November 2nd, 2022 | 14:10 CET
BioNTech, XPhyto Therapeutics, MorphoSys - Biotech stocks facing a renaissance?
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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 - Full product pipeline
BioNTech made a name for itself by winning the race to develop a vaccine against COVID-19. As a result, it could hardly save itself from orders, and for a while, it was hard to get the vaccine called Comirnaty in Germany. In the meantime, the situation has eased and the Company has placed its Omicron-adapted vaccine on the markets. Partner Pfizer plans to more than quadruple prices for the USD 30 Corona vaccine after US contracts end. That would make the cash register ring even with smaller sales volumes.
On October 19, BioNTech received a positive CHMP recommendation for Comirnaty in children 6 months to 5 years in the EU. With profits from vaccine production, new opportunities have long since opened up for the Company. For example, a strategic partnership has been formed with the Australian state of Victoria to establish an mRNA research center. mRNA technology is considered key to the fight against cancer. The development pipeline comprises 11 preclinical phase projects, 16 projects in phase 1, 5 in phase 2 and BNT161 against seasonal influenza in phase 3.
The stock has come back down to earth after soaring to new heights. Since January, the share has been running sideways. There need to be more impulses to move the value emphatically. The quarterly figures on November 7 may provide new fantasy. Most analysts currently recommend holding the share. Only Berenberg recently issued a buy recommendation with a price target of USD 312. Currently, one pays EUR 141.20 for a share certificate. On average, analysts have issued price targets of around EUR 205.
XPhyto Therapeutics - Good results on Alzheimer's patch
The Canadian biotech company XPhyto Therapeutics is operationally active, mainly in Germany. The Company has built up three business units dealing with drug formulations and dosage forms, diagnostics and new psychedelic agents, such as cannabinoids. It has developed innovative and cost-effective delivery methods to combat neurological diseases, such as transdermal patches and orally dissolvable films. In diagnostics, the Company offers affordable PCR and biosensor tests for early disease detection. Psychedelic agents can treat depression and other mental illnesses without being toxic or addictive.
On September 20, a patent application was filed for a library of novel psychedelic compounds. This allows the active ingredient library to be specifically tailored to mental impairment. On October 18, the Company presented the successful in vivo results of its rotigotine patch for the treatment of Parkinson's disease. Compared with the branded product, the new copycat product performed as well as the original in skin penetration. It was minimally behind the branded product in the solubility of the active ingredient. CEO Hugh Rogers said, "We are confident that our Rotigotine patch is fully optimized and ready for further human clinical trials. This is an important milestone on the road to product commercialization." The study will last between 6 and 12 months. The market potential is currently USD 518 million and is expected to increase to USD 760 million by 2030.
On October 4, the Company announced that a non-binding letter of intent was signed with a US-based manufacturing company. The manufacturing, distribution and product development of diagnostic products are being explored. If there are sufficient synergies for both parties, XPhyto will have access to a state-of-the-art, FDA-cleared pharmaceutical manufacturing facility. A more detailed analysis regarding the potential can be found at researchanalyst.com. The stock peaked at CAD 1.70 in February and subsequently fell back to CAD 0.36. Since the beginning of September, the share has gained over 38% and currently stands at CAD 0.50.
MorphoSys - Fresh neck blows
The German biotech company MorphoSys was once the stock market darling of the Germans. Several bad decisions later, it is now forced to bake smaller rolls. As a contract research company, it was doing great. But the founder wanted to turn MorphoSys into a pharmaceutical company. That turned out to be more difficult than expected. At the latest, when the Company gave up its fixed royalties to finance the acquisition of Constellation Pharmaceuticals for USD 1.7 billion, things went downhill. The question is whether the stock has now found a bottom.
On October 21, the Company had to adjust its financial guidance downward slightly. Originally, USD 90 - 110 million had been targeted. Now, it will likely be USD 90 million at best. The problem lies in the weak sales of the cancer drug Monjuvi, which brought in only USD 64.1 million in the first 9 months. On October 27, licensing partner GlaxoSmithKline abandoned the development of otilimab for arthritis. In contrast, the results of the phase 1/2 trial of tulmimetostat were more positive. The compound showed promising results in various tumor types.
Further hopes are pinned on pelabresib, which was acquired with the Constellation takeover, and the Alzheimer's drug being developed jointly with Roche. Results from the latter are to be presented at the Alzheimer's Conference in San Francisco on November 29. Deutsche Bank has set the stock at Sell with a price target of EUR 18, while JPMorgan recommends a Hold with a price target of EUR 32.50. The share is currently available for EUR 19.72. Investors should wait for new impulses.
The biotech sector is very volatile. Good news from positive study results can quickly cause a share to rise by 20%. As an investor, however, you also have to be patient. BioNTech will continue to earn well from the Corona vaccine this year. The product pipeline is full. XPhyto Therapeutics is on the move in three different areas, all of which are predicted to have high growth rates through 2030. All three areas have recently reported progress. MorphoSys is struggling with the sins of the past. However, with major partners like Roche, positive news is likely only a matter of time.
Conflict of interest
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