Exchange Traded Concepts and Loncar Investments LLC have launched the Loncar China BioPharma ETF (CHNA) on the Nasdaq on Wednesday, Aug. 15.

The ETF is based on the Loncar China BioPharma Index, which was launched by biotechnology investor Brad Loncar in March. The fund carries an expense ratio of 0.79% and invests in 28 firms, of which 22 are listed on the Hong Kong Stock Exchange and six on the Nasdaq.

Loncar also developed a cancer immunotherapy index, on which the Loncar Cancer Immunotherapy ETF (CNCR), launched in October 2015, is based.

The China fund's holdings include Sihuan Pharmaceutical Holdings Group Ltd., Austar Lifesciences Ltd. and China Grand Pharmaceutical and Healthcare Holdings Ltd.

The ETF's launch comes as China's biotech industry is undergoing a transformation, Loncar noted in an interview on Wednesday.

In the past, "most of the companies there were either manufacturing drugs or commercializing generic drugs," he said. "There was very little innovative, new drug development there like we have here. For the first time in a big way, that's starting to change."

He pointed to factors such as a rule change effective April 30 by the Hong Kong Stock Exchange allowing pre-revenue biotech companies to list on the exchange.

In addition, Loncar noted that some biotech entrepreneurs in the U.S. are moving back home to China and starting up companies.

Most of the companies in the Loncar China BioPharma Index generate revenue and would fall under the category of traditional drug companies with a focus on generics.

Such firms are starting to move toward developing new products, Loncar said.

The ETF's launch came after Krane Funds Advisors LLC rolled out the KraneShares MSCI All China Health Care Index ETF (KURE) on the New York Stock Exchange earlier this year. The fund offers exposure to Chinese companies listed in mainland China, Hong Kong and the U.S. Besides biotech and pharmaceutical firms, the fund invests in hospital administration and healthcare IT companies, among others.