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Biotech ETFs to Gain From Latest Advancements in Cancer Drugs

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Though the coronavirus pandemic has claimed more than 82,000 lives in the United States so far, heart diseases and cancer continue to be the leading causes of death, according to Centers for Disease Control and Prevention. According to American Cancer Society journal, around 1.8 million new cancer cases are expected to be diagnosed and 606,520 cancer deaths to be reported in the United States in 2020. The rising incidence of the disease has encouraged several major pharmaceutical and biotech players to invest substantially in the developments of drugs for its treatment.

Notably, buoyed by the latest developments in the space, Loncar Cancer Immunotherapy ETF (CNCR - Free Report) touched a 52-week high of $26.10 in yesterday’s trading session. However, the ETF ended yesterday’s trading session down 2.2%, probably due to some disappointing earnings releases.

Latest Developments in Oncology Drug Space

AstraZeneca’s (AZN - Free Report) shares gained 0.3% in yesterday’s trading session since the company announced the receipt of FDA approval for the PARP inhibitor Lynparza for a broader ovarian cancer population with its partner Merck (MRK - Free Report) on May 11. In combination with bevacizumab, Lynparza has won approval in the United States for the maintenance treatment of adult patients with advanced epithelial ovarian, fallopian tube or primary peritoneal cancer that are in complete or partial response to first-line platinum-based chemotherapy and whose cancer is associated with homologous recombination deficiency (HRD) positive status defined by either a deleterious or suspected deleterious BRCA mutation, and/or genomic instability, according to the management. Notably, around one in two women with advanced ovarian cancer has an HRD-positive tumor.

Meanwhile, the FDA approved Myriad Genetics’ (MYGN - Free Report) myChoiceCDx test for use as a companion diagnostic test to identify patients with HRD positive ovarian cancer who will likely respond to Lynparza treatment. According to the company’s press release, ovarian cancer is the eighth most common cause of death from cancer in women globally. In this regard, Nicole Lambert, president of Myriad Oncology and Women’s Health said, “the approval of the myChoice CDx test will help clinicians quickly identify the potential one in two women whose ovarian cancer is HRD positive and who will likely respond to targeted therapy.” 

Going on, AstraZeneca also recently clinched the Breakthrough Therapy Designation (BTD) to antibody drug conjugate Enhertu for HER2-positive metastatic gastric cancer from the FDA. The BTD was based on data from the registration phase II DESTINY-Gastric01 study. Enhertu was approved by the FDA last December for metastatic breast cancer. AstraZeneca acquired joint development and commercialization rights to this promising cancer candidate from Japan’s Daiichi Sankyo last April.

Retevmo (selpercatinib) capsules belonging to Loxo Oncology, Inc., a subsidiary of Eli Lilly (LLY - Free Report) , have been recently approved by the FDA for treating three types of tumors – non-small cell lung cancer, medullary thyroid cancer and other types of thyroid cancers – in patients whose tumors have an alteration (mutation or fusion) in a specific gene (RET or “rearranged during transfection”). Notably, Retevmo is the first therapy approved particularly for cancer patients with the RET gene alterations.

Last month, Immunomedics, Inc. received the FDA approval for Trodelvy (sacituzumab govitecan-hziy), an antibody-drug conjugate, for the treatment of patients with metastatic triple-negative breast cancer who received at least two prior therapies for metastatic disease. This marks the first FDA nod for any of this company’s pipeline candidates.

Meanwhile, Pfizer Inc. (PFE - Free Report) has been awarded with the FDA approval for its cancer drug Braftovi (encorafenib) in combination with Eli Lilly’s EGFR antagonist, Erbitux (cetuximab), for the treatment of BRAFV600E-mutant metastatic colorectal cancer in patients having received prior therapy. Following this nod, the Braftovi combo became the first and the only FDA-approved targeted regimen for the said indication.

ETFs to Gain

Given the high incidence of the disease, the global oncology drug market represents bountiful opportunities that investors can cash in. In fact, according to a Medgadget report, the global oncology drugs market is expected to see a CAGR of 12.3% between 2018 and 2026. Following are a few ETFs that can provide exposure to this lucrative space:

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 210 holdings. It has AUM of $8.26 billion and charges a fee of 47 basis points a year. The fund has gained around 10.2% year to date (read: Novavax Soars on Coronavirus Vaccine Funding: ETFs to Gain).

SPDR S&P Biotech ETF (XBI - Free Report)

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. Its AUM is $5.09 billion and expense ratio, 0.35%. The fund has gained about 7.8% year to date (read: Are Biotech ETFs in Trouble as Coronavirus Dims Guidance?).

Loncar Cancer Immunotherapy ETF (CNCR - Free Report)

This ETF offers exposure to a basket of companies that develop therapies to treat cancer by harnessing the body's own immune system. Holding 25 stocks in its basket, it has AUM of $38.7 million. The product charges 79 bps in annual fees. The fund trades has gained around 8.3% year to date.

Invesco Dynamic Biotechnology & Genome ETF (PBE - Free Report)

This fund follows the Dynamic Biotech & Genome Intellidex Index. The index comprises companies that are majorly engaged in the research, development, manufacturing and marketing plus distribution of various biotechnological products, services and processes as well as companies that gain significantly from scientific and technological advances in biotechnology and genetic engineering and research. The fund holds 30 stocks in its basket. It has managed $237.5 million in its asset base. Expense ratio is at 0.57%. The fund has gained about 3.4% year to date.

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