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September 6th, 2023 | 08:00 CEST

BioNTech, Cardiol Therapeutics, Bayer - Tiger mosquitoes, and rising Corona numbers bring biotech back in focus

  • Biotechnology
  • Cancer
  • Covid19
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Corona infections are already rising, even though autumn has not even begun. Hospitals are already fearing a high burden during the winter. Gerald Gaß, the Chairman of the Board of the German Hospital Federation, advised high-risk patients, their close contacts and healthcare workers to keep their flu and COVID-19 vaccinations up to date. Due to constant stress triggered by crises and workload-related pressures, the number of heart patients have also increased in recent years. At the end of August, entire neighborhoods and streets in Paris were closed off to spray insecticides against tiger mosquitoes, which spread diseases like dengue and Zika viruses, among others. This is reason enough for us to examine three companies fighting these threats.

time to read: 4 minutes | Author: Armin Schulz

Table of contents:

    BioNTech - Changes legal team

    Increased coverage of rising coronavirus infections is good for top dog BioNTech. On September 1, the Main-based company received approval from the European Commission for its COVID-19 vaccine adapted from Omicron XBB.1.5. The European Medicines Agency has recommended Corona vaccination for everyone 5 years and older. The new vaccine should be available in pharmacies and doctors' offices around mid-September. Criticism regarding the dispensing quantity of a minimum of 6 doses was voiced by, among others, the German General Practitioners' Association, which fears that quite a few doses will have to be thrown away again.

    Orders for personal use can be placed until September 12. This could bring new momentum to the share, which was under constant pressure until early August. This is also due to a large number of lawsuits concerning possible vaccine-related damages that the Company is facing. Shortly before the wave of lawsuits began, the Mainz-based company replaced the CMS legal team with White & Case. According to industry insiders, this is an unusual move. In the end, however, the German government provided comprehensive guarantees, so the vaccine manufacturers should be out of any liability.

    The share has made a decent rebound after the Corona reports of the last few days and is currently available for EUR 113.75. The low for the year at the beginning of August was EUR 86.72. Regardless of the current Corona "boom", the more crucial question is how the Company is progressing with its oncology trials. At the latest, there should be an update with the Q3 numbers, which will be presented on November 6.

    Cardiol Therapeutics - Recruitment progressing

    Heart disease is growing, and this trend will continue for some time. Cardiol Therapeutics is a clinical-stage biotech company dedicated to developing anti-inflammatory and antifibrotic therapies for heart disease. The Company is focused on underserved heart disease and has a promising oral drug candidate, CardiolRx™, which is in Phase II trials for the treatment of recurrent pericarditis (RP) and acute myocarditis (AM), demonstrating its anti-inflammatory and antifibrotic properties. Cardiol is also developing CRD-38, a subcutaneously administered drug for the treatment of heart failure.

    According to research from First Berlin Equity Research (FBER), management provided information at a US investor conference about patient enrollment in the trial of RP. A total of 8 hospitals are participating in patient recruitment. FBER analysts expect at least 50% of participants to be identified in the coming weeks. That would be a milestone for the Company because if the results are positive, it could approach the FDA for permission to start a Phase III trial. The AM trial has already attracted more than 35 clinics, and recruitment is ahead of schedule. The 50% threshold is expected to be reached in early 2024.

    This is good news for Cardiol, which has an extensive intellectual property portfolio. At the same time, they are debt-free and sufficiently capitalized until 2026. The management team has extensive experience in cardiovascular medicine and works with top researchers. For those who want to learn more, you should have a look at the report from FBER. As of August 8, the Company is also back in compliance with NASDAQ regulations, so the listing is no longer in jeopardy. The stock is currently trading at USD 1.00 and has thus made more than 100% since the low in April.

    Bayer - Upswing due to tiger mosquitoes?

    The tiger mosquito is considered aggressive. In Paris, entire apartment blocks and streets were sprayed with insecticides because health authorities feared the spread of dengue fever. The Kronen Zeitung asked whether Vienna would follow suit because the mosquito is now also native to that city. Bayer's Crop Science division knows a thing or two about insecticides. About 17% of the global pesticide market is supplied by Bayer. Only Syngenta is larger. The Monsanto acquisition is still a problem for Bayer, as some glyphosate lawsuits are still pending.

    In this area, the Group recently invested EUR 220 million in a research and development facility at its Monheim site. The Group has entered into a new collaboration with Pairwise to further develop short-stem corn. The Pharmaceuticals division is doing much better. There, a Phase I study with bemdaneprocel reached its primary clinical endpoint. The results of the therapy against Alzheimer's disease were consistently positive in terms of safety and tolerability, regardless of whether high or low doses were administered. A Phase II study is now planned to follow in the 1st half of 2024.

    Most recently, Bayer's outlook has been set to negative by rating agency Fitch, although the BBB+ rating remained. The main point of criticism is the high debt level of approximately EUR 39 billion, which is mainly due to the Monsanto acquisition. The high interest expenses could potentially reduce the funds available for research and development. Additional risks exist due to the legal disputes in the Crop Science division. The share is currently trading at EUR 50.78.

    The aging population is leading to increased diseases, particularly heart and cancer-related conditions. BioNTech has built a substantial financial cushion with its COVID-19 vaccine and can work on the oncology pipeline peacefully. Cardiol Therapeutics specializes in heart diseases, and once at least 50% of patients are recruited for the Phase II trials, it can accelerate the path to Phase III, likely resulting in a significant boost in the Company's value. Bayer's Crop Science division remains the problem child. Perhaps addressing the tiger mosquito issue could help to achieve the turnaround. A split is still on the cards.

    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

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author

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