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December 5th, 2022 | 12:43 CET

Attention biotech stocks: Bayer, BioNTech, Defence Therapeutics and Morphosys - These stocks look good!

  • Biotechnology
  • Cancer
  • research
Photo credits: pixabay.com

After months of selling off, they are back: biotech stocks! A strong turn on the NASDAQ quickly flushed the beaten-up stocks back to the top of the hit lists. With COVID out of the spotlight, companies are returning to their long-term research lines. These have been heavily focused on cancer in recent years, and now there is even groundbreaking news on metastasis. BioNTech has thus already gained more than 40% since the October low. Morphosys, on the other hand, lost another 40% after an Alzheimer's study failed to deliver valuable results. It is worth taking another look at the sector.

time to read: 5 minutes | Author: André Will-Laudien
ISIN: BAYER AG NA O.N. | DE000BAY0017 , BIONTECH SE SPON. ADRS 1 | US09075V1026 , DEFENCE THERAPEUTICS INC | CA24463V1013 , MORPHOSYS AG O.N. | DE0006632003

Table of contents:


    David Elsley, CEO, Cardiol Therapeutics Inc.
    "[...] As a company dedicated to developing treatments for rare heart diseases, we see this as an opportune moment to contribute to the fight against heart disease and make meaningful strides in improving heart health worldwide. [...]" David Elsley, CEO, Cardiol Therapeutics Inc.

    Full interview

     

    Cancer researchers get on track of metastasis, Bayer receives fast-track approval

    More than four million people in Germany are living with a cancer diagnosis, and the number is rising. Some can be cured, yet malignant tissue neoplasms still puzzle physicians. One of the biggest mysteries to date: Why do metastases often form only after a tumor has already been removed? In a news release, researchers at the German Cancer Research Center at the Medical Faculty in Mannheim provide study results that should provide evidence as to why cancer metastases form even though a tumor has been removed. According to these findings, the primary tumor produces messenger substances that suppress the growth of metastases. If it is removed, this also stops the production of these messenger substances. That makes the growth of offshoots from the original tumor more likely. The messenger ANGPLT4 was one of the molecules most strongly correlated with progressive tumor growth. It is said to inhibit the formation of metastases.

    On Monday, Bayer announced that the UK's Medicines and Healthcare products Regulatory Agency will immediately approve "Nubeqa" in combination with androgen deprivation therapy (ADT) and the chemotherapy "docetaxel," having already fast-tracked the drug for metastatic hormone-sensitive prostate cancer (mHSPC). The accelerated approval comes as part of a regulatory program called Project Orbis, an international collaboration between drug regulatory agencies in countries such as the United Kingdom, the United States and Australia. Nubeqa, which Bayer developed with Finnish pharmaceutical company Orion Corporation, performed well in 2022, nearly doubling sales to EUR 127 million in the third quarter. Shortly after this sales increase, Nubeqa scored another success on its way to becoming a blockbuster. By expanding the reach of its future blockbuster in prostate cancer, Nubeqa could generate peak sales of between one and three billion euros, according to Bayer. Bayer shares have weathered the glyphosate controversy well and continue to trend upward. At EUR 54.80, the 2023 P/E ratio is only 6.8, with a payout of 4.4%.

    Research is progressing. Soon, vaccines for certain cancers will be available. Source: pixabay.com

    Defence Therapeutics - With a new vaccine against cervical cancer

    Canadian biotech specialist Defence Therapeutics (DTC) has developed its ACCUMTM platform, a patented technology that holds great hope in current cancer research. The combination of mRNA technology with modern methods of delivery to affected cells is a real advance within recent research. It stemmed from the fight against the COVID pandemic, which steered many biotech companies in a new direction. The valuable knowledge can now be used against the great enemy "cancer". There is progress to report in Good Laboratory Practice (GLP) studies on the vaccine candidate AccuVAC-PT007, which was developed specifically for use against cervical cancer. GLP studies in rodents already demonstrate comprehensive safety and tolerability with no evidence of complications. Cervical cancer typically occurs when epithelial cells of the cervix become infected with human papillomavirus (HPV), one of the most common sexually transmitted diseases.

    Currently, targeted vaccination against HPV can protect against cervical cancer. However, commercially available vaccines are not designed to protect against all HPV subtypes, and vaccines on the market cannot be used to treat pre-existing cervical cancer. Defence aims to close this "gap" with its protein-based vaccine AccuVAC-PT007, which contains a single oncoprotein (E7). This vaccine can provide not only prophylactic protection against HPV but also represents the only experimental vaccine capable of curing existing cervical cancer when combined with immune checkpoint inhibitors. Preclinical studies in rodents demonstrated that co-administration of AccuVAC-PT007 with multiple immune checkpoint inhibitors (PD-1, CTLA4 or CD47 antibodies) resulted in effective control of tumor growth.

    The successful completion of the GLP trials demonstrates Defence Therapeutics' commitment to the efficient development of vaccines to eradicate tumors. A partner can now be sought for a Phase I clinical trial. In addition to cervical cancer, HPV can also cause cancer of the vulva, vagina, penis or anus. Cervical cancer has a high mortality rate, which can be reduced through diagnosis and prevention. A report by 360ResearchReports predicted that the global cervical cancer treatment market is expected to grow at a CAGR of 4.8% by 2027, reaching a value of USD 11 billion. With its multiple fields of application, the DTC share should come more into the focus of investors, as its successes are tangible and its market capitalization is only about EUR 52 million.

    Director Dr Moutih Rafei will answer questions from investors on December 7, 2022, at 15:00 CET on the occasion of the 5th IIF - International Investment Forum. Participation in the virtual event is free of charge. Click here to register.

    MorphoSys and BioNTech - Analysts are divided

    Opinions are currently far apart on two biotech stocks, Morphosys and BioNTech. Morphosys had published a botched series of studies with Roche on Alzheimer's disease at the end of November. The share price took a massive dive within 24 hours, falling by 40%. At the last Equity Forum in Frankfurt, CFO Sung Lee did not mention this event in the presentation. That made it clear that the focus for Morphosys is on the clinical trials for Pelebrasib and the revenues from Monjuvi. Morphosys also has a broad mid to late-stage development pipeline focused on hematology and oncology. With about EUR 1 billion in cash and cash equivalents, the Company is well secured into 2024 before new funding is needed again. Analysts are split, with expected price targets ranging from EUR 13 to 65 but likely to be heavily revised, with the midpoint currently at EUR 31.20. With a current price of EUR 15.65, this would be a smooth doubler.

    Meanwhile, the mood is better for BioNTech. Four analyst firms are consistently positive, with a median price target of EUR 197. Expected sales for 2022 are still at a high of EUR 16.6 billion, but next year they are expected to decline to EUR 9.1 billion. A major unknown, however, is likely to be the strength of sales of mRNA vaccines against COVID-19, as most countries have declared the pandemic over and are only ordering in significantly reduced batches. Not so in the Federal Republic of Germany, where eight additional vaccine doses have been ordered for each citizen. This keeps sales at BioNTech and Moderna high, and profits will likely follow suit. Important for BioNTech is the quality of the pipeline, which should generate new sales in subsequent years. With almost EUR 20 billion in cash on hand, research can be done very well. The Mainz-based company should remain on the watch list for potential surprises.


    The stock market is probably past the worst, but the biotech sector always "settles" quickly. Morphsys took another huge tumble, and Bayer and BioNTech are already back on the upside. Defence Therapeutics continues to deliver, but the share price is still dormant. This may change at some point ad hoc. Keep a balanced spread across the entire sector.


    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

    André Will-Laudien

    Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.

    About the author



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