September 5th, 2022 | 11:49 CEST
BioNTech, Cardiol Therapeutics, Formycon - Biotech stocks about to make a comeback?
Fears of a recession have recently pushed the markets down again. Those who want to bet on crisis-proof investments should look at biotech stocks. The world population is growing, people are getting older, and in line with age, more diseases are appearing. This trend will continue in the coming years. Therefore, the prospects for success in this sector are excellent. One cannot cut corners on health. Since September 2021, shares of biotech companies have also consolidated strongly. In some cases, shares appear severely undervalued. Today, we look at three interesting companies in the biotech sector.
time to read: 5 minutes
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Author:
Armin Schulz
ISIN:
BIONTECH SE SPON. ADRS 1 | US09075V1026 , FORMYCON AG | DE000A1EWVY8 , CARDIOL THERAPEUTICS | CA14161Y2006
Table of contents:
Author
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.
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BioNTech - Patent disputes
BioNTech is, of course, mainly known for its COVID-19 vaccine. Together with its partner Pfizer, it is the market leader, and now that autumn is just around the corner, the Corona issue is again being increasingly discussed. But where there is great success, the envious are not far behind. There are reports that Moderna is accusing the Mainz company of infringing its patents. At the beginning of July, CureVac had also filed a lawsuit for alleged patent infringements. In both cases, the Mainz-based company denies the allegations and has now gone on the counteroffensive. Together with Pfizer, they have filed a lawsuit at the High Court in England to establish that their Comirnaty vaccine does not infringe CureVac's patents.
On a positive note for the Company, news broke on August 31 that it has received FDA emergency approval for the booster vaccination with the vaccine adapted to Omicron BA.4 and BA.5. Things may now move quickly in Europe as well. After completing the marketing authorization application for the Omicron vaccine on August 26, there was a recommendation from the Committee for Medicinal Products for Human Use (CHMP) on September 1. The CHMP recommends conditional approval to the European Medicines Agency. Pfizer's CEO commented, "Our bivalent vaccine adapted to Omicron BA.1 offers all EU residents and health authorities an immediate opportunity to boost immune protection against Omicron if approved."
BioNTech shares have come under pressure since the Company announced its half-year results on August 8. The reason for this was a weak 2nd quarter, in which sales and profits fell by about 40%. However, the declines were due to postponements of orders that will be made up in H2. In addition to the Corona vaccine, the Mainz-based company is increasingly working on cancer vaccines. The revenues from the Corona vaccine mean that research and development costs are no longer a problem. The share is currently quoted at EUR 148.50. The share should pick up once the patent suits are off the table.
Cardiol Therapeutics - ARCHER study started
Canadian biotech company Cardiol Therapeutics uses highly purified cannabidiol to treat cardiovascular diseases. Its lead product, CardiolRX, is already in two clinical trials. The ARCHER study is in the Phase II clinical development program and addresses acute myocarditis. The LANCER study is already a step further with Phase II/III and focuses on cardiorespiratory complications in Corona patients with pre-existing cardiac disease. At the end of 2021, the study, which enrols 422 people, was expanded to other countries.
On August 3, the Company was pleased to announce that the first patient in the ARCHER program was enrolled. A total of 100 patients are expected to be enrolled at major cardiac centers in several countries. Dennis McNamara, MD, MS, Professor of Medicine and Chair of the study's Steering Committee, said: "I am pleased that this important milestone has now been reached and the ARCHER study, designed to evaluate the therapeutic potential of CardiolRx in myocarditis, is officially underway." In addition, the Company has received approval from the FDA for an open-label Phase II pilot study evaluating the tolerability and safety of CardiolRX in patients with recurrent pericardial inflammation.
The Annual General Meeting on June 28 confirmed management's course by approving all resolutions with more than 99% of the voting shareholders. Financially, the Company is in good shape. At the end of June, it had more than CAD 70 million in cash. In addition, a share issuance program at the current market price of up to CAD 50 million has been running since the beginning of June. Accordingly, the Company no longer has any financing requirements in the next 2 years. Due to the new studies, more news can be expected in the future. Currently, one share on the NASDAQ costs USD 1.12. The market capitalization is thus around CAD 90 million, which is only CAD 20 million above the cash balance. Anyone with questions about the Company can direct them to CEO David Elsley, who will be presenting at the 4th International Investment Forum on September 27.
Formycon - Approval of FYB201 in Europe and the US
Formycon AG develops and markets biosimilar products. When the patent protection of an established drug expires, this is also the starting signal for generics. If these are produced biologically and not chemically, they are called biosimilars. These are often significantly cheaper than the former standard brand-name product. The Company specializes in therapies for ophthalmology, immunology, and chronic diseases. Major industrialized countries are seen as the main target markets.
In August, the Company achieved a milestone with the approval of FYB201 in the US and Europe. The biosimilar was already approved in the UK in May. The product is a biosimilar for Lucentis, prescribed to treat wet age-related macular degeneration. Novartis had sales of about USD 2.2 billion for the drug in 2021. Now it remains to be seen how much of the pie Formycon can take for itself in the future. But the Company has other products in the pipeline. The most advanced is FYB202, which mimics the drug Stelara. On August 16, the Company announced that the Phase III trial had comparable results to the reference product.
Most recently, it added two more biosimilar developments, FYB208 and FYB209. While biosimilar sales were around EUR 15 billion in 2020, they are expected to quadruple to EUR 60 billion by 2030, according to BCC Research, IQVIA and McKinsey. The Company is therefore operating in a clear growth market. In addition, anyone who has a choice will probably prefer to take a biological drug rather than a chemically produced one, provided the effect is the same. While the share price peaked at EUR 87.90 on August 17, it subsequently fell to EUR 72.10. The support level of EUR 72.60 was successfully tested. The share then jumped back up to EUR 75.
The healthcare sector is booming. In the long term, the market will grow due to the ageing population. All three companies presented should benefit from this. BioNTech is currently still strongly focused on the Corona vaccine, but there is also progress in cancer research. Cardiol Therapeutics has just started the next Phase II trial. There should be news flow here in the future. Formycon's first product has been approved in Europe and the US. Further compounds are in the pipeline.
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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.
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