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ETFs to Play as Merck Shares Surge on COVID Treatment News

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Merck & Co. Inc. (MRK - Free Report) shares gained 8.4% on Oct 1, 2021 on news of success in its COVID treatment. The company reported that its oral antiviral medication molnupiravir lowered the risk of COVID-19 hospitalization or death by 50% in a Phase 3 study of patients with mild or moderate symptoms. Gilead Sciences’ antiviral drug remdesivir was approved for emergency use in treating COVID-19 in 2020, but remdesivir is administered via IV.

Dr. Anthony Fauci said the FDA will review data on Merck and Ridgeback Biotherapeutics’ new Covid oral antiviral fast so that those medications can receive an emergency use authorization. In the phase three clinical trial, which registered 775 trial participants who took either molnupiravir or a placebo, eight people who received the placebo died within 29 days. None of the participants who took molnupiravir died, according to the data released Friday, as quoted on CNBC.

An emergency use authorization from the FDA would make molnupiravir the first oral antiviral to battle Covid. The United States has agreed to buy 1.7 million courses of molnupiravir. While the government has the option of purchasing even more doses if the drug gets approved. Merck projects that it will produce 10 million courses of molnupiravir by the end of 2021.

No wonder, Merck shares will rise amid such a situation.  Shares traded 10 times the regular volume on Oct 1. Against this backdrop, investors can definitely play Merch-heavy ETFs.

ETFs in Focus

First Trust Nasdaq Pharmaceuticals ETF (FTXH - Free Report)

The underlying Nasdaq US Smart Pharmaceuticals Index is a modified factor weighted index, designed to provide exposure to US companies within the pharmaceuticals industry. Merch accounts for about 8.74% of the fund. The fund charges 60 bps in fees (read: J&J ETFs to Gain on Upbeat COVID-19 Vaccine Data).

Invesco Dynamic Pharmaceuticals ETF (PJP - Free Report)

The underlying Dynamic Pharmaceutical Intellidex Index is comprised of stocks of U.S. pharmaceutical companies. It is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors. Merck & Co takes the top spot (6.56% weight) in the fund. The fund charges 56 bps in fees.

iShares Evolved U.S. Innovative Healthcare ETF (IEIH - Free Report)

The iShares Evolved U.S. Innovative Healthcare ETF seeks to provide access to U.S. companies with innovative healthcare exposure. Merck takes the fifth spot (5.76%) in the fund. The fund charges 18 bps in fees.

Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report)

The underlying Dow Jones Industrial Average Yield Weighted Index provides exposure to high-yielding equity securities in the Dow Jones Industrial Average by their 12-month dividend yield over the prior 12 months. Merck takes the fifth position (5.71%) in the fund.

VanEck Pharmaceutical ETF (PPH - Free Report)

The underlying MVIS US Listed Pharmaceutical 25 Index tracks the overall performance of companies involved in pharmaceuticals, including pharmaceutical research and development as well a production, marketing and sales of pharmaceuticals. Merck (4.92%) takes the ninth spot in the fund.