December 12th, 2023 | 06:50 CET
BioNTech, Defence Therapeutics, Bayer - Golden times for the biotech and pharma industry?
With the arrival of winter, people are increasingly worried about illnesses such as coronavirus and influenza. The current wave of diseases and the new coronavirus variant are increasing the demand for medicines, which could positively impact the shares of pharmaceutical and biotech companies. Biotech's success in drug development for COVID-19 vaccines has allowed the industry to flourish over the past two years. But after the boom came the crash. However, the stock market always moves in cycles. The current challenges in the healthcare sector, such as the rising number of cancer cases, could, therefore, mean golden times for pharmaceutical and biotech companies, as they not only contribute to improving global health but also offer attractive returns for investors.
time to read: 4 minutes
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Author:
Armin Schulz
ISIN:
BIONTECH SE SPON. ADRS 1 | US09075V1026 , DEFENCE THERAPEUTICS INC | CA24463V1013 , BAYER AG NA O.N. | DE000BAY0017
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 - Product development is progressing
The new COVID-19 variant Pirola has now also arrived in Germany. The RKI has been registering an increase in coronavirus infections and other respiratory infections since September. This could boost BioNTech's business with the updated COVID-19 vaccine. In November, when announcing the figures for the third quarter, the Company reduced its sales expectations from EUR 5 billion to EUR 4 billion for the financial year. In the third quarter, sales amounted to EUR 895.3 million, which, as expected, was significantly below the EUR 3.46 billion from the previous year. Net profit amounted to EUR 160.6 million, equivalent to EUR 0.67 per share.
The new information on business development is always more exciting than the figures. The Company reported positive developments for various product candidates, including outstanding results for antibody-drug conjugate (ADC) candidates such as BNT323/DB-1303 for breast cancer and BNT325/DB-1305 for patients with metastatic solid tumors. In addition, the CAR-T cell therapy candidate BNT211, the T cell therapy candidate BNT221 and the mRNA cancer vaccine candidate BNT116 showed promising results in clinical trials. In addition, several clinical trials in the oncology field have started in advanced phases.
On December 8, the Company signed a multi-year strategic partnership with the Australian state of Victoria to strengthen the local mRNA ecosystem. This includes the establishment of an mRNA production facility and innovation center in Melbourne, as well as support for the development of investigational medicinal products. The share, which formed a sliding zone between EUR 83.30 and EUR 96.00 at the beginning of November, is preparing to leave this zone to the upside. One share currently costs EUR 95.50.
Defence Therapeutics - Patent granted and IND application filed
Defence Therapeutics is an innovative company dedicated to developing the next generation of vaccines and antibody-drug conjugate (ADC) products based on a proprietary platform. The Accum™ technology provides a solution for targeted and efficient drug delivery to infected cells, particularly in the field of cancer therapy and vaccine therapy. The innovative technology has made it possible to achieve up to 10 times greater efficacy than conventional delivery. AccuTOX® has achieved good results in the fight against cancer. It is a modification of the original Accum™ molecule and fights cancer cells on several levels.
On November 9, the Company submitted an Investigational New Drug (IND) application for AccuTOX® to the Food Drug Administration (FDA). All study data from preclinical tests demonstrating an acceptable safety profile were submitted with the application. As soon as the FDA approves the application, the Phase I clinical trial can begin. The Company expects the trial to start in the first half of 2024. CEO Sébastien Plouffe commented: "Given the ongoing difficulties facing clinical oncology, we are convinced that the therapeutic use of AccuTOX® offers a novel and effective approach to fighting cancer."
The cancer therapy market is growing and is expected to reach a volume of around USD 393 billion by 2032. The Company's knowledge is protected by patents. On November 7, Patent No. 3,201,103 was granted in Canada, covering all key technologies of the Company's vaccine platform. Prior to this, approval had already been granted in the US. Patents are also to follow for the European and Asian markets. Since December 7, the volume in the share has increased dramatically. On Friday, the share closed trading with a plus of 27% and is currently trading at CAD 2.80.
Bayer - Something is about to change
Things have been tough for Bayer shareholders in recent weeks. From defeats in the glyphosate litigation and the failure of the blood thinner asundexian to weak quarterly figures. The latter is attributable to the Crop Science division. Net sales amounted to EUR 10.3 billion in the third quarter, with EBITDA falling significantly from just under EUR 2.5 billion to almost EUR 1.7 billion, a decline of 31%. The annual forecast for EBITDA is EUR 11.5 billion. Free cash flow is nevertheless strong at EUR 6.5 billion per year and offers a return of 10% on enterprise value.
Nevertheless, the Company is allowed to sell glyphosate in Europe over the next ten years. In an interview with Handelsblatt, the new CEO Bill Anderson announced: "We have a clear plan". It is clear that there must be changes, as the CEO had previously stated that the Leverkusen-based company had invested too little in the pharmaceuticals division. Accordingly, there are plans for innovations and increased agility in this area. It aligns with the fact that in the future, the Company intends to work together with Salus Optima on AI-supported solutions related to healthy ageing**. Against the backdrop of an ageing population, this could become an exciting development.
However, before moving into the future, the Group must get back on track. The CEO is also looking into a possible split-up. First of all, it is crucial to regain trust. The Company's executive bodies are showing how this can be done. First, Alberto Weisser bought 8,000 shares from the Supervisory Board at an average price of EUR 31.01. Then, Heike Prinz from the Management Board took action and bought 3,500 shares at an average price of EUR 30.85. When corporate bodies invest six-figure sums in their own company, this is usually a positive sign. So far, the share has hardly been able to benefit from this and is currently trading at EUR 31.50.
In general, shares in healthcare companies are very volatile when the companies have a significant development pipeline. All it takes is one positive study, and the share can explode or crash, as happened recently with Bayer. So far, the pharmaceutical sector has compensated for the issues in Crop Science at Bayer, but currently, it is not as successful. Just how quickly it can happen can be seen at Defence Therapeutics, where the share was recently sold off heavily and then staged a rebound of over 27% in one day. The prospects of cancer therapies are creating share price fantasies. BioNTech has a full development pipeline and could benefit from the rising Corona figures. The cash register is still full to bursting for the development of the next blockbuster.
Conflict of interest
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