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June 21st, 2023 | 08:40 CEST

Biotech comeback! Profit with BioNTech, Morphosys and BioNxt Solutions

  • Biotechnology
  • Pharma
Photo credits: BASF SE

Biotech shares have not been among the favourites on the stock market in recent months. After the Corona hype, they were overshadowed by BigTech and especially AI. Sartorius, BioNTech and Co. have corrected strongly. But in the meantime, there are strong signs of a comeback - led by Morphosys. The share of the German biotech veteran has doubled since the beginning of April. MediGene and Evotec have also recorded price jumps. Are BioNTech and BioNxt Solutions next? Morphosys also continues to be praised by analysts. But Goldman Sachs wants to end the party.

time to read: 3 minutes | Author: Fabian Lorenz
ISIN: BIONTECH SE SPON. ADRS 1 | US09075V1026 , MORPHOSYS AG O.N. | DE0006632003 , Bionxt Solutions Inc. | CA0909741062

Table of contents:

    BioNxt: Strong newsflow and soon the CEO will speak

    BioNxt Solutions shares went up by 55% to EUR 0.532 at the turn of the year. In the meantime, the stock has corrected again to EUR 0.375. Due to the low market capitalization of EUR 38 million and the continued strong newsflow, the time for a comeback could have come in the improved environment. The Canadian-German biotech company is making progress in commercializing its products and establishing itself as a contract manufacturer for large pharmaceutical companies.

    Most recently, BioNxt Solutions reported the finalization of the acquisition of a novel coating and delivery technology for oral solid dosage form drugs. A royalty will be paid for this if successful. BioNxt CEO Hugh Rogers said, "With BioNxt already having established platforms for transdermal and oral soluble drug delivery, acquiring a novel coating technology for oral drugs is a significant step in expanding and solidifying our drug delivery expertise." The new method could improve dosage calculation and, therefore, significantly improve drug delivery in the form of tablets and capsules. The field of application is huge: ranging from food supplements and over-the-counter medicines to prescription drugs and psychedelic substances. Oral pharmaceuticals in solid dosage form still accounted for around 24% of the global pharmaceutical market in 2021.

    BioNxt is also currently in the early planning stages for a pilot comparative human bioavailability study to assess the technology's potential applications. The Company plans to conduct this study in North America and will provide an update in due course. And as a contract manufacturer, BioNxt's German subsidiary Vektor Pharma TF is to produce an orally soluble product. The contract has been signed, and the deposit paid.

    BioNTech: High revenues and full pipeline

    BioNTech shareholders have had little reason to rejoice in recent weeks. Since mid-December, the share has lost 40% and is currently trading just above EUR 100. At the end of 2021, it was still over EUR 320. At first glance, the latest analyst reports did not inspire much hope. Both UBS and Goldman Sachs rate BioNTech as "Neutral". The price targets are quite respectable. At UBS, the target price is USD 153. Although the Corona vaccine would continue to be the focus of investors, the development in cancer research is positive. The oncology portfolio is being expanded step by step.

    Goldman Sachs still believes that BioNTech shares are worth USD 140. The analysts highlighted the new study data of the Mainz-based company on an active substance against non-small cell lung cancer.

    In any case, financing the research pipeline is not a problem for BioNTech. In the first quarter, sales of the Corona vaccine were still at EUR 1.3 billion and net profit at EUR 502 million. For the full year 2023, the Company expects sales of around EUR 5 billion.

    Morphosys: Thanks to UBS

    Morphosys is likely responsible for the comeback of biotech stocks. Since the beginning of April, the stock has almost doubled in value and is now trading at over EUR 27. The rally is being driven by the analysts at UBS. In an initial study, they recommended buying the share with a target price of EUR 47. From their point of view, only the sales of the blood cancer drug Monjuvi were taken into account for Morphosys. This has been lower than expected. The drug pipeline was no longer included at all. The blood cancer drug Pelabresib alone has blockbuster potential.

    The analysts at JPMorgan have likely taken this to heart and have taken another closer look at Morphosys. They suddenly recognized the potential of Pelabresib. Data from the Phase III drug trial against bone marrow cancer are expected at the end of 2023. If it were to come onto the market, the sound barrier of EUR 1 billion could be cracked. Accordingly, the analysts upgraded the Morphosys share from "underweight" to "overweight". The price target tripled to EUR 36 from EUR 12.

    The analysts at Goldman Sachs are still not convinced. They confirmed their sell recommendation last week. Although the management has expressed optimism about Pelabresib, more is needed for the analysts. Their price target remains at EUR 12.50. That is more than 50% below the current price.

    All three companies discussed have an interesting pipeline. In the case of BioNTech and BioNxt, this is broader than in the case of Morphosys. BioNTech also scores with current revenues and a high cash position. With a market capitalization of less than EUR 40 million, BioNxt has a surprising number of irons in the fire. Contract manufacturing could quickly generate revenues and thus also lead to a revaluation.

    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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