December 19th, 2022 | 13:57 CET
BioNTech top, Morphosys flop and Defence Therapeutics takeover candidate?
Biotech shares are volatile. Investors were reminded of this again just last week. Moderna shares initially rose by almost 30%, only to fall back by around 10% towards the weekend. But overall, the mood in the biotech segment was positive. Moderna reported positive study results on a combination therapy of a Moderna cancer vaccine and the tumor drug pembrolizumab from Merck & Co. At BioNTech, two buy recommendations and the expansion in Asia created a good mood. This mood has also prevailed at Defence Therapeutics for several weeks. The Canadians reported positive study results against tumors, and their Accum technology delivers what it promises, in which case mRNA specialists such as Moderna, BioNTech and Co. should be interested in a cooperation or even acquisition. In contrast, Morphosys slides to a new multi-year low.
time to read: 3 minutes
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Author:
Fabian Lorenz
ISIN:
BIONTECH SE SPON. ADRS 1 | US09075V1026 , MORPHOSYS AG O.N. | DE0006632003 , DEFENCE THERAPEUTICS INC | CA24463V1013
Table of contents:
Author
Fabian Lorenz
For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.
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BioNTech: Is the breakout on the way?
While mRNA technology is not new, it is thanks to BioNTech and Moderna's COVID-19 vaccines based on it that it has gained widespread attention. However, this is said to be just the beginning. Market researchers at Precedence Research expect the market for mRNA therapeutics to grow by an average of 13% to more than USD 128 billion by 2030. German top dog BioNTech and competitor Moderna are focusing heavily on vaccines to fight cancer, among other things. In Germany alone, almost half a million people are diagnosed with cancer - every year. And the disease often ends fatally. In 2020, around 200,000 people in Germany died as a result. The figures illustrate how important a vaccine against the disease would be. The race for initial approval is on, and BioNTech is in the lead thanks to billions in profits from the COVID-19 vaccine. The pipeline currently includes 19 product candidates in 24 ongoing clinical trials. For 2023, BioNTech has announced new data from up to 10 clinical trials. Driven by hopes of positive newsflow and analyst commentary, the stock is currently on pace to break out of its 2022 sideways trend. The BioNTech share is currently trading at around EUR 186.
Bank of America upgraded BioNTech from "Neutral" to "Buy" last week. The analysts' price target for the stock is USD 239. The experts at Bryan Garnier & Co are also confident that BioNTech will convince in the coming year. Their price target for the share of the Mainz-based mRNA specialists is USD 250.
Defence Therapeutics: Takeover candidate thanks to a booster for mRNA vaccines?
The Defence Therapeutics share has also moved a good distance away from its low for the year of EUR 1.03. However, at EUR 1.40, the share price of the Canadian biotech company is still well below the high for the year of around EUR 4. Two aces up the Company's sleeve speak in favor of further price increases. One of them could even make Defence Therapeutics an attractive takeover candidate for mRNA specialists such as Moderna and BioNTech.
Defence Therapeutics is currently researching the combination of its patented Accum technology with mRNA vaccines. The Canadians believe Accum can increase the stability and potency of mRNA vaccines. The Defence team is therefore working with a European partner company to synthesize mRNA vaccines in conjunction with Accum. The goal is to directly compare Accum-linked and "pure" mRNA vaccines in terms of their potential to generate an immune response and eradicate existing tumors. If Accum becomes a booster for mRNA vaccines, mRNA specialists such as Moderna, BioNTech & Co. would have to be interested in collaborating with Defence Therapeutics - or someone would buy the entire company outright. After all, with a market capitalization of CAD 85 million, the Canadians are anything but expensive.
In principle, the Accum method should enable more efficient and effective vaccines since vaccine antigens and antibody-drug conjugates are transported to the respective target cells in an intact form. The focus of the Canadians is on cancer and infectious diseases. The Company also conducts its own research on vaccines. Most recently, the successful completion of a GLP study in connection with the anti-cancer molecule AccuTOX was reported. The vaccine was shown to be highly effective in animals with no undesirable side effects. The active ingredient triggers oxidative stress in tumor cells, causing these tumor cells to die. Therefore, in coordination with the US Food and Drug Administration (FDA), the Phase 1 trial is expected to start as early as the first quarter of 2023.
Morphosys: Price slide after Goldman recommendation
Back again to the volatility of biotech stocks. Last Friday, Morphosys shareholders experienced the downward volatility of biotech stocks. Although the share recovered from its lows during the course of the day, it still lost over 10% and is now trading below EUR 13. The reason for the price slide on Friday: The share of the biotech company was downgraded by Goldman Sachs from "Neutral" to "Sell". The analysts halved the price target from EUR 24 to EUR 12. The current sales driver Monjuvi has yet to meet expectations. The drug pipeline is also sobering. Morphosys recently had to report failures with otilimab and gantenerumab. The share price is now at its lowest level since 2009, and no improvement seems to be in sight.
After COVID-19, BioNTech and Moderna are now engaged in an exciting race for cancer vaccines. Those who like it more speculative should look at Defence Therapeutics. The recent newsflow is promising. Quite the opposite is true for Morphosys. A countermovement is possible at any time, but positive news is needed for a sustainable uptrend. This news is not in sight.
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