October 19th, 2022 | 13:52 CEST
Biotech funds looking over their shoulders: Bavarian Nordic, Cardiol Therapeutics, Valneva
A recent study by Accenture shows that consumers are not willing to reduce their spending on health and wellness - even if things are not going well economically. Despite uncertainties, respondents see spending in the areas of "health" and "fitness" as "essential." Those who pay for these areas are also likely to want to exhaust all options when it comes to health insurance benefits, such as medications and vaccines. Informed patients and consumers put pressure on their doctors when new therapies are available. Health insurers, who are also in competition with each other, are taking this into account. We highlight three biotech stocks and do the investment check.
time to read: 3 minutes | Author: Nico Popp
ISIN: BAVARIAN NOR NAM. DK 10 | DK0015998017 , CARDIOL THERAPEUTICS | CA14161Y2006 , VALNEVA SE EO -_15 | FR0004056851
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Author
Nico Popp
At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
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Bavarian Nordic: A good mix of substance and fantasy
The share of Bavarian Nordic was recently kissed awake again. The reason: several countries, including the German government, are buying more vaccine doses against monkeypox. At the same time, the Company has reported that a COVID-19 vaccine candidate, intended as a booster, is still showing a robust immune response in several Corona variants after six months. Also at a clinical stage is a vaccine against the respiratory syncytial virus (RSV), which can cause lower respiratory tract disease. There is no vaccine yet, though a first regulatory filing is expected in the second half of the year. The market for RSV vaccines has the potential to be worth billions.
Bavarian Nordic already has vaccines against smallpox, Ebola, rabies, TBE and monkeypox on the market. The share, therefore, also offers a balanced mix of growth opportunities and continuous cash flows. This is also the view of analysts. On average, the seven analysts currently covering the share give it a "buy" recommendation. The average price target is around 88% above the current price. Even the price target of the most pessimistic analyst still sees a potential of about 30%. Now that the share has come back after its monkeypox hype, investors can again consider an entry. However, investors should keep in mind that setbacks in clinical trials cannot be ruled out.
Cardiol Therapeutics: Study shows positive signals
Looking at the performance of the Cardiol Therapeutics share, one might think that the stock had already suffered such a setback - the share has been unstoppable for months and is now a penny stock again. Yet Cardiol Therapeutics is still considered a beacon of hope for inflammatory diseases of the heart. Less than a year ago, the Company raised around USD 50 million in the course of a capital increase. At that time, the price per unit was USD 3.07. Today, the stock is trading at USD 0.61 on the Nasdaq. Operational setbacks since then? None whatsoever!
A few weeks ago, Cardiol Therapeutics presented preclinical results at the annual scientific compendium of the Heart Failure Society of America. Their basic tenor is that the compound CardiolRx™ is capable of protecting cardiac function and provides antifibrotic effects. "Our research colleagues at Houston Methodist DeBakey Heart & Vascular Center have already shown that CardiolRx™ preserves cardiac function in a preclinical model of heart failure. The results of the present study provide further evidence of CardiolRx's cardioprotective properties, suggesting antifibrotic mechanisms with therapeutic potential in heart failure," said Andrew Hamer, M.D., Chief Medical Officer and Head of Research and Development at Cardiol Therapeutics. Given that cardiovascular disease is a common condition and such symptoms may also be associated with severe courses of COVID-19, investors should not write off the share of Cardiol Therapeutics. It is quite possible that there are reasons behind the share sell-off that have nothing to do with Cardiol Therapeutics. At the moment, the share seems to be bottoming out - but the stock is still not for the faint of heart. Hardened speculators with adequate money and risk management can already take a look at the value again.
Valneva: Biotech professionals grab the falling knife
The Valneva share also recently made a comeback. After the French company's Corona plans turned into a fiasco, the Company is now focusing on vaccines against chikungunya fever and Lyme disease. Major investors have also taken a liking to the Company and recently subscribed to a capital increase of EUR 100 million. In addition to existing shareholders, biotech investor Deep Track Capital is also said to have taken a stake and is rumored to have subscribed to around half of the new shares. The vote of confidence from industry experts should also reassure existing shareholders. As with Cardiol Therapeutics, whether the share price will find a bottom at current levels remains to be seen.
The entry of the biotech professionals from Deep Track Capital, despite the disastrous share price performance of Valneva in recent months, should also encourage former biotech hopefuls, such as Cardiol Therapeutics. As soon as clinical studies show success, hardened investors jump at the chance - and in the case of Deep Track Capital, they like to do so on a large scale. In the case of Cardiol Therapeutics, this is likely to be compounded by the fact that some investors who also held warrants in the Company have pulled the ripcord in recent months in challenging market conditions. However, there is still potential for innovative active ingredients and vaccines.
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.
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