13. July 2021 | 07:55 CET
BioNTech, Defence Therapeutics, Formycon - Which biotech stock suits which investor?
Corona is and remains the threat of the hour. In this respect, it is not surprising that the papers of the German vaccine pioneer BioNTech have gone on a fabulous journey. Other companies are still trying to jump on this bandwagon, too. For example, both Canada's Defence Therapeutics and Munich-based Formycon AG are researching a Covid-19 vaccine. However, these developments are at very different stages. In addition, the further product spectrum differs significantly in some cases. But which share is the right one for the portfolio? We took a closer look at the three dissimilar siblings.
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ISIN: BIONTECH SE SPON. ADRS 1 | US09075V1026 , DEFENCE THERAPEUTICS INC | CA24463V1013 , FORMYCON AG | DE000A1EWVY8
BioNTech SE - Application to FDA for approval of a third "booster vaccine" likely to expand revenues further
The positive newsflow at BioNTech does not stop. Protection of the human body after vaccination has proven to be highly robust, even against the various mutations up to the Delta variant of the SARS-CoV-2 virus. However, the Company has now conceded that the protective effect will likely diminish after about half a year. Data from the Israeli Ministry of Health had indicated this. However, what initially sounds like a negative headline opens up great business potential on the other side. According to the Company, vaccination protection can be restored or even improved by a third booster shot.
Consequently, the Company, together with technology partner Pfizer, has applied to the US Food & Drug Administration (FDA) for approval of the booster shot. Inquiries with the European Medicines Agency (EMA) and other relevant agencies worldwide are expected to follow. In a joint statement with the US Food and Drug Administration (CDC), the FDA initially rejected the third dose for Americans who had previously been fully vaccinated. However, the FDA made it clear that the issue was currently being investigated, and this recommendation could, of course, be revised at any time in the event of new findings.
According to BioNTech/Pfizer, this will happen soon, so production of the additional vaccine doses could begin very soon. In this context, they also plan to develop a version of the common mRNA vaccine that is better adapted to the new mutations. All of this is fantastic news for existing BioNTech shareholders. Investors who have not yet invested may prefer to pause. Analysts have set their price target at around EUR 150, which would be an upside potential of around 20%.
Defence Therapeutics - Canadian ADC pioneers report success in the fight against Covid-19
The Canadian biotechnology Company Defence Therapeutics is developing the next generation of vaccines and ADC preparations (ADC = Antibody Drug Conjugates, i.e. the antibody-drug combination in a "piggyback" process) based on its proprietary Accum platform. This process, which is considered particularly promising for cancer therapy, is similar to the mRNA process used by BioNTech in its Covid-19 vaccine. Defence is also currently researching such a process. A few days ago, the Company announced a great success: serum isolated from animals vaccinated with the AccuVAC-PT001 vaccine developed by Defence showed cross-reactions with the spike protein of several SARS-CoV-2 variants in laboratory tests.
The highest efficacy was observed with the currently rampant Delta variant. The vaccine was effective in blocking infection of the parent strain. Further laboratory tests are now underway to verify the neutralization ability of the antibodies produced. The long-term goal is to develop a booster vaccine that blocks both virus transmission and immune evasion by means of further mutation. But Defence Therapeutics is also continuing full steam ahead in other areas. A few days ago, the Company informed the public that it had signed a cooperation agreement with the renowned Institut Curie in Paris to test the breast cancer treatment T-DM1 Kadcyla ("Accum-T-DM1-ADC"), which has been optimized using Accum technology. Extensive studies in animal experiments with mice are to be developed.
Using Accum technology, Defence Therapeutics expects to shorten treatment duration with fewer side effects while increasing efficacy through targeted drug positioning. We regard both announcements as highly positive. According to the market research institute Kuick, the market for breast cancer therapies alone is expected to reach a volume of USD 20 billion by 2026. In addition, there is great potential in the area of Covid-19 fighting. However, Defence Therapeutics is still in the relatively early stages of development with its products. It remains exciting in any case.
Formycon - Despite good business figures and a positive news flow, the share is currently unable to break out to the upside
The share price of biosimilar pioneer Formycon seems to be tied to the EUR 60 mark with a rubber band. About a week ago, the Company published quite good financial figures in line with expectations, announced a renewed application for approval of its drug FYB201 and announced that it had found appropriate distribution partners in Teva Pharmaceuticals and Coherus. In addition, the Company announced that its previously unpartnered Covid-19 vaccine FYB207, which is based on a long-acting ACE2 immunoglobulin fusion protein, has received a EUR 12.7 million financial injection from the Free State of Bavaria as part of the "BayTherapie 2020" initiative. Development of the previously unpublished and unpartnered biosimilar candidate FY206 continues as planned. Based on all this data, analysts arrive at an average price target of around EUR 70. In their last update from the beginning of the month, the analysts from First Berlin even see EUR 78 as realistic. However, all this seems to make little impression on the stock market at present. Despite the positive news flow, there is currently no sign of an upward breakout.
So which biotech stock suits which type of investor? BioNTech's stock is already quite expensive, but we do not expect any slowdown in business in the near future. An investment in Defence Therapeutics is certainly riskier, but in the event of success, high returns await. Equally interesting for us is Formycon. It is unclear why the share price is currently stuck at EUR 60, and the positive newsflow should allow the share price to move upwards soon.