Loncar Cancer Immunotherapy Index Reshuffles Listed Companies

The Loncar Cancer Immunotherapy Index has reduced the number of immunotherapy-focused companies from 30 to 25 and also swapped out a number of stocks as part of an effort to strengthen the index’s liquidity profile and ensure the holdings hold equal weight.

This morning Loncar Investments said it added six companies to the index: Arcus Biosciences (NYSE: RCUS), Fate Therapeutics (Nasdaq: FATE), Mirati Therapeutics (Nasdaq: MRTX), MorphoSys (Nasdaq: MOR), Sorrento Therapeutics (Nasdaq: SRNE) and Zymeworks (NYSE: ZYME).

In its reshuffle, Loncar removed Agenus (Nasdaq: AGEN), ARMO BioSciences (Nasdaq: ARMO), Bellicum Pharmaceuticals (Nasdaq: BLCM), Celldex Therapeutics (Nasdaq: CLDX), Idera Pharmaceuticals (Nasdaq: IDRA), Incyte Corporation (Nasdaq: INCY), Inovio Pharmaceuticals (Nasdaq: INO), Jounce Therapeutics (Nasdaq: JNCE), Pieris Pharmaceuticals (Nasdaq: PIRS), NantKwest (Nasdaq: NK) and NewLink Genetics (Nasdaq: NLNK).

Brad Loncar, chief executive officer of Loncar Investments and chairman of the index committee, said the changes that have been made “reflect the speed with which the science of immunotherapy is moving.” Loncar typically conducts a “rebalance and reconstitution” of its index. The next rebalance is planned for Dec. 18, 2018.

“Our index is designed to evolve with the science and highlight technologies at the forefront of research. We welcome these new additions that bring innovative and unique approaches to the field,” Loncar said in a statement.

The goal of Loncar’s Cancer Immunotherapy index is to give investors a better understanding of the immunotherapy sector by highlighting major companies involved and providing a metric to track their progress, according to information on its website. Loncar designed the index to “capture contributions” from companies leading the way in immunotherapy research.

In selecting companies, Loncar listed several criteria on its website:

•          The company has a drug(s) approved by either the FDA or EMA that harnesses the immune system to fight cancer.
•          The company has a drug(s) in the human stage of testing that harnesses the immune system to fight cancer.
•          The company has announced intentions to begin human stage testing of a drug(s) that harnesses the immune system to fight cancer
•          The company has announced an immunotherapy collaboration or partnership with a major pharmaceutical company.

In selecting its 25 companies for the index, Loncar said it looks at “five top large pharmaceutical companies.” Those companies are selected for their strategic focus on immunotherapy and “their leadership role” in a specific type of immunotherapy.

The remaining top 20 growth biotechnology companies in immunotherapy by market capitalization are then added to the index. Loncar said it believes the mix of companies for its index “provides the best way of measuring the field’s growth.”

Loncar said the changes to the index are designed to “strengthen the index’s liquidity profile by boosting the market cap of the smallest component.” Additionally, the changes are designed to lower the index’s exposure to smaller companies that have not yet demonstrated proof of concept in early clinical trials, Loncar said.

“Cancer immunotherapy is a transformational field of research, and we think it is important to have an index that specifically tracks its progress. We have the highest admiration for the researchers who are working to develop new therapies using this approach, and also for courageous patients who participate in trials that make progress possible. It is our hope that highlighting immunotherapy in this way will drive more awareness and investment in their direction,” Loncar said in a statement.

Not only does Loncar officer its immunotherapy sector index, earlier this year the investment firm launched its China Biopharma Index. The index contains globally listed pharmaceutical companies, biotech companies, drug manufacturers, diagnostics companies, wholesalers, distributors and service providers that have a strategic role in growing China’s drug industry.