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November 30th, 2023 | 07:10 CET

Biotech Alert! Morphosys, Bayer, BioNTech and Defence Therapeutics

  • Biotechnology
  • Pharma
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Morphosys is not for the faint-hearted. After unclear study results, the stock gave up its annual gains within a few days. Analysts are also divided on what the future holds. On December 10, the study details will be released, hopefully shedding light on the situation. Bayer shareholders are currently seeing dark clouds. The stock plummeted from EUR 40 to EUR 30 in a short time. Is the dividend now at risk, or is the entire company in jeopardy? There is a slew of positive news for Defence Therapeutics. Can the stock break out of its sideways trend? A potential partner for the Canadians could be BioNTech. The German biotech favourite is working with full coffers on cancer vaccines. However, analysts remain cautious.

time to read: 3 minutes | Author: Fabian Lorenz

Table of contents:

    David Elsley, CEO, Cardiol Therapeutics Inc.
    "[...] 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.

    Full interview


    Defence Therapeutics with strong news

    Since June 2023, Defence Therapeutics' stock has been trading around USD 2. While this represents a gain of approximately 20% in a challenging year for biotech stocks, the operational developments suggest the potential for higher prices. For weeks, the Company, focused on combating cancer, has released one positive announcement after another. Most recently, an application for the approval of a new investigational drug, known as "AccuTOX®" ACCUM-002TM-Dimer CDCA-SV40, was submitted to the US Food and Drug Administration (FDA). "AccuTOX®" is an injectable anti-cancer molecule designed to treat solid tumors. It combats cancer from multiple angles: breaking endosomal membranes, triggering genotoxic effects, blocking DNA repair mechanisms, and initiating a form of immunogenic cell death. In preclinical tests, "AccuTOX®" demonstrated a survival rate of 70 to 100% in animals with solid T-cell lymphomas, melanomas, or breast cancer. Defence Therapeutics plans to initiate its Phase I clinical trial in the first half of the coming year, subject to FDA approval.

    Defence Therapeutics CEO Sébastien Plouffe commented: "We look forward to collaborating with the clinical investigators at City of Hope hospital to investigate this important and novel candidate for the treatment of melanomas and potentially other solid tumors. Given the ongoing challenges faced by clinical oncology, we are confident that the therapeutic use of AccuTOX® will make a significant impact."

    Defence is also conducting research in vaccines. In this area, important patents have been granted not only in the United States but also in Canada. These patents essentially cover the key technologies of Defence's vaccine platform. The Canadian biotech company's technology aims to enhance vaccine effectiveness. With patent protection secured in the two major markets, Defence is now pursuing the same in Europe and Asia. Patents are crucial for licensing and collaborations. For instance, manufacturers of approved protein-based vaccines can enhance the effectiveness of their products and extend patent durations by utilizing the Defence platform.

    These are just some updates from the exciting Defence Therapeutics pipeline, which should result in a rising stock price, even if it sometimes takes longer.

    Bayer: Dividend at Risk

    Bayer is facing issues with its product pipeline. Recently, there were negative updates about Asundexian. The anticoagulant was considered one of Bayer's hopeful prospects, but it has proven to be less effective. As a result, the DAX company has terminated the study on Asundexian. Previous study results indicated "inferior efficacy" compared to the control group. Overall, the situation at Bayer is extremely challenging. In addition to the weak pipeline and patents expiring in the coming years, there are ongoing legal battles related to glyphosate and high debt levels. A resolution to these problems does not seem to be on the horizon.

    While no analyst recommends selling Bayer, the same was true when it was 100% higher. For instance, earlier this week, Berenberg reduced the price target for Bayer from EUR 60 to EUR 36. Somewhat belatedly, they maintain a "Hold" rating. The analysts see the discontinuation of Asundexian as a significant setback for the development of future revenue sources. They also point to the possibility of a dividend cut, which would not be surprising given the debt burden, impending patent gaps for Xarelto and Eylea, and a declining agribusiness. The analysts even anticipate a corporate split.

    BioNTech: Analysts lower price target

    BioNTech boasts substantial funds and an extensive pipeline. The billions in revenue from the COVID-19 vaccine are being utilized by the Company, particularly for the development of cancer vaccines. CEO and co-founder Ugur Şahin emphasized in an interview with "Bild" that the Company aims to bring an anti-cancer vaccine to the market by 2030. The personalized vaccine is expected to be an alternative to conventional chemotherapy in the future. The goal is for the body's immune system to combat and defeat cancer. Chemotherapy typically attacks not only cancer cells but also healthy cells. This is not the case with a vaccine. Instead, the immune system is strengthened to find and destroy the tumor.

    However, it will take several years before BioNTech generates revenue from new products. Therefore, UBS has reduced the price target for the biotech stock from USD 153 to 110 and confirmed the "Neutral" rating. While BioNTech will still make profits this year with the COVID-19 vaccine, it is considered unlikely in the coming years.

    Defence Therapeutics is consistently working on its exciting pipeline. The Canadian company's vaccine platform is also of interest to companies like BioNTech to further enhance their vaccines. Defence is valued at around CAD 120 million, making it relatively inexpensive. BioNTech has a market capitalization of approximately USD 24 billion, while Bayer is still at EUR 30 billion. However, predicting when the downtrend in Leverkusen will end is challenging.

    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

    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.

    About the author

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