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October 10th, 2022 | 10:43 CEST

BioNTech, Fonterelli GmbH & Co KGaA, Fonterelli SPAC 2 AG, MorphoSys - Bullish forecasts

  • Investments
  • Biotechnology
  • Covid19
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The capital-intensive biotech and pharma sector has been stuck in a correction since the central banks changed their strategy at the beginning of the stock market year. In particular, vaccine manufacturers, which have exploded since the outbreak of COVID-19, have lost disproportionately in value since their highs in August of last year. However, the pandemic is likely to be with us for the next few years, albeit in a weakened form. The development of new drugs benefits companies that could now face a similar path as the vaccine producers.

time to read: 6 minutes | Author: Stefan Feulner
ISIN: Fonterelli GmbH & Co KGaA | DE000A1TNUU5 , FONTERELLI SPAC 2 AG | DE000A3MQR65 , BIONTECH SE SPON. ADRS 1 | US09075V1026 , MORPHOSYS AG O.N. | DE0006632003

Table of contents:

    BioNTech - The future of cancer research

    Fall is coming in leaps and bounds and, with it rising corona case numbers and incidences. There is no question that the pandemic will continue to occupy us in the coming winter, regardless of its severity. The dominant vaccine in Germany is currently the Omicron sub-variant BA.5, for which the vaccine manufacturer BioNTech has developed adapted booster vaccines with its US partner Pfizer. An emergency marketing authorization application was recently filed in the US for use in children between five and eleven years of age. An application to expand marketing approval in the EU for this vaccine in this age group is expected to follow. Positive regulatory approval is likely only a matter of time. The single-product company will continue to profit significantly from the Corona vaccines over the next few years. But whether the expected sales for the full year 2022 of between EUR 13 billion and EUR 17 billion can be repeated is questionable.

    However, based on the mRNA technology on which the BioNTech vaccine Comirnaty is also based, the Mainz-based company already has promising product candidates for the treatment of cancer in the pipeline, which are in clinical phases. According to the Company, the pipeline currently comprises a total of 18 product candidates in 23 ongoing clinical trials. Although it is likely to be some time before final approvals are granted, BioNTech's advantage lies in its bulging coffers of around EUR 3 billion. Research and production will now also take place in Australia in the future. BioNTech agreed Friday to a strategic collaboration with the state of Victoria to work together on the research and development of potential mRNA-based vaccines and therapies, according to the Company. The jointly operated research center is to be built in Melbourne. It will also support the construction of a clinical-scale mRNA production facility for a broad range of clinical programs. The containers for production, known as "BioNTainers," are also to be built at the Melbourne site.

    From a chart perspective, the share is currently struggling and defending the prominent support at EUR 131.00. A breakout would trigger another short signal with a first price target of around EUR 120.00.

    Fonterelli GmbH & Co KGaA - Leverage in the SPAC business

    With a market capitalization of just EUR 4.04 million, Munich-based Fonterelli GmbH & Co KGaA is known to only a few investors. The Company, founded in 2007 by experienced former bank executive Andreas Beyer, stands on three pillars. While the inflation-proof art and wine trade focuses on art editions by world-renowned artists and premium wines, Fonterelli invests in club deals, especially in buy & build concepts and pre-IPOs. The goal is to achieve one exit per year from the portfolio. That this has been achieved is shown by the dividend distributions since 2019, which cumulatively amount to EUR 0.52 per share. The share price is currently quoted at EUR 2.42.

    Considerable fantasy is hidden behind the third little door of the trading house for special asset classes. Last year, IPOs via SPACs boomed, especially in the US. However, overseas transactions took place, weighing in at an order of several million USD. Fonterelli's idea with the "mini-SPAC" model is to enable SMEs to go public in Germany in an uncomplicated manner. In this process, stock corporations with a share capital of EUR 250,000 are founded and listed on the stock exchange. In this model, the Munich-based company holds an 85% stake in each company, with the remainder held by family offices or entrepreneurs from the network it has built up over many years.

    With the exit from Fonterelli SPAC 1 AG and the sale of the Company shares to a group of investors, a cash flow in the lower six-digit range was generated last year. In addition to the direct sale of shares to stock market candidates, the strategy for Fonterelli SPAC 2 AG promises significantly greater leverage. Here, the minority shareholder remains on board with 212,500 shares and benefits from the performance of the Company contributed in kind. With Viromed Medical GmbH, the distribution company of the Viromed Group, which has been active in the healthcare market since 2004 with a focus on protection against viruses and germs and has exclusive distribution rights for innovative products of the Viromed Group and products of other companies, it has now been possible to present a real asset as a SPAC buyer. Viromed Medical GmbH achieved sales of EUR 133.6 million and an after-tax result of EUR 24.9 million in the past financial year.

    With the anti-corona nasal spray VirX Enovid, which successfully contributed to the fight against the pandemic in Israel, the figures for the current year are likely to be pushed up again significantly. Viromed Medical GmbH holds exclusive rights for the DACH region, and expansion to the whole of Europe should be imminent. Clinical studies show, the phase 3 study was published in the renowned specialized magazine "The Lancet", that with Corona-infected persons, the virus with the variants known so far after use of the new spray VirX Enovid disappeared within 24h to 94% and after 48 hours to 99%. In addition, according to the Company's website, the drug has been shown to shorten the duration of infection by 50%.

    A bottle of the miracle cure costs EUR 24.80 and is to be sold in drugstores and pharmacies. The potential is undoubtedly huge. Assuming only 10 million customers in Germany alone, this would result in sales of EUR 248 million. As with comparable preparations, the margin is likely to be several 100%. In addition to the Corona spray, Viromed Medical GmbH, which will be transformed into an AG after the IPO, has another expensive horse in its stable. According to CEO Perbandt, the Munich-based company is the world market leader in research into cold plasma therapy for diabetic foot, cancer, open wounds and skin diseases. Wounds would heal five times faster in combination with cold plasma than with conventional methods, and chronic wounds would close up to 85%, the Viromed CEO emphasizes.

    It is no wonder Fonterelli boss Beyer believes that with the planned strategic reorientation of Fonterelli SPAC 2 AG, a considerable value contribution can be realized for Fonterelli GmbH & Co KGaA.

    MorphoSys - On the right track

    The past months were certainly no joy for the shareholders of MorphoSys AG. After the Company, headquartered in Planegg near Munich, lowered its forecasts for the blood cancer drug Monjuvi, the already weakening share price took a further tumble. Since the end of November last year, the loss has amounted to almost 63%. However, this does not stop CEO Kress from setting ambitious profitability goals by 2026. "We want to have two cancer drugs on the market in 2025," Group CEO Jean-Paul Kress confirmed to journalists in Planegg on Wednesday.

    In the case of Monjuvi, the Planegg-based company is hoping for further approvals in the coming years, which is currently being tested for new areas of application. In addition, MorphoSys expects to bring the drug Pelabresib, acquired from the US company Constellation Pharmaceuticals to market maturity. With a market capitalization of EUR 674.79 million, the Company is trading well below its cash position of approximately EUR 1 billion.

    From a chart perspective, the share is increasingly hitting chart support zones in the area of EUR 19.50 after the sharp sell-off. A sharp countermovement to the EUR 26.60 area, at least in the short term, is not unlikely. At least the trend-following indicator MACD and the relative strength indicator have already turned to buy.

    Due to the stricter monetary policy of the central banks and concerns about further interest rate hikes, the capital-intensive biotech sector lost disproportionately in value in recent months. MorphoSys could find a bottom, at least in the short term, while BioNTech has further potential for setbacks. In contrast, Fonterelli GmbH & Co KGaA should benefit enormously in the long term from the development with Viromed Medical GmbH and Fonterelli SPAC 2 AG.

    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

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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