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Biotech ETFs to Shine on Coronavirus Antibodies Progress

Sweta Jaiswal, FRM
·5 mins read

The biotech sector has been making a lot of buzz these days as it sees impressive progress in the development of antibodies for coronavirus. Even details regarding Trump’s COVID-19 treatment protocol kept hogging investors’ attention.

Recently, two major players, Regeneron Pharmaceuticals (REGN) and Eli Lilly & Company (LLY) applied to the FDA for an Emergency Use Authorization (EUA) for their antibody therapy treatments, REGN-COV2 and LYCoV555, respectively. Notably, Regeneron’s REGN-COV2 is a combination of two monoclonal antibodies (REGN10933 and REGN10987) and was designed specifically to block the infectivity of SARS-CoV-2, the virus that causes coronavirus infection. It is being studied for both treatment and prevention of COVID-19. Per the company, there are doses ready for nearly 50,000 patients and it projects to have doses prepared for 300,000 patients in total within the next few months.

According to sources, Trump has been treated with REGN-COV2 along with Gilead Sciences’ (GILD) antiviral drug remdesivir and dexamethasone. Going by the sources, this antibody therapy was administered in response to an Individual Patient Investigational New Drug (IND) application, which was commonly known as “compassionate use” request from the President’s physicians.

It is worth mentioning here that Regeneron recently presented promising first data from a descriptive analysis of a seamless phase I/II/III study of REGN-COV2. Data showed that the candidate reduced the viral load and time to alleviate symptoms in non-hospitalized patients with coronavirus. REGN-COV2 also showed positive trends in lowering medical visits.

Meanwhile, LYCoV555 is a monotherapy for the treatment of higher-risk patients who have recently been diagnosed with mild-to-moderate COVID-19. Lilly has informed that, if approved, it can make as many as one million doses of LY-CoV555 monotherapy (700 mg dose) available in 2020 with 100,000 available in October. Lily’s request for EUA was based on data from both the monotherapy cohort as well as the combination cohort of the phase II BLAZE-1 study on LYCoV555.

Currently, there are no FDA-approved treatments for the severe illness caused by SARS-CoV-2. However, companies are working round the clock to come up with an effective treatment.

Vir Biotechnology (VIR) and Glaxo’s investigational monoclonal antibody, VIR-7831, has also entered phase III portion recently for the early treatment of coronavirus patients at high risk of hospitalization. The phase II/III study has two other cohorts, one for the treatment of hospitalized patients and another for the prevention of symptomatic infection. A phase II study on another monoclonal antibody VIR-7832 is expected to start in the near term.

Biotech ETFs in Spotlight

The biotechnology sector has kept its promise of returns so far. Notably, the race to introduce vaccine and treatment of coronavirus is opening up opportunities, making the biotech sector a prospective space for investments. Here, we discuss a few ETFs that might gain in such a scenario:

iShares Nasdaq Biotechnology ETF IBB

This fund seeks to provide exposure to U.S. biotechnology and pharmaceutical stocks and tracks the Nasdaq Biotechnology Index. The fund has an AUM of $8.95 billion, with an expense ratio of 0.46% (read: Top-Performing Biotech ETFs Amid the Coronavirus Crisis).

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 has AUM of $5.20 billion and an expense ratio of 0.35% (read: Healthcare ETFs Pop on Bristol Myers-MyoKardia Deal).

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 has AUM of $2.29 billion and an expense ratio of 0.75% (read: Top & Flop ETF Zones of First Nine Months of 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. Its AUM is $484.9 million and it has an expense ratio of 0.35%.

Invesco Dynamic Biotechnology & Genome ETF PBE

The fund is based on the Dynamic Biotech & Genome Intellidex Index. The index is is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action, and value. The fund’s AUM is around $218.7 million and expense ratio, 57 bps (read: Genomics ETFs Surge on Nobel Prize for Gene-Editing Pioneers).

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iShares Nasdaq Biotechnology ETF (IBB): ETF Research Reports
 
SPDR SP Biotech ETF (XBI): ETF Research Reports
 
VanEck Vectors Biotech ETF (BBH): ETF Research Reports
 
Invesco Dynamic Biotechnology Genome ETF (PBE): ETF Research Reports
 
ARK Genomic Revolution ETF (ARKG): ETF Research Reports
 
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