Back to top

Image: Bigstock

Is Moderna Winning the COVID-19 Vaccine Race? ETFs to Gain

Read MoreHide Full Article

Moderna, Inc. (MRNA - Free Report) raised hopes of a coronavirus vaccine amid these desperate times after it informed about positive interim data from a phase I study evaluating its mRNA-based coronavirus vaccine candidate, mRNA-1273, on May 18. The results reflected that levels of antibodies in patients vaccinated with mRNA-1273 were similar or higher than those typically found in blood samples of patients who recovered from COVID-19 naturally. Moderna’s shares gained around 20% on the day of announcement of the results.

However, shares of Moderna lost around 10.4% on May 19 after several vaccine experts pointed out that there was lack of enough critical data to properly evaluate Moderna's coronavirus vaccine candidate, per a STAT News report.

Findings in a Glimpse

The ongoing phase I study on mRNA-1273 being conducted by the National Institute of Allergy and Infectious Diseases is evaluating three doses of the candidate — 25 µg, 100 µg and 250 µg — in three patient groups — adults aged 18 to 55 years, older adults aged 56 to70 years and elderly people aged 71 years and above — in nine separate cohorts.

Per the company, across all doses, all patients established specific antibodies against COVID-19 and the antibodies became discoverable in the blood by day 15 after a single dose. Moderna also informed that two weeks after the second dose or nearly 43 days after the first dose, it was observed that levels of binding antibodies in the group that was administered two 25 µg doses of mRNA-1273 were found to be almost similar in blood samples of patients who have recovered from COVID-19. Notably, patients who received two 100 µg doses achieved levels of binding antibodies significantly exceeded the levels seen in convalescent sera (level of antibodies seen in blood sample of patients naturally recovered from COVID-19). Also, the vaccine successfully produced neutralizing antibodies against COVID-19 in at least eight participants.

The ambiguity as reported by the vaccine experts per the STAT News report points out that Moderna didn’t reveal the age group of the eight participants that developed neutralizing antibodies out of the 45 participants in the research. The data is vital as the goal behind creating a vaccine is to develop neutralizing antibodies.

Moreover, according to Anna Durbin, a vaccine researcher at Johns Hopkins University, the blood was drawn within two weeks after patients received the vaccine and therefore, it fails to reveal if the antibodies are durable, per the STAT News report.

What’s Next for Moderna?

Moderna has partnered with Lonza for manufacturing of mRNA-1273 earlier this month. Last month, the company entered into an agreement with the Biomedical Advanced Research and Development Authority ("BARDA") where the latter will be investing approximately $483 million to fast-track the development of Moderna’s coronavirus vaccine candidate. Also, under an encouraging development, the FDA has reviewed Moderna’s investigational new drug application for starting a phase II study on its vaccine and approved the same. The company will now start evaluating 50 µg and 100 µg doses of mRNA-1273 with a dose to be selected for pivotal studies in the new study. Moderna is also near to closing on the design for a phase III study on mRNA-1273 and expects to begin the study in July.

Other Coronavirus Vaccines in Progress

Novavax, Inc. (NVAX - Free Report) has informed that Coalition for Epidemic Preparedness Innovations (“CEPI”) will invest up to $384 million in the development and production of NVX-CoV2373, Novavax's vaccine candidate against coronavirus. Management informed that the funding will be used for combined safety and effectiveness testing of the vaccine.

Per a Bloomberg article, AstraZeneca (AZN - Free Report) will manufacture approximately 30 million doses of coronavirus vaccine that is being developed at the University of Oxford and make them available in the U.K. by September and has committed to deliver 100 million doses this year resulting in U.K. being the first country to get a vaccine, if it gets approved.

Going on, researchers at the New York University Grossman School of Medicine in Manhattan and the University of Maryland School of Medicine in Baltimore said they began injecting people with the first of the four vaccine candidates from Pfizer Inc. (PFE) and Germany’s BioNTech in the beginning of May (read: Healthcare ETFs to Gain on Progress in Coronavirus Vaccine).

Large pharmaceutical player, Johnson & Johnson (JNJ - Free Report) entered into a manufacturing deal with Emergent BioSolutions Inc. (EBS) to strengthen the U.S.-based manufacturing capacity for its COVID-19 vaccine candidate. The company expects to initiate a phase I study on the candidate in September 2020 under an accelerated timeline. Safety and efficacy data from the study is likely to be available by this year-end, based on which, the company expects a vaccine to be available for emergency use in early 2021. Notably, J&J has also identified two back-up candidates apart from the chief COVID-19 candidate.

Heating up competition, pharmaceutical giants Sanofi (SNY - Free Report) and GlaxoSmithKline plc (GSK - Free Report) joined forces to speed up development of a vaccine for the virus on Apr 14. Both drug makers plan to begin the initial clinical tests of the vaccine prototype in the second half of 2020. The vaccine should be available in the second half of 2021, if the results are positive.

Moderna ETFs to Gain

The competition to come up with a vaccine is opening up near-term opportunities, making the biotech sector a prospective space for investments. Therefore, we discuss a few ETFs that seek to provide exposure to Moderna:

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 around 10% exposure to Moderna. The fund has AUM of $42.5 million. The product charges 79 bps in annual fees (read: Biotech ETFs to Gain From Latest Advancements in Cancer Drugs).

iShares Genomics Immunology and Healthcare ETF (IDNA - Free Report)

The fund seeks investment results, before fees and expenses, which match the NYSE FactSet Global Genomics and Immuno Biopharma Index. It holds about 47 securities in its basket with Moderna occupying a weight of approximately 9.1%. It has AUM of $79.6 million and an expense ratio of 0.47% (read: Healthcare & Biotech ETFs Digest GILD's Failure News: 5 Winners).      

VanEck Vectors Biotech ETF (BBH - Free Report)

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. It holds about 24 securities in its basket with nearly 5.6% exposure to Moderna. Its AUM is $432.4 million and it has an expense ratio of 0.35%.

Other broader biotech ETFs that hold companies developing tests, vaccines and therapies for the coronavirus include the iShares NASDAQ Biotechnology ETF (IBB - Free Report) and the SPDR S&P Biotech ETF (XBI - Free Report) .

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 >>