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August 9th, 2023 | 07:00 CEST

After BioNTech shock: Evotec, Morphosys and Cardiol Therapeutics emerge as the new biotech favorites

  • Biotechnology
Photo credits: Bayer AG

BioNTech startled investors and analysts with its quarterly figures on Monday. Yet the biotech segment has actually developed positively in recent months. Several stocks are currently going full throttle, and S&P's sector index also outperformed the S&P 500 and MSCI World in July. This could finally signal the end of the underperformance of recent years, and biotech stocks could be celebrating a comeback. On the German stock charts, Evotec and Morphosys are among the high flyers. Both shares have performed strongly since April. Cardiol Therapeutics also looks promising from a technical chart perspective, and analysts see a price potential of over 200%. In contrast, there is currently no reason to buy BioNTech. Instead, investors should also bet on strength.

time to read: 3 minutes | Author: Fabian Lorenz
ISIN: EVOTEC SE INH O.N. | DE0005664809 , MORPHOSYS AG O.N. | DE0006632003 , CARDIOL THERAPEUTICS | CA14161Y2006

Table of contents:

    Cardiol Therapeutics: First Berlin sees over 200% share price increase potential

    Shareholders of Cardiol Therapeutics currently have reason to rejoice. The share price has risen from EUR 0.45 to around EUR 1.00 since April. Nevertheless, the Company is still only valued at around EUR 70 million. The analysts of First Berlin recommend the Cardiol shares as a buy, with a price target of EUR 3.30. Further price increases can now also be contributed by US investors, as the biotech company regained compliance for continuing trading on the Nasdaq. But what makes this Canadian company so interesting?

    Cardiol Therapeutics is focused on diseases of the cardiovascular system. Research is being conducted into anti-inflammatory and anti-fibrotic therapies. The most advanced is the development of CardiolRx™. It is intended to be used as an oral solution for the treatment of debilitating forms of inflammatory heart disease that affect a younger age demographic, and where treatment is not addressed adequately by currently available therapies. The effectiveness of CardiolRx™ is currently being investigated in a Phase II study in the US involving 25 patients with recurrent pericarditis and an international Phase II study involving 100 patients with acute myocarditis. Results for both studies are anticipated in the coming year. Analysts from First Berlin estimate Cardiol's annual revenue potential from these two indications to be around USD 1.5 billion. Cardiol is also in a solid financial position with cash and cash equivalents sufficient to finance research until 2026. Therefore, the Company is considered "significantly undervalued."

    Evotec: Buy after the profit warning?

    In contrast, Evotec already weighs in at almost EUR 4 billion. This biotech share has also developed positively in recent months and is now trading at around EUR 22. At the end of April, it was only EUR 16.60. Even a hacker attack and an earnings warning did little to harm the share. Management emphasized that it is on track to achieve its medium-term targets by 2025. Optimization measures are also expected to contribute to this. For example, costs of up to EUR 25 million are to be saved. Analysts, for the most part, remained unfazed by the profit warning. Among the optimists is Warburg, with a price target of EUR 30. For the analysts, the slight price slide offers an opportunity to enter. For Deutsche Bank, the Evotec share is a hold. The analysts reduced sales and earnings expectations after the hacker attack. Their price target is EUR 20, around 10% below the current price.

    Morphosys: Important study results expected at year-end

    Things are getting exciting at Morphosys today. The Company is releasing its numbers for the second quarter and the first half of the year. Additionally, a conference call is scheduled for tomorrow. After the significant rise in the share price in recent months, expectations are likely to be high. After all, the share has almost doubled since the beginning of April to EUR 27.

    Analyst opinions vary widely when it comes to the question of how the share will fare. According to UBS, there is still a lot more potential. The analysts take a positive view of the Morphosys hopeful Pelabresib. There should be new study results on Pelabresib later in the year. The analysts' price target is EUR 47. Accordingly, they recommend the share as a "buy". In contrast, Goldman Sachs rates the Morphosys share as "Sell". In order to reach the analysts' price target of EUR 12.50, the share would have to more than halve in value. The analysts do not expect any new impetus from the quarterly figures, as the important study data will still take several months to emerge. Morphosys currently has a market capitalization of almost EUR 1 billion.

    Investors appear to be returning to biotech stocks, although certainly not to all of them. BioNTech is currently clearly on the sidelines. In contrast, the charts of Cardiol Therapeutics, Evotec and Morphosys show positive momentum. Due to the low valuation and high cash position, analysts see the greatest upside potential in Cardiol.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Fabian Lorenz

    For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.

    About the author

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