October 25th, 2023 | 07:20 CEST
BioNTech, Cardiol Therapeutics, Paion - Rising Attractiveness and Lots of Movement
Table of contents:
Paion with further sell-off
One could be forgiven for thinking that the share chart of the biotech company, which was founded in Aachen, Germany, in 2000, is a good place to start. Following a capital reduction approved at the end of March, where each shareholder received one new share for ten old shares, the next measure has now been decided. The Company intends to raise a total of EUR 9 million through a rights issue to be used for investments in its commercial infrastructure, the European market launch of Byfavo in general anesthesia, product life cycle management, and the fulfillment of development obligations. In addition, the funds will be used for repayments and interest under the loan agreement with the European Investment Bank and for general corporate purposes.
A look at the terms shows just how great the need appears to be. Thus, a total of 4.8 million shares at a price of EUR 1.90 will be offered to interested parties. Curiously, at the time of this announcement, the paion share was still at around EUR 3.75, nearly 100% higher compared to the subscription price.
The only positive aspect is that the Chinese Humanwell Healthcare Group, "subject to certain conditions", undertakes to acquire new shares for a total amount of up to EUR 6 million. An exclusive remimazolam licensing agreement for the Chinese market has existed between Yichang Humanwell, a subsidiary of Humanwell, and paion since 2012. In addition, the Swiss investor Nice & Green also expressed interest and would acquire shares with a total value of EUR 5 million if the existing shareholders did not subscribe. However, this deal is also subject to certain conditions, which were not further explained in the current press release.
The paion share is currently trading at EUR 2.25 and is dramatically approaching the subscription price of the new share. From our point of view, an investment is currently not advisable, even at the significantly lower level.
Cardiol Therapeutics - Setback as an opportunity
In the course of the general market correction in the biotech sector, as well as negative events such as the profit warning from the pharmaceutical giant Pfizer, the shares of the life sciences company Cardiol Therapeutics, which specializes in the research and clinical development of anti-inflammatory and anti-fibrotic therapeutics for the treatment of heart disease, also corrected. After hitting a high for the year at USD 1.24, the shares are consolidating at a 38% lower level at USD 0.76. However, the share price development does not correlate with the positive company performance of recent weeks, making it an attractive entry opportunity for long-term oriented investors. This perspective is shared by the Canadian investment house Leede Jones Gable, who, following positive study results in mid-October, issued a one-year price target of USD 3.28 with a "speculative buy" rating. This represents a price potential of around 375% relative to the current share price. Furthermore, Cardiol shares have impressively appreciated 441% year-to-date.
At the 8th IIF-International Investment Forum, Cardiol’s CEO David Elsley explained the recent press release of study results presented by researchers from the Instituto Tecnológico de Monterrey in Mexico at the Heart Failure Society of America Annual Scientific Meeting 2023. The results demonstrated that subcutaneously administered cannabidiol, the active pharmaceutical ingredient in Cardiol's novel CRD-38 formulation, decelerates the increase in body and heart weight while also preventing undesirable increases in crucial inflammatory and remodeling markers of the heart.
In addition, concerning the ARCHER trial, which focuses on acute myocarditis, Cardiol reported in mid-September that recruitment of the required patients is expected to be completed six months earlier than anticipated. The Company estimates that the 100 patients needed for the study will be recruited in the third quarter of the coming year. Furthermore, collaboration with all clinical research centers required for the study has been initiated.
Another plus point for Cardiol Therapeutics compared to peer group companies is that the Company does not require any further capital measures for research and development until at least early 2026. As of June 30, 2023, the cash balance was CAD 45 million.
BioNTech - Dangerous Situation
The Mainz-based biotech company, BioNTech, is not likely to encounter financing problems in the near future, as the cash box is still bulging with income from the Corona vaccines. Instead, the problem here is that, due to the flattening of the pandemic, sales in the billions have been lost, which can hardly be **compensated by other preparations, such as cancer research, in the coming years. And the market cap is still a whopping USD 22 billion at a share price of around USD 91.
BioNTech reported progress in one of its research projects. In a Phase II trial, the first patient with surgically removed pancreatic ductal adenocarcinoma was treated with the mRNA-based, individualized neoantigen-specific immunotherapy candidate Autogene cevumeran. A total of 260 patients are expected to participate in the Phase II clinical trial, which is being supported by BioNTech and Genentech. The focus of the collaboration is the global development, manufacturing and commercialization of innovative mRNA-based individualized cancer vaccines targeting neoantigens.
The biotech sector is currently in a broad correction due to the current market environment. BioNTech is suffering from the sales warning of its partner Pfizer. At paion, a sell-off occurred due to the announcement of a capital increase significantly below market price. In contrast, analysts see a potential of around 375% for Cardiol Therapeutics following the announcement of positive study results.
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.
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