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ETFs to Rise as Gilead Drug Shows Promise in Coronavirus Cure
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The number of confirmed coronavirus cases globally is nearing a grim mark of two million, with death toll rising to about 120,000. In such a scenario, the desperation for vaccine and drugs to deal with the pandemic is rising. Gilead Sciences (GILD - Free Report) has ignited a ray of hope with its recently-released positive data on the role of remdesivir as a drug to treat COVID-19. Notably, shares of Gilead rose 2.4% on Apr 13 backed by the positive data release.
Remdesivir is a nucleotide analogue prodrug originally tested in Ebola patients. Researchers and scientists currently believe it to be the most promising drug against the coronavirus to reach human trials. Some analysts are predicting that remdesivir might get approved by mid-May.
Gilead’s Data in Details
The report was published in the New England Journal of Medicine. The test results came from tracking 53 people in the United States, Europe and Canada, who required respiratory support. Notably, about half of them were receiving mechanical ventilation and four were on a heart-lung by-pass machine (read: These Medical ETFs & Stocks Deserve a Salute on Health Day).
The patients were provided with remdesivir for up to 10 days on a compassionate-use basis. The results reflected that over 18 days, 68% of the patients improved, including 17 of the 30 patients on mechanical ventilation not requiring the breathing device. Moreover, about half of the patients studied were discharged, while 13% succumbed to the disease. Mortality was the highest among the patients on ventilators at 18%. In a statement from Gilead, lead author Jonathan Grein, director of hospital epidemiology at Cedars-Sinai Medical Center in Los Angeles, said that “we cannot draw definitive conclusions from these data, but the observations from this group of hospitalized patients who received remdesivir are hopeful.”
More Studies on Remdisivir
Many large-scale clinical trials are being conducted to study the efficacy of remdesivir against the virus. In fact, the study currently being carried out in China might present results in April. Another study that has been sponsored by the U.S. National Institutes of Health has enrolled patients rapidly and could come up with results in the coming weeks. Gilead is also sponsoring two additional trials.
Other COVID-19 Drugs in Progress
According to WSJ, more than 140 experimental drug treatments and vaccines for the coronavirus are in development worldwide, most in early stages, including 11 already in clinical trials.
Going on, biotech giant Amgen (AMGN - Free Report) has entered into a strategic partnership with Adaptive Biotechnologies ADPT to co-develop fully-human neutralizing antibodies targeting SARS-CoV-2.
Regeneron Pharmaceuticals (REGN - Free Report) has identified antibodies, which can possibly treat coronavirus. Moreover, Regeneron and partner Sanofi (SNY - Free Report) are evaluating their rheumatoid arthritis drug, Kevzara, to treat patients hospitalized with severe infection due to the virus. Another player, Roche (RHHBY - Free Report) has started a Phase 3 clinical trial studying Actemra as a treatment for patients suffering from coronavirus, and are hospitalized with severe pneumonia. Meanwhile, Incyte (INCY - Free Report) and partner Novartis (NVS - Free Report) have announced plans to jointly initiate a phase III study on their JAK1/JAK2 inhibitor, Jakafi (plus standard of care medicines), as a treatment for patients with COVID-19-associated cytokine storm that is an immune overreaction causing respiratory complications in serious COVID-19 patients.
President Trump has called hydroxychloroquine a major player against the coronavirus and the FDA fast-tracked the approval process for the drug. But some experts have warned that the drug may not be safe, particularly for heart patients.
ETFs to Gain
The race to introduce vaccine and treatment for coronavirus is opening up opportunities, making the biotech sector a prospective space for investments. Therefore, we discuss a few ETFs below that provide exposure to the biotech sector:
The underlying MVIS US Listed Biotech 25 Index tracks the overall performance of companies involved in the development and production, marketing and sales of drugs based on genetic analysis and diagnostic equipment. It holds about 25 securities in its basket. Gilead holds second position with 9.63% weight. Its AUM is $346.3 million and it has an expense ratio of 0.35%. The fund currently carries a Zacks Rank #2, with a High-risk outlook.
This fund seeks to provide exposure to U.S. biotechnology stocks and tracks the Nasdaq Biotechnology Index. It comprises 211 holdings with Gilead occupying the top spot with 9.52% exposure. It has an AUM of $7.01 billion and charges a fee of 47 basis points a year. It carries a Zacks Rank #2 (Buy), with a High-risk outlook (read: ETF Strategies to Play the Rising Virus-Induced Volatility).
First Trust Amex Biotechnology Index (FBT - Free Report)
The fund measures the performance of a cross section of companies in the biotechnology industry that are primarily involved in the use of biological processes to develop products or provide services. It holds about 31 securities in its basket with Gilead occupying the second spot along with 4.35% weight in the fund. Its AUM is around $1.57 billion and expense ratio is 0.57%. The fund carries a Zacks ETF Rank #3 (Hold), with a High risk outlook (read: A Guide to Biotech ETF Investing).
The fund seeks daily investment results, before fees and expenses, which match the S&P Biotechnology Select Industry Index. It holds about 122 securities in its basket. Gilead occupies the fourth spot with 2.3% weight. It has an AUM of $3.67 billion and an expense ratio of 0.35%. The fund has a Zacks Rank #2, with a High risk outlook (read: 5 Low-Cost Top-Ranked ETFs to Tap at Discounted Prices).
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ETFs to Rise as Gilead Drug Shows Promise in Coronavirus Cure
The number of confirmed coronavirus cases globally is nearing a grim mark of two million, with death toll rising to about 120,000. In such a scenario, the desperation for vaccine and drugs to deal with the pandemic is rising. Gilead Sciences (GILD - Free Report) has ignited a ray of hope with its recently-released positive data on the role of remdesivir as a drug to treat COVID-19. Notably, shares of Gilead rose 2.4% on Apr 13 backed by the positive data release.
Remdesivir is a nucleotide analogue prodrug originally tested in Ebola patients. Researchers and scientists currently believe it to be the most promising drug against the coronavirus to reach human trials. Some analysts are predicting that remdesivir might get approved by mid-May.
Gilead’s Data in Details
The report was published in the New England Journal of Medicine. The test results came from tracking 53 people in the United States, Europe and Canada, who required respiratory support. Notably, about half of them were receiving mechanical ventilation and four were on a heart-lung by-pass machine (read: These Medical ETFs & Stocks Deserve a Salute on Health Day).
The patients were provided with remdesivir for up to 10 days on a compassionate-use basis. The results reflected that over 18 days, 68% of the patients improved, including 17 of the 30 patients on mechanical ventilation not requiring the breathing device. Moreover, about half of the patients studied were discharged, while 13% succumbed to the disease. Mortality was the highest among the patients on ventilators at 18%. In a statement from Gilead, lead author Jonathan Grein, director of hospital epidemiology at Cedars-Sinai Medical Center in Los Angeles, said that “we cannot draw definitive conclusions from these data, but the observations from this group of hospitalized patients who received remdesivir are hopeful.”
More Studies on Remdisivir
Many large-scale clinical trials are being conducted to study the efficacy of remdesivir against the virus. In fact, the study currently being carried out in China might present results in April. Another study that has been sponsored by the U.S. National Institutes of Health has enrolled patients rapidly and could come up with results in the coming weeks. Gilead is also sponsoring two additional trials.
Other COVID-19 Drugs in Progress
According to WSJ, more than 140 experimental drug treatments and vaccines for the coronavirus are in development worldwide, most in early stages, including 11 already in clinical trials.
Going on, biotech giant Amgen (AMGN - Free Report) has entered into a strategic partnership with Adaptive Biotechnologies ADPT to co-develop fully-human neutralizing antibodies targeting SARS-CoV-2.
Regeneron Pharmaceuticals (REGN - Free Report) has identified antibodies, which can possibly treat coronavirus. Moreover, Regeneron and partner Sanofi (SNY - Free Report) are evaluating their rheumatoid arthritis drug, Kevzara, to treat patients hospitalized with severe infection due to the virus. Another player, Roche (RHHBY - Free Report) has started a Phase 3 clinical trial studying Actemra as a treatment for patients suffering from coronavirus, and are hospitalized with severe pneumonia. Meanwhile, Incyte (INCY - Free Report) and partner Novartis (NVS - Free Report) have announced plans to jointly initiate a phase III study on their JAK1/JAK2 inhibitor, Jakafi (plus standard of care medicines), as a treatment for patients with COVID-19-associated cytokine storm that is an immune overreaction causing respiratory complications in serious COVID-19 patients.
President Trump has called hydroxychloroquine a major player against the coronavirus and the FDA fast-tracked the approval process for the drug. But some experts have warned that the drug may not be safe, particularly for heart patients.
ETFs to Gain
The race to introduce vaccine and treatment for coronavirus is opening up opportunities, making the biotech sector a prospective space for investments. Therefore, we discuss a few ETFs below that provide exposure to the biotech sector:
VanEck Vectors Biotech ETF (BBH - Free Report)
The underlying MVIS US Listed Biotech 25 Index tracks the overall performance of companies involved in the development and production, marketing and sales of drugs based on genetic analysis and diagnostic equipment. It holds about 25 securities in its basket. Gilead holds second position with 9.63% weight. Its AUM is $346.3 million and it has an expense ratio of 0.35%. The fund currently carries a Zacks Rank #2, with a High-risk outlook.
iShares Nasdaq Biotechnology ETF (IBB - Free Report)
This fund seeks to provide exposure to U.S. biotechnology stocks and tracks the Nasdaq Biotechnology Index. It comprises 211 holdings with Gilead occupying the top spot with 9.52% exposure. It has an AUM of $7.01 billion and charges a fee of 47 basis points a year. It carries a Zacks Rank #2 (Buy), with a High-risk outlook (read: ETF Strategies to Play the Rising Virus-Induced Volatility).
First Trust Amex Biotechnology Index (FBT - Free Report)
The fund measures the performance of a cross section of companies in the biotechnology industry that are primarily involved in the use of biological processes to develop products or provide services. It holds about 31 securities in its basket with Gilead occupying the second spot along with 4.35% weight in the fund. Its AUM is around $1.57 billion and expense ratio is 0.57%. The fund carries a Zacks ETF Rank #3 (Hold), with a High risk outlook (read: A Guide to Biotech ETF Investing).
SPDR S&P Biotech ETF (XBI - Free Report)
The fund seeks daily investment results, before fees and expenses, which match the S&P Biotechnology Select Industry Index. It holds about 122 securities in its basket. Gilead occupies the fourth spot with 2.3% weight. It has an AUM of $3.67 billion and an expense ratio of 0.35%. The fund has a Zacks Rank #2, with a High risk outlook (read: 5 Low-Cost Top-Ranked ETFs to Tap at Discounted Prices).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>