January 30th, 2024 | 06:30 CET
BioNTech, Cardiol Therapeutics, Evotec - Biotech upswing post-Corona
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"[...] 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.
BioNTech - Is a breakthrough in oncology on the horizon?
BioNTech made a name for itself by winning the race for the first COVID-19 vaccine. After fantastic results, the Company could not sustain the momentum as the demand for COVID-19 vaccines significantly declined. Accordingly, the share price also started to fall. The profits were used to drive forward research in oncology. At the JP Morgan Healthcare Conference, the Company provided a forecast of its ventures in 2024. At least 10 pivotal studies are expected to be in the pipeline by the end of the year. At the same time, work is underway to build up commercial capacities so that sufficient production can be achieved in the event of approval.
There was also an outlook for the financial year. Sales of EUR 3 billion are planned for the current year. At the end of 2023, BioNTech had a cash position of around EUR 17.5 billion. The first oncology product should be on the market in 2026. On January 22, the Company announced the start of its Phase III trial with antibody-drug conjugate (ADC) candidate BNT323/DB-1303 in metastatic breast cancer together with DualityBio. The trial aims to evaluate the efficacy and safety of the innovative ADC targeting human epidermal growth factor receptor 2 ("HER2"). A total of 532 patients are expected to take part in the trial.
Investors are currently taking a wait-and-see approach as sales continue to decline. Nevertheless, the Company's pipeline is full to bursting, and it can be assumed that the share will quickly regain momentum if another drug is approved. In addition, the Company has sufficient capital to drive its research and development forward at full steam. The share is currently trading at EUR 86.62 and thus at an important support zone around EUR 85.30, which has already held three times. The analysts recommend holding the shares and see a price target of around EUR 100.
Cardiol Therapeutics - ARCHER study more than 50% full
Cardiol Therapeutics is a clinical-stage life sciences company focused on the development of therapies for heart disease. The Company is pursuing promising approaches for the treatment of recurrent pericarditis, acute myocarditis and heart failure using cannabidiol as the lead compound. The lead product, CardiolRx™, is currently being tested in 2 different Phase II studies. One is the MAvERIC Pilot study, which is being conducted in patients with recurrent pericarditis. Eight hospitals, including the renowned Massachusetts General Hospital, have now been won as partners.
The ARCHER Phase II study is also underway, in which CardiolRx™ is being used in patients with acute myocarditis - inflammation of the heart muscle. Cardiol announced on January 9 that the study has already been more than 50% filled. This randomized, placebo-controlled study is intended to investigate the effects of CardiolRx™ on myocardial recovery. The results will contribute to the understanding of the therapeutic potential of CardiolRx™ and, at the same time, complement important clinical data from the ongoing MAvERIC Pilot Phase II study. Since the Corona pandemic, cases of acute myocarditis have increased, and the need for therapeutic options has increased accordingly.
Another product in the starting blocks is CRD-38. It is a novel subcutaneously administered drug formulation of cannabidiol, which is intended for use in heart failure. However, it is still in preclinical trials. Since January 23, the share has again fulfilled all minimum requirements for its NASDAQ listing. This means that a possible delisting is off the table. This may also have been responsible for the recent price surge, which pushed the share price up to USD 1.27. In November, we pointed out the established upward trend, which has continued. At times, the share had a market capitalization that was below the Company's cash position.
Evotec - Share remains under pressure
Evotec SE is a drug discovery and development company with a broad range of services. The Company uses innovative technologies such as PanOmics, iPSC cell therapy and continuous biologics manufacturing, i.e. drugs consisting of biological substances, to drive drug development. However, the recent focus has been on the resignation of CEO Werner Lanthaler for personal reasons. At the same time, it came to light that Lanthaler had engaged in insider trading but that this had not been reported by the Company. He is said to have sold shares worth EUR 6 million before a major shareholder announced his exit. He also bought shares shortly before the announcement of an important partnership. So, there remains a bitter aftertaste.
Operationally, however, things are progressing positively. In January, Evotec and Owkin announced a partnership to accelerate AI-based target discovery and the development of new therapeutics in the fields of oncology, immunology and inflammation. The neurology partnership with Bristol Myers Squibb is also increasingly paying off. Based on significant scientific progress, Evotec receives USD 25 million to further advance the joint pipeline of neurology programs. The partnership will be extended and expanded for an additional 8 years. On January 10, the Company announced a partnership with the Crohn's & Colitis Foundation to advance drug discovery for inflammatory bowel disease (IBD). The collaboration focuses on developing new therapeutic approaches for Crohn's disease and ulcerative colitis.
With the resignation of the former CEO, Evotec's share price took a beating. Short sellers exerted additional pressure. At the same time, there are positive analyst opinions. In January, there were 3 "Buy" recommendations from RBC Capital Markets, Jeffries and Warburg Research, with price targets of between EUR 18.60 and EUR 29.00. Among other things, the analysts referred to a draft bill in the US from which the Company could benefit. Deutsche Bank downgraded the stock to "Hold" and issued a price target of EUR 20.00. Although the share has significant upside potential in some cases according to all analyst firms, the share remains under pressure and produced a new low for the year of EUR 13.925 on January 29.
Any positive news can send the shares of a biotech or pharmaceutical company soaring like a rocket. BioNTech led the way with the COVID-19 vaccine. Now, they are working on the next oncology blockbuster. At Cardiol Therapeutics, two studies are currently in Phase II. If CardiolRx™ enters Phase III, the share price will rise significantly. Evotec is making operational progress, but the resignation of the former CEO still leaves questions unanswered. However, the discount here is possibly exaggerated.
Conflict of interest
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