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

 | Nov 03, 2020 05:29

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:

h2 Companies Approaching The Finishing Line/h2

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.

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Here's one to consider:

h2 ETFMG Treatments, Testing and Advancements ETF/h2
  • 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.