Innovation in Healthcare: HTEC's Q1 2024 Index Rebalance

This article examines the first index rebalance and reconstitution of 2024 for the ROBO Global Healthcare Technology and Innovation Index, which underlies the $63 million ROBO Global Healthcare Technology and Innovation ETF (HTEC). Index movements are due to scoring changes from a combination of sector trends, individual companies’ financial health, quantitative analysis, and the insights of seasoned professionals and advisor network. The rebalance took place as of March 15.

VettaFi’s ROBO Global Healthcare Technology and Innovation Index provides investors with a comprehensive, transparent, and diversified benchmark representing the global value chain of disruptive and emerging technologies in the healthcare sector. The index holds companies that derive a distinct portion of their business and revenue from the field of healthcare technologies and have the potential to grow within this space through innovation and/or market adoption of their products and/or services. 

The changes this quarter were:  

HTEC Index Rebalance: Additions

United Therapeutics (Regenerative Medicine)

United Therapeutics was founded in 1996 to find a cure for pulmonary arterial hypertension. It has since become a leader in treating rare diseases and advancing organ manufacturing. It has a strong portfolio of FDA-approved therapies providing a solid financial foundation and free cash flow. The company also is pioneering genetically modified xenotransplants and 3D bioprinted organs to address the shortage of transplantable organs.

Index Rebalance 1

Revolutionizing Regenerative Medicine: United Therapeutics pioneers bioprinting technology that brings us closer to a future with readily available transplantable organs

United Therapeutics’ groundbreaking work includes the first pig-to-human heart transplant, the development of the most complex 3D-printed human lung scaffold, and the first bioengineered organ product to reach clinical trials for acute liver failure. These achievements position the company to transform treatment for rare diseases and end-stage organ failure. 

CRISPR Therapeutics (Precision Medicine)

CRISPR Therapeutics is a leading gene-editing company focused on developing transformative therapies for serious diseases using its proprietary CRISPR/Cas9 platform. The firm was co-founded by Nobel Prize winner Emmanuelle Charpentier.

Index Rebalance 2

Unlocking the Potential of Genes: CRISPR Therapeutics utilizes revolutionary gene-editing technology to develop life-changing treatments

The company’s lead product, Exa-cel (CTX001), was developed in partnership with Vertex Pharmaceuticals. It is the first CRISPR/Cas9-based therapy to demonstrate proof-of-concept in two hemoglobinopathies — sickle cell disease and transfusion-dependent beta-thalassemia. CRISPR has pivotal trials around the treatment underway and a rolling BLA submission to the FDA initiated in late 2022.

Beyond Exa-cel, CRISPR Therapeutics is advancing a deep pipeline of potentially curative therapies. These include regenerative medicine programs in diabetes; CTX130, an allogeneic CAR-T cell therapy targeting CD70 for both solid tumors and certain hematologic malignancies; and a collaboration with Capsida Biotherapeutics targeting lupus and other autoimmune disorders. 

HTEC Index Rebalance: Removals

Avanos Medical (Medical Instruments)

Avanos Medical faces persistent challenges around meeting financial expectations, intensifying competition in key markets, and a lack of recent innovation. The company has experienced declining revenues, net losses, and underperformance in its pain management portfolio, despite the benefits of its products in this area. Avanos Medical also faces increasing pressure from novel pain management drugs, such as Vertex’s VX-548, and other competitors.  

Insulet (Medical Instruments) 

The company saw a rebound in Q4 following an oversold period in Q3 due to the GLP-1 sell-off. However, the company faces significant challenges. Insulet finds itself caught between rapid innovation in the gene editing space for Type 1 Diabetes — its largest market — and the impact of GLP-1 and other interventions on the previously growing type 2 diabetes market. It also does not demonstrate innovation in drug delivery for other therapeutic areas. As a result, Insulet must address reduced growth outlooks.  

For more information on the methodology of the ROBO Global Healthcare Technology and Innovation Index,  please visit the index’s home page.

For more news, information, and strategy, visit the Disruptive Technology Channel.

VettaFi LLC (“VettaFi”) is the index provider for HTEC, for which it receives an index licensing fee. However, HTEC is not issued, sponsored, endorsed or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of HTEC.