Healthcare ETFs to Watch Post Merck-Moderna Cancer Vaccine Breakthrough
Merck MRK and Moderna MRNA delivered a significant breakthrough in melanoma treatment, with their jointly developed mRNA cancer vaccine showing positive results in its first-ever Phase 3 trial. This vaccine, combined with Merck’s exemplary immunotherapy Keytruda, met the primary goal of significantly extending the period patients lived without melanoma returning compared with Keytruda alone.
The immediate market reaction highlighted how important the trial could be for both healthcare stocks. On Aug. 19, Moderna’s shares skyrocketed nearly 177% following the announcement, whereas Merck rose 12.60%.
With rising incidence of skin cancers worldwide, along with the rapid adoption of innovative immuno-oncology drugs, the latest development puts a spotlight on MRK and MRNA, as well as healthcare exchange-traded funds (ETFs) holding them.
Immunotherapy Gaining Prominence in Melanoma Treatment
Melanoma treatment has evolved substantially over the past decade as checkpoint inhibitors and targeted therapies have replaced many older chemotherapy approaches.While traditional chemotherapy works by directly attacking rapidly dividing cells, immunotherapy helps the patient’s immune system to destroy cancer cells and has led to significant progress in treating patients with advanced melanoma over the past few years.
Per the Institute of Cancer Research’s data published in 2024, more than 52% of people diagnosed with advanced melanoma are now surviving the disease for 10 years or more when they receive a combination immunotherapy treatment compared with only 1 in 20 patients with advanced melanoma surviving for five years, just 15 years ago.
Consequently, immunotherapy drugs like Merck’s Keytruda or Bristol Myers Squibb‘s BMY Nivolumab are gaining strong traction in melanoma treatment.
What Are Market Growth Prospects?
With an estimated 234,680 cases of melanoma expected to be diagnosed in the United States in 2026, melanoma treatment, particularly immunotherapy, offers solid market growth opportunities.
To this end, the global melanoma therapeutics market, estimated at $5.83 billion in 2024, is projected to reach $10.27 billion by 2030, witnessing a 9.9% CAGR, according to Grand View Research. Importantly, immunotherapy is the largest and fastest-growing product segment, with the global melanoma immunotherapy market estimated to see a CAGR of 11.7% to reach $4.62 billion by 2030.
Against this backdrop, the latest breakthrough achieved by the cancer vaccine, co-developed by Merck and Moderna, should help these stocks capture a larger portion of the aforementioned melanoma immunotherapy market.
ETFs to Watch
Reuters reported that Barclays analysts estimate the Merck-Moderna vaccine to generate up to $3 billion in annual melanoma-related sales by 2035.
Against this backdrop, ETF investors eager to capitalize on the expected benefits of this vaccine breakthrough may want to gain exposure to the following healthcare ETFs, which hold Merck or Moderna or both.
iShares Genomics Immunology and Healthcare ETF IDNA is a thematic healthcare ETF designed to capture long-term growth of genomics, immunology and bioengineering. MRNA holds 8.85% of this fund, enjoying the first spot, whereas MRK holds 3.66% at the seventh position.
It has net assets worth $256.7 million and an expense ratio of 0.47%. The fund trades at an average daily volume of 90,628 shares.
VanEck Pharmaceutical ETF PPH is a focused healthcare ETF that provides exposure to major drugmakers and pharmaceutical companies globally. MRK holds 10.94% of this fund, enjoying the second spot.
It has total net assets worth $1.03 billion and an expense ratio of 0.36%. The fund trades at an average daily volume of 280,123 shares.
Tema Oncology ETF CANC is an actively managed thematic ETF offering exposure to biotech companies shaping the future of cancer therapeutics and care. MRK holds a weightage of 3.56% in this fund, enjoying the seventh position.
It has assets under management worth $211.1 million and an expense ratio of 0.75%. The fund trades at an average daily volume of 33,006 shares.
State Street SPDR S&P Biotech ETF XBI provides exposure to biotechnology stocks. MRNA holds 2.76% of its portfolio, having the first position.
It has assets under management worth nearly $11.40 billion and an expense ratio of 0.35%. The fund trades at an average daily volume of 9.02 million shares.
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Merck & Co., Inc. (MRK) : Free Stock Analysis Report
Moderna, Inc. (MRNA) : Free Stock Analysis Report
State Street SPDR S&P Biotech ETF (XBI): ETF Research Reports
VanEck Pharmaceutical ETF (PPH): ETF Research Reports
iShares Genomics Immunology and Healthcare ETF (IDNA): ETF Research Reports
Bristol Myers Squibb Company (BMY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).