Investors may be waiting until 2021 before a Covid-19 vaccine becomes available, according to quantitative pioneers PanAgora Asset Management Inc.
The Boston-based systematic asset manager is using its ability to parse vast quantities of medical research data to infer whether any of approximately 60 trials currently underway will succeed in producing a successful vaccine, said George Mussalli, chief investment officer and head of equity research at PanAgora. Their findings may disappoint those hoping that access to one soon will boost markets.
“It doesn’t look very promising, based on today’s data, that there’s going to be a vaccine any time this year,” he said in an interview on Friday. He does see progress before 2020 ends, though — “we find that there’s a really good chance that by the fall or the end of this year, doctors will have a toolkit to treat patients.”
Markets are rebounding as countries take tentative steps toward reopening their economies as numbers of Covid-19 infections decrease. A rally during the past few weeks has been underpinned by announcements of massive liquidity injections by governments and central banks, and spurred on by hopes that effective drug treatments will be available soon. Still, it could be months before a vaccine is available.
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The company, which manages around $30 billion, invested heavily in building industry-specific models after the sub-prime crisis, which provided an illustration of how relying on public financials and market pricing of the banking sector alone could end in tears, Mussalli said. Its biotechnology industry model is now allowing it to assess the likelihood that any of the multitude of drug trials currently under way will find an effective treatment or vaccine for Covid-19, he said.
The unprecedented nature of the lockdowns countries have implemented to stop the spread of the virus appears to be at odds with machine-learning techniques that depend upon parsing reams of past data. But those tools can be used to gauge the success of ongoing drug trials from those that have taken place in the past, where information is plentiful, said Richard Tan, PanAgora’s head of stock selector equity investments.
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