June 17th, 2022 | 10:45 CEST
BioNTech, Defence Therapeutics, Formycon - Biotech stocks with a lot of future potential
Table of contents:
BioNTech - Share price falls despite the good news
According to Karl Lauterbach, a summer Corona wave is currently sweeping through Germany, and he recommends the fourth vaccination. The numbers are rising due to the new variant BA.5. In Portugal, where there is the highest vaccination rate in Europe, the number of Corona cases has dramatically increased. Ideal conditions for BioNTech, which has made its breakthrough with the COVID-19 vaccine. On June 15, the EU Medicines Agency (EMA) gave the green light for the fast-track review process for the Mainz-based company's Omicron-adapted vaccine. In the US, the advisory panel voted to approve the vaccine for children between the ages of 6 months and 5 years.
But the Company is also working at full speed away from the Coronavirus. It is trying to develop immunotherapies against cancer and other infectious diseases. The chances are better than ever because the Corona vaccine has opened the door for mRNA technology. Currently, 20 clinical trials are underway for 16 product candidates in the oncology field. Most recently, there has been positive Phase 1 data from mRNA-based individualized neoantigen-specific immunotherapy in patients with pancreatic cancer. Thanks to solid profits from the Corona vaccine business, research and development spending is secured for the coming years.
The good long-term prospects are not helping the shares at all at the moment. Most recently, the share fell by EUR 20 to currently EUR 129.95. The stock is thus within the sideways phase that has been built up since March between EUR 111.30 and EUR 170.00. Analysts have also been more cautious since the beginning of May and rate the share as 'hold'. Goldman Sachs, JPMorgan and Jeffries see price targets between EUR 175.00 and EUR 220.00. An initial entry could be worthwhile if one believes in a renewed flare-up of the Corona pandemic. In the long term, the Company has many product candidates in its quiver.
Defence Therapeutics - Good results with cancer vaccine
Canadian biotech Defence Therapeutics has developed and patented the Accum drug enhancer platform. This platform can optimally deliver approved antibody-drug conjugates (ADCs) into diseased cells, achieving efficacy up to 10-fold greater than conventional ADC-based drugs. This technology overcomes the challenge that diseases such as cancer block the action of ADCs through endosome entrapment. Through Accum, the ADCs are carried into the cell nucleus, and only there do they exert their effects. Tests on mice with cancers of the lymphatic tissue showed that 70% of the test animals could be cured.
Accordingly, on May 25, the Company announced that the trial of the cancer vaccine AccuVAC-D001 had been successfully completed. CEO Plouffe was pleased, saying, "With this, Defence and its technology are showing the way for the future development of universal therapeutic cancer and infectious disease vaccines." If successfully transferred to humans, this vaccine could protect against tumor formation. There have also been positive results in the area of breast cancer. With ADC Kadcyla, the Accum technology has been shown to enhance efficacy in the fight against breast cancer cells. A Phase 1 clinical trial is in preparation.
Also in the product pipeline is a Covid vaccine that resulted in high protection in rodents. Antibodies remained detectable for 16 weeks. Again, preclinical studies and Phase 1 are being prepared. The immuno-oncology market, in particular, is expected to grow significantly over the next 5 years. The vaccine market alone is expected to grow to around USD 105 billion by 2027. The share was dragged down by the overall market. While the share price was still at 8.15 Canadian dollars (CAD) last September, a share certificate can now be purchased CAD for 2.07. That is only just above the initial listing of the share at CAD 1.75, although the results to date speak in favor of the company.
Formycon - Good news in May
Formycon AG develops and markets biosimilar products. What are biosimilars? They are a type of generic drug, but these pharmaceuticals are produced in living cells rather than chemically. This involves imitating bio-drugs when their patent has expired. The focus is on therapies in ophthalmology, immunology, and chronic diseases. The main markets are the EU, UK, US, Canada, Japan and Australia. The Company's goal is to provide sick people with high-quality and effective medicines that are also affordable for patients.
In May, the course was set for the future of the Company. On May 10, the Company acquired the biosimilar candidate FYB202 (ustekinumab) in full and 50% of FYB201 (ranibizumab), as well as Bioeq GmbH from Athos KG, the family office of Hexal founders Strüngmann. As a result, Athos KG is also the largest shareholder in Formycon, with 26.6%. On May 17, the Company received approval for FYB201, a biosimilar for Lucentis, in the UK. Teva Pharmaceutical Industries will handle local sales. Two days later, longtime COO Dr Stefan Glombitza was appointed CEO. Nicola Mikulcik and Dr Andreas Seidl were introduced as Chief Business Officer and Chief Scientific Officer, respectively.
The Company is thus well-positioned for future commercial growth. Last year, sales amounted to EUR 41.7 million. The changes made should enable this result to be increased significantly. Liquidity is also decent at around EUR 36 million at the end of 2021. The analysts at Alster Research have raised their price target to EUR 90 following the news, and the Bernecker editorial team considers triple-digit prices feasible. The share is currently trading at EUR 71.70 in the weak market environment. The next support level is at EUR 70.30.
Particularly in times of high uncertainty, the stock markets do not always react rationally, and then even large stocks go under the wheels once in a while. This has now happened with BioNTech. The Company will earn a lot of money again this year, but this is not reflected in the share price. Defence Therapeutics has created an innovative platform with Accu that is very scalable. This was also rewarded by the market last year. But at the moment, the entire biotech market is being dragged down. Formycon is currently doing the best of all three companies because it is in the process of taking a step towards commercialization. Profits beckon here in the future.
Conflict of interest
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