A bombshell at Nel ASA! Buying opportunity for Bayer and Defence Therapeutics shares?

Defence Therapeutics: Stock with catch-up potential and takeover speculation

Defence Therapeutics currently offers an interesting entry opportunity. In February, the biotech company's share price was still above EUR 1 – it is currently EUR 0.48. The Company is making great strides in drug development and aims to generate additional revenue by licensing out its own platform. There is also takeover speculation.

Defence Therapeutics is working on new vaccines against cancer. The Company relies on its proprietary Accum® technology, which enables the precise delivery of vaccine antigens or ADCs in their intact form to the target cells. The ARM-002 vaccine is currently being tested in difficult-to-treat cancers such as pancreatic, colon, and ovarian cancer.

Most recently, the Company announced an important partnership with Canadian Nuclear Laboratories ("CNL"). Canada's leading nuclear research facility will conduct preclinical studies combining actinium-225 ("Ac-225") alpha particle radiation therapy with Defence's Accum® delivery technology. The synergy between Accum® and CNL is expected to advance precision oncology and lead to more effective and safer treatments.

The results of Ac-225 in targeted radiation therapies for cancer treatment are very promising. Ac-225 emits powerful alpha particles that irreparably damage the DNA of cancer cells, leading to cell death. The partners now want to test various antibodies modified with Accum® technology to find the variant that can best penetrate the cell nucleus. The goal is to maintain the therapeutic efficacy of Ac-225 while reducing the required dosage and thus minimizing side effects. The partners are thus addressing a huge market. According to straitsresearch.com, the global radiopharmaceutical market is expected to reach a volume of USD 16.87 billion by 2033.

Nel ASA: Weak quarterly figures

Unlike Defence Therapeutics, Nel ASA has little positive news to report. Yesterday, Nel reported its results for the first quarter of 2025. The Company had to cope with a 44% decline in net sales (revenue from customer contracts) to NOK 155 million. The Norwegian company slipped back into the red in terms of operating earnings (EBITDA). The loss amounted to NOK -115 million. In the same quarter of the previous year, a positive EBITDA of NOK 32 million was achieved. The temporary production stoppage in the Alkaline division contributed to the negative development. The net loss amounted to NOK -179 million (Q1 2024: NOK 39 million).

Order intake came in at NOK 311 million, around 22% below the same quarter last year. At the end of the quarter, the order backlog amounted to NOK 1,460 million. This was 10% less than at the end of 2024 and 31% less than in the first quarter of 2024. Nevertheless, Nel still had NOK 2.1 billion in cash at the end of March.

Nel CEO Håkon Volldal remains optimistic about the future: "With a solid cash position, proven production capacity, and a portfolio of groundbreaking technologies in development, we are uniquely positioned in the market. The continued interest of leading strategic and industrial investors, such as SAMSUNG E&A, clearly confirms the Company's long-term potential." Samsung's entry currently seems to be the only ray of hope. Nel shares reacted little to the news and were trading virtually unchanged at NOK 2.276 yesterday afternoon.

Bayer: mwb research recommends buying after AGM

Bayer shareholders have not had much to cheer about for a long time. The share price has been on a downward trend for around 10 years now. The mood at the annual general meeting at the end of last week was correspondingly subdued. The analysts at mwb research subsequently published a detailed update.

According to this, Bayer confirmed that 2025 would be the most challenging year of the planned turnaround, with expected stagnating consolidated revenue year-on-year and a decline in profit and free cash flow. Due to the patent expiry for Xarelto, net sales in the pharmaceuticals division will be slightly below those of 2024, and margins will be under pressure. The Consumer Health division aims to grow as fast as the market and keep EBITDA margins stable. Crop Science remains the most challenging segment, with sales expected to decline in the first quarter of 2025 and margins under pressure for the full year. Overall, Bayer reaffirmed its medium-term revenue growth targets of more than EUR 3.5 billion and an increase in the EBITDA margin to the mid-20% range by 2029. However, 2025 will be a challenging year.

The biggest issue for Bayer remains litigation in the US. Ongoing court proceedings and negative rulings relating to glyphosate are weighing on the Company. In March 2025, Bayer filed a petition with the US Supreme Court, which could be a potential turning point if accepted. From mwb's perspective, credible progress in settling litigation over the next 12 months would be an important catalyst for a revaluation of the stock, which currently prices in a very negative scenario.

Since much of the negative news is already priced in, analysts recommend buying Bayer shares. The target price is EUR 29. The share is currently trading at just over EUR 23.

Defence Therapeutics shares appear ripe for a rebound at present. The decline in the share price in recent months is not attributable to the Company's operating performance. Takeover speculation is keeping the price down and could lead to a positive surprise. At Nel, revenue, earnings, and order intake are declining, so there is no urgent need to buy at present. This also applies to Bayer. Although the share price appears to reflect many negative factors, negative news about glyphosate could emerge at any time.