79% of disease experts worldwide ranked influenza as the most likely next pandemic in a survey conducted by the European Union’s Vaccelerate Site Network. 

–  Travel Medicine & Infectious Disease. 2024. 57:10267.

“It’s very difficult to predict which virus will cause the next pandemic. But what we can predict is that at least an influenza pandemic will come back. We have seen that over the last century we have seen that now four times, and it’s definitely going to come back.” 

– Al Osterhaus, PhD, Virologist & Professor/Founding Director, Research Center for Emerging Infections and Zoonoses, University of Veterinary Medicine, Hannover

“I really do think it’s very likely that we will, at some time, it’s not a question of if, it’s more of a question of when we will have a bird flu pandemic.” 

–  Robert Redfield, MD, Former Director, US CDC

Influenza remains one of the world’s most serious respiratory disease threats and a persistent global public health concern. Seasonal outbreaks cause up to 650,000 deaths annually, disproportionately affecting children and older adults. Pandemic strains can emerge when viruses cross from animal hosts into humans, adapt for sustained transmission, and spread rapidly through populations with little or no immunity. Three influenza pandemics in the 20th century alone caused at least 50 million deaths worldwide.

While SARS CoV-2 and the Covid-19 pandemic still loom large in the public psyche, many experts are convinced that the next pandemic will be caused by an influenza virus. A likely candidate is at hand – a highly pathogenic strain of influenza type A virus called H5N1, commonly known as avian or bird flu. First recognized in poultry in 1966, then in humans in 1997, the virus has gradually made its way around the world, decimating wild and domestic populations of numerous avian and mammalian species. The World Health Organization (WHO) has tallied 993 human cases so far, including 477 deaths, in 25 countries. Direct human-to-human transmission has not yet been documented. But continued transmission, infection, mutation and adaptation in animals together with a growing number of human cases increase the odds of a pandemic.

Vaccines for influenza H5N1 have been developed, licensed and stockpiled, though how effective they would be in a pandemic caused by a newly emerged H5N1 virus strain is unknown. These vaccines were developed to protect against one of several specific H5N1 variants singled out by the WHO as candidates for vaccine development.¹ Since H5N1 is constantly evolving, none of the strains for which these vaccines were designed ultimately may become the variant causing a pandemic. 

New vaccine approaches are needed to ensure protection against ever evolving highly pathogenic influenza virus strains and an inevitable influenza pandemic. Vivaldi Biosciences is meeting the need with a vaccine that’s better, broader and blocks transmission – its DelNS1 H5N1 nasal spray vaccine.

• Better Immune Response: DelNS1 H5N1 generates an immune response that’s both quantitatively and qualitatively better than the response induced by intramuscular shots for pandemic flu. Clinical studies show that just one dose of DelNS1 H5N1 achieves a serum antibody response² (i.e., seroconversion) accepted by regulators as predictive of clinical benefit. All of the licensed pandemic vaccines require two doses to mount this level of response. The immune response induced by DelNS1 H5N1 is qualitatively better, because nasal spray immunization with DelNS1 H5N1 activates multiple arms of the complex immune response, including but not limited to the serum antibodies induced by flu shots. DelNS1 H5N1 rapidly induces antibodies in the linings of the nasal passages (nasal mucosa), creating a first line of defense at invading viruses’ point of entry. The immune response to DelNS1 H5N1 also includes T cells, important in clearing the virus infection, enhancing the immune response, and enabling long-lasting protection. As a nasal spray, DelNS1 H5N1 is better suited for use in the event of a pandemic – immunization with a nasal spray requires minimal training and is amenable to mass administration campaigns and even self-administration. Needle-free immunization also mitigates vaccine hesitancy, avoids the hazards of sharps handling and disposal, and side-steps significant issues of supply chain disruptions and shortages of syringes and needles that can cripple immunization programs. 

• Broader Protection: The licensed pandemic flu shots are designed to elicit a specific immune response – serum antibodies –  to a single antigen called hemagglutinin (HA) on the surface of a specific strain of influenza virus. Influenza viruses constantly mutate, and HA is particularly prone to mutation. New influenza virus variants able to dodge immunity are constantly arising. The narrow immune response induced by the licensed vaccines is not geared to protect against strain variants. In contrast, DelNS1 H5N1 generates mucosal and serum immunity to multiple targets both on the surface and within influenza viruses, achieving activity against a multiple influenza virus strains. Clinical studies with DelNS1 vaccines show mucosal IgA antibodies from volunteers immunized with DelNS1 vaccines are active against a broad range of influenza strain variants, and even different influenza subtypes.

• Blocks Transmission: An influenza vaccine that can block transmission of a pandemic virus would be a major advance in reducing disease spread and bringing the pandemic to an end. DelNS1 H5N1 shows the unprecedented ability to block transmission of deadly influenza viruses. At the 2025 World Vaccine Congress in Washington, DC, Vivaldi presented results of studies in animal models showing the ability of DelNS1 vaccines to block transmission of multiple influenza virus strains. In particular, nasal spray administration of DelNS1 H5N1, followed by boost immunization with a vaccine for a different flu virus subtype, provided broad protection and completely blocked virus transmission. Immunized animals were protected from infection by the influenza virus that caused the 2009 pandemic, and transmission of this virus was completely blocked.

DelNS1 H5N1 is based on an influenza strain genetically modified by deletion of a gene called NS1 (DelNS1). This single and precise genetic change creates a vaccine that induces a multi-faceted and robust immune response. DelNS1 vaccines are unique in their ability to induce interferon, a signalling protein produced by the body that establishes an antiviral state and activates an array of mucosal and systemic immune mechanisms. Deletion of NS1 also makes DelNS1 H5N1 safe. The vaccine strain is unable to replicate and produce virus progeny. Safety of the vaccine, and absence of replication and shedding from vaccine recipients, have been demonstrated in multiple animal studies and confirmed in four clinical studies. 

Vivaldi has developed a highly efficient cell-based manufacturing process for DelNS1 H5N1. Cell-based manufacturing provides greater speed, capacity and reliability than production of conventional flu vaccines, which uses millions of eggs to grow vaccine viruses and takes six or more months to yield a finished vaccine product. 

DelNS1 H5N1 not only offers the significant advantages of a better, broader, and transmission-blocking vaccine. It enables new approaches to pandemic protection and control. Put to use at the onset of a pandemic, the broad immune response generated by a single dose of DelNS1 H5N1 could protect vulnerable individuals and populations no matter which particular influenza virus variant emerges to ignite a pandemic. By blocking virus transmission, DelNS1 H5N1 could keep the pandemic from gaining a foothold, crucially buying time for development of vaccines closely matched to the novel pandemic strain. Matched-strain vaccines currently are the gold standard for pandemic protection, but developing and producing a strain-matched pandemic vaccine takes time. Even mRNA pandemic flu vaccines (currently in early stages of clinical development) would take months to make and there’s no guarantee of an effective immune response. 

Vaccines already stockpiled and unlikely to match the next pandemic strain could be used early in the pandemic, made more effective as a boost following a DelNS1 H5N1 priming dose. Pandemic vaccines have a track record of generating a relatively weak immune response; two doses, a prime and a boost, are needed for all currently stockpiled vaccines. Used as the prime to a newly developed strain-matched conventional or mRNA boost vaccine, DelNS1 H5N1 could increase the efficacy of the strain-matched vaccine, and essentially cut the need for strain-matched doses in half. Considering the need for hundreds of millions of doses that would be required in a pandemic, this dose-sparing benefit is a huge advantage in protecting the population.

Vivaldi plans to begin a Phase 2 study in 2026 to evaluate the immunogenicity and safety of DelNS1 H5N1 as both a stand-alone, single-dose vaccine and as a prime vaccine followed by either an intramuscular strain-matched H5N1 vaccine or a second dose of DelNS1 H5N1. The company expects to submit an application in 2027 for WHO Emergency Use Listing (EUL) based Phase 2 clinical results. Vivaldi will continue clinical development through Phase 3 to apply for market authorization in the US, EU and other areas.

Whether paired with an intramuscular strain-matched vaccine or used on its own, DelNS1 H5N1 shows the promise of a new vaccine approach for pandemic preparedness – a vaccine that is efficiently manufactured, easy to administer, broadly protective, and blocks influenza virus transmission and disease spread. Emergence of a new influenza virus capable of causing a pandemic may be inevitable. But with a new and better approach to vaccine-based protection like DelNS1 H5N1, flu pandemics are not inevitable.

References:

1. World Health Organization. Summary of status of development and availability of A(H5N1) candidate vaccine viruses and potency testing reagents. https://cdn.who.int/media/docs/default-source/influenza/cvvs/cvv-zoonotic-northern-hemisphere-2025-2026/h5n1_summary_a_h5n1_cvv_20250228_rev20250813.pdf?sfvrsn=9c99e0a4_8

2. Nicolodi, et al. 2019. Safety and immunogenicity of a replication-deficient H5N1 influenza virus vaccine lacking NS1. Vaccine 37(28): 3722-3729.

The highly pathogenic avian influenza virus H5N1 causes extensive outbreaks and deaths in wild and domestic birds. The virus is known to infect humans, typically individuals that work with infected poultry, and has a high fatality rate. An outbreak of the virus in US dairy herds began in 2024 and three dairy workers have been infected. The recent transmission of influenza H5N1 from birds to mammals, the persistence of genetic features associated with mammalian adaptation, and the continuing possibility of reassortment with other animal influenza viruses significantly raise the pandemic threat of this virus. Vivaldi Biosciences’ DeltaFLU universal influenza vaccine is in development to protect against all influenza virus strains, including the highly pathogenic H5N1 virus and variants arising from its rapid mutation. Protection with current influenza vaccine technologies, including development-stage mRNA influenza vaccines, relies on a close match between the vaccine and circulating influenza virus strains. This hit-or-miss approach often results in poor protection. DeltaFLU is produced in an efficient cell culture system and conveniently administered as a nasal spray, providing critical advantages in the event of a pandemic. As the first universal influenza vaccine, DeltaFLU provides the much-needed solution to the threat of pandemic influenza and the annual toll of morbidity and mortality of seasonal influenza.

The Risk of Pandemic Influenza

Pandemic influenza is a relentless global public health threat. Three influenza pandemics in the 20^th century caused over 50 million deaths in total. The 2009 H1N1 influenza pandemic led to over a quarter of a million deaths worldwide. A highly pathogenic avian influenza (HPAI) H5N1 virus was first isolated in 1959, and the first human cases and deaths from this virus were reported in 1997¹. The World Health Organization has tallied 889 cases and 463 fatalities from human infection with H5N1 (cumulative case fatality rate of 52%) from 2004 to the present in 23 countries². H5N1 in wildlife has now been detected on all continents except Australia. HPAI H5N1 viruses (clade [genetic group] 2.3.4.4b) are enzootic in Europe, where they have infected wild birds and mammals, including farmed mink. H5N1 clade 2.3.4.4b reached North America by bird migration, and by 2024 the virus had spread from birds to multiple mammalian hosts including domestic cattle. The virus has been detected in dairy cattle in nine US states. Transmission among cattle has led to transmission to other domestic animals. With continued transmission in mammals, further mutations will arise affecting transmission efficiency, virulence, and pathogenicity, which in turn increase the risk of infection of human populations. From January 2022 to April 1, 2024 there were 14 reported human cases of H5N1 clade 2.3.4.4b worldwide, with some having severe consequences, including mortality. Three confirmed H5 cases have been reported in dairy farm workers in the US from April to late May 2024. In the first two cases, which occurred in Texas and Michigan, the individuals experienced conjunctivitis. The third individual, a dairy farm worker in Michigan, was the first to report respiratory symptoms³. While human-to-human transmission of this virus has not been detected, influenza typically spreads through the respiratory route. The virus now has persistent genetic features associated with mammalian adaptation⁴. Humans have no pre-existing immunity to this virus. The risk of a pandemic will be significant if the virus acquires the ability for efficient direct human-to-human transmission.

DeltaFLU for Protection Against Influenza H5N1

Vivaldi Biosciences (www.vivaldibiosciences.com) is developing the DeltaFLU universal influenza vaccine, a nasal spray vaccine for protection against all influenza virus strains: H5N1 and other emerging strains with pandemic potential, as well as seasonal influenza strains and variants that arise. DeltaFLU consists of genetically attenuated heterologous (unmatched) influenza strains in a prime-boost immunization regimen that generates a nearly immediate, broadly protective immune response in the nasal passages, and a robust systemic immune response of antibodies and T cells. 

Safe and immunogenic for H5N1 in humans: A component of DeltaFLU, a genetically attenuated vaccine strain based on HPAI H5N1 (A/Vietnam/1203/2004), was shown in a Phase 1 clinical trial to be safe and immunogenic, and to induce a superior antibody response compared with other H5N1 vaccine approaches. Seventy-five percent of the immunized study volunteers had serum HAI antibodies to H5N1 ≥1:40 after one intranasal dose of the vaccine, exceeding the FDA licensing threshold of 70%. After two doses, 92% met or exceeded this antibody response level. Antibody responses in the nasal mucosa also were observed among individuals with serum antibody responses⁵.

Universal protection against H5N1 and all potential pandemic and seasonal influenza viruses: Influenza viruses mutate rapidly. Co-infection of a host with different influenza viruses (e.g., a human infected with human and avian influenza viruses) can give rise to reassortment of viral RNA and yield a novel strain for which humans have no immunity. Universal protection requires effectiveness against all influenza type A and B viruses, consisting of at least 20 subtypes, innumerable variants and clades (genetic groups), and emerging strains with pandemic potential. Ferrets immunized intranasally with a genetically attenuated vaccine strain based on HPAI H5N1 (A/Vietnam/1203/04) similar to the DeltaFLU H5N1 component showed an immune response to multiple variants of influenza H5N1. Moreover, the immunized animals were protected from challenge with heterologous H5N1 viruses representing a range of clades, and also were protected from a H5N3 influenza virus⁶. 

Vivaldi has demonstrated proof of concept for universal protection with DeltaFLU in ferret and mouse models. With respect to H5N1 (a type A/group 1 virus), immunization with DeltaFLU vaccine strains for H5N1 and a second type A/group 1 strain (H1N1) protected ferrets from challenge with a broadly divergent H1N1 influenza strain, indicating potential for protection against all type A/group 1 strains. Additional studies gave similar results for type A/group 2 and type B viruses, providing strong evidence for DeltaFLU to protect against all influenza type A and B viruses, i.e., all influenza viruses that cause disease in humans.

Protection against transmission and disease spread: Influenza transmission between people primarily occurs via respiratory droplets. A vaccine that both protects against all influenza strains and blocks or reduces transmission would be a significant advance in preventing influenza and reducing the disease burden, especially in the event of a pandemic. Vivaldi is conducting studies in the ferret model to demonstrate the ability of DeltaFLU universal influenza vaccine to block transmission of all influenza virus types and prevent spread of infection and disease. The study specifically includes evaluation of DeltaFLU to block transmission of type A/group 1 strains representing H5N1. Final results of these studies are expected in June 2024.

Innovative, proprietary vaccine technology: DeltaFLU universal influenza vaccine combines two innovative concepts in the field of influenza virus vaccines: deletion of the influenza NS1 gene (delNS1), and heterologous prime-boost intranasal immunization with delNS1 vaccine strains. Deletion of the interferon antagonist NS1 results in the unique ability of DeltaFLU to rapidly induce interferon in the mucosal linings of the nasal passages. This creates a self-adjuvant effect, enhancing the generation of broadly cross-neutralizing antibodies in the nasal mucosa and systemic B and T cell-mediated immunity. Deletion of NS1 also makes DeltaFLU safe because the genetically modified vaccine strains are unable to replicate. Sequential immunization of heterologous delNS1 strains enables universal protection. The specific combination of delNS1 vaccine strains directs the immune response to highly conserved elements of the influenza virus shared by all influenza strain types, to confer protection against all influenza type A and B viruses. 

Preparation for an H5N1 pandemic: A pandemic vaccine must be capable of protecting against a known viral threat and also variant strains that may arise. Inactivated H5N1 vaccines for intramuscular injection have been developed and authorized for pandemic use. Because H5N1 is poorly immunogenic, a high dose or an adjuvant is used to boost the immune response (see table below). While adjuvants have the potential to improve the immune response and reduce the amount of antigen required in a vaccine, they also have important risk and drawbacks, including adverse reactions to immunization. A live attenuated vaccine for H5N1 A/Vietnam/1203/2004 for intranasal administration (2 doses) is produced by AstraZeneca. This vaccine is for pediatric use only (indicated for age 12 months to < 18 years). The vaccine virus must replicate to induce an immune response. The vaccine is produced in egg substrate. It was authorized in the EU in 2016 and re-authorized in 2023. None of the vaccines authorized by either the FDA or EMA use an H5N1 vaccine strain of clade 2.3.4.4b. 

Preliminary evaluations indicate the H5N1 vaccines retain cross-reactivity with currently circulating clade 2.3.4.4b viruses, though it is uncertain how protective they will be. It is likely that the H5N1 vaccines will need to be updated to address the H5N1 threat⁷. mRNA vaccines are in early stages of clinical development. Moderna initiated a Phase 1 dose-escalation study of an H5N1 clade 2.3.4.4b vaccine in July 2023, and in April 2024 Curevac and GSK began a Phase 1 dose-escalation study for their mRNA H5N1 vaccine. The low immunogenicity of H5N1 and reactogenicity of mRNA vaccines may be stumbling blocks to safety and efficacy. Although mRNA vaccine technology is vastly different from that of traditional inactivated influenza vaccines, both technologies produce strain-specific vaccines that require a close match to the circulating H5N1 strain, and likely will require frequent updating and reformulation as the H5N1 virus continues to mutate.

Inactivated Vaccines for H5N1 Authorized in the US and EU
Manufacturer	Vaccine Name	H5N1 Vaccine Strain	Adjuvant	Age Indication	Dosing	Production Substrate	Authorized
GSK	Adjupanrix	A/Vietnam/1194/2004	AS03	≥ 6 months	2 x 3.75 μg	Egg	2009 (EU)
GSK	—	A/Indonesia/05/2005	AS03	≥ 6 months	2 x 3.75 μg	Egg	2013 (US)
Sanofi	—	A/Vietnam/1203/2004	(none)	18-64 years	2 x 90 μg	Egg	2007 (US)
Seqirus (CSL)	Foclivia	A/Vietnam/1194/2004	MF59	≥ 6 months	2 x 7.5 μg	Egg	2009 (EU)
Seqirus (CSL)	Audenz	A/Turkey/1/2005 NIBRG-23	MF59	≥ 6 months	2 x 7.5 μg	MDCK cells	2020 (US)

Sanofi and GSK H5N1 vaccines are stockpiled by the US. The amount of vaccine stockpiled is only a fraction of what would be required to protect the population in the event of a pandemic. Doses sufficient for only about 50 million people could be available within 3-4 months⁷. 

To rapidly produce greater quantities of these H5N1 vaccines, the existing infrastructure for production of seasonal influenza vaccines would need to be diverted. Even if this were possible, production of H5N1 vaccines would be problematic. Most of the production infrastructure for influenza vaccines is dedicated to egg-substrate production, a cumbersome and time-consuming process. Over 90% of licensed influenza vaccines are produced in embryonated chicken eggs. Egg-based production may be unreliable due to the potentially limited supply of pathogen-free embryonated 10-day old chicken eggs needed as virus substrates, vulnerability of egg supply in the event of an outbreak of an HPAI virus affecting poultry or during a pandemic, the need to passage the vaccine virus to adapt to growth on eggs, growth optimization and scale-up, and problems with vaccine antigen yield and variability due to egg adaption. 

DeltaFLU diversifies the global vaccine pipeline with a reliable and sustainable Vero cell-based manufacturing system. Cell-based manufacture addresses strategic needs in the event of a pandemic, avoiding potential egg shortages that could occur with an HPAI pandemic, and providing greater speed and capacity than is possible with egg substrate production. With Vivaldi’s vaccine manufacturing system, the substrate is virtually unlimited, and the system is readily scalable⁸. Vivaldi’s high-yield system includes proprietary technologies to optimize vaccine strain growth, purity, and potency. Vaccines can be produced in as little as seven weeks.

Conclusion: DeltaFLU universal influenza vaccine is an innovative vaccine approach for pandemic preparedness and prevention of seasonal influenza. Broad and superior effectiveness, safety, convenient and pain-free administration, and efficient cell-based production should enable DeltaFLU to take a sizeable share the established market for seasonal influenza vaccines, which is dominated by inactivated, injectable vaccines produced in egg substrate. Availability of and immunization with DeltaFLU will not be restricted to certain months of the year, as are traditional vaccines with their long production lead-times. DeltaFLU is designed to protect against all influenza virus strains, including emerging strains with pandemic potential, seasonal strains, and variants that arise. Nasal spray administration of DeltaFLU is well-suited to mass administration in the threat of a pandemic, and avoids the need to produce, stockpile, handle, and dispose of hundreds of millions of syringes and needles. DeltaFLU is self-adjuvanting, avoiding the safety concerns of vaccine adjuvants. Immunization with DeltaFLU rapidly induces an immune response in the nasal passages, where antibodies neutralize the virus. The potential of DeltaFLU to block transmission of influenza viruses and reduce disease spread would be transformational. 

References:

1. Charostad, et al. 2023. A comprehensive review of highly pathogenic avian influenza (HPAI): An imminent threat at doorstep. Travel Medicine and Infectious Disease 55: 10263.
2. World Health Organization. 2024. Cumulative number of confirmed human cases for avian influenza A(H5N1) reported to WHO, 2023-2024, 3 May 2024. https://cdn.who.int/media/docs/default-source/influenza/h5n1-human-case-cumulative-table/2024_may_tableh5n1.pdf?sfvrsn=6ab0fe24_3&download=true 
3. CDC. 2024. CDC Confirms Second Human H5 Bird Flu Case in Michigan; Third Case Tied to Dairy Outbreak. https://www.cdc.gov/media/releases/2024/p0530-h5-human-case-michigan.html 
4. Uyeki, et al. 2024. Highly pathogenic avian influenza A(H5N1) virus infection in a dairy farm worker (Correspondence). NEJM. 3 May.
5. Nicolodi, et al. 2019. Safety and immunogenicity of a replication-deficient H5N1 influenza virus vaccine lacking NS1. Vaccine 37(28): 3722-3729.
6. Romanova, et al. 2009. Preclinical evaluation of a replication-deficient intranasal ΔNS1H5N1 influenza vaccine. PLOS ONE 4(6): e5984.
7. Lovelace. 2024. Two possible bird flu vaccines could be available within weeks. NBC News. 1 May. https://www.nbcnews.com/health/health-news/two-possible-bird-flu-vaccines-available-weeks-needed-rcna149961.
8. Barrett, et al. 2009. Vero cell platform in vaccine production: moving towards cell culture-based viral vaccines. Expert Rev. Vaccines 8:607.

Thoughts on COVID, Influenza, and the Mission of Vivaldi Biosciences Inc.

Among the key tools* for any seasoned investor are:

• A network of credible scholar relationships
• An eye on societal ROI

Venture capital plays a key role in cultivating societal return-on-investment and system-level impact by curating big opportunities and supporting innovation. At the existential level, there may be no wiser investment than in innovation to prevent disease.

The pandemic serves as a global and fearsome contemporary wake-up call on disease prevention investment and societal impact: Witness two years of dropping life expectancy in the US. Back in 2014 — early days in conceiving Health2047 — American Medical Association CEO Jim Madara, MD, said, “Prevention can make an even greater impact than diagnosis and treatment of disease.” He was not wrong.

The creation of Vivaldi Biosciences Inc. was rooted in similar insight. In 2005, as a VC discussing new company formation, I met with Elliott Kieff, MD, PhD. I put this question to him: “If you only had one chip to play in medical innovation investment and scale of human impact, where would you place your bet?”

Elliott — a virologist and immunologist, member of numerous National Academies, and Chief of Infectious Disease at Harvard/Brigham/Channing Lab, had a ready answer: an improved universal flu vaccine. Echoing in the background was the grim history of the 1918 Flu epidemic. I agreed.

Elliott recruited U.S.-based Peter Palese, PhD and Adolfo Garcia-Sastre, PhD — leading reverse genetics inventors and Live Attenuated Influenza Vaccine (LAIV) scientists. We formed and venture funded Vivaldi Biosciences, a biotechnology company devoted to advancing pandemic preparedness using designer genetic flu vaccine technologies and commercializing them for scale and impact. Its scientific founders— subsequently joined by Vienna-based Thomas Muster, PhD—have tenaciously pursued their influenza vaccine improvement premise in both the US and Europe for more than three decades.

Fast forward to the waning days of 2019 and the emergence of SARS-CoV-2. For global civilization, COVID represents the modern era’s nearest-scale disaster to the 1918 flu epidemic.

To quote Mayo Clinic Vaccine Research Group Director Greg Poland, MD on the progression of the prolonged pandemic:

“There was not one virologist I know of, including myself, not one of us thought we would see anything other than Delta subvariants. Instead, out of nowhere came Omicron. None of us expected that. And now what Omicron is demonstrating is something I have never really seen in my career before called convergent evolution, which means that what we’re seeing is a swarm of Omicron subvariants battling one another for dominance.”

In the fight against COVID, breakthrough mRNA vaccine development, and technology even newer than Palese’s reverse genetics, became a foundational pillar in immediate response to initiate recovery from the pandemic. But the full toll has not yet been tallied and future threats loom large. Disease prevention innovation remains essential at societal scale.

Elliott was right in calling out the imminent risk of future pandemic. Between 2006 and 2020, close calls with influenza, two previous SARS outbreaks, and Ebola rapidly emerged and burned out. Global influenza surveillance and annual vaccine adaptation for drift-and-shift mutation strains were in place. But the global community was still left scrambling to react to the sudden emergence of COVID-19 and its unprecedented evolution of highly transmissible and lethal strains.

We have been harshly reminded that we must continue to prepare on many levels and across many disciplines. Among the addressable issues:

• Support of governmental funding priority for fundamental scientific research, with advocacy and focus in the vein of Research!America
• Insufficient attention on vulnerable and aging populations
• Barriers to and gaps in universal healthcare access in all nations
• Global air travel networks and instantaneous outbreak spread
• Consistently parsimonious public health spending
• Gaps in WHO disease surveillance and epidemiology
• Incomplete understanding of zoonotic disease emergence and cross-species transmission
• Antibiotic resistance
• Insufficient vaccine preparedness, distribution, cold-chain logistics, and public acceptance
• The need for more vibrant research-based pharmaceutical innovation and industry
• Enormous burdens placed on our physician workforce, a global treasure

Mother Nature has put us on notice again. We’ve had our wake up call. Vivaldi Biosciences has not lost sight of future influenza pandemic risk, with every bit of the morbidity and mortality hallmarks of COVID. It continues its quest for improved universal influenza vaccine. Investing in preparation and prevention is never the wrong bet.

*My toolkit includes experience as: a Massachusetts General Hospital and Mort Schwartz/Bob Moellering-trained ID clinical specialist at the onset of the HIV/AIDS crisis; a University of Chicago and Elliott Kieff-trained virologist and human herpesvirus scholar; a JHBSPH Health Advisory Board (HAB) member for 18 years through the tenure of three deans focused on the practice of public health; a Max Essex associate on the HSPH International Council and HIV/AIDS Institute/Initiative, chiefly in Botswana; a member of the University of Chicago Biological Sciences Division and Pritzker School of Medicine Visiting Committee (former chair) for 30 years; a member of the AMA’s Health2047 Inc. and Health2047 Capital Partners ecosystem since 2014, supporting Jim Madara, MD; a serial biotech and healthcare entrepreneur and operator in the VC ecosystem for 30 years; and a 25-year collaboration with Larry Cohen, PhD, CEO Health2047, and Bill Wick, MBA, CEO Vivaldi.

By Douglass Given MD, PhD

How refreshing to be back in the real world instead of the virtual, and enjoying the “loyalty of friends.” Boston hosted the HLTH 2021 conference Oct 17–20, with 6,000 attendees and an open exhibit hall ensuring a return to inspiring social interactions.

First things first, all attendees were proven vaccinated, tested onsite as a prerequisite to entry, and masks were mandatory. We have entered the era of the pandemic of the unvaccinated. As with past flu pandemics, this one will have lasted about two years before we have it in the rearview mirror, hopefully by end of Q1 next year.

Investment Surge Atmosphere
Most notable as a VC, investment in digital health is breaking all records and racing to a tipping point. The $21B invested by the venture community in the first three quarters of 2021 exceeded the entire 2020 annual tally, which hit a record on its own. Investors now have comparables for digital health and more paths to liquidity, as well as optionality.

Investor panels sounded a common refrain, from Robbert Vorhoff at General Atlantic, to Andrew Adams at Oak HC/FT, Julie Yoo at a16z, and Alyssa Jaffee at 7wireVentures. With the wave of capital surplus, the speed of diligence is astoundingly accelerated. We are marking days to evaluate deal diligence in lieu of weeks or months of quantitative, market, competitive, and financial research. Valuations, milestone-driven and risk adjusted, may be replaced by multiples of the last round or simply target dilution. Unit economics are ignored, revenue multiples in support of valuations are stretched, and the search for hiring quality talent is often deferred for the given company stage, as are scaling forecasts. In the crush, we are overlooking that businesses lack the execution capacity to build in an enduring way. Nothing in healthcare works easily or without undue friction hinging on talent, available workforce, infrastructure, strength in operations and reimbursement, regulatory and licensing gates.

Selected insights by experienced industry leaders participating in HLTH (noted below) illustrate promises and gaps in moving from innovation to commercialization. Healthcare in America is a public trust. As such, we must get innovation and transformation right to deliver our potential for society.

Insights
Dr. Alan Lotvin, EVP of CVS Health and President of CVS Caremark, outlined innovation challenges for incumbents. In his view, it’s hard for big business to be entrepreneurs, and they’ve indeed missed some really good companies like GoodRx, ro Pharmacy, and hims. But as a $270B company with $15B in rebates alone, it can be hard to figure out what not to do. To address “death by pilot,” he emphasized the need to ensure solution scalability and address a real business purpose. CVS did 75 pilots recently and all failed evaluation. On the issue of drug pricing, Lotvin noted that pharmaceuticals are 10% of the national spend, a trend that has remained consistent for decades. High-deductible health plans and specialty medications create access and affordability issues, and the drive for generics and biosimilars accelerate competition, which is a good thing. As for PBMs, there is a push for greater transparency, but scale matters for infrastructure, technology, reliability, predictability, plumbing, and a counter-price balance to patent-holding innovators.

Dr. Gianrico Farrugia, President and CEO of Mayo Clinic, emphasized institutional values: “Our patient’s trust is sacrosanct.” Purpose-driven development drives Mayo — the duty to evaluate pilots, publish, prove it works, and see the possibilities is what “we owe to our patients.” His exemplars include vaccine development and administration achievements and the accelerated adoption of telehealth and virtual care during the pandemic. He noted that we all agree that healthcare needs transformation. But consensus stops there, descending into debate on what it is, how it is delivered, what it will cost, and who will pay for it. Speaking on intelligent information, he outlined the Mayo four-part data mantra: gather, discover, validate, and deliver with partners. Mayo has more than 100 partners in platforms and products, and algorithms running in the background with new knowledge allow each patient’s care to be increasingly individualized. Treatments can use Mayo data, but the data can’t be taken out of the system because patients trust Mayo —and that trust is inviolable. In his transformation assessment, he estimates that 30% of hospitalizations could be managed at home if everything else were in place, including factors such as housing and food, and that 70% of patients would rather be cared for at home. His hope is that more people will adapt and adopt pandemic learnings, building a better healthcare system in the US.

David Codani, CEO Cigna, always delivers good sense. He’s concise and to the point. His three themes were: precision pharmacological targeting (specialty pharma being key); alternative care sites (closer to the patient and more personal); and mental health implications (mind and body). His hope is that we supercharge these opportunities. As for pharma pricing, Cordani believes the US is lagging in leveraging biosimilars and that we need more precise use of precision medicines. A reward structure based on outcomes requires attention, as do clinical programs wrapped around the person. He outlined how payers have become more diversified health service companies including medical, pharmaceutical, and behavioral elements — and he suggested that similar evolution could be taken up by pharma.

Jonathan Bush, cofounder of AthenaHealth and CEO of Zus, and Glen Tullman, Transcarent CEO formerly with Livongo, are both operators, entertaining storytellers, and all-around flame throwers. Their conversation didn’t disappoint. Centered on a strategy that removes the cost and friction of middlemen in healthcare and focuses on consumer “experience,” their business model innovations win when they quickly deliver benefits with that customer focus. Their thrown gauntlet posits that, “Consumers and employers are the real buyers of healthcare, and providers aren’t the problem. Take the payer out!” My favorite Bush-ism of their talk was, “Wouldn’t it be nice if your doctor was your navigator?” The idea is to go direct, where the focus is the best care over the cheapest care. Functionally, you can’t navigate a broken system with narrow networks, by their estimation, noting that the average self-insured employer-sponsored health plan has 16 relationships trying to deliver better care and value — and they can’t take anymore solutions. An up and coming theme for both Bush and Tullman as healthcare futurists is reaching the underserved. They referenced CityBlock as a forerunner to the next space, where co-pays are eliminated and Walmart-style pricing makes healthcare easy and available to everyone.

Where to next
Dovetailing on Bush and Tullman’s modification model, there is new energy surrounding the role of primary care and where the medical professionals will come from to service these centers of the future. Reimagining the primary care sector is on fire with experiments like FireFly, Oak St, OneMedical, JPM Health, Amazon Cares, Walgreens/VillageMD, CVS Minute Clinics, WalMart, and more to come.

There’s a reason for all that intensity. Hemant Teneja at General Catalyst and Ken Frazier at Merck both see the next 3–5 years of innovation running the next 50 years of healthcare transformation. Values were the key theme I’d note from their discussion. Teneja observed that, with the pandemic, the incidence of anxiety and depression has increased four-fold. We are realizing that we haven’t developed mental health or elder care workforces and we need to confront these problems differently. They also addressed the values context superseding transformation objectives. No one wants their healthcare “disrupted.” Rather, they want to trust our intentionality as an industry with social responsibility as a core value. Teneja and Frazier emphasized putting the patient at the center, empowering providers, and caring about inequities and unequal access to care. They spoke of optimizing for all stakeholders, rather than maximizing for some, and living our stated values.

As you can gather, HLTH 2021 supplied a wealth of information worthy of reflection and analysis for weeks and months to come. I expect you’ll see interesting media coverage and commentary stemming from the event in the near term, and many of the issues discussed reverberating throughout our industry in the year ahead.

AI technologies are already transforming healthcare and impacting patient outcomes. There’s no question that everything from diagnostic methodologies to pharmaceutical development to health record management and even treatment strategy is being touched by advancements in machine learning and augmented/artificial intelligence applications.

It seems a day doesn’t go by without a new computational wonder or bold digital health promise atop the healthcare headlines. Dual areas of interesting AI impact include:

Physician Support — In accordance with Vinod Khosla’s belief that major technological transformation in medicine is on the horizon, AI has produced great strides in diagnostic capability. And applications of the technology also show great potential to help release physicians from crushing clerical burdens through augmented record keeping and data management. One project under development aims to streamline notetaking and generate higher quality clinical data using progressively optimized speech recognition and AI-interpreted commands. Such work indicates that Health2047 advisor Norman Winarsky is prescient in forecasting that soon “AI assistants will provide real-time and ongoing support and recommendations to the physician for diagnosis and treatment, as well as administrative support…all at scales impossible to digest via human effort alone.”

Patient Empowerment — In addition to highly publicized developments in consumer wearable products that feature AI-powered personal health-monitoring applications, AI may help stem the rising tide of chronic disease management. A study in the Journal of Medical Internet Research found that AI “has the potential to enable the creation and delivery of better management services to deal with chronic diseases,” noting in particular that “artificial intelligence methods are being progressively established as suitable for use in clinical daily practice, as well as for the self-management of diabetes. Consequently, these methods provide powerful tools for improving patients’ quality of life.”

And all this activity is driving an increasingly dynamic market in the sector. Frost & Sullivan estimates that AI’s use in healthcare IT (HIT) is will top $1.7 billion by the end of 2019. Acumen Research recently reported that the market for AI in healthcare is expected to reach over $8 billion by 2026 and grow at CAGR 49.7% during the forecast 2019–2026 period. And Accenture predicts that key clinical health AI applications can potentially create $150 billion dollars in annual savings for the U.S. healthcare economy alone within the next decade.

It is, indeed, an exciting time for both technological and medical transformation. But what is often underplayed is the necessity of sustainable commercial infrastructure and strategic investment to support the widespread adoption and diffusion of these advances across the healthcare sector.

For example, billionaire Blackstone cofounder Steve Schwarzman recently made admirable and enormous horizontal investments in educational support for humanities and AI ethics with donations to MIT and Oxford University. But it occurs to me that these generous donations, while interesting and noble, are not actionable. And while big tech companies like Google and Microsoft are developing incredible AI technologies with myriad potential healthcare applications, their expertise lies in horizonal solutions.

Time and again, broad horizontal solutions fail when attempts are made to establish business units to penetrate vertical industry sectors. Unlike water, innovations such as AI technology do not naturally flow downward and fill in the gaping voids. This is particularly true in the slow moving, highly regulated, necessarily human constrained, and uniquely sensitive healthcare industry — which is cause for concern about all those billions of investment dollars projected to flow though the AI healthcare economy in the near future.

We at G5 Partners, as advisors to Health2047, on the other hand, begin from the unique healthcare vertical point of view. We’re laser-focused on a mission to harness the power of technology for the aggressive advancement of American healthcare, and everything we pursue must be actionable, scalable, commercializable, and demonstrate measurable progress toward achieving that goal.

The investment strategies and funding collaborations that will underpin this kind of purpose-built application of AI for broad healthcare impact require as much development and deliberation as do the technologies being implemented, and must weigh barriers to adoption, feasible market entry points, and the identification of synergies between partners to bridge the divide between what exists and what is possible.