(Stephen Dawson, Unsplash)
9 Dec. 2021. A new exchange traded fund or ETF is underway for individuals to invest in companies developing vaccines or therapies with messenger RNA. The Direxion mRNA ETF (Ticker: MSGR) is a product of Direxion, an investment company in New York that puts together ETFs for individual investors.
Messenger RNA or mRNA is a nucleic acid based on the genetic code from DNA, with instructions for cells to produce the amino acids in proteins for cellular functions, and a platform for therapies and vaccines now center stage in the Covid-19 pandemic. But ribonucleic acid, or RNA, by itself breaks down quickly in the body, thus it needs delivery methods that provide stability and durability. At the same time, even stable treatments or vaccines with natural mRNA would likely require frequent repeat doses, thus their delivery materials need to be safe for repeated use. As a result, biotechnology companies are creating longer-acting synthetic forms of mRNA, as well as delivery mechanisms to ensure safety and stability.
An exchange traded fund tracks a collection of assets, such as commodities, companies in a particular industry, or entire exchanges like S&P, but can be purchased or sold on a stock exchange like individual company shares. For this ETF, Direxion is tracking 24 publicly traded biotechnology companies in North America and Europe working in mRNA creating therapeutics or vaccines. Those companies are indexed in the Messenger RNA Technology NTR Index compiled by BITA GmBH in Frankfurt, Germany that constructs specialized investment indices. Direxion says as of 8 Dec., MSGR is trading at $25.00 a share.
More than Covid-19 vaccines
Direxion says as of 19 Nov., the 24 companies in MSGR have a median market capitalization of $2 billion, ranging in value from $41 million to $107 billion. The list includes the now-household names Moderna and BioNTech, developers of the leading approved vaccines preventing Covid-19 disease, as well as established biopharmaceutical companies such as Alnylam Pharmaceuticals and Vertex Pharmaceuticals, and more recently founded enterprises.
As Direxion’s managing director David Mazza notes in a company statement, it’s taken a long time for mRNA to get a foothold in the industry. “For years, messenger RNA (mRNA) technologies struggled to gain acceptance,” says Mazza. “The Covid-19 pandemic changed all of that, thanks to the highly effective vaccines developed using mRNA to combat the novel coronavirus and its emerging variants.”
Mazza says as well that mRNA has wider applications beyond Covid-19. Among the companies in MSGR is Dicerna Pharmaceuticals in Lexington, Massachusetts, a biotechnology company developing therapies with RNA-interference, acquired last month by global drug maker Novo Nordisk for $3.3 billion, as reported by Science & Enterprise. Another MSGR company reported on recently by Science & Enterprise is Gritstone Bio in Emeryville, California. In February, Gritstone licensed its cancer immunotherapy to Gilead Sciences in a $785 million deal, and in August received $20.6 million from CEPI to develop a vaccine against Covid-19 variants.
Editor’s note. This story reports on developments in business and science and should not be construed as a solicitation for investments. Consult your financial adviser for investment advice.
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