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Genomics ETFs Surge on CRISPR's Gene Editing Progress

Sweta Jaiswal, FRM

CRISPR Therapeutics CRSP and its partner Vertex Pharmaceuticals Incorporated VRTX recently announced encouraging preliminary safety and efficacy data from the ongoing phase I/II studies. Notably, the studies were evaluating the CRISPR/Cas9 gene-editing therapy CTX001 for two severe blood disorders — sickle cell disease (SCD) and adult transfusion-dependent b-thalassemia (TDT).

CRISPR Therapeutics and Vertex were each up 17% and 2.5%, respectively, on Nov 19 in response to this news. However, CRISPR lost some gains due to an underwritten public offering on the same day during after-hours trading.

Notably, CRISPR /Cas9 is a very efficient and fast technique to edit genomes. It is in early clinical trials for certain disorders like sickle cell disease, cystic fibrosis and Huntington’s disease. This comes after six years of CRISPR technique’s first application on animals. The interim data is believed to have demonstrated meaningful advantages from CTX001 for patients following a one-time intervention (read: ETFs Poised to Benefit from Gene Editing Revolution).

Insight Into the Data

The data was from the first two patients infused with CTX001 in the study, one from each disease. The patient with SCD was free of vaso-occlusive crises or pain crises, a painful complication of SCD disease, at four months following infusion versus 7 annualized events prior to therapy. The patient with TDT was transfusion independent at nine months after infusion versus 16.5 annualized transfusion rate prior to therapy.

Meanwhile, both patients achieved normal levels of haemoglobin and fetal hemoglobin on CTX001 infusion. While the TDT patient had total hemoglobin levels of 11.9 g/dL and 10.1 g/dL fetal hemoglobin, the same came in at 11.3 g/dL and 46.6%, respectively, for the patient suffering SCD. However, both the patients developed some severe problems, including infections. On the brighter side, the complications were found to be unrelated to the gene-editing treatment.

Genomic ETFs in Focus

Genome editing is a technique to alter or modify the DNA of a cell or organism. It uses an enzyme to cut the DNA at a particular sequence and then it is repaired by the cell, making a change to the sequence. As a result, the characteristics of a cell or organism are changed. According to analysts, growing demand for personalized medicine, solid investments and higher R&D activities will soon make genomics the next big thing in the investing space. In fact, going by a MarketsandMarkets report, the $18.9-billion global genomics market is expected to reach $35.7 billion by 2024, at a CAGR of 13.5%. Here we highlight a host of ETFs that investors can keep a tab on:

ARK Genomic Revolution Multi-Sector ETF ARKG

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. The fund holds 38 stocks in its basket, with CRISPR Therapeutics occupying the second position with 10% weight.  Th fund charges 0.75% in expense ratio. It has accumulated $442.1 million in its asset base. The fund has gained 3.7% since the news release (read: ETFs to Gain From the Booming Genomics Market).

Invesco Dynamic Biotechnology & Genome ETF PBE

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 and companies that gain significantly from scientific and technological advances in biotechnology and genetic engineering and research. The fund holds 28 stocks in its basket, with Vertex holding the second position with 6.2% exposure. It has managed $226.9 million in its asset base. Expense ratio is at 0.57%. The fund has gained 2.2% since the news release.

Global X Genomics & Biotechnology ETF GNOM

This is a new entrant in the space, having accumulated $17.4 million since its inception on Apr 5, 2019. It seeks to invest in companies that stand to benefit from advancements 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, with Vertex and CRISPR Therapeutics together having 7.7% weight. The fund has gained 4.3% since the news release (read: Healthcare Sector Outperforming: 5 Best ETFs & Stocks QTD).

iShares Genomics Immunology and Healthcare ETF IDNA

This is another new entrant, which was launched in June 2019. Tracking the NYSE FactSet Global Genomics and Immuno Biopharma Index, the fund provides exposure to developed and emerging market companies that could gain from long-term growth and innovation in genomics, immunology and bioengineering. Holding a basket of 45 securities with 2.2% exposure to CRISPR Therapeutics. The fund has an AUM of $25 million. It charges a fee of 47 basis points. The fund has gained 2.8% since the news release (as of Nov 22).

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Invesco Dynamic Biotechnology & Genome ETF (PBE): ETF Research Reports
 
Vertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report
 
CRISPR Therapeutics AG (CRSP) : Free Stock Analysis Report
 
ARK Genomic Revolution ETF (ARKG): ETF Research Reports
 
iShares Genomics Immunology and Healthcare ETF (IDNA): ETF Research Reports
 
Global X Genomics & Biotechnology ETF (GNOM): ETF Research Reports
 
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