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Top-Performing Biotech ETFs Amid the COVID-19 Crisis
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The biotechnology sector has been one of the most talked about spaces amid the coronavirus crisis. The sector has kept its promise of solid returns so far. Notably, the S&P Biotechnology Select Industry Index has returned 53.8% so far in 2020 in comparison to the broader S&P 500’s 15.6%.
The coronavirus outbreak continues to aggravate globally as the number of cases crosses the grim mark of 81 million. The United States is having a tough time controlling the pandemic, with more than 19.3 million reported COVID-19 cases, per the Johns Hopkins University data. Also, the country’s death toll is near 334,000 since the beginning of the outbreak. Consequently, the pandemic has triggered a race to introduce vaccine and treatment, thereby opening up new investing opportunities in the biotech sector.
Impressive progress is being observed with regard to the coronavirus vaccine development. Pfizer Inc. (PFE) and BioNTech SE (BNTX) are continuously posting encouraging updates regarding their coronavirus vaccine candidate, BNT162b2. The duo’s two-shot vaccine has been given the conditional marketing authorization (CMA) by the European Commission. BNT162b2 is also the first coronavirus vaccine to receive approval in Europe.
The Pfizer/BioNTech coronavirus vaccine is now approved for emergency/temporary use in more than 40 countries, including the U.K., Bahrain, Mexico, Singapore, Switzerland and Canada.
Moderna (MRNA) also shipped its first batch of the coronavirus vaccine after it receiving an emergency use authorization (EUA) from the FDA.
Meanwhile, amid the ongoing health crisis, the discovery of a new COVID-19 strain has taken a toll on investor optimism. The new variant, first discovered in England, has resulted in several nations imposing restrictions on travel from the U.K. However, a CNN report states that Pfizer/BioNTech and Moderna are testing their coronavirus vaccines for efficacy against the new mutated version of the virus (per company statements).
Going by a U.K. media report, the coronavirus vaccine, being developed by Oxford University/AstraZeneca (AZN), should work well against the severely communicable new strain of the virus (per a Business Standard article).
Becoming the fifth company to launch a trial in the United States, Novavax (NVAX) has informed about the start of the Phase 3 trial of its COVID-19 vaccine in the United States and Mexico, per a CNN report.
Per the Centers for Disease Control and Prevention (CDC) data released on Dec 28, 2,127,143 people in the United States have been administered the first shot of the coronavirus vaccine, while 11,445,175 doses have been distributed across the country (per a Business Standard article).
Going on, Sanofi (SNY), GlaxoSmithKline (GSK) and Johnson & Johnson (JNJ) are also progressing with the development of coronavirus vaccines and will likely be ready to roll out the same in 2021.
Impressive progress is being observed in the coronavirus treatment and antibodies space as well. The FDA has granted EUA to Eli Lilly & Company’s (LLY) and Incyte’s (INCY) oral JAK inhibitor, Olumiant, for use in combination with Gilead’s (GILD) remdesivir in hospitalized COVID-19 patients based on positive phase III results from the ACTT-2 study.
Meanwhile, Regeneron’s (REGN) novel investigational antibody "cocktail,” casirivimab and imdevimab, administered together (formerly known as REGN-COV2 or REGEN-COV2) was also granted EUA by the FDA for the treatment of mild-to-moderate COVID-19 in patients who are at high risk of progressing to severe COVID-19 and/or hospitalization.
Going on, the FDA also granted EUA to Lilly’s bamlanivimab as a monotherapy for the treatment of recently diagnosed mild-to-moderate COVID-19 illness at high risk of progressing to severe COVID-19 or hospitalization.
Moreover, increasing mergers and acquisition (M&A) deals, growing AI dominance and favorable regulatory tidings continue to work in favor of the biotech market. It is worth noting here that AstraZeneca (AZN) and Alexion Pharmaceuticals, Inc. (Alexion) have entered into a definitive agreement for AstraZeneca to acquire Alexion. The acquisition is expected to close in the third quarter of 2021. While Alexion has solid growth prospects on a standalone basis, the combination will give it a chance to globalize its portfolio further. Going on, Gilead’s recent acquisition of oncology company, Immunomedics, for approximately $21 billion attracted investors’ attention.
Biotech ETFs to Watch Out For
Here, we have highlighted the biotech ETFs that have gained more than 50% in 2020 for investors seeking to benefit from the strengthening biotechnology market.
ARK Genomic Revolution ETF (ARKG - Free Report) — up 203.2% in 2020
This is an actively-managed ETF focusing on companies likely to benefit from the extension and enhancement of the quality of human and other life by incorporating technological and scientific developments plus improvements and advancements in genomics into their business. The fund charges 0.75% in expense ratio and has accumulated $7.91 billion in its asset base (read: 5 Sector ETFs That Beat the Market in 2020).
iShares Genomics Immunology and Healthcare ETF (IDNA - Free Report) — up 62.5%
This is another new entrant, which was launched in June 2019. Tracking the NYSE FactSet Global Genomics and Immuno Biopharma Index, the fund provides exposure to developed and emerging market companies that could gain from long-term growth and innovation in genomics, immunology and bioengineering. The fund has an AUM of $253.7 million. It charges a fee of 47 basis points (read: Moderna ETFs to Shine on Vaccine News as Outbreak Worsens).
Global X Genomics & Biotechnology ETF (GNOM - Free Report) — up 61.8%
This is a new entrant in the space, having accumulated $117.1 million since its inception on Apr 5, 2019. It seeks to invest in companies that stand to benefit from advancements in the field of genomic science, such as companies involved in gene editing, genomic sequencing, genetic medicine/therapy, computational genomics and biotechnology. The product follows the Solactive Genomics Index, charging 50 bps in annual fees (read: ETFs in Focus on Bayer's Bet on Gene Therapy).
Principal Healthcare Innovators Index ETF (BTEC - Free Report) — up 56.9%
The investment seeks to provide investment results that closely correspond, before expenses, to the performance of the Nasdaq Healthcare Innovators Index. It holds 263 stocks in its basket. BTEC charges 42 bps in annual fees. The product has accumulated $160.1 million in its asset base.
The fund seeks daily investment results, before fees and expenses, which match the S&P Biotechnology Select Industry Index. Its AUM is $7.19 billion and expense ratio, 0.35% (read: Buy 5 High-Beta ETFs Offering Value to Tap Santa Rally).
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Top-Performing Biotech ETFs Amid the COVID-19 Crisis
The biotechnology sector has been one of the most talked about spaces amid the coronavirus crisis. The sector has kept its promise of solid returns so far. Notably, the S&P Biotechnology Select Industry Index has returned 53.8% so far in 2020 in comparison to the broader S&P 500’s 15.6%.
The coronavirus outbreak continues to aggravate globally as the number of cases crosses the grim mark of 81 million. The United States is having a tough time controlling the pandemic, with more than 19.3 million reported COVID-19 cases, per the Johns Hopkins University data. Also, the country’s death toll is near 334,000 since the beginning of the outbreak. Consequently, the pandemic has triggered a race to introduce vaccine and treatment, thereby opening up new investing opportunities in the biotech sector.
Impressive progress is being observed with regard to the coronavirus vaccine development. Pfizer Inc. (PFE) and BioNTech SE (BNTX) are continuously posting encouraging updates regarding their coronavirus vaccine candidate, BNT162b2. The duo’s two-shot vaccine has been given the conditional marketing authorization (CMA) by the European Commission. BNT162b2 is also the first coronavirus vaccine to receive approval in Europe.
The Pfizer/BioNTech coronavirus vaccine is now approved for emergency/temporary use in more than 40 countries, including the U.K., Bahrain, Mexico, Singapore, Switzerland and Canada.
Moderna (MRNA) also shipped its first batch of the coronavirus vaccine after it receiving an emergency use authorization (EUA) from the FDA.
Meanwhile, amid the ongoing health crisis, the discovery of a new COVID-19 strain has taken a toll on investor optimism. The new variant, first discovered in England, has resulted in several nations imposing restrictions on travel from the U.K. However, a CNN report states that Pfizer/BioNTech and Moderna are testing their coronavirus vaccines for efficacy against the new mutated version of the virus (per company statements).
Going by a U.K. media report, the coronavirus vaccine, being developed by Oxford University/AstraZeneca (AZN), should work well against the severely communicable new strain of the virus (per a Business Standard article).
Becoming the fifth company to launch a trial in the United States, Novavax (NVAX) has informed about the start of the Phase 3 trial of its COVID-19 vaccine in the United States and Mexico, per a CNN report.
Per the Centers for Disease Control and Prevention (CDC) data released on Dec 28, 2,127,143 people in the United States have been administered the first shot of the coronavirus vaccine, while 11,445,175 doses have been distributed across the country (per a Business Standard article).
Going on, Sanofi (SNY), GlaxoSmithKline (GSK) and Johnson & Johnson (JNJ) are also progressing with the development of coronavirus vaccines and will likely be ready to roll out the same in 2021.
Impressive progress is being observed in the coronavirus treatment and antibodies space as well. The FDA has granted EUA to Eli Lilly & Company’s (LLY) and Incyte’s (INCY) oral JAK inhibitor, Olumiant, for use in combination with Gilead’s (GILD) remdesivir in hospitalized COVID-19 patients based on positive phase III results from the ACTT-2 study.
Meanwhile, Regeneron’s (REGN) novel investigational antibody "cocktail,” casirivimab and imdevimab, administered together (formerly known as REGN-COV2 or REGEN-COV2) was also granted EUA by the FDA for the treatment of mild-to-moderate COVID-19 in patients who are at high risk of progressing to severe COVID-19 and/or hospitalization.
Going on, the FDA also granted EUA to Lilly’s bamlanivimab as a monotherapy for the treatment of recently diagnosed mild-to-moderate COVID-19 illness at high risk of progressing to severe COVID-19 or hospitalization.
Moreover, increasing mergers and acquisition (M&A) deals, growing AI dominance and favorable regulatory tidings continue to work in favor of the biotech market. It is worth noting here that AstraZeneca (AZN) and Alexion Pharmaceuticals, Inc. (Alexion) have entered into a definitive agreement for AstraZeneca to acquire Alexion. The acquisition is expected to close in the third quarter of 2021. While Alexion has solid growth prospects on a standalone basis, the combination will give it a chance to globalize its portfolio further. Going on, Gilead’s recent acquisition of oncology company, Immunomedics, for approximately $21 billion attracted investors’ attention.
Biotech ETFs to Watch Out For
Here, we have highlighted the biotech ETFs that have gained more than 50% in 2020 for investors seeking to benefit from the strengthening biotechnology market.
ARK Genomic Revolution ETF (ARKG - Free Report) — up 203.2% in 2020
This is an actively-managed ETF focusing on companies likely to benefit from the extension and enhancement of the quality of human and other life by incorporating technological and scientific developments plus improvements and advancements in genomics into their business. The fund charges 0.75% in expense ratio and has accumulated $7.91 billion in its asset base (read: 5 Sector ETFs That Beat the Market in 2020).
iShares Genomics Immunology and Healthcare ETF (IDNA - Free Report) — up 62.5%
This is another new entrant, which was launched in June 2019. Tracking the NYSE FactSet Global Genomics and Immuno Biopharma Index, the fund provides exposure to developed and emerging market companies that could gain from long-term growth and innovation in genomics, immunology and bioengineering. The fund has an AUM of $253.7 million. It charges a fee of 47 basis points (read: Moderna ETFs to Shine on Vaccine News as Outbreak Worsens).
Global X Genomics & Biotechnology ETF (GNOM - Free Report) — up 61.8%
This is a new entrant in the space, having accumulated $117.1 million since its inception on Apr 5, 2019. It seeks to invest in companies that stand to benefit from advancements in the field of genomic science, such as companies involved in gene editing, genomic sequencing, genetic medicine/therapy, computational genomics and biotechnology. The product follows the Solactive Genomics Index, charging 50 bps in annual fees (read: ETFs in Focus on Bayer's Bet on Gene Therapy).
Principal Healthcare Innovators Index ETF (BTEC - Free Report) — up 56.9%
The investment seeks to provide investment results that closely correspond, before expenses, to the performance of the Nasdaq Healthcare Innovators Index. It holds 263 stocks in its basket. BTEC charges 42 bps in annual fees. The product has accumulated $160.1 million in its asset base.
SPDR S&P Biotech ETF (XBI - Free Report) — up 54.3%
The fund seeks daily investment results, before fees and expenses, which match the S&P Biotechnology Select Industry Index. Its AUM is $7.19 billion and expense ratio, 0.35% (read: Buy 5 High-Beta ETFs Offering Value to Tap Santa Rally).
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 >>