October 26th, 2022 | 11:28 CEST
Biogen, Cardiol Therapeutics, Evotec - Brilliant results
The reporting season for the third quarter is in full swing and is creating a thoroughly positive mood. For example, the software group SAP posted surprisingly strong growth in its cloud business in the third quarter, and its operating result was better than forecast. Positive signals are also coming from the biotech sector, which has been badly battered in recent months. After the horrendous share price losses, this sector, in particular, offers attractive long-term entry levels.
time to read: 3 minutes
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Author:
Stefan Feulner
ISIN:
CARDIOL THERAPEUTICS | CA14161Y2006 , BIOGEN INC. DL -_0005 | US09062X1037 , EVOTEC SE INH O.N. | DE0005664809
Table of contents:
"[...] 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.
Author
Stefan Feulner
The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
He is passionate about analyzing a wide variety of business models and investigating new trends.
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Biogen - Sales and earnings exceeded
The heavyweight Biogen provided the start for the biotech sector. The Company from Cambridge in the US state of Massachusetts beat both the profit and sales expectations of analysts in the third quarter. Earnings per share came in at USD 4.77. The analyst consensus was for a per-share gain of USD 4.14. The USD 39.44 billion publicly traded biotechnology company also beat analysts' consensus on revenue, coming in at USD 2.51 billion.
The better-than-expected third-quarter figures also led to an upward adjustment of the annual forecast. The US company now expects earnings per share between USD 16.50 and USD 17.15. The previous estimate was between USD 15.25 and USD 16.75 per share. Full-year revenue is expected from USD 10.0 billion to USD 10.15 billion, up from the previous forecast of USD 9.9 billion to USD 10.1 billion. The Company said the increase in full-year revenue EPS guidance was primarily due to better-than-expected revenue performance and continued cost management.
From a chart-technical point of view, there is no reason to buy the stock at the current level. Due to the publication of positive data from a Phase III study of the Alzheimer's drug candidate Lecanemab at the end of September, the chart formed a price gap with an increase of over 40%. This is likely to be closed at around USD 201 in the event of a slide below the USD 251 mark. On the other hand, if the resistance at USD 283.44 is overcome, the chart picture would brighten significantly.
Cardiol - Financed through to 2026
The panic selling in the biotech sector in recent months led to clearly exaggerated markdowns for individual stocks. In the case of Nasdaq-listed life sciences company Cardiol Therapeutics, which has a market capitalization of CAD 49.50 million, the undervaluation is obvious, as the Canadians are currently trading below their cash position of over CAD 50 million. The suspension of the LANCER study due to lack of eligible patients to support recruitment, which was conducted to evaluate the cardioprotective properties of blockbuster candidate CardiolRx in people hospitalized with COVID-19, has secured the Company's funding for an additional year until 2026.
CardiolRX, a lead product candidate and a pharmaceutically manufactured oral cannabidiol formulation, is now being used to increase focus on advancing the Phase II ARCHER study, which has been investigated to evaluate CardiolRx in acute myocarditis, an inflammation of the heart muscle. The study, developed with renowned international experts in heart failure and myocarditis, has already received regulatory approval in several countries and is expected to enrol 100 patients in major cardiac centers in North America, Europe, Latin America and Israel. Initial study results are expected later this year.
In addition, a Phase II pilot study is underway in recurrent pericarditis, an inflammation of the pericardium. The study is expected to enrol 25 patients at major clinical centers specializing in pericarditis in the United States, with initial results expected to be published in 2023.
The analysts at Cantor Fitzgerald see the discontinuation of the LANCER study as positive since the focus should be on the studies against myocarditis and recurrent pericarditis. In addition, the analysts welcomed the extension of the financing scope into 2026. The investment rating was confirmed as "overweight", and the price target remains USD 5. At the current price of USD 0.61, this means an upside potential of over 700%.
Evotec - Profitable partnership
With a price gain of almost 6% to EUR 18.87, the share price of the Hamburg-based biotechnology company is pushing close to the prominent resistance at EUR 19.40. A sustained break would generate follow-up potential to the September high at around EUR 23.01.
The reason for the strong share price performance was the announcement of a cooperation with the Hannover Medical School to establish a molecular patient database for autoimmune diseases. According to the Company, the partnership aims to better understand Sjögren's syndrome (SjS) and systemic lupus erythematosus (SLE) by building a unique PanOmics longitudinal database from the analysis of patient material. For academic research purposes, MHH will have access to the data generated under the partnership via Evotec's AI-driven analysis software PanHunter. Evotec has exclusive rights to commercially exploit the data with its unique capabilities in the field of data-driven precision medicine.
After the horrendous share price losses of the past months, many biotech stocks are about to complete their bottoming process. Evotec could generate a buy signal by breaking above a prominent resistance level. At Biogen, the signs are pointing to consolidation after the recent strong price rally. In contrast, analysts see a price potential of 700% for Cardiol Therapeutics.
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") currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a "Transaction"). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
In this respect, there is a concrete conflict of interest in the reporting on the companies.
In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
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