300%-Opportunity, problems, and the German Chancellor: Bayer, BioNTech, and Cardiol Therapeutics

Cardiol Therapeutics: More than 300% share price potential after study data

Following convincing study data, the analysts at First Berlin have substantially increased their price target for Cardiol Therapeutics shares. The experts have raised the fair value from USD 3.60 to USD 8.50. At the current price level of USD 2.00, the analysts believe the share price could jump by more than 300%. Accordingly, their recommendation is "Buy". However, the sell-off of the shares after the study data was surprising – sometimes, things turn out differently than you think on the stock market. However, from the analysts' point of view, this represents a buying opportunity.

For First Berlin, the data announced from the Phase II MAvERIC-Pilot open-label US study of Cardiol's lead drug candidate, CardiolRx™, for the treatment of recurrent pericarditis (inflammation of the pericardium) were excellent. The efficacy of CardiolRx™ on two key endpoints would be similar in magnitude of improvement to the biologic rilonacept. Rilonacept has already received approval from the US Food and Drug Administration (FDA) and is in commercial use. However, CardiolRx™ would have a significantly better tolerability and side effect profile. The analysts, therefore, see the potential for CardiolRx™ to replace rilonacept as a second-line therapy for recurrent pericarditis following approval. Rilonacept generated sales of around USD 233 million in 2023, the third year after FDA approval. Based on the benefits, the analysts believe that CardiolRx™ has even higher revenue potential; especially if CardiolRx™ were also approved in Europe.

Commenting on the trial data, Cardiol CEO David Elsley said: "We are particularly pleased to announce the primary endpoint data from the MAvERIC-Pilot study. These data showed that oral administration of our small molecule CardiolRx™ led to a significant reduction in pain and inflammation associated with pericarditis. Due to the clinically significant effect of CardiolRx™ on the key symptom of this highly debilitating disease, we now anticipate that the totality of the data from the MAvERIC-Pilot study will support progression to a Phase III study of CardiolRx™, which we hope will achieve our goal of providing thousands of pericarditis patients with a more accessible and non-immunosuppressive treatment option." By the way, the price target of USD 8.50 (Link to study) for Cardiol shares is not the highest. H.C. Wainwright even believes the share could reach USD 9.00.

Bayer: German Chancellor speaks out

Despite the price setback, Cardiol shares have more than doubled in the current year, and, as described above, analysts believe that the stock is capable of much more. There is still no sign of this in Bayer shares. Nevertheless, Germany's former most valuable company has recently made positive headlines again. For example, the go-ahead was given in Berlin for a translational center for gene and cell therapies. It is being set up jointly with the Charité Hospital and funded by the federal government and the state of Berlin. The joint project aims to make the treatment options of these pioneering technologies available to patients more quickly and, at the same time, to establish a leading biotech ecosystem for innovative therapies in Berlin.

Federal Chancellor Olaf Scholz: "With the launch of the new Translational Center, we are also celebrating a unique form of cooperation between science, industry and politics. This institution will become the core of an entire organism of gene and cell-based therapies. For this, we need scientists and entrepreneurs who see both the smallest details in the cell nucleus and the big picture: the medicine of the future, which provides answers to the big questions already posed by Rudolf Virchow. It is good that we have both here in Germany: courageous research and innovative companies. I wish you every success with this visionary project!" In recent years, Bayer has strengthened its position in cell and gene therapy through the acquisitions of BlueRock Therapeutics and Asklepios Biopharmaceutical, among others.

BioNTech: Problems with the FDA

BioNTech shares currently lack sustained positive momentum. On the contrary, a cancer drug candidate recently caused alarm in the US. BioNTech announced that a clinical Phase I study for the candidate BNT326/YL202 has been partially suspended by the FDA due to safety concerns. The reason is that there are concerns about the safety of the drug at higher doses. The study is investigating an agent for the treatment of advanced or metastatic EGFR-mutated non-small cell lung cancer or HR+/HER2 breast cancer. BioNTech and Suzhou MediLink signed an agreement for the development of BNT326 only last October. The study is on hold while MediLink resolves the FDA's concerns.

*Before that, however, there was also positive research news: Genmab and BioNTech announced the first data from an ongoing Phase II trial with the bispecific antibody test preparation Acasunlimab. The trial is investigating the candidate GEN1046/BNT311 as monotherapy and in combination with pembrolizumab in patients with PD-L(1)-positive metastatic non-small cell lung cancer who have progressed after one or more prior anti-PD(L)1 lines of therapy. At the end of the observation period (data cut-off), the data showed a 12-month overall survival rate of 69%, a median overall survival rate of 17.5 months and an overall response rate of 30%. BioNTech co-founder and CMO Prof. Dr. Özlem Türeci: "Most patients with metastatic non-small cell lung cancer have limited treatment options after discontinuing first-line therapy with checkpoint inhibitors. For these patients, chemotherapy remains the main treatment option despite limited efficacy and significant toxicity. The data from our Phase II study show that combining acasunlimab with PD-L1 inhibition may be a suitable approach for this heavily pre-treated patient population*."

At Bayer and BioNTech, there is currently no urgency to buy. The situation with Cardiol Therapeutics is much more exciting. The study results, and analysts' price targets do not match the short-term sell-off. This could represent an exciting buying opportunity.