26. August 2021 | 10:41 CET
BioNTech, Cardiol Therapeutics, Bayer: Where Covid-19 still provides returns
The pandemic has not only brought losers. There is also a long list of winners. Starting with Amazon and Deutsche Post and ending with BioNTech. Before Corona, the latter Company was always considered a beacon of hope around mRNA technology. Then came the pandemic, and suddenly several small test balloons turned into a gigantic project as we know it today, with a successful outcome. We shed light on BioNTech and also focus on other potential winners of the pandemic.
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ISIN: BIONTECH SE SPON. ADRS 1 | US09075V1026 , CARDIOL THERAPEUTICS | CA14161Y2006 , BAYER AG NA O.N. | DE000BAY0017
BioNTech: What is next?
Currently, BioNTech is investigating the potential of a third vaccination. While advocates of a global approach to vaccination call for Western industrialized countries to forgo the third dose in favor of the first dose in poorer countries, tangible benefits of such a "booster vaccination" are emerging. Given existing supply contracts and public pressure, BioNTech could soon be shipping boosters. Initial studies on the effectiveness of the boosters are promising. Another positive for BioNTech is that the vaccine has received full approval from the US Food and Drug Administration (FDA). That means that even the last minor reservations about the vaccine have been dispelled. Many employers and even official bodies are now likely to urge their employees to be vaccinated. For example, mandatory vaccination in the US military is now expected - good for business for BioNTech.
While noted US immunologist Anthony Fauci expects a return to normalcy next spring, BioNTech may be one of the companies that has benefited most from the pandemic. In addition to sales of the vaccine, BioNTech is likely to have gained confidence and capital around other projects, putting it in a much better position than it was two years ago. In a slightly different form, such a development could also be in store for Canadian pharmaceutical Company Cardiol Therapeutics, recently listed on the Nasdaq.
Cardiol Therapeutics: Nasdaq listing and FDA provide a boost
Cardiol is researching drugs for acute myocarditis. This inflammation of the heart also occurs in connection with Covid-19. In general, inflammatory processes are considered to be a driver for many different diseases. Yesterday, Cardiol Therapeutics received a positive notification from the US Food and Drug Administration (FDA): According to this, the regulator has expressed its non-objection regarding a Phase II study that will investigate the efficacy of CardiolRx and its effects on the regeneration of the heart muscle. "IND approval to proceed with our Phase II clinical trial of CardiolRx in patients with acute myocarditis represents another important milestone for Cardiol as we continue to develop new treatment options for patients with inflammatory heart disease," commented David Elsley, President and CEO of Cardiol Therapeutics.
The green light from regulators has been very well received in the market. In general, the listing on Nasdaq is good for the stock - the trend has been upwards for three weeks. The analysts at Leede Jones Gable also believe that the share has potential and see the price target for Cardiol Therapeutics at CAD 12.50 in an analysis published yesterday. The share is currently trading at just under CAD 4. In the past, biotech stocks with promising projects were often able to convert the attention thus gained into rising prices after a listing on the Nasdaq. The reason: Many funds are only allowed to invest if a company is also listed on a well-known trading venue. The Nasdaq represents an upgrade compared to the Toronto Stock Exchange and the trading centers in Germany. Cardiol Therapeutics could have one of the drugs in its portfolio that effectively treats at-risk groups when infected in the new normal - that is, when Covid-19 becomes more like the flu. In any case, the potential use in Covid-19 patients should not be detrimental to the approval process.
Bayer: Boring with qualities
One stock that is also repeatedly mentioned in connection with increased investment in the healthcare system is Bayer. After all, the chemical company has a drug division responsible for more than 40% of its sales. With its focus on cell and genetic engineering, Bayer is considered a technology leader. In addition, there is a good business with seeds. The latter is benefiting from a growing world population and rising raw material prices. In the first quarter, the Company succeeded in posting a substantial 40% jump in profits. Although the stock has been languishing for years, it looks fundamentally sound. However, there is currently a lack of momentum. To tide investors over, however, they can look forward to a dividend yield of around 3.8%.
While Bayer is a solid stock that will not offer any big surprises, the situation is quite different for BioNTech and Cardiol Therapeutics. The latter companies have future projects and potential blockbusters in their development portfolio. However, BioNTech is already the talk of the town and is valued accordingly. That leaves Cardiol, where a huge growth opportunity meets a valuation of only around EUR 95 million.