October 20th, 2021 | 11:04 CEST
Bayer, Sativa Wellness Group, MorphoSys - Can the pharmaceutical industry benefit from the new German government?
Table of contents:
Bayer - Well-positioned in the pharmaceutical sector
While the Monsanto takeover has been weighing on the Group for 6 years now, Bayer's pharmaceutical sector is doing exceptionally well. It is foreseeable that in the coming decades, people will live to become older and older. Chronic diseases increase with age, and obesity and diabetes are already widespread in the affluent Western civilization. Added to this are cardiovascular diseases and cancer. The Group is particularly committed to all these areas.
On September 20, the Phase III study of Finerenon was extended, in which the effect of the drug against chronic kidney disease is being investigated. In early October, a collaboration with the British Company Huma was extended to classify certain types of lung cancer using machine learning technologies. CT scans will be used to identify different types of cancer more quickly so that patients can receive the appropriate treatment as quickly as possible.
Many analysts are now more optimistic about the future development of the share. Only one analyst advises selling the share. JPMorgan, Bernstein Research and UBS see price targets between EUR 67 and EUR 85. Yesterday, the share tested the support at EUR 45.76 and bounced off there. It could form a double bottom and test the resistance at EUR 49.10. Currently, the share is trading at EUR 46.57.
Sativa Wellness Group is growing fast
Sativa Wellness Group is a Canadian Company that has subsidiaries in the United Kingdom. The business model is based on three pillars. Firstly, on the production of cannabidiol products (CBD), which are marketed under the brand "Goodbody Botanicals". Furthermore, the laboratory "Phytovista Laboratories" offers cannabinoid tests according to ISO17025 standard both in the EU and Great Britain. As a third pillar, there is "Goodbody Wellness".
The telemedical consultation service is offered for new blood tests. A total of 16 such tests are already in use at three sites and will also be rolled out to a total of 70 sites where state-approved PCRs tests are also performed.
The company plans to distribute its CBD products by subscription. CBD is certainly the best-known cannabinoid of over 100 from the cannabis plant. It does not contain THC and therefore has no psychoactive effect. In addition a wide variety of positive properties are attributed to CBD. First. a relaxing, anti-inflammatory, analgesic and antioxidant effects. A 2007 study by the California Pacific Medical Center Research Institute states also said that CBD is able to prevent metastasis. CBD products are to be sold by subscription, and the product line is to be expanded.
Things are moving quickly at Sativa Wellness Group. The second-quarter numbers clearly show this growth. Revenue increased over 800% year-on-year to CAD 6 million, and gross profit was CAD 3.3 million. The market capitalization is CAD 21.8 million. As the trend towards legalization of cannabis continues, the market certainly offers great potential.
MorphoSys - Continuously new lows
Innovative drugs have been developed again and again from the antibody library of MorphoSys. It enabled the German biotech company to build up a portfolio over the years through collaborations, from which recurring licensing income was generated. Thus, the Company grew slowly and steadily. It was only when they tried to build up a pharmaceutical company themselves that the difficulties began.
With the acquisition of Constellation Pharmaceuticals, the Company put all its eggs in one basket. If the two cancer drugs in Phase III trials become a blockbuster, the Company will rise like a phoenix from the ashes. The Company went into debt to finance this takeover and pledged a large part of its secure licensing income. Good news, such as the recent news from licensing partner Roche, which received breakthrough therapy status for an Alzheimer's drug from the US Food and Drug Administration, ultimately fizzled out.
The stock opened with a Gap-up after the news, only to hit new lows for the year afterward. Such a clean downtrend is rarely seen. Shareholders hoping for better times will have to wait for the results of Constellation Pharmaceuticals' Phase III trials. At the moment, these results are probably the only prospect for improvement. Before investing, one should wait for the break of the downtrend line.
Healthcare is constantly evolving. We are getting older, and so diseases will also increase. It is good that companies are taking on the prevention and combating of diseases. It is often a rocky road to a breakthrough. Bayer is well-positioned in the pharmaceutical sector but is still struggling with the consequences of the Monsanto takeover. The Sativa Wellness Group occupies a market with hemp that is not yet wholly legalized. Nevertheless, sales and profits are already growing very strongly. MorphoSys, the former stock market darling, must wait for the success of the acquired Phase III studies.
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