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April 24th, 2023 | 08:30 CEST

BioNTech, Defence Therapeutics, Sartorius - Takeover fever in the biotech sector

  • Biotechnology
  • Pharma
  • vaccine
  • Cancer
Photo credits: pixabay.com

In the past year, the NASDAQ Biotechnology Index took a severe beating until mid-June. In the meantime, an initial upward trend has developed, and the market is slowly heating up again because some biotech companies are still valued too cheaply. This is when the big players strike, such as Merck & Co, which recently bought Prometheus Biosciences for USD 10.8 billion. The buyer thus paid a premium of a whopping 75% on the previous day's closing price. The biotech start-up Tubulis has also agreed on a collaboration with Bristol-Myers Squibb that could bring more than USD 1 billion into the Munich-based company's coffers. Reason enough to take a look at three companies from the pharmaceutical and biotech sector.

time to read: 4 minutes | Author: Armin Schulz
ISIN: BIONTECH SE SPON. ADRS 1 | US09075V1026 , DEFENCE THERAPEUTICS INC | CA24463V1013 , SARTORIUS AG VZO O.N. | DE0007165631

Table of contents:


    David Elsley, CEO, Cardiol Therapeutics Inc.
    "[...] As a company dedicated to developing treatments for rare heart diseases, we see this as an opportune moment to contribute to the fight against heart disease and make meaningful strides in improving heart health worldwide. [...]" David Elsley, CEO, Cardiol Therapeutics Inc.

    Full interview

     

    BioNTech - When will the bottom be reached?

    While BioNTech was known mainly to insiders only before the Corona pandemic, the picture has changed drastically since then. The success of the COVID-19 vaccine caused the share price to soar and profits to be huge. For the 2022 financial year, total revenue was EUR 17,311 million, down from EUR 18,977 million in the same period last year. Net profit for the year was EUR 9,434 million. At the end of December, there was around EUR 13.5 billion in the coffers. This year, both turnover and profit will shrink significantly because demand for Comirnaty is falling sharply.

    In early April, the Company secured exclusive rights to 2 antibody-drug conjugates (ADC) from Duality Biologics for treating cancer and autoimmune diseases. The collaboration will give BioNTech access to Duality Biologics' most advanced product candidate, DB-1303, which targets human epidermal growth factor receptor 2 (HER2) in various cancers. In addition, BioNTech will gain access to a second ADC candidate, DB-1311. A purchase price of USD 170 million was mentioned. This sum may rise to over USD 1.5 billion after defined milestones are achieved. In addition, Duality Biologics will receive royalties depending on net sales.

    The BioNTech share has been in a downward spiral since August 2021 and marked a new low for the year at EUR 107.65 last Friday. The share has thus lost a good 70% from its all-time high. Around half of the current market capitalization is covered by cash. With interest rates currently at 4%, this could flush more than EUR 500 million into the coffers. Moreover, the product pipeline is full. For example, an mRNA vaccine against shingles could be approved this year. At the moment, one pays EUR 108.60 for one share.

    Defence Therapeutics - Clinical trial against cancer ongoing

    The biopharmaceutical industry is experiencing a surge in innovation and investment. Companies like Defence Therapeutics are at the forefront of fundamentally changing the treatment of deadly viruses and infectious diseases like COVID-19. Defence Therapeutics' proprietary and patented platform technology, ACCUM™, has been shown to deliver treatment drugs to targeted diseased cells, significantly increasing efficacy. The platform offers broad application areas such as oncology, vaccine development and nanotechnology, with a focus on vaccine development and the development of cancer therapeutics.

    For the latter area, the Company announced the launch of its mRNA vaccine programme against cancer in April. This will pit its own mRNA vaccine against a combination of mRNA vaccine and ACCUM™ technology in a clinical trial. The Corona pandemic has opened the door for mRNA vaccines, and the ACCUM™ platform could increase their effectiveness. The trial, which has been ongoing since April 17 and is being conducted on mice, will compare the number of antibodies produced by the two test groups. The next step will be to test the therapeutic potency on tumours in animals. The Company is developing mRNA vaccines against various types of cancer. Thanks to the ACCUM™ platform, foreign mRNA substances can be transported in a targeted manner.

    The market for mRNA is expected to grow by a good 13% per year until 2030, rising to more than USD 128 billion. The biopharma sector, which accounts for about 17% of the pharmaceutical market, is expected to reach USD 526 billion as early as 2025. The growth prospects are bright. Those who want to know more about the Company should look at the latest updates on researchanalyst.com. (https://researchanalyst.com/en/updates/pipelines-from-biontech-moderna-and-defence-therapeutics-it-s-a-match). If there are still unanswered questions, there is the 7th International Investment Forum on May 10, where Dr. Moutih Rafei will present the Company. The share has recently consolidated after a rally from October to the end of January and is trading at CAD 3.50. If the latest cancer studies bring positive results, the share should jump significantly, and the Company, with a market capitalization of just around CAD 146 million, could quickly become a takeover candidate.

    (https://ii-forum.com/speaker/dr-moutih-rafei-vp-rd-director-defence-therapeutics-inc/)

    Sartorius - Weak quarterly figures and expensive takeover

    Things are not going well for Sartorius at the moment. In the first quarter, the life science group reported sales revenue of EUR 903 million, corresponding to a currency-adjusted decline of 13.2% compared to last year. Order intake in the first quarter was EUR 765 million, down 32%, mainly due to the reduced inventories that customers had built up during the pandemic. Operating EBITDA for the first three months of the year decreased by 22.1% to EUR 272 million, and the operating EBITDA margin was 30.1%, compared to 34.1% in the same period last year. Group net profit reached EUR 116 million, a decline of 30.5% compared to the previous year.

    In addition to the weak figures, acquiring Polyplus, a French company that produces DNA and RNA transfection reagents and plasmid DNA, for around EUR 2.4 billion has recently upset investors. The acquisition is expected to be completed in the 3rd quarter. Even though the acquisition complements Sartorius' existing range of cell culture media and critical components for developing and producing novel therapies, the price seems too high. Polyplus' sales revenue this year is expected to be in the upper double-digit million range, with a high EBITDA margin.

    Assuming a best-case scenario and a turnover of EUR 99 million, the company has paid more than 24 times the turnover. The transaction is also likely to have a negative impact on the leverage ratio. The share opened with a down-gap after the figures and is currently available for EUR 350.40. Analysts issued 4 buy recommendations and 2 hold recommendations after the figures. The price targets are between EUR 400 and EUR 530.


    If a company or its products fit into the portfolio of a large player, a little more is paid. BioNTech has secured the exclusive rights to the antibody-drug conjugates (ADC) of Duality Biologics in order to strengthen oncology. Defence Therapeutics has developed its mRNA vaccine against cancer and is now testing its efficacy with and without the ACCUM™ platform. The first results are expected after six weeks. Sartorius has paid a lot for the acquisition of Polyplus. Many experts see the purchase as too expensive.


    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.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    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.

    About the author



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