Breaking News
Close
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

In The COVID Vaccine Race, This ETF May Be A Better Bet Than Moderna Or Pfizer

By Investing.com (Tezcan Gecgil/Investing.com )ETFsNov 03, 2020 10:29
uk.investing.com/analysis/in-the-covid-vaccine-race-this-etf-may-be-a-better-bet-than-moderna-or-pfizer-200449222
In The COVID Vaccine Race, This ETF May Be A Better Bet Than Moderna Or Pfizer
By Investing.com (Tezcan Gecgil/Investing.com )   |  Nov 03, 2020 10:29
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

As the world eagerly awaits results for the U.S. Presidential election, there's yet another highly anticipated event: a breakthrough in the coronavirus vaccine.

Positive news about an approved vaccine for SARS-CoV-2, the virus behind the pandemic, could make a big difference not only for daily lives worldwide but also for many stocks.

We've addressed some of the companies and exchange-traded funds (ETFs) appropriate for those looking to bet on biopharma stocks.

Below we take a closer look at companies leading the race for the vaccine and an ETF to help investors gain broader exposure:

Companies Approaching The Finishing Line

Globally, there have been over 46 million confirmed COVID-19 cases.

The World Health Organization (WHO) publishes updates on worldwide scientific work on a potential cure for the novel coronavirus. Three of the biopharma companies attracting attention in recent weeks from that list include Pfizer (NYSE:PFE), BioNTech (NASDAQ:BNTX), and Moderna (NASDAQ:MRNA).

In an open letter of Oct. 16, Pfizer's CEO, Dr. Albert Bourla, underlined three big issues in the development of a successful vaccine:

  • Clinical issues (effectiveness and safety);
  • Regulatory issues (will the vaccine be approved by national regulators, such as the FDA);
  • Commercial issues (successful manufacturing and distribution capability).

Pfizer and Germany-based partner BioNTech are about to receive efficacy results from the late-stage trial of the vaccine. According to Dr. Bourla:

"Assuming positive data, Pfizer will apply for Emergency Authorization Use in the U.S. soon after the safety milestone is achieved in the third week of November."

BioNTech went into detail on its manufacturing plans, saying "if regulatory authorization or approval is obtained, [we] expect to manufacture up to 100 million doses by the end of 2020 and potentially more than 1.3 billion doses by the end of 2021."

Moderna, also shared some promising updates when it released Q3 financial results Oct. 29, saying it recently "completed enrolment of 30,000 participants for the Phase 3 COVE study of mRNA-1273, its vaccine candidate against COVID-19."

In the third-quarter report, management said:

"We are actively preparing for the launch of mRNA-1273 and we have signed a number of supply agreements with governments around the world."

The scientific community, as well as investors, are waiting for further updates, each of which influences relevant stock prices. Since the start of the year, MRNA shares are up over 240%.

Investing in the sector via an ETF provides exposure to the gains from vaccine development without needing to monitor the fast-paced scientific developments of each company.

Here's one to consider:

ETFMG Treatments, Testing and Advancements ETF

  • Current price: $27.10
  • 52-week range: $23.80 - $35.15
  • Yield: 1.42%
  • Expense ratio: 0.68%

The ETFMG Treatments, Testing and Advancements ETF (NYSE:GERM) is made up of biopharma businesses that are developing vaccines or other cures as well as diagnostic technology against infectious diseases.

GERM Weekly Chart
GERM Weekly Chart

The fund started trading in June 2020. Although most investors would understandably regard the COVID-19 as the primary focus, there are over 20 epidemic diseases countries are working against.

Thus, the work done by these firms or other newcomers will not end even if there is a vaccine against the novel coronavirus soon. According to a report by MarketsandMarkets, "The global vaccines market is projected to reach USD 58.4 billion by 2024 from USD 41.7 billion in 2019, at a CAGR of 7.0% during the forecast period."

GERM, which has 63 holdings, follows the Prime Treatments, Testing and Advancements Index. The top ten businesses make up about 45% of the fund's net assets of over $50 million.

BioNTech, Moderna, diagnostic test manufacturer Quidel (NASDAQ:QDEL), drug treatment developer Hercules (NYSE:HTGC), life science research and clinical diagnostics firm Bio-Rad Laboratories (NYSE:BIO) and diagnostic information services provider Quest Diagnostics (NYSE:DGX) head the list of firms.

Also, shares of other companies working on a COVID-19 cure are included in GERM. CureVac (NASDAQ:CVAC), Gilead (NASDAQ:GILD), Ibio (NYSE:IBIO), Inovio Pharmaceuticals (NASDAQ:INO), Merck (NYSE:MRK), Novavax (NASDAQ:NVAX), Regeneron Pharmaceuticals (NASDAQ:REGN), Sanofi (NASDAQ:SNY) and Sorrento Therapeutics (NASDAQ:SRNE) are a few such companies among others.

Since its inception, the fund is up over 7% and hit a high of $35.15 on July 20. GERM's short-term fortunes are likely to ebb and flow with vaccine news headlines, especially on the final stages of clinical trials and potential approvals by national authorities.

Bottom Line

A successful vaccine in the coming weeks could significantly influence the global economy and lift hope for 2021. Biotech ETFs, in particular, could profit from a successful vaccine.

Those market participants considering allocating some of their investment capital to biopharma in hopes of a vaccine soon could also research the following ETFs:

  • SPDR® S&P Biotech ETF (NYSE:XBI)
  • VanEck Vectors Biotech ETF (NASDAQ:BBH)
  • Virtus LifeSci Biotech Clinical Trials ETF (NYSE:BBC)
In The COVID Vaccine Race, This ETF May Be A Better Bet Than Moderna Or Pfizer
 

Related Articles

In The COVID Vaccine Race, This ETF May Be A Better Bet Than Moderna Or Pfizer

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
DOWNLOAD APPApp store
Investing.com
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
or
Sign up with Email