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Biotech ETFs Gaining on Progress in Coronavirus Treatment
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The coronavirus pandemic has so far infected roughly 2.5 million globally. The death toll has risen at least 171,000 worldwide, according to Johns Hopkins University. The number of deaths in the United States has risen to more than 42,000. In such a health crisis, the world is desperately awaiting a drug and vaccine.
From positive news related to Gilead Sciences’ (GILD - Free Report) remdesivir to progress in development of cell therapies for the treatment of COVID-19, let’s take a look at some of the latest developments in the biotech space that have kept the sector surging. Notably, the most popular ETF in the biotech space, iShares Nasdaq Biotechnology ETF (IBB - Free Report) has gained 15.4% so far in April (as of Apr 21).
Remdesivir Instils Optimism
Gilead Sciences is showing progress in developing a cure for COVID-19. The company’s shares rallied on Apr 17 on release of data showing promising results from its experimental antiviral, remdesivir. According to a STAT report, treatment with remdesivir resulted in fast recoveries in fever and respiratory symptoms in COVID-19 patients in a closely-watched study in a Chicago hospital. Roughly all of these patients were discharged in less than a week. The University of Chicago Medicine enrolled 125 COVID-19 patients under two phase III studies by Gilead Sciences. Of these, 113 had severe conditions. All patients were treated with daily infusions of remdesivir. While two patients died, most of the others were discharged. Gilead Sciences has also increased its enrolment target by 3,600 for the trial testing of its experimental drug remdesivir in severe coronavirus-infected patients.
Notably, another report supporting remdesivir’s role in treating COVID-19 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 (per a Bloomberg article). 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. However, compassionate use data have limitations and multiple phase III studies are ongoing to evaluate the safety and effectiveness of remdesivir in the treatment of COVID-19.
Notably, Gilead Sciences is presently conducting two phase III studies on remdesivir, the SIMPLE studies, in countries with a higher prevalence of COVID-19.
Advancements in Stem Cell Treatment
Innovative treatments like stem cell therapy are also being studied to treat coronavirus-infected patients. In this regard, Hope Biosciences, a Sugar Land-based stem cell lab, has received FDA approval for its second protocol to study the safety and efficacy of stem cell therapy, per an article on Chron.com. Going on, Israel-based Pluristem Therapeutics Inc. has treated a patient in the United States with PLX cell therapy in its active site for Pluristem’s phase III critical limb ischemia study in New Jersey. Another player, Athersys, Inc. announced last week that the FDA has approved the company to start a Phase 2/3 pivotal study to evaluate the safety and effectiveness of MultiStem therapy in patients with moderate to severe acute respiratory distress syndrome ("ARDS") induced by the coronavirus.
Meanwhile, Mesoblast Limited (MESO - Free Report) , global leader in cellular medicines for inflammatory diseases, received a FDA clearance early this month for an Investigational New Drug application to treat patients with ARDS caused by COVID-19 with intravenous infusions of its allogeneic mesenchymal stem cell product candidate, remestemcel-L. The candidate will be studied in a randomized, placebo-controlled trial on 240 patients with ARDS.
Other COVID-19 Drugs in Progress
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.
Biotech giant Amgen (AMGN - Free Report) has entered into a strategic partnership with Adaptive Biotechnologies (ADPT - Free Report) 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 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, which is an immune overreaction causing respiratory complications in serious COVID-19 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 that provide exposure to the biotech sector:
This fund seeks to provide exposure to U.S. biotechnology stocks and tracks the Nasdaq Biotechnology Index. It comprises 211 holdings. The fund has an AUM of $8.04 billion with an expense ratio of 0.47% (read: ETF Strategies to Play the Rising Virus-Induced Volatility).
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. It has an AUM of $4.23 billion and an expense ratio of 0.35% (read: 5 Low-Cost Top-Ranked ETFs to Tap at Discounted Prices).
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. Its AUM is around $1.77 billion and expense ratio is 0.57%.
This is an actively-managed fund. Companies within ARKG are focused on and are expected to substantially benefit from extending and enhancing the quality of human and other life by incorporating technological and scientific developments and advancements in genomics into their business. It generally holds about 30-50 securities in its basket. It has an AUM of $679.5 million and an expense ratio of 0.75%.
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. Its AUM is $385.1 million and it has an expense ratio of 0.35%.
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Biotech ETFs Gaining on Progress in Coronavirus Treatment
The coronavirus pandemic has so far infected roughly 2.5 million globally. The death toll has risen at least 171,000 worldwide, according to Johns Hopkins University. The number of deaths in the United States has risen to more than 42,000. In such a health crisis, the world is desperately awaiting a drug and vaccine.
From positive news related to Gilead Sciences’ (GILD - Free Report) remdesivir to progress in development of cell therapies for the treatment of COVID-19, let’s take a look at some of the latest developments in the biotech space that have kept the sector surging. Notably, the most popular ETF in the biotech space, iShares Nasdaq Biotechnology ETF (IBB - Free Report) has gained 15.4% so far in April (as of Apr 21).
Remdesivir Instils Optimism
Gilead Sciences is showing progress in developing a cure for COVID-19. The company’s shares rallied on Apr 17 on release of data showing promising results from its experimental antiviral, remdesivir. According to a STAT report, treatment with remdesivir resulted in fast recoveries in fever and respiratory symptoms in COVID-19 patients in a closely-watched study in a Chicago hospital. Roughly all of these patients were discharged in less than a week. The University of Chicago Medicine enrolled 125 COVID-19 patients under two phase III studies by Gilead Sciences. Of these, 113 had severe conditions. All patients were treated with daily infusions of remdesivir. While two patients died, most of the others were discharged. Gilead Sciences has also increased its enrolment target by 3,600 for the trial testing of its experimental drug remdesivir in severe coronavirus-infected patients.
Notably, another report supporting remdesivir’s role in treating COVID-19 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 (per a Bloomberg article). 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. However, compassionate use data have limitations and multiple phase III studies are ongoing to evaluate the safety and effectiveness of remdesivir in the treatment of COVID-19.
Notably, Gilead Sciences is presently conducting two phase III studies on remdesivir, the SIMPLE studies, in countries with a higher prevalence of COVID-19.
Advancements in Stem Cell Treatment
Innovative treatments like stem cell therapy are also being studied to treat coronavirus-infected patients. In this regard, Hope Biosciences, a Sugar Land-based stem cell lab, has received FDA approval for its second protocol to study the safety and efficacy of stem cell therapy, per an article on Chron.com. Going on, Israel-based Pluristem Therapeutics Inc. has treated a patient in the United States with PLX cell therapy in its active site for Pluristem’s phase III critical limb ischemia study in New Jersey. Another player, Athersys, Inc. announced last week that the FDA has approved the company to start a Phase 2/3 pivotal study to evaluate the safety and effectiveness of MultiStem therapy in patients with moderate to severe acute respiratory distress syndrome ("ARDS") induced by the coronavirus.
Meanwhile, Mesoblast Limited (MESO - Free Report) , global leader in cellular medicines for inflammatory diseases, received a FDA clearance early this month for an Investigational New Drug application to treat patients with ARDS caused by COVID-19 with intravenous infusions of its allogeneic mesenchymal stem cell product candidate, remestemcel-L. The candidate will be studied in a randomized, placebo-controlled trial on 240 patients with ARDS.
Other COVID-19 Drugs in Progress
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.
Biotech giant Amgen (AMGN - Free Report) has entered into a strategic partnership with Adaptive Biotechnologies (ADPT - Free Report) 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 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, which is an immune overreaction causing respiratory complications in serious COVID-19 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 that provide exposure to the biotech sector:
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. The fund has an AUM of $8.04 billion with an expense ratio of 0.47% (read: ETF Strategies to Play the Rising Virus-Induced Volatility).
SPDR S&P Biotech ETF XBI
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. It has an AUM of $4.23 billion and an expense ratio of 0.35% (read: 5 Low-Cost Top-Ranked ETFs to Tap at Discounted Prices).
First Trust Amex Biotechnology Index FBT
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. Its AUM is around $1.77 billion and expense ratio is 0.57%.
ARK Genomic Revolution ETF ARKG
This is an actively-managed fund. Companies within ARKG are focused on and are expected to substantially benefit from extending and enhancing the quality of human and other life by incorporating technological and scientific developments and advancements in genomics into their business. It generally holds about 30-50 securities in its basket. It has an AUM of $679.5 million and an expense ratio of 0.75%.
VanEck Vectors Biotech ETF BBH
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. Its AUM is $385.1 million and it has an expense ratio of 0.35%.
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 >>