nasdaq biotechnology index®

Nasdaq Biotechnology Index®Investing in the Next Generation of Healthcare Innovators

2

Biotech in the Age of Covid

Source: Nasdaq Global Indexes, New York Times, McKinsey Global Institute1. https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html

• 5 Key Areas of Impact – Vaccines, Vaccines, Vaccines! But also: significant advancements in Identification, Diagnosis, Treatment, and Epidemiology

• Harbinger of the Future of Tech-Driven R&D – Biomolecules, Biosystems, Biomachine Interfaces, and Biocomputing

48.4

51.6

Top 10 vs. Rest of Index

Top 10 Rest of Index

3

NBITM Index Composition

Source: Nasdaq Global Indexes as of May 14, 2021

9.7

7.5

5.2

4.9

4.7

4.7

3.7

3.3

2.3 2.2

Top 10 Index % Weights as of May 14, 2021

AMGEN

GILEAD SCIENCES

MODERNA

VERTEX PHARMACEUTICAL

ILLUMINA

REGENERON PHARMACEUTICAL

BIOGEN

ALEXION PHARMACEUTICAL

SEAGEN

ASTRAZENECA

4

Market Cap/Subsector/Globality Profile

Source: Nasdaq Global Indexes, FactSet, Bloomberg as of April 30, 2021

87%

13%

Index % Weights by Domicile Country

US International

12.8

23.5

27.1

15.5

21.1

Index % Weight by Market Cap

$100B+ $10-50B $50-100B

$5-10B <$5B

65.2

34.8

Index % Weight by ICB Subsector

Biotechnology Pharmaceuticals

# of Biotechnology: 230# of Pharmaceuticals: 44

# of US-Domiciled: 231# of International: 43

# of >$5Bn Companies: 54# of <$5Bn Companies: 220

5

Biotechnology vs. Pharmaceuticals

Source: Nasdaq Global Indexes, FactSet, Bloomberg

1) Biotechnology is a complex, hybrid industry comprised mainly of 2 types of companies:• R&D-intensive, often clinical trial-stage companies focused on intellectual property/patents • More mature companies with approved products already on the market, participating in all phases of

Discovery / Development / Manufacture of treatments

2) Companies exist which blur the line between “pure-play Pharma” and “pure-play Biotech”• Amgen – largest NBI Index constituent – was reclassified by ICB in 2021 from Biotechnology to

Pharmaceuticals• 41 companies representing 13% of NBI weight are classified as Biotechnology by ICB Subsector, but

contain the word “Pharma” or “Pharmaceutical” in their Company Name• 140 companies classified as Biotechnology by ICB (38.5% of index weight) contain “Pharma” or

“Pharmaceutical” in their Company Description, per Factset

3) Nasdaq-listed Pharmaceutical companies tend to be much younger than NYSE-listed (average time of 15 years since IPO vs. 37 years, respectively) based on Dow Jones US Select Pharmaceuticals Index To construct the perfect benchmark for Biotechnology, ideally the index will capture all pure-play

Biotechnology firms (most of which are Nasdaq-listed) + certain Pharmaceuticals that are “biotech-adjacent” or were originally founded as pure-play biotech (most of which are also Nasdaq-listed)

6

NBI vs. Competitor Benchmarks: Highlights

Source: Nasdaq Global Indexes, S&P Dow Jones Indices, ICE Data Indices as of May 14, 2021.

Index Name Index Ticker

WeightingDescription

Weighting Constraints

Industry Classification

Launch Year

Count Listing Venue

Nasdaq BiotechnologyIndex

NBI Modified Market Cap-Weighted

8% cap for Top 5; 4% cap for rest

ICB:Biotechnology or Pharmaceuticals Subsectors

1993 274 Nasdaq-Only

S&PBiotechnology Select Industry Index

SPSIBI Modified Equal-Weighted

Each constituent has liquidity to allow 100% daily turnover of a $2Bn tracking portfolio

GICS: Biotechnology Sub-Industry

2006 190 Nasdaq/NYSE/ CBOE

ICE Biotechnology Index

ICEBIO Modified FloatMarket Cap-Weighted

8% cap for Top 5; 4% cap for rest

ICE: Biotechnology Sub-Industry*

2021 273 Nasdaq/NYSE/ CBOE

* Per ICEBIO index methodology: “This includes companies that are engaged in the research and development of therapeutic treatments but are not focused on the commercialization and mass production of pharmaceutical drugs.”

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NBI vs. Competitors: Methodology DetailsIndex Name Index

TickerReconstitution Schedule

Rebalance Schedule

Minimum Market Cap Constraints

Minimum Liquidity Constraints

Minimum Float Constraints

Geography

Nasdaq BiotechnologyIndex

NBI December MarchJuneSeptember

$200MM (non-floatadjusted)

100,000 Shares (10-month ADTV)

None Global

S&PBiotechnology Select Industry Index

SPSIBI MarchJuneSeptemberDecember

MarchJuneSeptemberDecember

$300MM (float-adjusted); $400MM/ $500MM for new additions

12-monthfloat-adjusted liquidity ratio (FALR) of 50%

None, but minimum FALR for new additions is 150%/90%

US

ICE Biotechnology Index

ICEBIO December MarchJuneSeptember

$200MM (non-floatadjusted)

100,000 Shares (10-month ADTV)

5% Unknown

Source: Nasdaq Global Indexes, S&P Dow Jones Indices, ICE Data Indices as of May 14, 2021.

8

SPSIBI: Overlap by Subsector/Exchange

Source: Nasdaq Global Indexes, FactSet, Bloomberg as of 5/14/2021.

ICB Subsector: Biotechnology Medical Services

Medical Supplies

Pharmaceuticals Grand Total

Count of Constituents

NYSE-listedNasdaq-listedTotal

5165170

033

011

11516

6184190

Sum of Index Weight

NYSE-listedNasdaq-listedTotal

2.89%84.98%87.88%

0.00%1.83%1.83%

0.00%0.27%0.27%

0.79%9.11%9.90%

3.68%96.19%99.87%*

Count of Constituents

SPSIBI-OnlyNBI OverlapTotal

35135170

303

101

11516

40150190

Sum of Index Weight

SPSIBI-OnlyNBI OverlapTotal

16.76%71.12%87.88%

1.83%0.00%1.83%

0.27%0.00%0.27%

0.79%9.11%9.90%

19.65%80.23%99.87%

*SPSIBI constituent-level data based on XBI ETF holdings, which includes 0.13% allocated to Cash.

293.2%

361.3%

262.7%

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

500%

Total Returns vs. Competitor Benchmarks as of June 9, 2021

ICEBIOT SPSIBITR XNBI

9

Performance Since Inception of ICE Biotech Backtest


10

YTD 2021 Performance


7.2%

12.3%

5.1%

6.0%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

12/31/2020 1/31/2021 2/28/2021 3/31/2021 4/30/2021 5/31/2021

Price Performance vs. Market Benchmarks as of June 9

NDX SPX IHC NBI

10.1%

-4.4%

6.0%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

12/31/2020 1/31/2021 2/28/2021 3/31/2021 4/30/2021 5/31/2021

Price Performance vs. Competitor Indexes as of June 9

ICEBIO SPSIBI NBI

11

Full-Year 2020 Performance


26.6%

47.9%

25.7%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Price Performance vs. Competitor Indexes

ICEBIO SPSIBI NBI

47.6%

16.3%

30.0%

25.7%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Price Performance vs. Market Benchmarks

NDX SPX IHC NBI

12

Performance Throughout the 2010s


369.4%

189.7%

284.4%

348.9%

-25%

25%

75%

125%

175%

225%

275%

325%

375%

425%

12/31/2009 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019

2010-2019 Performance vs. Market Benchmarks

NDX SPX IHC NBI

13

NBI ETF AUM: 3-Year Trend

ETFs currently tracking NBI in the US include the iShares Nasdaq Biotechnology ETF (Nasdaq: IBB), ProShares Ultra Nasdaq Biotechnology ETF (Nasdaq: BIB), and ProShares UltraShort Nasdaq Biotechnology ETF (Nasdaq: BIS). In Europe and Israel, products include Invesco Nasdaq Biotech UCITS ETF (London: SBIO), iShares Nasdaq US Biotechnology UCITS ETF (London: BTEC), and Tachlit Nasdaq Biotechnology ILS (Tel Aviv: TCBI105).In Asia, products include Capital Nasdaq Biotechnology Index ETF (Taiwan: 00678), and Mirae Asset TIGER Nasdaq BIO ETF (Korea: 203780).


6

7

8

9

10

11

12

13

14

4/30/2018 7/31/2018 10/31/2018 1/31/2019 4/30/2019 7/31/2019 10/31/2019 1/31/2020 4/30/2020 7/31/2020 10/31/2020 1/31/2021 4/30/2021

3-Year Global ETF AUM thru April 30, 2021 ($Bn)

+ 86% since March 2020 low

14

R&D Intensity Across Key Areas of Innovation

Source: Nasdaq Global Indexes, Yewno data as of May 31, 2020

12.4%

21.4%

31.6%

38.9%

50.0%

19.0%

78.2%

BioInformatics & BioChips

Geriatrics

Human Augmentation & Gene Therapy

Next Generation Sequencing

Precision Medicine

Regenerative Medicine

Orphan Diseases

3-Year Patent Contribution by NBI Companies

7

24

22

2

1

38

5

BioInformatics & BioChips

Geriatrics

Human Augmentation & Gene Therapy

Next Generation Sequencing

Precision Medicine

Regenerative Medicine

Orphan Diseases

# of NBI Companies with Patent Activity

* Clinical Trials Data

15

Biotechnology & Pharmaceutical Diversity

Source: Nasdaq Global Indexes as of May 14, 2021

Disclaimer

Nasdaq®, Nasdaq Biotechnology Index® are registered trademarks of Nasdaq, Inc. NBITM is a trademark of Nasdaq, Inc. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. Neither Nasdaq, Inc. nor any of its affiliates makes any recommendation to buy or sell any security or any representation about the financial condition of any company. Statements regarding Nasdaq-listed companies or Nasdaq proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.

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nasdaq biotechnology index®

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