Moderna Q2 Earnings, Buyback Plans Lift Biotech ETFs | ETF Trends

Moderna Inc (NasdaqGS: MRNA) shares surged Wednesday, lifting biotechnology sector-related exchange traded funds, after the pharmaceutical company revealed better-than-expected profit and revenue in its latest quarterly report, along with a share buyback plan.

On Wednesday, the Invesco Nasdaq Biotechnology ETF (IBBQ) increased 4.2%, the ETFMG Treatments Testing and Advancements ETF (GERM) advanced 5.5%, and the VanEck Vectors Biotech ETF (BBH) gained 4.2%.

Meanwhile, Moderna shares jumped 16.0% on Wednesday. MRNA makes up 6.5% of IBBQ’s underlying portfolio, 6.2% of GERM, and 6.0% of BBH.

The biotech and pharma company generated $4.75 billion in sales over the second quarter, or a 9% year-over-year rise, as its COVID-19 vaccine continued to support the company’s growth.

“Today’s earnings represent a strong second quarter performance, with $10.8 billion in revenue for the first half of the year. We continue to have advance purchase agreements for expected delivery in 2022 of around $21 billion of sales,” Stéphane Bancel, CEO of Moderna, said in a note.

“Despite the slowing economy and challenges in the biotech industry, Moderna is in a unique position: a platform to drive scale and speed in research of new medicines, a strong balance sheet with $18 billion of cash, and an agile, mission-driven team of over 3,400 people and growing. We will continue to invest and grow as we have never been as optimistic about Moderna’s future.”

Furthermore, investors responded positively to Moderna’s approved plans for $3 billion in stock repurchases.

“Given our strong financial position and commercial momentum, we are announcing today that the Board of Directors has approved a new share repurchase program for $3 billion,” Bancel said.

Looking ahead, the company could continue to find support from its COVID-19 booster shoots as it rolls out an update by late summer. Moderna is currently developing updates to its vaccine to target the newer BA.4 and BA.5 COVID-19 variants that have grown dominant among new infections.

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