'QQQA' Won’t Miss Its Shot as Pfizer and Moderna Set to Profit with Boosters

Analysts and healthcare investors estimate that Moderna and Pfizer will earn billions from Covid-19 boosters in the coming months and set the stage for a booster market that would be similar to the $6 billion annual flu vaccine market, as reported in Reuters.

The companies have been anticipating the need for boosters for months that would combat new variants as well as protect those who are immunocompromised in which the initial double doses are not as effective.

The FDA authorized the use of a Moderna or Pfizer booster on Thursday for immunocompromised individuals, including organ transplant recipients, cancer patients, and those with HIV, reported CNBC. The Center for Disease Control and Prevention’s advisory board meets today to discuss the shots, and if they issue a recommendation that is then approved by the CDC, booster shots could begin immediately.

Immunocompromised people currently make up 2.7% of the adult population in the U.S. but are 44% of breakthrough Covid infections that are hospitalized. Other countries, such as Germany, Chile, and Israel have experienced the same trend and are currently issuing boosters to those with weakened immune systems and older citizens.

Since the beginning of the pandemic, Pfizer and partner BioNTech, as well as Moderna, have made over $60 billion in sales of shots to date. Analysts anticipate another $6.6 billion for Pfizer and $7.6 billion in 2023, derived mostly from boosters.

“We don’t know what the market forces will be,” Moderna President Stephen Hoge said in an interview with Reuters last week. “At some point, this will become a more traditional market – we’ll look at what are the populations at risk, what value are we creating, and what are the number of products that serve that value. That will ultimately impact price.”

QQQA Invests in Moderna

The ProShares Nasdaq-100 Dorsey Wright Momentum ETF (QQQA) is a smart beta ETF that, despite only holding 21 securities, is more diversified than the broader Nasdaq-100, according to Todd Rosenbluth, Head of ETF and Mutual Fund Research for CFRA.

The Nasdaq-100 Index tracks the largest domestic and international non-financial mega-cap growth stocks of the tech-heavy Nasdaq. It serves as the benchmark for the Invesco QQQ Trust (QQQ), one of the most widely traded ETFs in the world.

QQQA, meanwhile, utilizes a momentum strategy to select top performers within the Nasdaq-100 Index.

To build the portfolio, Dorsey Wright, a leader in momentum investing, uses a “relative strength” signal to select the top 21 companies within the Nasdaq-100 based on their highest price momentum at the time of rebalance.

Unlike the cap-weighted QQQ, QQQA is equal-weighted. Collectively, after its rebalance, the fund now sports a 26.34% allocation to healthcare.

Moderna Inc. (MRNA) is currently the top holding in QQQA at 7.58%: other healthcare sector securities include Illumina (ILMN), a company that creates innovative technology for DNA sequencing, at 4.83%, and Biogen (BIIB), a biotech company, at 4.28%.

QQQA has an expense ratio of 0.58% and carries 21 holdings.

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