Moderna Study Sends Biotech ETFs And Stock Futures Surging

Stock futures rocketed higher and are continuing the uptrend in overnight trading on Tuesday after Moderna said its coronavirus vaccine generated antibodies in all patients in an early trial, creating optimism for a swifter economic recovery.

Futures on the Dow Jones Industrial Average popped 300 points, while the S&P 500 futures and the Nasdaq 100 futures added 0.8% each.

 Biotech company Moderna’s potential vaccine to ward off Covid-19 produced a “robust” immune response in the form of neutralizing antibodies in all 45 patients in its early stage human trial, according to newly released data published Tuesday evening in the peer-reviewed New England Journal of Medicine.

Moderna’s stock spiked more than 12% in after-hours trading on Tuesday, in a move reminiscent of what happened in May, before the stock and broader market gave back gains quickly when it was decided more data was needed.

The biotech company had claimed that the vaccine created neutralizing antibodies against the disease in at least eight participants in May, and with this latest study, there is even more optimism for investors. Those neutralizing antibodies could be valuable in acquiring protection from the coronavirus, according to experts. FDA had recently provided Fast Track status for this vaccine.

“These interim Phase 1 data, while early, demonstrate that vaccination with mRNA-1273 elicits an immune response of the magnitude caused by natural infection starting with a dose as low as 25 [micrograms],” Moderna chief medical officer Dr. Tal Zaks said in a statement in May.

“When combined with the success in preventing viral replication in the lungs of a pre-clinical challenge model at a dose that elicited similar levels of neutralizing antibodies, these data substantiate our belief that mRNA-1273 has the potential to prevent COVID-19 disease and advance our ability to select a dose for pivotal trials,” Zaks then added.

The Principal Healthcare Innovators Index ETF (Nasdaq: BTEC) jumped 2.32% Tuesday, thanks in part to  Moderna, which drove the already hot ETF to new highs.

“This should further increase confidence that we are getting a robust immune response, in that there should be greater confidence that this will be protective to a degree in the transmission of Covid,” Michael Yee, a managing director at Jefferies, said on CNBC’s “Fast Money.” “This is all going along with our positive thesis and our view that both Moderna and Pfizer-BioNTech are definitely on a good track to get a vaccine by the end of the year.”

“In the first full year of sales of its potential vaccine, Jefferies’ model shows it could bring in $2 billion worldwide if roughly 50 million people get the vaccine at $50. This could grow to a peak of $5 billion between 2025 and 2026, according to the note,” according to Business Insider.

Stocks finished Tuesday’s volatile session pushing their highs, after a rough reversal on Monday. The Dow surged more than 500 points to post its best day in two weeks, while the S&P 500 advanced 1.3%, boosted by cyclical names sensitive to the economic recovery, with only the Nasdaq Composite underperforming for a second day.

The U.S. is aiming to deliver 300 million doses of a coronavirus vaccine by early 2021, and companies like Johnson and Johnson are in the competition as well. However, Dr. Anthony Fauci, the nation’s top infectious disease expert, has often lauded Moderna’s potential vaccine.

On Monday, he said he’s “cautiously optimistic” scientists will be able to generate at least one safe and efficacious vaccine by the end of the year or early 2021.

While the process to generate a new vaccine is likely to take some time, rather than pin their hopes on one particular company, investors can bet on a broad swath of biotech companies using ETFs.

Some of the most popular ETFs to consider, or ones with significant allocations of Moderna, include the iShares NASDAQ Biotechnology ETF (IBB), the SPDR S&P Biotech ETF (XBI) and the VanEck Vectors Biotech ETF (BBH), and Loncar Cancer Immunotherapy ETF (CNCR).

For more market trends, visit  ETF Trends.