August 9th, 2022 | 13:45 CEST
BioNTech, Defence Therapeutics, Valneva - Will biotech stocks continue to rally in the fall?
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"[...] At the end of 2022 or the beginning of 2023, we plan to start a Phase I study around each of our activities against breast cancer and skin cancer. [...]" Dr. Moutih Rafei, Director and VP of research and development, Defence Therapeutics
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.
BioNTech - Disappointing quarterly figures
BioNTech is the market leader in COVID-19 vaccines. Together with its partner Pfizer, it sold over 3.6 billion vaccine doses. As the Corona numbers have not really dropped this summer, Health Minister Karl Lauterbach is looking ahead to the fall with concern. Accordingly, the new Infection Protection Act was set up to provide the countries with a catalogue of measures for the colder season. One needs a recent vaccination to continue living without a mask. That is good news for BioNTech. Here one can count on further sales.
On August 8, the half-year figures were put to the test. Compared to the previous year, 30% more sales were achieved, namely EUR 9.57 billion. Profit was around EUR 5.4 billion, an increase of 37%. At first glance, these are respectable figures. However, if you look only at the 2nd quarter, things look gloomier. There, both sales and profit fell by around 40%. However, one should not forget that orders have been postponed and will be delivered in the next two quarters. Accordingly, management confirmed the forecast of EUR 13 to 17 billion in sales for the full year.
In addition to the figures, the Company also had good news. A clinical trial of the vaccines against Corona variants BA.4 and BA.5 is scheduled to begin before the end of August. Tests on various cancer therapies are also yielding promising data, according to BioNTech co-founder Özlem Türeci. The goal is a cancer vaccine. The product pipeline in this field is significant. Shareholders reacted with disappointment to the presentation and parted with the stock. Currently, the share is down about 8.8% at 162.80. Somewhat surprising, as the postponement of vaccine deliveries had previously been announced.
Defence Therapeutics - New patent
Defence Therapeutics uses its patented Accum drug enhancer platform to deliver antibody-drug conjugates (ADC) into diseased cells. This allows the drugs to achieve up to 10-fold efficacy. On August 8, the Company received a US patent for conjugated compounds that transport antibodies to the cell nucleus using Accum. The new technology makes it possible, for example, to control the intracellular delivery of chemotherapeutic drugs. CEO Sébastien Plouffe commented, "This US patent is an important milestone in protecting Accum's commercial potential, which is directly related to our ADC program.... interest in ADC application in oncology is increasing rapidly."
In addition to ADC transport, the Company has two other hot irons in the fire. One is vaccines against different types of cancer. There, a preclinical study was successfully completed on May 25, and 70% of mice with tumors were cured. Secondly, there is the new active ingredient AccuTOX. On August 2, the Company announced the discovery of a new DNA damage function of the compound. AccuTOX kills cancer cells by collecting misfolded proteins and forming free radicals, which ultimately leads to irreversible DNA damage in tumor cells. Detailed information can be found at researchanalyst.com.
The Company aims to set up three Phase 1 studies by early 2023. The oncology area is the most commercially interesting because the number of cancer cases is steadily increasing. Precedence Research expects 8% annual growth through 2029. According to Grand View Research, the ADC space is also expected to grow 16.4% annually through 2030. The Company is also looking at HPV and COVID-19 vaccines. The potential of the technology is huge. Despite the good news, the stock has fallen from over CAD 8 to currently CAD 2.12. Recently, a larger buyer could be identified. Closing prices above CAD 2.35 brighten the chart picture significantly.
Valneva - What is next after the COVID-19 vaccine?
Valneva has focused on vaccines against infectious diseases that have a high unmet medical need. As an investor, the Corona vaccine comes to mind first and foremost. But the old truism applies here: life punishes those who come too late. Approval of the active ingredient VLA2001 simply took too long. After the British had already terminated the supply contract in 2021 and a settlement was reached in mid-June, the last hope was EU approval. The Company received this on June 24. But the joy lasted only a short time. Instead of the 60 million vaccine doses originally planned in the supply contract, the EU ordered only 1.25 million.
A disappointment for the Company. But there are also rays of hope. Together with its partner Pfizer, the Company is working on a Lyme Borreliosis vaccine candidate that will enter Phase 3 trials in Q3. Pfizer has invested EUR 90.5 million in Valneva. In return, Pfizer received about 8.1% of Valneva's shares. The Company will receive between 14% and 22% in royalties plus any milestone payments. An additional drug fights Chikungunya fever and has already successfully completed Phase 3 trials. Due to global warming, the market could expand as the virus is transmitted by mosquitoes.
The future will show how much money the drug against Chikungunya fever will bring into the coffers. For the time being, things are likely to be quieter at Valneva. Much will depend on the success of the Phase 3 trial of the Lyme disease vaccine. The share has barely moved for a month and is currently quoted at EUR 9.90. One should wait for positive impulses before entering the market.
All three companies have a broader product pipeline. BioNTech can rapidly advance research and development through revenue from vaccine sales. Defence Therapeutics has several exciting approaches, all of which have blockbuster potential. Here, one can look forward to the first Phase 1 results. Valneva currently has two irons in the fire. With Pfizer, the Company has a well-known partner at its side. Nevertheless, one should wait and see.
Conflict of interest
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