J&J ETFs to Gain on Upbeat COVID-19 Vaccine Data

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Johnson & Johnson JNJ has again announced positive data highlighting the efficiency of its single-shot COVID-19 vaccine in providing protection against COVID-related hospitalizations. In this regard, Mathai Mammen, M.D., Ph.D., Global Head, Janssen Research & Development, Johnson & Johnson has reportedly said that “Our single-shot vaccine generates strong immune responses and long-lasting immune memory. And, when a booster of the Johnson & Johnson COVID-19 vaccine is given, the strength of protection against COVID-19 further increases.”

– Zacks

According to Johnson & Johnson, the largest real-world evidence study for a COVID-19 vaccine highlighted stable vaccine effectiveness of 79% (CI, 77%-80%) for COVID-induced infections and 81% (CI, 79%-84%) for hospitalizations due to COVID-19. Moreover, there was no evidence suggesting any decline in the vaccine efficiency over the study period. The study involved 390,000 people who were administered the Johnson & Johnson single-shot COVID-19 vaccine against roughly 1.52 million unvaccinated people matched on age, sex, time, three-digit zip code, and comorbidities and predictors for COVID-19 infection severity and conducted over the March to late July 2021 period (per the company).

Positive data was released with respect to the booster shot as well. Per the company, data from the Phase 3 ENSEMBLE 2 study demonstrated that another shot of the Johnson & Johnson COVID-19 vaccine administered 56 days after the first resulted in 100% protection (CI, 33-100%) against severe/critical COVID-19, at least 14 days after-final vaccination. The data also highlighted that 75% protection against symptomatic (moderate to severe/critical) COVID-19 worldwide (CI, 55-87%). Notably, 94% protection was observed against symptomatic (moderate to severe/critical) COVID-19 in the United States (CI, 58-100%).

ETFs That May Gain

Considering the important role played by coronavirus vaccines in Johnson & Johnson’s recent earnings results, the latest developments can be a positive for the stock. Notably, Johnson & Johnson’s single-dose COVID-19 vaccine, which was approved for emergency/conditional use in some countries this year, generated sales of $164 million in the second quarter compared with $100 million in the first quarter.

The company raised its guidance for 2021 earnings and sales to include a $2.5-billion contribution from its COVID-19 vaccine as well as expected growth in the base business. J&J expects more than half of the $2.5 billion in revenues from COVID-19 vaccines to come through in the fourth quarter.

The news has put the spotlight on a number of ETFs that could benefit the most due to their high exposure to J&J. Let’s take a look at these funds:

iShares U.S. Pharmaceuticals ETF IHE

This ETF provides exposure to 47 companies that manufacture prescription or over-the-counter drugs or vaccines by tracking the Dow Jones U.S. Select Pharmaceuticals Index. Of these, Johnson and Johnson takes the top spot, accounting for about 22.6% share. The product charges 42 bps in fees (read: Healthcare ETFs to Gain on $65-Billion Pandemic Protection Plan).

iShares Evolved U.S. Innovative Healthcare ETF IEIH

This actively-managed ETF employs data science techniques to identify companies with exposure to the innovative healthcare sector. Holding 249 stocks in its basket, J&J holds the second position with a 9.1% allocation. The product charges 18 bps in annual fees (read: Pharma & Healthcare ETFs at a One-Year High: Here’s Why).

The Health Care Select Sector SPDR Fund XLV

The most-popular healthcare ETF, XLV follows the Health Care Select Sector Index. Expense ratio is 0.12%. In total, the fund holds 64 securities in its basket, with Johnson & Johnson taking the top spot, accounting for 8.7% of the assets (read: 5 ETFs to Combat Stimulus Tapering Concerns, Virus Woes).

iShares U.S. Healthcare ETF IYH

This fund offers exposure to 116 securities by tracking the Russell 1000 Health Care RIC 22.5/45 Capped Gross Index. Here again, Johnson & Johnson dominates the fund’s returns with 8.1% of the total assets. The product charges 41 bps in annual fees (read: Climb the “Wall of Worry” With These ETFs).

First Trust Nasdaq Pharmaceuticals ETF FTXH

This ETF tracks the Nasdaq US Smart Pharmaceuticals Index and holds 28 stocks in its basket. Of these, Johnson & Johnson occupies the second position with a 7.9% allocation. It charges 60 bps in annual fees.

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Johnson & Johnson (JNJ): Free Stock Analysis Report
Health Care Select Sector SPDR ETF (XLV): ETF Research Reports
iShares U.S. Healthcare ETF (IYH): ETF Research Reports
iShares U.S. Pharmaceuticals ETF (IHE): ETF Research Reports
First Trust NASDAQ Pharmaceuticals ETF (FTXH): ETF Research Reports
iShares Evolved U.S. Innovative Healthcare ETF (IEIH): ETF Research Reports
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