?
A: In broad terms, treatments for COVID-19 include approved drugs that can be repurposed, antiviral therapies that counteract thevirus, antibody therapies that introduce neutralizing antibodies against the virus and convalescent plasma therapies, in whichplasma from convalescent patients is administered to those infected. On the therapeutic side, Gilead's remdesivir andRegeneron's antibody cocktail are most in focus. Gilead’s remdesivir is an Nuc inhibitor that terminates viral replication by
preventing the function of RNA-dependent RNA polymerases (an enzyme that catalyzes the replication of RNA), resulting in adecrease in viral RNA production. Thus far, there has been emerging data for remdesivir in COVID-19, but we await full Phase 3
results in late April (for severe patients), late May (for moderate patients) and data from the NIAID sponsored study in mid-to-late
May to elucidate the profile of the drug. Regeneron is developing a novel multi-antibody cocktail that can be used as a treatment
for COVID-19 in infected individuals. This treatment will use two undisclosed antibodies that target different parts of the virus toprotect against multiple viral variants. Regeneron's antibody cocktail will be ready to enter the clinic by early summer, with a goalof producing hundreds of thousands of doses per month by the end of summer.
As it relates to symptomatic relief of COVID-19, anti-IL6 inhibitors are in development, with Roche’s Actemra in a Phase 3 trial(data in 2H20, potentially in the summer) and Regeneron/Sanofi's Kevzara currently in Phase 2/3 testing. On the latter, going
forward, the Phase 3 trial will only include “critical” patients with results (US) expected in June and the rest of the global studies
in 3Q20. We also highlight Grifols, Takeda and CSL Behring, all of which are independently developing a novel convalescentplasma therapy against COVID-19. One potential limitation of this approach is the requirement of donor plasma, which could limit
its scale.
Q: What are the most promising vaccines currently in development, and what is the earliest timeline we can expect tosee for getting a vaccine to the public?
A: With several vaccines in development, we believe Moderna's mRNA-based vaccine (mRNA-127) and Johnson & Johnson's
vaccine candidate, which uses established and validated AdVac technology, are the leading contenders to address the publichealth needs of the global community. Moderna has previously issued guidance on the potential for emergency vaccine use in
primary populations (including physicians) as early as fall 2020, following the release of Phase 1 safety data in the spring andimmunogenicity data in the summer and Phase 2 initiation in 2Q20. We expect Johnson & Johnson to initiate Phase 1 trials in
September, with topline safety and immunogenicity data expected by the end of 2020, and note the vaccine could be available
under EUA in early 2021 (see other vaccines in development on pgs. 20-21.)
Q: Will any vaccine need to be administered every year, like a flu vaccine, or will it be effective over a multi-year period?
A: On the duration of efficacy, it is unclear if the COVID-19 vaccine will be similar to the yearly flu vaccine or whether it will beable to confer multi-year efficacy. While some experts believe multi-year protection is likely, more research is needed todetermine if this is the case based on what we know about similar viruses. Using the 2002 SARS and 2012 MERS epidemics as
analogs is not helpful in this case because there is not much known about their reinfection rates given the limited epidemiologicaldetails of both – there were >8,000 cases of SARS over 3 months, and only 2,500 observed cases of MERS over 8 years.

Goldman Sachs Global Investment Research18Issue 89

Top of Mind

COVID-19 therapies and diagnostics
El

Company(Compound)Category

GS comment

Event

Approved therapies
ROG(Actemra/
RoActemra)
REGN/SNY(Kevzara)
INCY/NVS(Jakafi)
ALXN(Ultomiris)
Fujifilm Holdings(favipiravir/
Avigan)Generic(chloroquine /hydroxylchloroquine)
Generic(lopinavir /ritonavir)

Anti-IL-6
Anti-IL-6
JAK inhibitor
C5 inhibitor

Anti-flu

Anti-malaria

Anti-HIV

While not currently for use in COVID-19 patients with pneumonia, we note that it has been
included in the 7th updated diagnosis and treatment plan for COVID-19 issued by China's
National Health Commissions (NHC) on March 3, 2020.
The companies have initiated global Ph2/3 studies evaluating Kevzara (anti-IL-6 approved totreat RA) for the treatment of severe symptoms.
Ph3 clinical trials will begin, ex-US, in patients with COVID-19 associated cytokine storm. Jakafi
is currently being distributed in the US under the emergency Expanded Access Program (EAP).
Ph3 trials will be conducted in COVID patients (n=270) with severe pneumonia or acuterespiratory distress syndrome. Preclinical data demonstrates reduced lung inflammation in
animals with pneumonia and evidence of effect in the compassionate use program.
Management has started Ph3 trials in Japan to expand the indication of an influenza treatment.
It has already reported that clinical trials in China suggested that the drug is effective in thetreatment of COVID-19.
FDA has authorized emergency use of both drugs. NVS and Bayer have committed to 30mn
and 3mn doses of CQ, respectively, for immediate use in controlled clinical studies. WHO is
running a SOLIDARITY trial testing the efficacy of these drugs against remdesivir and anti-HIV
drugs.
Initial expectations were dimmed due to a recent study, in China, where no difference wasseen in mortality or rate of improvement in comparison to standard of care.

Ph3 data expected in 2Q20

Ph2/3 data in mid-20+

Ph3 trials expected to start in May 2020

Trials are expected to be completed inJune 2020

Pipeline therapies
MRNA(mRNA-1273)

Vaccine

JNJ(Ad26-SARSCoV-2)

Vaccine

VIR/WuXi
Biologics

Vaccine

SNY

Vaccine

SNY/TBIO

Vaccine

SNY/GSK

VaccinePFE/BNTX(BNT162)

Vaccine

MRK

Vaccine

GSK/Clover
Biopharmaceuti
cals(S-Trimer)
CSL

Management guided to potential for emergency use in primary populations (including
physicians) in fall 2020.
JNJ has identified a vaccine candidate for clinical development and plans to initiate clinicalstudies by Sept 2020. The company intends to scale production in parallel to enable supply of
one billion doses. JNJ anticipates the vaccine could available for emergency use authorizationin early 2021.
VIR has partnered with WuXi to expedite the development of their lead COVID-19 candidate.
WuXi is responsible for and is in early stages of cell-line development, formulation and initial
manufacturing.
SNY is developing a novel, recombinant, protein-based vaccine in partnership with BARDA
using SNY's recombinant DNA platform.

Initial Ph1 safety data expected inspring and immunogenicity data insummerEfficacy and safety data expected by
year-end

Initial human trials will begin in 4Q20

Novel mRNA COVID-19 vaccine using TBIO's mRNA platform. TBIO will likely be able to meetthe demand for a pandemic response since it has established single batch production with its
clinical platform and also is partnered with a contract manufacturing company.

Ph1 trials to begin early 2021

SNY and GSK have entered into an agreement to use SNY's S protein antigen in combination
with GSK's pandemic adjuvant technology to develop a vaccine against SARS-CoV-2. If
successful, SNY/GSK aim to have the vaccine ready by 2H21.
This potential mRNA vaccine will be jointly distributed (excluding China).

Clinical trials to begin 2H20

Clinical trials will begin by end of April
2020

Company is screening their existing anti-viral products to see if any can be leveraged against
COVID-19.
Clover is responsible for manufacturing since it has one of the largest in-house, commercial
scale cGMP manufacturing facilities in China.

VaccineVaccineInovio/IVI/KNIH(INO-4800)

VaccineCureVac

VaccineNovavax(NVX-CoV2373)

VaccineOxfordUniversity

VaccineGILD(remdesivir)

Antiviraltherapy

Partnered with the University of Queensland where CSL will provide technical expertise andits adjuvant technology, MF59 which has been used in seasonal/pandemic influenza vaccines.
Program is currently in early stages of development.
First patient in Ph1 US trial (n=40) has been dosed. Each patient will receive two doses of INO4800 four weeks apart. In parallel, Inovio will collaborate with IVI and KNIH to test INO-4800 ina Ph1/2 study South Korea with an aim to produce 1mn doses by YE.

Initial immune responses and safety
data expected by late August

CureVac is leveraging its mRNA platform to develop a vaccine for COVID-19.
Novavax has identified NVX-Co2373 as a vaccine candidate that produces high levels ofneutralizing antibodies in animal studies.
The first phase (n=1,110) will be administered to healthy volunteers and will include a controlarm (meningitis vaccine). Each patient will receive two doses over four weeks.

Ph1/2 trial to begin in mid-May 2020
with preliminary readout in July 2020
First patients have been dosed; results
expected in ~6 months

Thus far, there is emerging data for remdesivir in COVID-19. We await results from the full
remdesivir GILD Ph3 studies to elucidate the profile of the drug.

Full remdesivir Ph3 results expected inlate April (severe patients) and late May(moderate patients) as well as datafrom NIAID sponsored study in mid-tolate May

Goldman Sachs Global Investment Research19Issue 89

Top of MindEl

VIR/ALNY

Antiviraltherapy

VIR has expanded its partnership with ALNY to develop an RNAi therapy against SARS-CoV-2.

REGN

Antibody
therapy

REGN is developing an antibody cocktail therapy as prophylaxis or treatment for individuals infectedwith the virus, similar to their Ebola program which is currently under regulatory review.

Ph2/3 data in mid-20+

VIR/BIIB

Antibody
therapy

VIR has modified its novel antibody to extend its half-life and increase its short term (vaccinal)
potency. The drug will be produced both with and without the vaccinal mutation.

Clinical trials to begin in JulySeptember 2020

VIR/GSK(VIR-7831/32)

Antibody
therapy

Begin Ph2 clinical trials in the next 3-5monthsAMGN/ADPT

Antibody
therapy

VIR has identified antibody candidates (VIR-7831/VIR-7832) which it is now developing in partnershipwith GSK. The companies are additionally utilizing VIR’s CRISPR screening and machine learning
approach and GSK’s vaccine technologies to further other initiatives in search for a vaccine for
COVID-19.
This partnership will leverage ADPT's immune medicine platform to identify neutralizing antibodies
from COVID-19 survivors and develop therapeutics for prophylaxis and treatment.
Ph2 trial in hospitalized COVID patients with pneumonia to begin in April.

Data readouts expected in earlysummer

LLY(LY3127804)
KNSA(Mavrilimumab)Antibody
therapy

Takeda(TAK-888)

PlasmatherapyTAK-888 will likely be used to treat high-risk patients only.

Plasmatherapy
Plasmatherapy

Currently the only company authorized to collect plasma from donors who have had COVID-19 in theUS.
CSL is exploring development of hyper-immune serum enriched with COVID-19 antibodies but has
not provided timelines.

Grifols
CSL

Antibody
therapy

Initial study in six severe COVID-19 patients shows promise. Company is working with the FDA tobegin trials in the US.
Trials to begin June/July 2020 andlaunch is anticipated by YE20

Diagnostics
ABT

RT-PCR

TMO

RT-PCRROG

RT-PCR

PKI

RT-PCR

DGX

RT-PCR

LH

RT-PCR

QGEN/TMO(QIAstat-Dx)

RT-PCR

Grifols

TMA

ABT(ID NOW)PoC

DHR(Xpert Xpress
SARS-CoV-2)

PoC

BDX

Serological

ABT's molecular test will be performed on ABT's M2000 system already in hospital and reference
labs.

Test provides results within four hours of receiving sample. As of March 16, TMO has 1.5mn tests
available to ship under the EUA label.

In our view, this approval and subsequent commercialization is unlikely to materially impact Roche's
broader growth outlook, however, we do see it as potentially enabling a de-bottlenecking of some of
the constraints faced by healthcare systems.
PKI has expanded production capacity of its extraction and RT-PCR tests throughout its global
facilities and guides to the capability to ship millions of test kits.
Conducting ~25k COVID-19 tests per day, with capacity to scale to ~30k tests bringing weekly
capacity to ~200k. As of March 23, DGX has performed ~100k tests.
Capacity to perform more than 30k COVID-19 tests per day, with greater capacity expected in the
coming weeks assuming adequate supplies. LH has performed ~350k tests to date.

Developed a panel that can differentiate SARS-CoV-2 from 21 other pathogens.

ROG(Elecsys antiSARSCoV-2)

Serological

ABT

Serological

CEMI

Grifols anticipates that its TMA test can detect the virus with a sensitivity equivalent (or potentially)
superior to that of PCR. Each automated instruments can run >1k samples per day.
ABT received US approval of its ID NOW system which targets the coronavirus' RdRp gene and canyield positive results in five minutes and negative results in 13 minutes. Per GS estimates, 1mn test
can be manufactured per month.
Test is able to detect SARS-CoV-2 in ~45 min and is performed on Cepheid's GeneXpert Systems
platform (~5k in the US; 23k worldwide). While PoC provides faster results, each sample is run
individually vs traditional PCR where multiple samples can be run in parallel.
HSIC is working to make tests available to medical care facilities in the US.
The test is able to identify people who have been infected with COVID-19, even if they do notdisplay symptoms. The test will run on ROG's Cobas E systems through a blood sample, withresults available in 18 min and a test throughput of up to 300 tests per hour, depending on theanalyser. Per Roche, this test already has a specificity of >99% and a sensitivity >95% to the
SARS-CoV-2 virus. ROG aims to make the test available in countries accepting the CE mark by early
May, and is working with the FDA for an Emergency Use Authorization.
Test will run on ABT's Architect i1000SR and i2000SR instruments. Per the company, there are >2k
instruments in use in the US and can run up to 100-200 tests per hour. It tests only for IgG and has
a sensitivity of 86.4% and a specificity of 99.6%. ABT began shipping tests on April 16 and is priced
at $5 per test.
Per press reports, CEMI received FDA approval for its 15 min PoC test.

Serological

FDA approved; ABT is manufacturing
50k tests/day of the new 5-min PoC
test with plans for 2mn tests/monthby June
TMO received FDA approval andexpects to scale production up to 5mn
tests per week during the month ofApril.
FDA approved, capacity of >3.5mn
tests/month available now with an aim
to significantly expand this capacity
FDA approved
DGX received FDA approval andexpects to meet full US demand overthe next ~2 weeks.
Per prior management commentary,
LH plans to scale to more than 100k
tests per week. It has also received
FDA approval.
Initially evaluated at a hospital in Parisand is now being tested at four
hospitals in China
Test should be ready in the following
weeks
FDA approved and ABT will start
shipping 50k tests/day of new 5-min
PoC test from April 1stFirst to receive EUA from the FDA

BDX expects to supply >1mn tests inthe coming months
Capacity of 100mn tests/month byJune with an aim to ramp up capacity
further later in the year

ABT will ship 4mn tests in April 2020
and will ramp up to 20mn tests in the
US in June 2020
Expects to begin shipping tests withthe help of its partner LumiraDX, in
April 2020

Note: Latest as of April 28, 2020.
Source: Data compiled by Goldman Sachs Global Investment Research. See here for more details. Special thanks to Salveen Richter.
Goldman Sachs Global Investment Research

20Goldman Sachs Global Investment Research

FDA sends team ofexperts to facility toensure manufacturing
can be done and vaccine
data are accurate

Labeling discussion areheld in order to reachagreement on thecontents and wording ofprescribing information

FDA application determinationis conveyed via Action Letter. If
approved, an Approval Letter
authorizes the manufacturer tobegin vaccine distribution in US

Shortened by: Potential use of
FDA’s Emergency Use
Authorization (EUA)

COVID-19 timeline:
Few months

Typical timeline:
1-2 years

REGULATORY REVIEW

Shortened by: A fast-tracked
process for each stage of clinical
trials based on surrogate
endpoints rather than clinicalendpoints, with Phase 2 andPhase 3 trials being combined

COVID-19 timeline:~12+ months, but potentiallysooner for certain populations

Typical timeline:
4-8 years

CLINICAL(2) Use of research on theexisting SARS vaccine as astarting template, as COVID-19
shares 80% of its genetic codewith SARS

Shortened by:(1) Developments over the last
few years in vaccine platform
technologies that can instruct apatient’s own cells to produce
proteins that can prevent
infection

COVID-19 timeline:
2+ months

Typical timeline:
3-7 years

PRE-CLIINICALAPPROVAL STAGES

Source: FDA, WHO, CDC, MIT, World Economic Forum, The New England Journal of Medicine, European Journal of Immunology, Johns Hopkins, Biotechnology Innovation Organization, NCBI, NLM, NIH,
Nuventra, Goldman Sachs GIR.

FDA and manufacturer meetto discuss application
deficiencies, labeling issues,and the need for any risk
management studies

100s of volunteers participate;most common short-term side
effects and immune responses
are studied. ~60% of vaccines
move on to next stage

IND is submitted to FDA withtesting results, vaccine
description, and proposed clinicalprotocol. FDA decides whether
to let clinical trials begin

1000s of volunteers enroll; criticaleffectiveness documentation andadditional safety information isgathered. ~60% of vaccines
move on to next stage

Manufacturer tests new
vaccine on animals for
toxicity. Safety and efficacy
information is gathered

Manufacturer submits BLA,
including pre-clinical and clinicaldata, safety and efficacy
information, draft labeling, anddescription of facility

Special thanks to Salveen Richter.

Manufacturer
provides FDA
with latest safety
report within 4months of initial
form submission

FDA reviews BLA
for completion. If
successful, FDA
issues Filing Letter

A vaccine is developed
and manufacturer
seeks approval for its
use in the US

20-80 healthy volunteers
participate in testing for
vaccine safety and serious
side effects. ~2/3 ofvaccines move on to
next stage

Top of Mind
Issue 89

El

The race to a vaccine

21Issue 89

Top of Mind

Top of Mind archive: click to accessEl

Click the icon or title to access the report:
Issue 88
Oil’s Seismic ShockMarch 31, 2020

Issue 72
Recession Risk
October 16, 2018

Issue 87
Roaring into Recession
March 24, 2020

Issue 71
Fiscal Folly
September 13, 2018

Issue 862020’s Black swan: COVID-19
February 28, 2020

Issue 70
Deal or No Deal: Brexit and the Future of Europe
August 13, 2018

Issue 85
Investing in Climate Change
January 30, 2020

Issue 69
Emerging Markets: Invest or Avoid?
July 10, 2018

Special Issue
2019 Update, and a Peek at 2020
December 17, 2019

Issue 68
Liquidity, Volatility, Fragility
June 12, 2018

Issue 84
Fiscal Focus
November 26, 2019

Issue 67
Regulating Big Tech
April 26, 2018

Issue 83
Growth and Geopolitical Risk
October 10, 2019

Issue 66
Trade Wars 2.0
March 28, 2018

Issue 82
Currency Wars
September 12, 2019

Issue 65
Has a Bond Bear Market Begun?
February 28, 2018

Issue 81
Central Bank Independence
August 8, 2019

Issue 64
Is Bitcoin a (Bursting) Bubble?
February 5, 2018

Issue 80
Dissecting the Market Disconnect
July 11, 2019

Special Issue
2017 Update, and a Peek at 2018
December 14, 2017

Issue 79
Trade Wars 3.0
June 6, 2019

Issue 63
Late-Cycle for Longer?
November 9, 2017

Issue 78
EU Elections: What’s at Stake?
May 9, 2019

Issue 62
China’s Big Reshuffle
October 12, 2017

Issue 77
Buyback Realities
April 11, 2019

Issue 61
Fiscal Agenda in Focus
October 5, 2017

Issue 76
The Fed’s Dovish Pivot
March 5, 2019

Issue 60
The Rundown on Runoff
September 11, 2017

Issue 75
Where Are We in the Market Cycle?
February 4, 2019

Issue 59
Regulatory Rollback
July 26, 2017

Issue 74
What’s Next for China?
December 7, 2018

Issue 58
The Fed’s Dual Dilemma
June 21, 2017

Issue 73
Making Sense of Midterms
October 29, 2018

Issue 57
Geopolitical Risks
May 16, 2017

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22Top of Mind

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米国法ならびに米国の規制に基づく開示事項
本資料に記載された企業に要求される以下の開示事項に関しては、上記の各会社に関する規制に基づく開示事項をご参照ください：主幹事会社または 共同
主幹事会社の役割；1%またはその他の持分；特定の業務に係る報酬の受領；顧客関係の種類；過去の証券公募における主幹事会社または共同主 幹事会社の役割；役員の兼務；株式については、マーケット･メーカーおよび/またはスペシャリストの任務。ゴールドマン・サックスは本資料に記載 された発行体の債券(あるいは関連する派生商品)の自己勘定売買を行います、あるいは行う場合があります。
追加の開示事項： 証券の保有ならびに実質的な利害の対立：ゴールドマン・サックスの方針では、アナリスト、アナリストの下で業務を行うプロフェッ
ショナル、およびその同居家族が、アナリストが調査対象としている企業の証券を保有することを禁止しています。 アナリストの報酬：アナリストの報
酬は、投資銀行部門の収益を含むゴールドマン・サックス全体の収益も考慮した上で決定されています。 アナリストによる役員の兼務：ゴールドマン・
サックスの方針では通常、アナリスト、アナリストの下で業務を行う者、またはその同居家族が、アナリストが調査対象としている企業 の役員、取締役
または顧問を兼務することを禁止しています。 米国以外のアナリスト：米国以外のアナリストは必ずしもゴールドマン・サックス・アンド・カンパニーの外務員ではなく、したがって調査対象企業とのコミュニケーション、公の場への登場、保有証券の売買を規制するFINRAの規則2241あるいは規則2242の適用対象とならない場合があります。

米国以外の管轄地域の法律や規制に基づく追加の開示事項
以下の開示事項は、米国法ならびに規制に基づきすでに記載された項目以外に、各管轄地域で開示が求められているものです。 オーストラリア：ゴール
ドマン･サックス･オーストラリアPty Ltdおよびその関連会社はBanking Act 1959 (Cth)で定義されるオーストラリアの公認預金受入機関ではなく、オーストラリアにおいて銀行サービスを提供することも銀行業務を営むこともありません。本資料および本資料の入手や利用は、ゴールドマン･ サックスが別段に合意した場合を除き、Australian Corporations Actで定義されている”wholesale clients”のみを対象としています。調査資料の作成にあたり、ゴールドマン･サックス･オーストラリア投資調査部の社員が、調査資料で言及する企業およびその他の事業体が主催する会社訪問や工 場見学、その他会合に出席することがあります。ゴールドマン･サックス･オーストラリアがかかる訪問や会合に関する状況に照らして適切かつ妥当と 判断した場合には、その訪問や会合の費用の一部または全額を当該発行体が負担することがあります。本資料において金融商品に関してなんらかの意 見が含まれる場合は一般的な見解であり、個々のお客様の投資目的、財務状況、もしくは必要性を考慮することなくゴールドマン･サックスが作成し たものです。お客様は、これらの意見に基づき投資行動をとる場合、当該意見が自身の投資目的、財務状況、必要性に鑑み適切であるかを事前にご考 慮ください。 オーストラリアおよび
ニュージーランドのゴールドマン・サックスにおける利益相反に関する開示事項並びにゴールドマン･サックスにおけるオーストラリアセルサイドリサー
チの独立性に関するポリシーはhttps://www.goldmansachs.com/disclosures/australia-new-zealand/index.html をご覧ください。 ブラジル：ブラジル
証券取引委員会(CVM) Instruction 598に関係する開示情報については、https://www.gs.com/worldwide/brazil/area/gir/index.htmlをご覧ください。
CVM Instruction 598第20項が適用される場合、本文の最後に特に明記のない限り、本資料の初めに記載された最初のアナリストが、同項が定義する、本資料の内容に 主たる責任を負う、ブラジルで資格登録されたアナリストとなります。 カナダ：ゴールドマン･サックス･カナダ･インクはゴールドマン･サックス･グループ･インクの関連会社であり、したがってゴールドマン･サックス(上記定義)に関する会社に関する規制に基づく開示の対象に含まれます。ゴール ドマン･サックス･カナダ･インクは、本資料を顧客に広範に配布する場合、その範囲において本資料を承認するものとし、またその内容に責任を負う
ことに同意しているものとします。 香港：本資料に記載された、当社アナリストが調査対象としている企業の有価証券に関し、さらに詳しい情報がご入用の際には、ゴールドマン･サックス(アジア)L.L.C.にお問い合わせください。 インド：本資料に記載された企業に関しさらに詳しい情報がご入用の際には、ゴールドマン･サックス(インド)セキュリティーズ･プライベート･リミテッド、SEBIにおけるリサーチアナリスト登録番号INH000001493、951-A,
Rational House, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400 025, India、法人登記番号U74140MH2006FTC160634、電話番号+91 22 6616 9000、
Fax +91 22 6616 9001までお問い合わせください。ゴールドマン･サックスは本資料に記載された企業の(Indian Securities Contracts (Regulation)
Act 1956第2項(h)で定義される)証券を1%以上実質保有している場合があります。 日本：金融商品取引法第37条に定める事項の表示をご参照ください。
韓国：本資料及びそのアクセスは、ゴールドマン・サックスとの別段の同意がない限り、韓国金融投資サービスおよび資本市場法の｢プロフェッショナル
投資家｣に向けたものです。 本資料に記載された企業に関しさらに詳しい情報がご入用の際には、ゴールドマン･サックス(アジア)L.L.C.ソウル支店まで
お問い合わせください。 ニュージーランド：ゴールドマン･サックス･ニュージーランド･リミテッドおよびその関連会社は(Reserve Bank of New
Zealand Act 1989で定義される)｢登録銀行｣でも｢預金受入機関｣でもありません。本資料および本資料の入手や利用は、ゴールドマン･サックスが別段に合意した場合を除き、Financial Advisors Act 2008で定義されている”wholesale clients”のみを対象としています。 オーストラリアおよびニュージ
ーランドのゴールドマン・サックスにおける利益相反に関する開示事項はhttps://www.goldmansachs.com/disclosures/australia-newzealand/index.html をご覧ください。 ロシア：ロシア連邦で配布される調査リポートは、ロシア法で定義される広告ではなく、商品の宣伝を主目的としない情報・分析に該当するものであり、ロシアの資産評価に関する法の意義の範囲 内における評価を提供するものではありません。 調査リポートは、
ロシア法ならびに規制に基づく個人向けの推奨を構成するものではありません。また、特定のお客様に向けたものではなく、お客様の財務状況、投資プロ
ファイルまたはリスクプロファイルを分析することなく作成したものです。 本資料に基づくお客様やその他の投資行動について、ゴールドマン･サックス
は一切の責任を負いかねます。 シンガポール：本資料に記載された、当社アナリストが調査対象としている企業に関しさらに詳しい情報がご入用の際は、ゴールドマン･サックス(シンガポール)Pte.(Company Number: 198602165W)までお問い合わせください。 台湾：本資料は情報提供のみを目的としたものであり、当社の承諾なしに転載することはできません。投資に際しましては、各自の投資リスクを慎重にご検討ください。投資の結果につきましては個々の投資家が責任を負うものとします。 英国：英国金融行動監視機構の規則において個人投資家の定義に該当するお客様は、本資料を本資料で取り上げた、当社アナリストが調査対象としている企業に関す る過去のゴールドマン･サックス･リポートと関連してお読みいただき、ゴールドマン･サックス･イ
ンターナショナルから送られたリスク警告を参照し て下さい。これらのリスク警告の写しや本資料で使用した金融用語の用語解説をご希望の方は、ゴールドマン･サックス･インターナショナルまでお問 い合わせ下さい。
欧州連合：投資推奨または投資戦略を推奨、提案するその他の情報の客観的な提示、および個人の利益の開示または利益相反の表明の技術的な手続き に関する規制技術基準についての欧州議会および理事会規則(EU) No 596/2014を補足する欧州委員会委任規則(EU)(2016/958)の第6条2項に関連する開示情報
は、欧州での投資調査に関する利益相反管理方針を記載したhttps://www.gs.com/disclosures/europeanpolicy.htmlでご覧いただけます。

グローバル調査資料：配布機関
ゴールドマン･サックスのグローバル･インベストメント･リサーチ部門は、全世界でゴールドマン･サックスのお客様向けに調査資料の発行と配布を行 っています。世界各地のゴールドマン･サックスのオフィスに勤務するアナリストは、業界および企業、マクロ経済、為替、市況商品、ポートフォリ オ戦略に関する調査資料を発行しています。本資料の配布については、オーストラリアではゴールドマン･サックス･オーストラリアPtyリミテッド (ABN 21 006
797 897)が、ブラジルではゴールドマン･サックス･ドゥ･ブラジル･コレトラ･デ･ティツロス･エ･ヴァロレス･モビリアリオスS.A.が、オンブスマン･ゴー
ルドマン･サックス･ブラジル： 0800 727 5764 および/または ouvidoriagoldmansachs@gs.com (平日の午前9時から午後6時にお問い合わせください)。
Ouvidoria Goldman Sachs Brasil: 0800 727 5764 e/ou ouvidoriagoldmansachs@gs.com. Horário de funcionamento: segunda-feira à sexta-feiraGoldman Sachs Global Investment Research

23

Top of Mind

Issue 89El

(exceto feriados), das 9h às 18h、カナダではゴールドマン･サックス･カナダ･インクまたはゴールドマン･サックス･アンド･カンパニーが、香港ではゴールドマン･サックス(アジア)LLC が、インドではゴールドマン･サックス(インド)セキュリティーズ･プライベート･リミテッドが、日本ではゴールドマン･サックス証券株式会社が、韓国ではゴールドマン･サックス(アジア)LLC ソウル支社が、ニュージーランドではゴールドマン･サックス･ニュージーランド･リミテッドが、ロシアではOOOゴールドマン･サックスが、シンガポールではゴールドマン･サックス(シンガポール)Pte(Company Number: 198602165W)
が、米国ではゴールドマン･サックス･アンド･カンパニーが、これを行います。ゴールドマン･サックス･インターナショナルは英国および欧州連合内での本資料の配布を承認しています。
欧州委員会：英国プルーデンス規制機構により認可され、英国金融行動監視機構ならびに英国プルーデンス規制機構の監督を受けるゴールドマン･サ ッ
クス･インターナショナルは、欧州連合域内および英国国内における本資料の配布を承認しております。ドイツ国内においては、ドイツ連邦金融監 督庁の監督を受けるゴールドマン･サックスAG およびゴールドマン･サックス･インターナショナル フランクフルト支店も本資料の配布を行うことがあります。

一般的な開示事項
本資料はお客様への情報提供のみを目的としています。ゴールドマン･サックスに関する開示事項を除き、本資料は信頼できると思われる現在の公開 情報に基づいて作成されていますが、当社はその正確性、完全性に関する責任を負いません。本資料に記載された情報、意見、推定、予想等は全て本 資料発行時点のものであり、事前の通知なしに変更される場合があります。当社は本資料中の情報を合理的な範囲で更新するようにしていますが、法 令上の理由などにより、これができない場合があります。定期的に発行される一部の業界リポートを除いて、大部分のリポートはアナリストの判断に より変則的な間隔を置いて発行されます。
ゴールドマン･サックスは、投資銀行業務、投資顧問業務および証券業務を全世界で提供する総合金融会社です。当社はグローバル･インベストメン ト･リサーチ部門が調査対象としている企業の大部分と投資銀行その他の業務上の関係を持っています。米国のブローカー･ディーラーであるゴールド マン･
サックス･アンド･カンパニーは証券投資家保護公社(SIPC)(https://www.sipc.org)に加盟しています。
当社のセールス担当者、トレーダーその他の従業員は、口頭または書面で、本資料で述べられた意見と異なる内容の市場に関するコメントや投資戦略 を、当社の顧客およびプリンシパル取引部門に提供することがあります。当社の資産運用部門、プリンシパル取引部門、投資部門は、本資料で示され た投資見解や意見と整合しない投資決定を下すことがあります。
当社および当社の関連会社、役員、社員は、法令あるいはゴールドマン･サックスのポリシーで禁じられていない限り、本資料に記載された証券また は派生商品(もしあれば)の買い持ちや売り持ち、および売買を時として行うことがあります。
当社主催のコンファレンスで、当社の他の部門の従業員を含む、サードパーティのスピーカーが示す見解は、必ずしもグローバル投資調査部の見解を 反映したものではなく、また当社の公式見解でもありません。
ここで述べるサードパーティは、セールス担当者、トレーダー、その他プロフェッショナル、およびその同居家族を含み、本資料で言及された金融商 品について、本資料を執筆したアナリストの見解と相反するポジションをとることがあります。
本資料は市場や業種、セクターを越えた投資テーマに重点を置いています。本資料は当社が言及する業種またはセクター内の個別企業の見通しやパフ ォー
マンスを識別しようとするものではなく、個別企業の分析を提供しようとするものでもありません。
本資料における、ある業種またはセクター内の一つもしくは複数のエクイティまたはクレジット証券に関する取引推奨は、いずれも本資料で論じた投 資テーマを反映するものであり、テーマから切り離して当該証券を推奨するものではありません。
本資料は売却・購入が違法となるような法域での有価証券の売却もしくは購入を勧めるものではありません。本資料は個人向けの推奨を構成するもの ではなく、また個々のお客様の特定の投資目的、財務状況、もしくは要望を考慮したものでもありません。お客様は、本資料のいかなる意見または推 奨に基づ
き投資行動をとる場合でも、その前にそれらがお客様の特定の状況に当てはまるか否かを考慮に入れるべきであり、必要とあれば税務アドバ イスも含めて専門家に助言を求めて下さい。本資料に記載されている投資対象の価格と価値、およびそれらがもたらす収益は変動することがありま す。過去の実績は将来のパフォーマンスを約束するものではありません。将来の収益は保証されているわけではなく、投資元本割れが生じることはあ り得ます。為替変動は
特定の投資の価格と価値、およびそれがもたらす収益にマイナスの影響を与えることがあります。
先物、オプション、およびその他派生商品に関係する取引は大きなリスクを生むことがあり、すべての投資家に適切な取引ではありません。投資の際 にはゴールドマン･サックスの担当者もしくはウェブサイトhttps://www.theocc.com/about/publications/character-risks.jspおよびhttps://www.fiadocumentation.org/fia/regulatory-disclosures_1/fia-uniform-futures-and-options-on-futures-risk-disclosures-booklet-pdfversion-2018を通じて入手可能なオプションおよび先物に関する最新の開示資料をよくお読みください。オプションの買いと売りを組み合わせるスプ レッ
ドなどのオプション戦略では取引コストがかなり高くなることがあります。関連資料をご希望の方はお申しつけください。
グローバル投資調査部が提供する異なるレベルのサービス：当社グローバル投資調査部が提供するサービスのレベルならびに種類は、コミュニケーシ ョ
ンを受け取る頻度や手段に関するお客様のご要望、お客様のリスク特性や投資の重点分野ならびに大局的な投資観(市場全体、セクター固有、長期、短期等)、当社との顧客関係全体の規模や範囲、法律や規制による制約といった様々な要因により、当社の社内顧客および社外の他の顧客に提供 されるサービスと異なる場合があります。一つの例として、特定の有価証券に関する調査資料の発行時に通知を依頼されるお客様もいれば、当社顧客 向け内部ウェブサ
イトで入手可能なアナリストのファンダメンタル分析の基礎となる特定のデータの、データフィードその他手段による電子配信を依 頼されるお客様もいます。アナリストの根本的な調査見解の変更(株式の場合はレーティングや目標株価、業績予想の大幅な変更など)については、か かる情報を含む調査リポー
トが作成され、当社顧客向け内部ウェブサイトへの掲載という電子的発行または必要に応じてその他手段により、当該リポ ートがそれを受け取る資格のあ
るすべての顧客に広範に配布されるまでは、いかなる顧客にも伝達されることはありません。
すべての調査資料は電子的発行手段により当社の顧客向け内部ウェブサイトですべての顧客に一斉に配布され、閲覧可能となります。調査資料のすべ ての内容が当社顧客向けに再配布されたり、第三者のアグリゲーターに提供されたりするわけではなく、ゴールドマン・サックスは第三者のアグリゲ ーターによる当社の調査資料の再配布に責任を負っているわけでもありません。一つ以上の有価証券や市場、資産クラス(関連サービス含む)に関して ご利用可能な調査資料やモデル、その他データについては、当社の営業担当者にお問い合わせいただくか、https://research.gs.comをご覧ください。
その他の開示事項については、https://www.gs.com/research/hedge.htmlをご参照いただくか、200 West Street, New York, NY 10282のリサーチ･コンプ
ライアンスから入手することができます。

金融商品取引法第37 条に定める事項の表示
本資料とともに、金融商品取引をご案内させていただく場合は、各金融商品取引の資料をよくお読みください。金融商品取引を行われる場合は、各商品等に所定の手数料等(たとえば、株式のお取引の場合には、約定代金に対し、事前にお客様と合意した手数料率の委託手数料および消費税、投資信託のお取引の場合には、銘柄ごとに設定された販売手数料および信託報酬等の諸経費、等)をご負担いただく場合があります。また、すべての金融商 品には、関連する特殊リスクがあり、国内外の政治・経済・金融情勢、為替相場、株式相場、商品相場、金利水準等の市場情勢、発行体等の信用力、 その他指標とされた原資産の変動により、多額の損失または支払い義務が生じるおそれがあります。さらに、デリバティブのお取引の場合には、弊社 との合意により具体的な額が定まる保証金等をお客様に差し入れていただくこと、加えて、追加保証金等を差し入れていただく可能性もあり、こうし た取引についてはお取引の額が保証金等の額を上回る可能性があります(お取引の額の保証金等の額に対する比率は、現時点では具体的条件が定まっ ていないため算出できません)。また、上記の指標とされた原資産の変動により、保証金等の額を上回る損失または支払い義務が生じるおそれがあり ます。さらに、取引の種類によっては、金融商品取引法施行令第16条第1項第6号が定める売付けの価格と買付けの価格に相当するものに差がある場合 があります。なお、商品毎に手数料等およびリスクは異なりますので、当該商品等の契約締結前交付書面や目論見書またはお客様向け資料をよくお読 みください。
権利行使期間がある場合は権利を行使できる期間に制限がありますので留意が必要です。
期限前解約条項、自動消滅条項等の早期終了条項が付されている場合は、予定された終了日の前に取引が終了する可能性があります。
Goldman Sachs Global Investment Research

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商号等：ゴールドマン･サックス証券株式会社 金融商品取引業者 関東財務局長(金商)第69号
加入協会：日本証券業協会、一般社団法人金融先物取引業協会、一般社団法人第二種金融商品取引業協会© 2020 ゴールドマン・サックス
本書の一部または全部を、ゴールドマン･サックス･グループ･インクの事前の書面による承諾がない限り、(i)複写、写真複写、あるいはその他のいか なる手段において複製すること、または(ii)再配布することを禁じます。

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