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Biotech Tops in November: Best ETFs & Stocks

Sweta Killa

The biotech space of the broad healthcare sector outperformed others in November, courtesy of a series of positive news including study results, regulatory backdrop and deal activities. Better-than-expected corporate earnings added to this strength (read: Why Biotech ETFs Surged in Monday's Trading Session). 

Among the latest top stories, one is about the FDA’s approval of a new drug Oxbryta for treating sickle cell disease in adults and children aged 12 years or above. The novel drug was developed by the biotech firm Global Blood Therapeutics GBT. CRISPR Therapeutics CRSP and Vertex Pharmaceuticals VRTX announced encouraging preliminary safety and efficacy data from the first two patients treated with investigational CRISPR/Cas9 gene-editing therapy CTX001 for severe hemoglobinopathies. Meanwhile, Swiss drugmaker Novartis NVS agreed to merge with The Medicines Company in a $9.7-billion deal. The acquisition will add inclisiran, a potentially first-in-class treatment to lower cholesterol, to Novartis’ pipeline.

Further, uncertainty over trade lent a boost to the sector given its non-cyclical nature, which in turn, provides a cushion to its portfolio. Moreover, the sector is clearly benefiting from impressive trends including new drug nods, an accelerated pace of innovation, promising drug launches, growing importance of biosimilars, cost-cutting efforts, an aging population, expanding insurance coverage, the rising middleclass, insatiable demand for new drugs and an ever-increasing spending on healthcare.

In light of the above, we highlight five biotech ETFs and stocks that led the market in November.

Virtus LifeSci Biotech Clinical Trials ETF BBC — Up 20.5%

This fund has a novel approach to biotechnology investing with exposure to companies that are in the clinical trial stage. This can easily be done by tracking the LifeSci Biotechnology Clinical Trials Index. BBC has amassed $28.6 million in its asset base and charges 79 bps in fees per year from investors. It trades in a light average daily volume of around 4,000 shares and holds 95 securities in its basket. The product carries a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Top-Ranked ETFs That Crushed the Market in a Month).

The Cancer Immunotherapy ETF CNCR — Up 18.2%

This ETF offers exposure to a basket of companies that develop therapies to treat cancer by harnessing the body's own immune system. Holding 26 stocks in its basket, it has AUM of $38.5 million and trades in average daily volume of 9,000 shares. The product charges 79 bps in annual fees and is Zacks #3 Ranked ETF with High risk outlook.

Global X Genomics & Biotechnology ETF GNOM — Up 17.2%

This is a new entrant in the space having accumulated $18.6 million since its inception on Apr 5. It seeks to invest in companies that potentially stand to benefit from further advances in the field of genomic science, such as companies involved in gene editing, genomic sequencing, genetic medicine/therapy, computational genomics and biotechnology. The product follows the Solactive Genomics Index, charging 68 bps in annual fees. It holds 39 stocks in its basket and trades in average daily volume of 4,000 shares.

Virtus LifeSci Biotech Products ETF BBP — Up 16.3%

The ETF follows the LifeSci Biotechnology Products Index, which measures the performance of biotechnology companies with at least one drug therapy approved by the FDA. Holding 40 stocks, the product has accumulated AUM of $28.6 million and charges 79 bps in fees per year. BBP trades in volume of 3,000 shares a day on average and has a Zacks ETF Rank of 3 with a High risk outlook.

ARK Genomic Revolution Multi-Sector ETF ARKG — Up 15.8%

This is an actively managed ETF, focusing on companies likely to benefit from the extension and enhancement of the quality of human and other life by incorporating technological and scientific developments plus improvements and advancements in genomics into their business. With AUM of $474.5 million, the fund holds 38 stocks in its basket and has 0.75% in expense ratio. It trades in average daily volume of 120,000 shares (read: Genomics ETFs Surge on CRISPR's Gene Editing Progress).

Karuna Therapeutics Inc. KRTX — Up 446.8%

This clinical-stage biopharmaceutical company is primarily focused on developing novel therapies to address disabling neuropsychiatric conditions characterized by significant unmet medical needs. The stock has a Zacks Rank #2 (Buy) and a VGM Score of C. It has a market cap of $1.78 billion. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Myovant Sciences Ltd. MYOV — Up 215.7%

This biopharmaceutical company is focused on developing and commercializing therapies for women's health diseases and other endocrine-related disorders including advanced prostate cancer. With a market cap of $1.55 billion, it has a Zacks Rank #3 and a VGM Score of F.

Clovis Oncology Inc. CLVS — Up 291.5%

This biopharmaceutical company is focused on developing and commercializing treatments targeting specific subsets of cancer population. It has a Zacks Rank of 2 and a VGM Score of F. The stock has a market cap of $680.3 million.

Constellation Pharmaceuticals Inc. CNST — Up 209.3%

This bio-pharmaceutical company discovers and develops molecule therapeutics for the treatment of cancer, inflammatory and immunologic disorders. The stock has a Zacks Rank #3 and a VGM Score of D. It has a market cap of $1.43 billion (read: Healthcare Sector Outperforming: 5 Best ETFs & Stocks QTD).

Proteostasis Therapeutics Inc. PTI — Up 189.3%

This biopharmaceutical company focuses on the discovery and development of novel therapeutics to treat diseases caused by an imbalance in the proteostasis network, primarily in the United States. With a market cap of $122.7 million, the stock is Zacks #2 Ranked and has a VGM Score of D.

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