A hallmark of severe COVID-19 pneumonia is SARS-CoV-2 infection of the facultative progenitors of lung alveoli, the alveolar epithelial type 2 cells (AT2s). However, inability to access these cells from patients, particularly at early stages of disease, limits an understanding of disease inception. Here we present an in vitro human model that simulates the initial apical infection of alveolar epithelium with SARS-CoV-2, using induced pluripotent stem cell-derived AT2s that have been adapted to air-liquid interface culture. We find a rapid transcriptomic change in infected cells, characterized by a shift to an inflammatory phenotype with upregulation of NF-kB signaling and loss of the mature alveolar program. Drug testing confirms the efficacy of remdesivir as well as TMPRSS2 protease inhibition, validating a putative mechanism used for viral entry in alveolar cells. Our model system reveals cell-intrinsic responses of a key lung target cell to SARS-CoV-2 infection and should facilitate drug development.

Coronaviruses are adept at evading host antiviral pathways induced by viral double-stranded RNA, including interferon (IFN) signaling, oligoadenylate synthetase–ribonuclease L (OAS-RNase L), and protein kinase R (PKR). While dysregulated or inadequate IFN responses have been associated with severe coronavirus infection, the extent to which the recently emerged SARS-CoV-2 activates or antagonizes these pathways is relatively unknown. We found that SARS-CoV-2 infects patient-derived nasal epithelial cells, present at the initial site of infection; induced pluripotent stem cell-derived alveolar type 2 cells (iAT2), the major cell type infected in the lung; and cardiomyocytes (iCM), consistent with cardiovascular consequences of COVID-19 disease. Robust activation of IFN or OAS-RNase L is not observed in these cell types, whereas PKR activation is evident in iAT2 and iCM. In SARS-CoV-2–infected Calu-3 and A549ACE2 lung-derived cell lines, IFN induction remains relatively weak; however, activation of OAS-RNase L and PKR is observed. This is in contrast to Middle East respiratory syndrome (MERS)-CoV, which effectively inhibits IFN signaling and OAS-RNase L and PKR pathways, but is similar to mutant MERS-CoV lacking innate immune antagonists. Remarkably, OAS-RNase L and PKR are activated in MAVS knockout A549ACE2 cells, demonstrating that SARS-CoV-2 can induce these host antiviral pathways despite minimal IFN production. Moreover, increased replication and cytopathic effect in RNASEL knockout A549ACE2 cells implicates OAS-RNase L in restricting SARS-CoV-2. Finally, while SARS-CoV-2 fails to antagonize these host defense pathways, which contrasts with other coronaviruses, the IFN signaling response is generally weak. These host–virus interactions may contribute to the unique pathogenesis of SARS-CoV-2.

Alveolar epithelial type 2 cells (AEC2s) are the facultative progenitors responsible for maintaining lung alveoli throughout life but are difficult to isolate from patients. Here, we engineer AEC2s from human pluripotent stem cells (PSCs) in vitro and use timeseries single-cell RNA sequencing with lentiviral barcoding to profile the kinetics of their differentiation in comparison to primary fetal and adult AEC2 benchmarks. We observe bifurcating cell-fate trajectories as primordial lung progenitors differentiate in vitro, with some progeny reaching their AEC2 fate target, while others diverge to alternative non-lung endodermal fates. We develop a Continuous State Hidden Markov model to identify the timing and type of signals, such as overexuberant Wnt responses, that induce some early multipotent NKX2-1 + progenitors to lose lung fate. Finally, we find that this initial developmental plasticity is regulatable and subsides over time, ultimately resulting in PSC-derived AEC2s that exhibit a stable phenotype and nearly limitless selfrenewal capacity.