How Will Vaccine Arrivals Affect Biotech ETFs? | ETF Trends

November has been a big month for stock and biotech ETFs, and with the Federal Aviation Administration announcing that it supported the “first mass air shipment” of coronavirus vaccines on Friday, pharmaceutical companies and airlines are now readying networks for wide dissemination, which could be a further boon for biotech ETFs.

United Airlines ferried Pfizer’s much-touted coronavirus vaccine from Brussels to Chicago O’Hare International Airport, according to pundits, as pharmaceutical companies, airlines and other parts of the supply chain are setting up for distribution once regulators give the go-ahead. A substantial network that will include cold storage to preserve the vaccines is crucial, given the vaccine’s capricious minus 94 degree Fahrenheit storage requirements.

Competitor Moderna claims its vaccine is stable at 36 to 46 degrees Fahrenheit, the temperature of a standard home or medical refrigerator, for up to 30 days, and can be stored for as much as six months at negative 4 degrees Fahrenheit.

“Several vaccines need continued cold temperatures during transport, which, in some circumstances, require dry ice, a hazardous material,” the FAA said in a statement. “The FAA is working with manufacturers, air carriers, and airport authorities to provide guidance on implementing current regulatory requirements for safely transporting large quantities of dry ice in air cargo.”

While citizens are anxious for a resolution to the pandemic, Pfizer’s vaccine will initially be available only in small quantities. The company has previously said it can produce 50 million doses of its two-dose regimen by the end of the year, a quantity that should be sufficient to immunize roughly 7-8% of the population of the United States.

First a Vaccine Challenge. Now a Logistical One

Limited available airline carriers is one of the challenges to a widespread dissemination of the vaccine.

“As the nation looks forward and takes on the logistical challenges of distributing a vaccine, it will be important to ensure there are sufficient certified employees and planes in service necessary for adequate capacity to complete the task,” Airlines for America, a trade group that represents the largest U.S. airlines, said in a Nov. 18 letter to congressional leaders.

Vaccine news has catalyzed the stock market surge in November, and both stock and biotech ETFs have benefitted.

“With three vaccines now showing efficacy at 90%+ and health officials in the U.S. and EU rushing to approve them, the vaccination process is set to commence before the end of the year,” wrote Adam Crisafulli of Vital Knowledge. “This vaccine optimism is more than offsetting the very grim near-term transmission/mitigation landscape as cases spike and governments take further action to curb the virus spread.”

For investors looking for biotech ETFs to invest in, the iShares Nasdaq Biotechnology ETF (IBB), which advanced more than 3.05% on Friday, is one place to consider. Other popular biotech ETFs include the SPDR S&P Biotech ETF (XBI), VanEck Vectors Biotech ETF (BBH), and Loncar Cancer Immunotherapy ETF (CNCR).

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