December 22nd, 2021 | 13:50 CET
BioNTech, Novavax, Cardiol Therapeutics: This pandemic profiteer is as cheap as can be
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"[...] 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.
BioNTech and Novavax: Different omens
BioNTech's stock is now a classic on the stock market. The Company is no longer a newcomer but is earning good money for the foreseeable future. The Coronavirus is constantly changing, and, according to all analyses to date, the new Omicron variant is significantly more contagious than the Delta variant, which was more contagious than its predecessors. It is entirely appropriate not to take the upcoming wave lightly. In addition, Omicron is different from the previous variants and, to all appearances, is not as well recognized by the immune system. For this reason, major vaccine manufacturers, such as BioNTech and Moderna, are already adapting their vaccines. The expected benefit is that those immunized with the new vaccine will do better with Omicron and possible successors.
Thanks to the mRNA technology used by BioNTech and Moderna, adaptation to new virus variants should be rapid. Currently, the Company expects to have the corresponding solutions available as early as April. According to Klaus Cichutek, President of the Paul Ehrlich Institute, obtaining approval with a small clinical trial should also be possible. The reason is the flexibility of the mRNA technology.
BioNTech: In case of doubt, the Mercedes of vaccines benefits
However, Novavax, the new protein-based vaccine from the US that does not require mRNA technology, will also be adapted to Omicron's unique challenges. The Company is currently testing how effective the vaccine is in its original form. In parallel, some approval procedures are underway. In the EU, the vaccine received the green light from the EU's Medicines Agency (EMA) this week. However, it remains to be seen whether this recommendation will result in approval in Germany. Germany has already lagged in approval procedures in the past - the upcoming holidays are unlikely to help the situation.
Novavax shares have risen by around 20% in recent days but are already weakening. The unclear efficacy against Omicron and the pending approval procedures could mean that the vaccine will be left behind in the wake of the Omicron wave. BioNtech, on the other hand, is better positioned. The vaccine is considered the Mercedes of vaccines, and the stock has found a bottom at EUR 200. In addition, BioNTech is also well positioned around other vaccines, such as against cancer.
Cardiol Therapeutics: Analysts see a fourfold increase
While Novavax and BioNTech are relatively expensive, the share of Cardiol Therapeutics is still trading in the area of the three-year low. Yet, the stock is also a Corona beneficiary. Cardiol Therapeutics researches inflammatory heart disease and has developed several pharmacological formulas for this purpose that have already been studied in trials. Inflammatory heart diseases, such as myocarditis, are possible side effects of COVID-19 infection. But typical diseases of civilization, such as high blood pressure and diabetes, also affect the heart. Cardiol Therapeutics is currently treating COVID-19 patients with its active ingredient CardiolRX as part of a Phase 2/3 study. Results are expected in the first half of 2022. If the study is positive, Cardiol plans to file for emergency approval and enter the market by the end of 2022.
Recently, Cantor Fitzgerald analysts gave the stock an "overweight" rating and called for a price target of USD 8. Currently, the stock is trading around USD 2. The Nasdaq-listed share has repeatedly been good for steep rises and dynamic developments in recent months. No wonder - CEO David Elsley frequently drew parallels to comparable companies in the past, which were taken over many times after positive study results. But that is - as of today - pie in the sky. The stock has been significantly punished following a USD 50 million corporate action. The upside is that the Company appears to be adequately funded for 2022. Further negative surprises from the financing side should be ruled out.
While many investors are piling into vaccine maker stocks, Cardiol Therapeutics could also benefit as a research-based biotech company with a compound to address the consequences of COVID-19 and other diseases. Accelerated approval in view of the pandemic also does not seem unrealistic. From a chart perspective, the share looks interesting but remains a hot potato that only experienced investors should touch.
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