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Can Biotech ETFs Continue to Soar in 2020?

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  • (1:20) - Who Could Benefit From A Coronavirus Treatment?
  • (5:45) - What Should Investors Expect From Biotech In 2020?
  • (10:50) - Will The FDA Approve Biogen’s New Alzheimer’s Drug?
  • (15:00) - New and Exciting Cancer Treatments
  • (22:15) - CRISPR: Is 2020 The Year For Gene Therapy?
  • (32:40) - Merck’s Product Spin Off
  •                 Podcast@Zacks.com

In this episode of ETF Spotlight, I speak with Brad Loncar, biotech expert and CEO of Loncar Investments.

Biotech stocks soared in 2019, particularly in the fourth quarter, thanks in part to very strong M&A activity in the space. Per EY, life sciences M&A activity, driven by pharmaceutical buyers, totaled an unprecedented $357 billion in 2019 (as of November 30), topping the 2014 record.

Looking at the longer term,  the SPDR S&P Biotech ETF (XBI - Free Report) was one of the best performing ETFs of the past decade. What lies ahead in 2020?

Coronavirus has already killed about 565 people, mostly in China, and infected more than 28,000 people across 25 countries. Gilead (GILD - Free Report) is reported to be working with the Chinese authorities to conduct a clinical trial of the drug remdesivir in patients infected with the coronavirus. Johnson & Johnson (JNJ - Free Report) and GlaxoSmithKline (GSK - Free Report) are also working on vaccines.

Some small and mid-sized biotech companies like Moderna (MRNA - Free Report) , Novavax (NVAX - Free Report) and NanoViricides have said they are working on new treatments for the virus and their shares have been quite volatile. Should investors look at them?

Will FDA approve Biogen’s potentially game changing Alzheimer’s drug this year? The drug reportedly showed slower declines in study patients’ cognitive abilities.

The cancer death rate in the US declined 2.2% from 2016 to 2017, the largest single-year decrease ever recorded, according to the latest report from the American Cancer Society, mainly due to great improvements in survival rates for lung cancer and melanoma.

Major drug makers like Roche (RHHBY - Free Report) and Bristol Meyers (BMY - Free Report) are spending billions of dollars to gain an edge in the $123 billion global cancer drugs market, which is among the industry’s biggest and fastest growing, per WSJ.

What are the key things to watch in cancer treatments like immunotherapy for 2020?

Spending on gene therapies is projected to grow 25 times by the end of 2024. Brad thinks 2020 could be a big year for gene therapy.

Crispr is the best-known gene-editing technology. The Chinese scientist who created the world’s first genetically modified babies, using the Crispr-Cas9 editing technique, was sentenced to three years in prison recently. Tune into the podcast to learn more.

Please visit loncarfunds.com to learn more about the immunotherapy and China biopharma indexes. Make sure to be on the lookout for the next edition of the ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com

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