The coronavirus outbreak has wreaked havoc on human health globally this year. In such a scenario, the latest progress in the development of vaccines or treatments to combat the disease has raised optimism as well as boosted the biotech sector and related ETFs.

Frontrunners in the vaccine development race are Moderna, AstraZenaca, Johnson & Johnson and Pfizer. On the treatment front, the FDA issued an emergency use authorization for investigational convalescent plasma to treat COVID-19 in hospitalized patients.

While the treatment is yet to face full clinical trials, the FDA feels that the“product may be effective in treating COVID-19 and that the known and potential benefits of the product outweigh the known and potential risks of the product.”

Moreover, the Financial Times reported that the Trump administration is considering providing "emergency use" approval to the experimental coronavirus vaccine from AstraZeneca and Oxford University in October.

In addition to this, the United States has reached a deal with Moderna for 100 million doses of its experimental coronavirus vaccine. Moderna noted that the deal for its vaccine, mRNA-1273, is worth $1.53 billion. Not only this, the rapid progress in its vaccine candidate has given Moderna a place on the Nasdaq Index too (read: Expect Further Rally in Nasdaq-100 ETFs as Moderna Joins).

Small-Cap Biotech in Pre-COVID Period

Defiance ETFs noted that “even before COVID-19, small-cap biotech companies had the advantage of a Food and Drug Administration more receptive to new cutting-edge and rare-disease therapies. They were also strengthened by increased patient lobbying and greater willingness by insurers to pay for treatments.”

Higher chances of mergers and acquisitions, Trump’s tax cuts, a dovish Fed and the U.S. government’s recent mammoth stimulus aid to small and mid-sized companies made the segment winner, per Defiance ETFs. Be it COVID vaccine or cancer research, small-cap biotech companies are making their presence felt in every area. “Government regulation and policies also appear to prioritize these sectors, whose centrality to the wider economy has only been highlighted by the global corona pandemic.”

Against this backdrop, below we highlight a few small-cap or mid-cap biotech ETFs that could be winners over the long term.

Junior Biotechnology ETF

The underlying Nasdaq Junior Biotechnology Index tracks approximately 176 companies from over 16 countries. These are companies engaged in biotech research and development, the sale or licensing of biological substances for the purposes of drug discovery and diagnostic development; and pharmaceutical manufacturers of prescription or over-the counter drugs, including vaccines and development and manufacturing companies. The fund charges 45 bps in fees.

iShares Genomics Immunology and Healthcare ETF (IDNA Quick QuoteIDNA - Free Report)

The underlying iShares Genomics Immunology and Healthcare ETF seeks to track the investment results of an index composed of developed and emerging market companies that could benefit from the long-term growth and innovation in genomics, immunology and bioengineering. The fund charges 47 bps in fees.

Principal Healthcare Innovators Index ETF 

The 206-stock fund seeks to tap into the increasing demand for healthcare solutions as demographic trends have driven healthcare spending to more than double in the last 20 years.

Virtus LifeSci Biotech Clinical Trials ETF (BBC Quick QuoteBBC - Free Report)

BBC tracks an equally weighted index of U.S.-listed biotech companies with lead drugs in various phases of clinical trials. The fund charges 79 bps in fees.

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