Although biotechnology stocks have been lackluster for the past year, the industry is gaining increased attention of late, not just for the role it’s played in combatting the COVID-19 pandemic, but also for the headlines that several biotech firms have made in accelerating methods to diagnose and treat cancer. Some key players in the industry have announced partnerships and initiatives this week that could garner investor interest — and possibly lead a path toward a sector rebound.
For example, Amgen (NASDAQ:AMGN) and Arrakis Therapeutics announced on Tuesday a research collaboration focused on the discovery and development of RNA degrader therapeutics against a range of difficult-to-drug targets in multiple therapeutic areas. This new class of “targeted RNA degraders” consists of small molecule drugs that selectively destroy RNAs encoding disease-causing proteins by inducing their proximity to nucleases.
Amgen, which discovers, develops, manufactures, and delivers innovative human therapeutics, is the largest holding in the Invesco Nasdaq Biotechnology ETF (IBBQ), a biotech ETF that tracks the Nasdaq Biotechnology Index (NBI).
IBBQ, which debuted last June, has a total expense ratio of 0.19% and is modified market cap-weighted and includes large-, mid-, and small-cap companies at every stage of growth.
Another large holding in IBBQ is antiviral drug developer Gilead Sciences (NASDAQ:GILD), which announced on Monday that it has entered into two clinical trial collaboration and supply agreements with Merck to evaluate the combination of Gilead’s Trop-2 targeting antibody-drug conjugate Trodelvy® and Merck’s anti-PD-1 therapy KEYTRUDA® in first-line metastatic non-small cell lung cancer.
TipRanks equity research analyst Stavros Georgiadis said that he is “bullish” on Gilead’s company’s stock, “not only because of its attractive dividend yield but because of its strong fundamentals despite a bad financial performance in 2020.” Georgiadis added that the company’s stock “is a prime candidate among [TipRanks’] Top Dividend Stocks.”
Additionally, biotech firm Illumina (NASDAQ: ILMN), which makes up 5.6% of IBBQ’s holdings, announced two separate partnerships on Monday designed to advance cancer treatments. In one, it is teaming up with Boehringer Ingelheim to develop companion diagnostics for several programs in Boehringer Ingelheim’s oncology pipeline to accelerate the development of therapy selection and precision medicines for patients with advanced cancer. In the other, it has formed a multi-year partnership with Agendia N.V., a world leader in precision oncology for breast cancer, to co-develop in vitro diagnostic tests for oncology testing.
Illumina also on Monday announced a multi-year agreement with Vanderbilt University Medical Center subsidiary Nashville Biosciences to accelerate medicines development through large-scale genomics and the establishment of a preeminent clinico-genomic resource.
Home to 374 stocks, IBBQ has a roster that features both potential buyers and sellers. Constituents, according to Invesco, include a high concentration of companies that were crucial to COVID vaccines and treatments, as well as to the continued growth of genomics, wellness, and advanced medical therapeutics.
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