BioShares Launches Two New Biotechnology ETFs
(Nasdaq: BBC, BBP)
BioShares Biotechnology Funds give investors unique and selective exposure to the dynamic, high-growth biotechnology sector
New York, December 17, 2014 — LifeSci Index Partners, LLC (“LSIP”), a New York City-based investment advisor and index provider, today launched the BioShares™ Biotechnology Clinical Trials Fund (Nasdaq: BBC) and the BioShares™ Biotechnology Products Fund (Nasdaq: BBP) (together, “the Funds”). The Funds are designed by a team of biotechnology investment specialists and allow investors, for the first time, to choose from two distinct groups of stocks that are typically grouped together in other funds – advanced products stage companies with FDA approved drugs and earlier clinical trials stage companies.
The Funds are passively managed exchange traded funds (“ETFs”) and are designed to track their respective indexes, the LifeSci Biotechnology Clinical Trials Index and the LifeSci Biotechnology Products Index. The indexes are calculated and disseminated by an independent third party, Indxx, LLC.
Biotechnology is one of the most dynamic, high-growth sectors in the global economy today and has been one of the best performing sectors in the last two years. Everything ranging from antivirals, antibiotics and cancer-fighting medicines to gene therapies, cell-based therapies and enzyme replacement therapies are developed in the biotechnology space. The sector is also incredibly diverse, ranging from nimble, entrepreneurial start-ups to more-established global giants.
“The landscape of the biotechnology sector has experienced dramatic shifts since the IPOs of Cetus and Genentech in the early 1980s,” said LifeSci Index Partners co-founder, Paul Yook. “Our BioShares funds are designed with the current biotechnology market in mind and offer investors unique and diversified portfolios of entrepreneurial biotechnology stocks by applying our rules-based index methodology.”
Both indexes have been designed from the ground up by a seasoned team of experts to provide previously unavailable, targeted exposure to clinical trials stage and products stage biotechnology companies. Headed by scientists with PhDs in organic chemistry, molecular biology and neurobiology, as well as investment professionals with decades of experience in the health care sectors, LifeSci Index Partners’ insight into the biotechnology investment space is unique.
Andrew McDonald, Ph.D., LifeSci Index Partners’ Chief Executive Officer and former medicinal chemist, explained the critical differences between the funds, “Clinical Trials stocks can often have dramatic volatility especially around clinical trial data releases, but these binary events can also offer significant rewards to risk-tolerant investors. Products companies, on the other hand, have much of their clinical data risk behind them and offer investors a window on sales ramps of new drug launches.”
Biotechnology Clinical Trials companies, such as those found in BBC, conduct clinical human trials with the goal of eventually gaining FDA approval. They work at the cutting edge of experimental biotechnology: taking risks, testing out innovative approaches and novel compounds that, if approved, could one day become blockbuster drugs.
Biotechnology Product companies, such as those found in BBP, have developed at least one drug that has been approved by the Food and Drug Administration (FDA) and has gone into commercial production. These companies devote their energies toward sales and marketing, attempting to raise awareness of their new product launches.
Potential index constituents are first screened for market capitalization; a minimum of $250 million in market capitalization is required for inclusion and demonstrates institutional backing. Potential constituents are further screened for liquidity and must have a minimum average daily volume of $1 million to ensure that the security can be easily bought and sold on the open market.
Both indexes employ an equal weighting approach that allows each security’s performance to affect its ETF equally, regardless of the size of the company. In this way, a relatively small firm enjoying a major breakthrough can have a meaningful impact on an index. An equal weighting also serves to minimize the outsize impact that a handful of mega-cap biotechnology companies can have on more traditional, market cap weighted indexes.
ABOUT LIFESCI INDEX PARTNERS, LLC
LifeSci Index Partners, LLC is an index provider of biotechnology-focused stock market indices and also serves as the investment sub-advisor for the BioShares exchange traded funds. The principals of our firm are also founders of and/or are affiliated with LifeSci Advisors, LLC, a unique investor relations consultancy founded to provided companies in the life sciences a comprehensive solution to investor communications and outreach. For more information, please visit bioshares.com.
Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Funds’ prospectuses, which can be obtained by calling 1-(888) 383-4184 or at www.bioshares.com. Read the prospectuses carefully before investing.
An investment in the Funds is subject to investment risks; therefore you may lose money by investing in the Funds. There can be no assurance that the Funds will be successful in meeting their investment objectives. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility.
There are additional risks related to investing in the biotechnology sector. The Funds’ assets will be concentrated in the biotechnology sector, which means the Funds will be more affected by the performance of the biotechnology sector than a fund that was more diversified. The securities of biotechnology companies, especially those of smaller or newer companies, tend to be more volatile than those of companies with larger capitalizations or markets generally.
Risks associated with equally-weighted indexes. Equal weighting is a method of weighting index stocks whereby the same exposure is provided to both the smallest and largest companies included in the Index. Because the indexes use equal weighting, the Funds will likely have greater exposure to the small and mid cap stocks in its portfolio than it would if it used a market capitalization weighting.
The information presented here is for informational purposes only. It was prepared on information and sources that we believe to be reliable, but we make no representations or guarantees as to the accuracy or the completeness of the information contained herein.
This information is not intended to be individual or personalized investment or tax advice. Please consult a financial advisor or tax professional for more information regarding your tax situation.
LifeSci Index Partners, LLC is the Index Provider and Indxx is the Index Calculation Agent. Etfis Capital LLC serves as the investment advisor and LifeSci Index Partners, LLC serves as the sub-advisor to the Fund. The Fund is distributed by ETF Distributors LLC, an affiliate of Etfis Capital LLC.