BioNTech, XPhyto, Steinhoff - Explosives for the stock markets

BioNTech - Caution despite recovery

After the published quarterly results of its US partner Pfizer, which missed analysts' estimates of USD 24.2 billion with sales of USD 22.8 billion in the fourth quarter, the Mainz-based vaccine producer BioNTech fell sharply to an interim low of USD 156.24. Thereafter, a countermovement set in, which allowed the value to close around 10% higher again at USD 170.95 at the weekend. Nevertheless, the overall chart-technical picture is still tarnished, invested investors are advised to put a tight stop on BioNTech.

The facts for a further decline and normalization of the horrendous valuation are on the table. The declining willingness to vaccinate, the flattening of the Omicron variant and the possible switch to endemics does not exactly speak for a further boom of Pfizer, Moderna, BioNTech & Co. Pfizer Chief Financial Officer Frank D'Amelio has a similar opinion, commenting after the numbers were reported, "Compared to where we were in 2021 when the vaccine was new to the market, and few people had received a dose of the vaccine, there is less upside potential to that guidance as we go through the year."

In addition, BioNTech and Pfizer announced they would delay the application for emergency approval of its Corona vaccine with the FDA for children six months to four years of age until April. "Given the rapidly progressing study, the partners want to wait for the data for the third dose because they believe it will allow them to achieve a higher level of protection in this age group," a press release stated.

XPhyto - Broadly positioned

With horror stories being dragged through mainstream media daily, almost everything has been about the Coronavirus for the past 2 years. At bioscience accelerator XPhyto, one of its three business units is also about COVID-19. 3a-diagnostics GmbH, a wholly-owned German subsidiary, owns "COVID-ID Lab," a point-of-care PCR rapid test platform with CE marking ("CE-IVD") approved for sale in Europe, and an oral dissolvable biosensor for ultra-low-cost self-testing currently in product development. 3a has a portfolio of oral biosensors for oral infections and influenza. EU registration for 3a's oral inflammation biosensor product was made in late 2021.

In addition, XPhyto is conducting research with its wholly-owned subsidiary XPhyto Laboratories Inc. on psychedelic compounds that have the potential to improve the treatment of mental health conditions such as depression, anxiety, addiction and trauma-related stress disorders. With GMP drug synthesis, proprietary delivery systems, the development of new psychedelic analogs, and clinical validation, the Canadians are riding a multi-pronged approach to psychedelic medicine. A new update on the psychedelic medicine program is expected to be released here shortly, which should further highlight XPhyto's potential.

In the third business line, the German Vektor Pharma TF, also a wholly-owned subsidiary, is the market leader in the development of thin-film drug formulations, in particular transdermal patches and orally dissolvable strips for the delivery of active pharmaceutical ingredients for the treatment of pain and neurological disorders such as epilepsy and Parkinson's disease. In doing so, the Company is pursuing a scalable business strategy focused on developing and commercializing generic and hybrid-generic drug formulations that offer the potential for lower development costs, reduced regulatory risk, and faster time to market. The lead products are a hybrid-generic CBD drug formulation that leverage the Company's proprietary Oral Dissolvable Film (ODF) platform to deliver precise and efficient CBD doses for the treatment of certain forms of childhood epilepsy and a generic rotigotine patch for a slow and steady release of the drug over a 24-hour period.

The market capitalization of the broad-based XPhyto is EUR 46.93 million. Given the upcoming news flow, there could well be positive surprises soon. The current chart trend shows this. After months of sideways movement, the share price was able to break out above the EUR 0.90 mark. The next price target would be the last interim high at EUR 1.10.

Steinhoff - Powder shot

After Steinhoff fired off a news barrage in recent weeks, it was quiet around the Amsterdam-based retail group this week. At the end of January, the Western High Court in South Africa approved the settlement with the creditors. Now, the question is how management plans to work off the gigantic debt mountain of nearly EUR 10 billion.

"We have to reduce the absolute value of the debt, so we will have to sell more assets," Chief Financial Officer Theodore de Klerk said in an interview. "The amount is simply too high to restructure in its current form."

The listing of Pepco on the Warsaw Stock Exchange, in which Steinhoff still holds about 79%, the pending listing of Mattress Firm, and the sale of shares in Australian retailer Fantastic Holdings could bring more much-needed capital into the coffers. However, these shares are not nearly enough to cover the total liabilities.

As a result, the share price, which has exploded from around EUR 0.10 to EUR 0.33 since the end of November last year, could come back faster than some speculative investors can imagine.

The stock markets are depressed, and the fundamental environment also points to further declining share prices. Both BioNTech and Steinhoff could face further setbacks. XPhyto, on the other hand, could surprise with a positive news flow.