Biotechnology sector-related exchange traded funds were among the best performers Tuesday as the government program “Operation Warp Speed” allocates billions of dollars for a quick development and delivery of a coronavirus vaccine.
On Tuesday, the Invesco DWA Healthcare Momentum Portfolio (NASDAQ: PTH) rose 3.6%, SPDR S&P Biotech ETF (XBI) gained 2.5% and iShares Nasdaq Biotechnology ETF (IBB) increased 1.2.
The Federal government announced the largest Cvoid-19 contract to date, a $1.6 billion contract with Novavax (NasdaqGS: NVAX), CNN reports.
Novavax shares surged 33.3% on Tuesday. NVAX makes up 6.6% of PTH’s underlying portfolio and 1.7% of XBI.
“It speaks to the confidence that they have in our platform to be able to develop a vaccine,” Stanley Erck, Novavax’s President and CEO, said told CNN.
Erck projected that Novavax’s vaccine could be on the market by the first quarter of next year.
“I think we have a high level of confidence that our vaccine will set off the appropriate immune response to generate lots of antibodies,” Erck added.
Novavax is the fourth to receive federal support for large-scale Phase 3 clinical trials and to manufacture a Covid-19 vaccine.
Under Operation Warp Speed, Regeneron (NasdaqGS: REGN) also received a $450 million contract with the U.S. government for its coronavirus therapy, CNBC reports.
Regeneron shares increased by 3.6% on Tuesday. REGN makes up 6.4% of IBB’s underlying holdings.
Regeneron’s Covid-19 anti-viral antibody cocktail, REGN-COV2, is in separate clinical trials assessing its effectiveness in preventing and treating Covid-19. The company is testing the antibody cocktail in people recently exposed to the disease and among those whom have contracted the disease.
The fund agreement covers a fixed number of bulk lots that are expected to be completed by the fall of 2020.
Antibody drugs could treat sick Covid-19 patients, and could also prevent people who had been exposed to the virus from becoming sick or offer some short-term immunity.
The government grants are paid out through “Operation Warp Speed,” the Trump administration’s plan to quickly develop and deliver a viable coronavirus vaccine.
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