Unlocking The Hidden Potential in Cancer Therapeutics Development: The Range Cancer Therapeutics ETF

While biotech, including cancer therapeutic development firms, has weathered a multi-year bear market, there's a glimmer of hope on the horizon. This could be the perfect moment to seize the opportunity and invest in cancer therapeutics stocks! Why are we so optimistic? How can you get in on the action?

Missing Out on a Bargain?

Don't let price alone dictate your move, but when it comes to biotech stocks, the numbers are speaking volumes. According to Stifel Healthcare[1], the entire biotech sector's enterprise value [2] hit just $173 billion on 11/17/23 – a mere fraction of its peak value reached on 2/8/23.

Historically, trading below enterprise value [2] was rare, but times have changed. In September 2021, only 21 biotech companies were trading below this mark, compared to a whopping 200+ in November 2023.

So, if you've been waiting for the right moment, it might just be here…

Multi-Year Bear Market

Biotech stocks, as measured by the Nasdaq Biotech Index, peaked on 8/9/21 and have declined 19.1% through 11/30/23. The index has posted negative returns since 2021, with a -0.6% return for 2021 (although the index fell 13.6% from 8/9/21 – 12/31/21), 10.9% in 2022, and only eeking out a 3.7% return in 2023.[3]

From Gloomy Views to Glowing Opportunities

According to the latest Stifel report, the biotech sector is experiencing negative sentiment – but here's why some investors should be excited.

Drawing from academic evidence, the report cites that sentiment is a contrarian indicator. When the collective mood of investors is negative (positive), stock prices tend to rise (decline).

Looking back at history, during the 2002/3 and 2016 biotech downturns, sentiment was extremely negative, and the Nasdaq Biotech Index took a hit. What followed was the Index bouncing back, tripling from its low both times. Of course, past performance is not predictive of future returns.

Potential Mergers & Acquisitions Activity

Large pharmaceutical companies may lose over $113 billion in revenue over the next five years from drug patent expirations. Historically, large drug companies have not seen a return on their research efforts and have turned to acquisitions to boost their drug pipelines. For example, between 2015 and 2021, the top 20 pharmaceutical companies sourced 65% of (M&A) their new drug approvals from external sources.

As of November 2023, mergers & acquisitions volume was near record levels. Also, based on EBITDA [4], Stifel estimates that pharmaceutical companies have the capacity to continue funding M&A.

How May Investors Gain Exposure to Cancer Therapeutics Stocks?

The Range Cancer Therapeutics ETF (CNCR)

The Range Cancer Therapeutics ETF (CNCR) seeks to track the performance, before fees and expenses, of the Range Cancer Therapeutics Index. The index aims to track the performance of a portfolio of stocks that are involved in the development and distribution of cancer drugs and treatments.

[1] Unless otherwise noted, all data sourced from: Why Invest in Biotech?, Stifel Healthcare, 11/23/23
[2] Enterprise value is a measure of a company’s total value which includes its market capitalization, short-term and long-term debt, and any cash and cash equivalents on its balance sheet.
[3] Source: Nasdaq
[4] Earnings before income tax, depreciation, and amortization

Disclosures

All investing involves risk, and asset allocation and diversification do not guarantee a profit or protection against a loss. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, might be worth more or less than their original cost. ETFs are subject to risks similar to those of stocks, as well as other risks specific to the particular ETF.

ETF shares are traded on exchanges and are traded and priced throughout the trading day. ETFs permit an investor to purchase a selling interest in a portfolio of stocks throughout the trading day. Because ETFs trade on an exchange, ETF shares are bought and sold at market price (not NAV). The prices of ETFs may sometimes vary significantly from the NAVs of a ETFs’ underlying securities. Brokerage commissions will reduce returns.

The Fund is a recently organized investment company with no operating history. As a result, prospective investors have no track record or history on which to base their investment decision. Moreover, investors will not be able to evaluate the Fund against one or more comparable funds on the basis of relative performance until the Funds has established a track record.

The Range Cancer Therapeutics ETF is offered by prospectus. Carefully consider the investment objectives, risks, charges, and expenses. This and other important information can be found in the CNCR ETF prospectus, which should be read carefully before investing and can be obtained here or by calling 1-800-617-0004.

Exchange Traded Concepts, LLC serves as the investment advisor to the Fund. The Fund is distributed by Quasar Distributors, LLC. Quasar is not affiliated with Exchange Traded Concepts, LLC.

Cancer Therapeutics Companies Risk. The success of Cancer Therapeutics Companies heavily depends on the outcomes of clinical trials and obtaining necessary regulatory approvals for the development of new drugs and other treatments for cancer-related conditions. These companies face risks related to the failure of clinical trials, unforeseen safety issues, delays in the regulatory approval process, or failure to obtain approvals altogether. Cancer Therapeutics Companies are highly dependent on the development, procurement and marketing of drugs and the protection and exploitation of intellectual property rights. Changes in healthcare policies, reimbursement rates, patent laws, or regulations governing drug development and commercialization can significantly impact industry and individual companies. These changes may affect profitability, market access, and the viability of certain products or technologies.