February 10th marked the semi-annual rebalance and reconstitution of the China BioPharma ETF’s (Nasdaq: CHNA) underlying index. This happens in a few steps.
A committee of advisors that oversees the index gets together and determines the reconstitution, which means they decide if any new companies should be added. For the February meeting, the committee has added seven new companies:
- Alphamab Oncology (HKEX: 9966)
- Ascletis Pharma (HKEX: 1672)
- China Grand Pharmaceutical and Healthcare (HKEX: 512)
- CK Life Sciences (HKEX: 775)
- CStone Pharmaceuticals (HKEX: 2616)
- I-Mab Biopharma (Nasdaq: IMAB)
- Pharmaron Beijing (HKEX: 3759)
Once the index’s holdings have been finalized, a rebalance occurs according to the index’s modified equal weighting methodology. Each constituent is weighted equally, subject to the following adjustments applied depending on a company’s market capitalization to emphasize the role of larger companies.
CHNA ETF then places trades to replicate those changes as closely as possible. Investors in the ETF do not need to take any action since these trades by the fund automatically update their exposure. View all holdings of the China BioPharma ETF.
As of the rebalance, the China BioPharma ETF will have 36 holdings going forward.
To help the fund’s investors and followers learn more about the companies that have been added, we have provided a brief background of their work and what sets them apart. The CHNA ETF is thrilled to welcome each of them to the fund.
Alphamab Oncology (HKEX: 9966)
Alphamab Oncology had its initial public offering (IPO) on the Hong Kong Stock Exchange in December of 2019. As its name implies, the company focuses on developing cancer medicines. Alphamab’s lead programs include a subcutaneous PD-L1 inhibitor, a bi-specific antibody targeting PD-L1 and CTLA-4, and a HER2 bi-specific antibody.
Ascletis Pharma (HKEX: 1672)
Having a history of developing anti-viral medicines for conditions like hepatitis C and the human immunodeficiency virus (HIV), Ascletis has been working lately to see if any of its medicines might contribute to a treatment for the coronavirus. In addition, it is developing a PD-1 inhibitor and is conducting research against non-alcoholic steatohepatitis (NASH).
China Grand Pharmaceutical and Healthcare (HKEX: 512)
China Grand is welcomed back to CHNA ETF after successfully qualifying for the fund’s minimum liquidity threshold. You might recall that last year we visited with the company’s CEO, Rocky Shao, in Hong Kong. As Dr. Shao described in the interview, China Grand has a large ophthalmology franchise in China, owns Sirtex Medical in the United States, and has been transitioning to a model of innovation over time.
CK Life Sciences (HKEX: 775)
CK Life Sciences is part of the conglomerate CK Hutchison, which was founded by retired billionaire Li Ka-shing. The company’s subsidiary Polynoma has a cancer immunotherapy vaccine, seviprotimut-L, currently in phase 3 development for melanoma patients who are at high risk of seeing their cancer recur. This vaccine uses antigens from three melanoma cell lines.
CStone Pharmaceuticals (HKEX: 2616)
CStone Pharmcaceuticals had its initial public offering (IPO) on the Hong Kong Stock Exchange in February of 2019. The company focuses on developing cancer medicines. It has a PD-L1 inhibitor in pivotal trials, and also is developing medicines against targets such as PD-1, CTLA-4 and MEK. It has partnerships with the U.S. companies Agios and Blueprint Medicines to develop some of their lead assets in China.
I-Mab Biopharma (Nasdaq: IMAB)
I-Mab Biopharma recently had its initial public offering (IPO) on Nasdaq in January of 2020. It is developing drugs both in China and globally. In China, some projects in development include a CD38 monoclonal antibody, a B7-H3 monoclonal antibody, a long acting human growth hormone, and a soluble gp130 IL-6 inhibitor. Globally, its pipeline includes a GM-CSF monoclonal antibody, a CD47 monoclonal antibody, and a CD73 monoclonal antibody.
Pharmaron Beijing (HKEX: 3759)
Pharmaron Beijing had an initial public offering (IPO) on the Hong Kong Stock Exchange in November of 2019. It already had previously traded on the Shenzhen Stock Exchange (one of the two main stock exchanges in mainland China). The company is a contract research organization (CRO) that helps other biopharma companies conduct scientific research. It has 7,000 employees across locations in China, the United Kingdom, and the United States.
Thank you for your interest in the China BioPharma ETF. Please be sure to sign up for email alerts below if you would like to receive notification of news, company interviews, and research that we publish from time to time.
Opinions expressed are those of the author or Funds and are subject to change, are not intended to be a forecast of future events, a guarantee of future results, nor investment advice. Fund holdings and allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security. Agios and Blueprint Medicines are not a holding of the fund or affiliated with the fund.