Biotech ETFs to Gain on Trump's COVID-19 Treatment Protocol

Sweta Jaiswal, FRM
·4-min read

President Trump and first lady Melania Trump’s positive coronavirus test results have shaken the equity investment world. Naturally, the progress in Trump’s health condition and his treatment protocols are continuously under the purview of market participants.

According to sources, Trump has been treated with Regeneron Pharmaceuticals, Inc.’s (REGN) experimental antibody therapy, REGN-COV2, along with Gilead Sciences’ (GILD) antiviral drug remdesivir and dexamethasone. In fact, buoyed by the news, shares of Regeneron Pharmaceuticals rose 7.1% on Oct 5. Commenting on Trump’s coronavirus treatment, Dr. Jonathan Reiner, a professor of medicine at George Washington University, said that, "the President might be the only patient on the planet ever to receive this particular combination of medicines," per a CNN report.

Notably, REGN-COV2 is being evaluated for both treatment and prevention of coronavirus. 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 the time to alleviate symptoms in non-hospitalized patients with coronavirus.

Meanwhile, remdesivir has been granted the Emergency Use Authorization (EUA) by the FDA for the coronavirus infection. Several ongoing international phase III studies are evaluating the safety and efficacy of remdesivir for the treatment of SARS-CoV-2 infection.

Going on, dexamethasone is a cheap and widely available corticosteroid that can reduce inflammation while suppressing the immune system, per the sources.

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.

In this regard, Eli Lilly and Company (LLY) and partner Incyte have informed that their rheumatoid arthritis drug Olumiant in combination with remdesivir met the primary endpoint of reduction of time to recovery in comparison to remdesivir alone. Moreover, Roche (RHHBY) is studying its arthritis drug Actemra/RoActemra in combination with remdesivir in hospitalized patients with severe COVID-19 pneumonia.

Biotech ETFs That Can Gain

Here, we take a look at 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: How Will Biotech ETFs React to Vaccine Makers' Safety Pledge?).

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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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