July 26th, 2021 | 13:55 CEST
BioNTech, Cardiol Therapeutics, CureVac - What is next?
Are you smiling or shaking your head? Both are easily understandable reactions that investors might have in light of the latest statements from the Deutsches Aktien Institut (DAI). The DAI calls for better conditions for IPOs of growth companies to prevent such companies from migrating to foreign stock exchanges, as happened with BioNTech, among others. "Especially companies with specialized business models and high financing needs are dependent on foreign investors," explained Uta-Bettina von Altenbockum. However, this is not a new phenomenon either. Other countries have been creating better framework conditions for corporations and better tax incentives for investors for a long time. Own goal. What opportunities are there?
time to read: 3 minutes
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Author:
Carsten Mainitz
ISIN:
BIONTECH SE SPON. ADRS 1 | US09075V1026 , CARDIOL THERAPEUTICS | CA14161Y2006 , CUREVAC N.V. O.N. | NL0015436031
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
Carsten Mainitz
The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
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BIONTECH SE - New all-time high
The BioNTech share recently reached a new all-time high. The announcement by the US to buy another 200 million doses of the Corona vaccine from manufacturers BioNTech and Pfizer triggered the share price surge. According to the announcement, the US government is preparing for the vaccination of younger children and booster shots for adults. Pfizer said just over half of the doses would be delivered by the end of the year and the rest by April 2022. That brings the total orders to 500 million units.
The potential vaccination of children and adolescents and booster shots will continue to keep vaccine manufacturers' coffers ringing in the months ahead. In addition, there is a high probability that with the emergence of more and more new covid variants, vaccinations will be with us for a long time to come. The European Medicines Agency (EMA) recently voted to approve a second Corona vaccine for children and adolescents. As a result, after the vaccine from BioNTech, the preparation from Moderna could now also be used. The EU Commission still has to approve the approval, but this is considered a formality.
With a share price of around USD 282, BioNTech is currently valued at USD 58 billion. We assume that analysts will soon further increase the price targets for the shares; according to the prevailing opinion, the title is now exhausted. However, the latest developments and the resulting potential are probably not yet priced into the investment judgments. Looking at some experts' estimates, which assume earnings this year and next year in the order of USD 7 billion each, the stock is moderately valued with a P/E ratio of 8 to 9. Of course, the question is how sustainable the profits generated are. The bottom line is that the stock offers a good risk-reward ratio.
CARDIOL THERAPEUTICS INC - Change in the Board of Directors
Cardiol Therapeutics is breaking new ground in the therapy of inflammatory heart diseases. The Canadians are relying on cannabidiol (CBD) for therapeutic trials. A body of scientific evidence exists that cites the use of cannabidiol as beneficial as an anti-inflammatory agent.
The Company's lead product, CardiolRx, is a pharmaceutically manufactured oral cannabidiol formulation that is currently being evaluated in a Phase II/III outcomes study in hospitalized patients who tested positive for the Covid-19 virus. This potential pivotal study is designed to assess the efficacy and safety of CardiolRx as a cardioprotective therapeutic to reduce mortality and major cardiovascular events in Covid-19 patients with pre-existing cardiovascular disease or risk factors for cardiovascular disease. The study is also to evaluate the impact of CardiolRx on key markers of inflammatory heart disease.
Due to age, the Company recently announced a change within the board. Dr. Guillermo Torre-Amione has now been appointed as the new Chairman. Dr. Torre-Amione has served as an independent director of Cardiol since August 2018 and now takes over from Dr. Eldon Smith, who has held the role of Chairman since Cardiol's inception and is now retiring. Dr. Guillermo Torre-Amione is a board-certified specialist in cardiovascular disease and advanced heart failure/transplant cardiology.
Cardiol filed for listing on NASDAQ in March 2021. Inclusion in the US index is expected to result in a significant valuation boost for the stock. To further develop the Company, the Canadians raised more than CAD 50 million on the capital market in the last 12 months. Currently, a price of CAD 2.72 is being called for the shares, which means that the Company is valued at just under CAD 120 million. If the analysts at GBC are to be believed, the share has an upside potential of up to CAD 15.77!
CUREVAC NV - What does the future hold?
Opportunity and risk are two sides of the same coin. While Mainz-based BioNTech and partner Pfizer are writing a breathtaking success story, the Tübingen-based vaccine developer CureVac is on the downside. Some time ago, the Süddeutsche reported that the vaccine's effectiveness was only around 48%. As a result, the German government announced that the CureVac vaccine would no longer be included in the current campaign. Unsurprisingly, Curevac's share price plummeted as a result and has not recovered significantly to date. At a current share price of EUR 46, the Company is valued at around EUR 8 billion. The market will certainly take a while to price in the changed situation. Should the Company fail to launch the vaccine, the current valuation is far too high.
No opportunity without risk. Investors should keep this in mind, especially with biotech stocks. Biontech certainly offers the best risk-reward ratio. In the case of Cardiol, a reassessment should begin in the event of success. In our opinion, the risks outweigh the rewards for CureVac.
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