November 6th, 2023 | 06:45 CET
BioNTech and Bayer under pressure - Defence Therapeutics, on the other hand, with good results. Where is it worth investing?
Table of contents:
Defence Therapeutics - Strong preclinical study results
Defence Therapeutics is successfully utilizing its proprietary Accum® drug delivery platform to precisely transport antibody-drug conjugates (ADCs) into diseased cells. This innovative approach has enabled the Company to publish very positive preclinical study results for its three most advanced therapies. The cell vaccine ARM targets solid tumors. The protein vaccine AccuVAC-PT007 fights cervical cancer. AccuTOX® was developed to treat skin, breast and lung cancer. On October 17, study results were announced from a series of tests in animals with solid lymphoma tumors that received encapsulated AccuTOX® chitosan nanoparticles. The formulation was administered twice at 2-week intervals and was able to both stop the growth and induce the regression of the tumors to the point of complete regression.
The AccuTOX® molecule offers multiple ways to eliminate cancer cells. In animals with lung cancer, combination therapy of AccuTOX® and the immune checkpoint inhibitor anti-PD1 reduced cancer nodules by 50%. With the latest news on October 25, the Company announced an exciting discovery. In a transcriptomic analysis of tumor cells treated with AccuTOX®, a therapeutic effect known as antigen cross-presentation was observed. The process may be crucial for developing cell-based cancer vaccines that can activate CD8 T cells that can destroy cancer cells. On this basis, a proprietary platform can be developed that makes it possible to destroy tumor cells from the inside and stimulate an immune response so that the cancer cannot come back.
The preclinical data on Accum® as an anti-cancer material was published in the journal Cancer Science at the beginning of October. Three Phase I trials are to be launched as early as 2024. Oncology had a turnover of USD 286 billion in 2021 and is expected to reach USD 536 billion worldwide by 2029. Defence Therapeutics has thus positioned itself in a strong growth market. The experts at researchanalyst.com have taken a closer look at the Company and see increased opportunities for a strategic partnership with a large company. The share has outperformed the NASDAQ Biotechnology Index over the past year and is trading at CAD 2.71 after a consolidation.
BioNTech - Good study results, but quarterly figures from competitors are a burden
BioNTech shares were unable to escape the downward pull of the other corona profiteers. Pfizer had to revise its forecasts significantly downwards as demand for COVID-19 vaccines fell sharply. Moderna also had to endure a sharp slump after presenting its figures. Today, November 6, it is BioNTech's turn to present its quarterly figures. It is unlikely that the figures will be strong, especially as Pfizer's write-offs of up to EUR 900 million in connection with the Comirnaty vaccine will also affect the Mainz-based company.
October was peppered with good news about the Company's pipeline. On October 19, the start of a trial of an mRNA-based, individualized neoantigen-specific cancer immunotherapy candidate Autogene Cevumeran (BNT122) was announced. A total of 260 participants will be treated in the Phase II study. The series has started in the US, with Europe and the Asia-Pacific region to follow. On October 23, there was a positive data update from the Phase I/II study with the CAR-T cell therapy candidate (BNT211) in advanced solid tumors. Just 3 days later, there was also positive data from the mRNA-based combination vaccine program against influenza and COVID-19.
In addition, the Company was present at two congresses, the ESMO and the SITC annual meeting, where it presented the progress of its portfolio. When the quarterly figures are presented, the potentially poor quarterly figures should already be priced in. Nevertheless, the reaction to the figures should be closely monitored. On Friday, the share closed Xetra trading at EUR 90.74. As a result, a new low for the year was avoided. If closing prices exceed EUR 93, a gap close at EUR 100.70 is likely.
Bayer - Lawsuits cast a dark shadow
Since June 1, Bill Anderson has been at the helm of Bayer. Since then, the stock has lost over 20% at its peak. It is not the fault of the new CEO because he is not responsible for the Monsanto takeover. While it made them the number 1 seed producer, the Company also took on debt, and the ongoing glyphosate legal disputes are weighing on the stock price. Most recently, the Company lost three lawsuits in a row in the US. This is a setback, as the Company had previously been able to fend off several lawsuits. It is not yet clear whether the Company will appeal, but one can assume that it will. The cases have also resulted in provisions of over EUR 6 billion.
This sum could be put to good use in the pharmaceuticals sector. Bayer's division is facing challenges as the patents for its top sellers, Xarelto and Eylea, are about to expire. New products such as Nubeqa, Verquvo and Kerendia are expected to compensate for the anticipated decline in sales. To accelerate drug research, the Company has joined forces with Twist Bioscience and thus gains access to the phage display libraries, i.e. antibody libraries. Bayer is paying up to USD 188 million for this. It remains to be seen whether the promising product in clinical development, asundexian, will reach market maturity more quickly.
Bayer plans to publish its figures for the third quarter on November 8. Interested investors should take a closer look at the debt level. The mountain of debt could rise to EUR 36 billion by the end of the year. In times of rising interest rates, refinancing will become significantly more expensive. Analysts at DZ Bank expect the Group to be split up in order to separate the risks of the Crop Science division from the Pharma division. Barclays and UBS recommend the share as a Buy with price targets between EUR 65 and EUR 90. JP Morgan is much more cautious and has set the stock at Hold with a price target of EUR 47. The share is currently trading at EUR 42.06.
Currently, an investment in BioNTech appears the most promising as the Company has very high cash reserves and can continue research at full speed. Second place goes to Defence Therapeutics because the innovative Accum® platform is open to various applications, and almost any major pharmaceutical company can benefit from the technology. Bayer faces two major issues. They are dealing with tens of thousands of glyphosate lawsuits and high debt. A new strategy from CEO Bill Anderson is needed to make the share attractive again.
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