February 7th, 2024 | 07:30 CET
BASF shares on the upswing, BioNTech sees breakthrough in cancer, and Defence Therapeutics benefits from study
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"[...] 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.
Defence Therapeutics: Study reveals potential in the billion-dollar market
The market for HPV vaccines is expected to grow from USD 6.51 billion in 2022 to USD 15.94 billion by 2028, representing a doubling within just a few years. This conclusion is drawn from a recent study by Stratview Research. Background: Human Papillomaviruses (HPV) are among the most common viruses transmitted through intimate contact. They often result in cancers such as genital and cervical cancer. According to the study, the COVID-19 pandemic has had a significant impact on the spread of HPV. The overwhelmed healthcare systems led to significantly fewer screenings for sexually transmitted diseases. As a result, there are considerably more cases and fatalities, particularly in cervical cancer.
Defence Therapeutics should benefit from the increasing demand for HPV vaccines. The Canadian biotech company has developed a versatile platform technology, Accum™. The unconjugated Accum™ molecule can be used to fight cancer in two ways. Firstly, by directly inducing cell death in various cancer cell lines (T-cell lymphoma, colon cancer, melanoma and breast cancer). It also works indirectly by "alerting" the affected person's immune system to fight the cancer cells. As a result, cancer and other infectious diseases can be fought efficiently and very effectively. Research into various cancer vaccines is already underway. Defence Therapeutics is currently valued at less than CAD 100 million.
BioNTech: Defeating cancer with the help of AI
BioNTech currently has a market capitalization of around USD 22 billion. The share price is currently testing support at around USD 90. Due to declining income from the COVID-19 vaccine and potential revenues from new drugs only in the medium term, the German biotech star is running out of steam. However, CEO Ugur Sahin is confident about the Company's future prospects. In an interview with "Der Spiegel", Sahin sees the field of medicine as well on the way to "controlling or ideally curing cancer in the long term". The BioNTech co-founder believes that digital technologies and artificial intelligence are driving research forward. He, therefore, sees "no fundamental reason why many types of cancer should not be detectable earlier and more effectively treatable." BioNTech itself has already invested in AI specialists in the past. Sahin believes that by 2026, the first drugs should be ready for approval. By 2030, BioNTech should then have an extensive portfolio of cancer therapies. The Company currently has a research pipeline comprising 30 new cancer therapies.
BASF: Price target raises questions
For almost two years, BASF's stock has been fluctuating – with a few deviations upward and downward – between EUR 50 and EUR 40. Currently, it is trading at just under EUR 45. The economic sensitivity of the chemical industry has provided little upside potential. However, there are increasing signs that the downturn in the sector is coming to an end. Berenberg has recently expressed a positive outlook. Those who had bet on the upturn in the chemical industry in 2023 should be rewarded in the current year. Volumes and margins are expected to develop positively in 2024. Diversified companies, in particular, should be able to benefit from this. It all sounds positive for BASF and like a "Buy" recommendation. However, analysts cannot bring themselves to that conclusion. For them, BASF shares with a price target of EUR 46 are only a "Hold".
BASF is currently making negative headlines in another aspect. According to reports from ZDF magazine "frontal" and "Der Spiegel", the chemical company is increasingly involved in the system of oppression against the Uyghur minority in China. According to the report, employees of a joint venture between BASF and a Chinese company made home visits to Uyghur families in 2018/19, conducted investigations, and apparently passed on their findings to state authorities. In some cases, it was reported that the employees even moved in with the families. BASF intends to investigate the allegations.
The fight against and cure for cancer represents a billion-dollar market - and the trend is still rising. Defence Therapeutics has developed an exciting platform and is building a research pipeline. The valuation is not high, and there are frequent takeover speculations. The Canadians would certainly also be a good fit for BioNTech. The German biotech company not only has a full pipeline but also cash for possible further acquisitions. At BASF there is the lure of a generous dividend, but operationally, there has been little reason for joy in recent years.
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