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Biotech ETFs to Gain on Coronavirus Vaccine Progress

The coronavirus outbreak continues to tighten its grip as the United States is moving toward a staggering count of 4 million cases. In such a scenario, the latest progress in the quest to develop a vaccine for combatting the disease has raised some optimism. Data from the ongoing Phase I/II trial of the coronavirus vaccine candidate, also known as AZD1222, which AstraZeneca AZN is developing in collaboration with Oxford University was recently published in the medical journal The Lancet. The newly-released data showed “strong” antibody and immune T-cell responses were observed in participants which lasted at least for a couple of months (per a CNBC article).

The results also reflected that neutralising activity against coronavirus was seen in 91% of participants a month after receiving the vaccine and in 100% of participants after being administered with the second dose. AstraZeneca also announced earlier that it is working with industry partners to manufacture and distribute 2 billion doses of the vaccine.

Other Vaccine Developers Also Showing Progress

The first company to start human clinical trials of its coronavirus vaccine candidate in the United States — Moderna MRNA — has also shown progress. According to data published in the New England Journal of Medicine, Moderna’s potential coronavirus vaccine candidate resulted in a “robust” immune response in all participants in its early stage human trial, per a CNBC article. Moderna also recently updated that it is on track to deliver 500 million doses of 100 μg dosage of mRNA-1273 per year, which can possibly increase up to 1 billion doses per year, beginning 2021.

Positive update on coronavirus vaccines made by Pfizer (PFE) in collaboration with German biotech firm BioNTech was recently announced. Two out of four of the company’s coronavirus vaccine candidates, BNT162b1 and BNT162b2, have been granted the ‘fast track’ designation by the FDA. The fast-track status will speed up the review process of Pfizer’s coronavirus vaccines.

Pfizer and BioNTech are aiming to start a large trial by later this month if they receive regulatory approval. It is worth noting here that Pfizer is targeting to produce up to 100 million doses by the end of this year and more than 1.2 billion doses by 2021-end, if the vaccine is approved.

Novovax, Inc. (NVAX) was recently funded $1.6 billion by the federal government to support the late-stage development of its coronavirus vaccine candidate, NVX-CoV2373. The funding will also help the company establish large-scale manufacturing and deliver 100 million doses of NVX-CoV2373, as early as late 2020. Meanwhile, GlaxoSmithKline plc (GSK) and privately-held Medicago have come together to develop and evaluate a coronavirus candidate vaccine. The vaccine candidate will be produced using Medicago’s recombinant Coronavirus Virus-Like Particles and Glaxo’s pandemic adjuvant system. Medicago’s CoVLP technology will be used to develop a vaccine, which will mimic the structure of the virus responsible for COVID-19.

Going on, Vaxart, Inc.’s (VXRT) oral COVID-19 vaccine candidate has been picked for investigation in a non-human primate challenge study. The new study will be organized and funded by Operation Warp Speed (“OWS”), which is a new national program to provide substantial quantities of a safe, effective vaccine to Americans by January 2021. Notably, the five shortlisted companies under the OWS initiative to rapidly develop a coronavirus vaccine are Moderna, Oxford University and AstraZeneca (AZN), J&J (JNJ), Merck (MRCK) and Pfizer, per The New York Times report.

ETFs to Gain

The race to introduce vaccine and treatment for coronavirus is opening up opportunities, making the biotech sector a prospective space for investments. Therefore, we discuss a few ETFs that provide exposure to the biotech sector:

iShares Nasdaq Biotechnology ETF IBB

This fund seeks to provide exposure to U.S. biotechnology and pharmaceutical stocks and tracks the Nasdaq Biotechnology Index. Holding 207 securities, the fund has an AUM of $10.36 billion with an expense ratio of 0.47% (read: 3 Hot Sector ETFs to Tide Over the Coronavirus Crisis in Q3).

SPDR S&P Biotech ETF XBI

The fund seeks daily investment results, before fees and expenses, which match the S&P Biotechnology Select Industry Index. It holds about 133 securities in its basket. It has AUM of $6.09 billion and an expense ratio of 0.35% (read: Top-Ranked ETFs That Crushed the Market in 1H).

First Trust NYSE Arca Biotechnology ETF FBT

The fund measures the performance of a cross section of companies in the biotechnology industry that are primarily involved in the use of biological processes to develop products or provide services. It holds about 31 securities in its basket. Its AUM is around $2.34 billion (read: How Are Biotech ETFs Reacting to Coronavirus Treatment News?).

ARK Genomic Revolution ETF ARKG

This is an actively-managed fund. Companies within ARKG are focused on and are expected to substantially benefit from extending and enhancing the quality of human and other life by incorporating technological and scientific developments and advancements in genomics into their business. It generally holds about 30-50 securities in its basket. It has AUM of $1.71 billion and an expense ratio of 0.75% (read: 4 Sector ETFs Up More Than 30% in First-Half 2020).

VanEck Vectors Biotech ETF BBH

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. Its AUM is $539.5 million and it has an expense ratio of 0.35%.

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AstraZeneca PLC (AZN): Free Stock Analysis Report
 
Moderna, Inc. (MRNA): Free Stock Analysis Report
 
iShares Nasdaq Biotechnology ETF (IBB): ETF Research Reports
 
SPDR SP Biotech ETF (XBI): ETF Research Reports
 
VanEck Vectors Biotech ETF (BBH): ETF Research Reports
 
First Trust NYSE Arca Biotechnology ETF (FBT): ETF Research Reports
 
ARK Genomic Revolution ETF (ARKG): ETF Research Reports
 
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