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CNCR ETF Rebalance – December 2019

Dec. 20, 2019

December 17 marked the semi-annual rebalance and reconstitution of the Cancer Immunotherapy ETF’s (Nasdaq: CNCR) underlying index. This happens in two steps. First, 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. Second, once the index’s holdings have been finalized, a rebalance occurs and each company is given equal weight. CNCR ETF then places trades to replicate those changes as closely as possible. View all holdings of the Cancer Immunotherapy ETF.

For the December meeting, the committee has added two new immunotherapy companies. They are BioNTech (Nasdaq: BNTX) and NextCure (Nasdaq: NXTC).

These companies replace MacroGenics (Nasdaq: MGNX) and Seattle Genetics (Nasdaq: SGEN).

Brad Loncar, CEO of Loncar Investments and Chairman of the Index Committee, had the following comments, “With only two components changing, I am encouraged by the overall stability in composition of the index during this rebalance. We are happy to add BioNTech and NextCure and wish them best of luck in their clinical trials.”

To help the fund’s investors and followers learn more about these additions, we have provided a brief background on their work and what sets them apart. The CNCR ETF is thrilled to welcome both companies to the fund.

BioNTech (Nasdaq:BNTX)

BioNTech (Nasdaq: BNTX)

BioNTech was founded over 10 years ago with the goal of developing cancer medicines that are personalized to each individual patient. Today BioNTech has over 20 product candidates in development, eight that have reached the clinical stage in nine ongoing clinical trials, and the company is working with seven pharmaceutical partners. BioNTech is best known for its personalized messenger RNA (mRNA) platform. The aim is to deliver mRNA into cells and then have those cells create tools like tumor-specific antigens or cytokines that will help the body mount an immune response against cancer. BioNTech and its partners currently have trials using mRNA against cancers such as melanoma, head and neck cancer, and triple negative breast cancer.

While BioNTech is well known for its mRNA-based approach, some people might not know that mRNA is only one of four areas the company is working on. There is also an antibody platform that currently has both monoclonal antibodies and bispecific antibodies in the clinic, a preclinical cell therapy platform that is researching chimeric antigen receptor T-cell (CAR-T) and T-cell receptor (TCR) technologies, and a small molecule TLR7 agonist that is preclinical as well. As you can see, BioNTech is a company with a robust and diverse pipeline. We look forward following along as more BioNTech’s discoveries enter clinical trials.

NextCure (Nasdaq: NXTC)

NextCure (Nasdaq: NXTC)

NextCure is an immunotherapy company that has quite a famous scientific founder, Lieping Chen, M.D., Ph.D.. Dr. Chen is currently United Technologies Corporation Professor in Cancer Research and Professor of Immunobiology, of Dermatology and of Medicine (Medical Oncology); Co-Leader, Cancer Immunology, at Yale Cancer Center. He is credited with being the first to discover “co-stimulation of tumor immunity” in 1992 and his work eventually led to the development of the famous PD-(L)1 inhibitor cancer immunotherapy medicines that are the foundation of care for many cancers today.

NextCure’s core science is based on a platform it calls Functional, Integrated, NextCure Discovery in Immuno-Oncology, or FIND-IO for short. The company is trying to use this to find novel targets that might help patients respond to immunotherapies in the future who are not responding to them today. Its first medicine in development, called NC318, targets an immunomodulatory protein called Siglec-15. This is a novel, first in class medicine, which means that NextCure is the first company to develop something against the Siglec-15 target. We agree that patients need new options and we are pleased to support companies that are researching their own novel discoveries in this way.

NextCure recently made headlines after it presented an update of its early-stage trial of NC318 at an immunotherapy conference in November called SITC. 49 patients had been treated with various doses. In addition to the drug being well tolerated, some patients appeared to have responses. For example, in patients with non-small cell lung cancer, there was one complete response (this means the patient showed an absence of observable disease after treatment), one partial response, and four patients with stable disease. These are patients who were sadly no longer responding to other drugs like PD-(L)1 inhibitors so it is possible that NC318 might have produced the responses. We look forward to seeing updates from NC318 over the coming year.

Thank you for your interest in the field of immunotherapy and the Cancer Immunotherapy ETF. Be sure to sign up for email alerts below if you would like to receive notification of other news, company interviews, and research that we publish from time to time.

Opinions expressed are those of the author, interviewee, 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. United Technologies is not a holding of the Fund or affiliated with the Fund.

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CNCR Prospectus CHNA Prospectus

A basis point is a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01% (0.0001).

The Loncar Cancer Immunotherapy Index is an index of 30 securities that have a strategic focus on the area of cancer immunotherapy, or harnessing the immune system to fight cancer. Quotes for the index can be found under the symbol “LCINDX” on the Bloomberg Professional service and other financial data providers. One may not directly invest in an index.

The Loncar China BioPharma Index is an index of 50 securities that have a strategic focus on advancing China’s biopharma industry. Quotes for the index can be found under the symbol “LCHINA” on the Bloomberg Professional service and other financial data providers. One may not directly invest in an index.

Holdings are subject to change.

The Hong Kong Stock Exchange (HKEX) is the primary stock exchange in the Hong Kong Special Administrative Region of China. Nasdaq is one of the primary stock exchanges in the United States.

Carefully consider the Fund’s investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained at Read the prospectus carefully before investing.

Investing involves risk. Principal loss is possible. The fund may trade at a premium or discount to NAV. CNCR will invest in immunotherapy companies which are highly dependent on the development, procurement and marketing of drugs and the protection and exploitation of intellectual property rights. A company’s valuation can also be greatly affected if one of its products is proven or alleged to be unsafe, ineffective or unprofitable. The costs associated with developing new drugs can be significant, and the results are unpredictable. The process for obtaining regulatory approval by the U.S. Food and Drug Administration or other governmental regulatory authorities is long and costly and there can be no assurance that the necessary approvals with be obtained and maintained. The Fund may invest in foreign securities, which involve political, economic, currency risk, greater volatility, and differences in accounting methods. The Fund is non-diversified meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Therefore, the Fund is more exposed to individual stock volatility than a diversified fund. The Fund invests in smaller companies, which may have more limited liquidity and greater volatility compared to larger companies. The Fund is not actively managed and may be affected by a general decline in market segments related to the index. The fund invests in securities included in, or representative of securities included in, the index, regardless of their investment merits. The performance of the fund may diverge from that of the Index and may experience tracking error to a greater extent than a fund that seeks to replicate an index. Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.

RISK FOR THE CHNA ETF: The biopharmaceutical industry in China is strictly regulated and changes in such regulations, including banning or limiting certain products, may have a material adverse effect on the operations, revenues, and profitability of Biopharma Companies. The laws and regulations applicable to the process of administrative approval of medicine and its production in China require entities producing biopharma products to comply strictly with certain standards and specifications promulgated by the government. Changes in currency exchange rates and the relative value of non-U.S. currencies will affect the value of the investment. Currency exchange rates can be very volatile and can change quickly and unpredictably. Investments in non-U.S. securities involve certain risks that may not be present with investments in U.S. securities. For example, investments in non-U.S. securities may be subject to risk of loss due to foreign currency fluctuations or to political or economic instability. Investments in non-U.S. securities also may be subject to withholding or other taxes and may be subject to additional trading, settlement, custodial, and operational risks. These and other factors can make investments in the Fund more volatile and potentially less liquid than other types of investments. To the extent the Fund invests a significant portion of its assets in the securities of companies of a single country or region, such as China, it is more likely to be impacted by events or conditions affecting that country or region. The Fund is a recently organized, non-diversified management investment company with no operating history. As a result, prospective investors have no track record or history on which to base their investment decision. The Fund is considered to be non-diversified, which means that it may invest more of its assets in the securities of a single issuer or a smaller number of issuers than if it were a diversified fund. The Fund is not actively managed and the Fund's sub-adviser would not sell shares of an equity security due to current or projected underperformance of a security, industry or sector, unless that security is removed from the Index or the selling of shares of that security is otherwise required upon a reconstitution of the Index in accordance with the Index methodology. To the extent the Fund invests more heavily in particular sectors of the economy, its performance will be especially sensitive to developments that significantly affect those sectors."

Diversification may not protect against market risk.

Exchange Traded Concepts, LLC serves as the investment advisor, and Vident Investment Advisory, LLC serves as a sub advisor to the fund. The Funds are distributed by Quasar Distributors, LLC, which is not affiliated with Exchange Traded Concepts, LLC or any of its affiliates.