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Moderna Soars on Inclusion to S&P 500: ETFs in Focus
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Moderna (MRNA), known for its success in the COVID-19 vaccine, has entered the big league with its addition to the S&P 500 Index. S&P made the announcement late Thursday, and shares of Moderna MRNA surged 10.3% on Jul 16 on 4.5 times volume. The stock is up nearly 175% this year, leading to Moderna’s market valuation of more than $115 billion.
The significant success of the company came from its COVID-19 vaccine, which it successfully developed and launched toward the end of 2020. The vaccine is anticipated to generate revenues of more than $19 billion in 2021. The company’s revenues in 2020 were only $803.4 million, which included less than a month’s sales of mRNA-1273 worth $200 million, per another Zacks Research’s article.
A fraction of the rise in Moderna this year is also due to the fact that investors are giving more value to the company's mRNA technology platform, in hopes that it could prevent other viruses like the common cold and certain cancers, per Business Insider.
Last month, Moderna announced that mRNA-1273 is effective against major variants, including the rapidly spreading Delta variant. The evidence that mRNA-1273 can work against the Delta variant has boosted investors’ sentiment. With rising cases of infection with the Delta variant, the prospects of an effective vaccine like mRNA-1273 will likely drive revenues.
The acquisition ofAlexion Pharmaceuticals by AstraZeneca (AZN), pending final closing conditions, helped Moderna to gain its place in the S&P 500 Index. The COVID-19 vaccine maker will replace Alexion Pharma.
ETFs in Focus
Against this backdrop, below we highlight a few ETFs that are heavy on Moderna and could gain immensely.
Invesco Nasdaq Biotechnology ETF (IBBQ - Free Report) – Up 1% on : Moderna Weight: 9.35%
The underlying Nasdaq Biotechnology Index measures the performance of either biotechnology or pharmaceutical companies. Moderna takes the top position in the fund (read: Should You Buy Biotech ETFs Now?).
ETFMG Treatments Testing and Advancements ETF (GERM - Free Report) – Up 2.2%:Weight: 8.92%
The underlying Prime Treatments, Testing and Advancements Index provides investors with a reference measure that enables them to track both event-driven news and long-term trends of companies engaged in developing treatments and vaccines, or diagnostic technology, in the fight against infectious diseases. The stock takes the first position in the fund.
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. The stock takes the second spot in the fund. The fund charges 35 bps in fees (read: Moderna ETFs to Rise on Positive COVID-19 Vaccine Updates).
The underlying ICE Biotechnology Index contains securities of NASDAQ listed companies that are classified as either biotechnology or pharmaceuticals. The fund charges 46 bps in fees. Moderna takes the second spot in the fund.
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Moderna Soars on Inclusion to S&P 500: ETFs in Focus
Moderna (MRNA), known for its success in the COVID-19 vaccine, has entered the big league with its addition to the S&P 500 Index. S&P made the announcement late Thursday, and shares of Moderna MRNA surged 10.3% on Jul 16 on 4.5 times volume. The stock is up nearly 175% this year, leading to Moderna’s market valuation of more than $115 billion.
The significant success of the company came from its COVID-19 vaccine, which it successfully developed and launched toward the end of 2020. The vaccine is anticipated to generate revenues of more than $19 billion in 2021. The company’s revenues in 2020 were only $803.4 million, which included less than a month’s sales of mRNA-1273 worth $200 million, per another Zacks Research’s article.
A fraction of the rise in Moderna this year is also due to the fact that investors are giving more value to the company's mRNA technology platform, in hopes that it could prevent other viruses like the common cold and certain cancers, per Business Insider.
Last month, Moderna announced that mRNA-1273 is effective against major variants, including the rapidly spreading Delta variant. The evidence that mRNA-1273 can work against the Delta variant has boosted investors’ sentiment. With rising cases of infection with the Delta variant, the prospects of an effective vaccine like mRNA-1273 will likely drive revenues.
The acquisition ofAlexion Pharmaceuticals by AstraZeneca (AZN), pending final closing conditions, helped Moderna to gain its place in the S&P 500 Index. The COVID-19 vaccine maker will replace Alexion Pharma.
ETFs in Focus
Against this backdrop, below we highlight a few ETFs that are heavy on Moderna and could gain immensely.
Invesco Nasdaq Biotechnology ETF (IBBQ - Free Report) – Up 1% on : Moderna Weight: 9.35%
The underlying Nasdaq Biotechnology Index measures the performance of either biotechnology or pharmaceutical companies. Moderna takes the top position in the fund (read: Should You Buy Biotech ETFs Now?).
ETFMG Treatments Testing and Advancements ETF (GERM - Free Report) – Up 2.2%:Weight: 8.92%
The underlying Prime Treatments, Testing and Advancements Index provides investors with a reference measure that enables them to track both event-driven news and long-term trends of companies engaged in developing treatments and vaccines, or diagnostic technology, in the fight against infectious diseases. The stock takes the first position in the fund.
VanEck Vectors Biotech ETF (BBH - Free Report) – Up 1.42%: Weight: 5.92%
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. The stock takes the second spot in the fund. The fund charges 35 bps in fees (read: Moderna ETFs to Rise on Positive COVID-19 Vaccine Updates).
iShares Biotechnology ETF (IBB - Free Report) – Up 0.90%: Weight: 7.34%
The underlying ICE Biotechnology Index contains securities of NASDAQ listed companies that are classified as either biotechnology or pharmaceuticals. The fund charges 46 bps in fees. Moderna takes the second spot in the fund.