BIOTECH stocks in RALLY MODE: Valneva, BioNxt Solutions, Evotec – BUY signal or correction?

BioNxt Solutions: Share price set to rise again?

BioNxt Solutions, an insider tip in the biotech sector, has taken a break after the 50% rally in recent weeks. The consolidation was important, and the fact that the price level of around EUR 0.268 has been maintained is a positive sign. There is a good chance that the stock – which is now also actively traded on German exchanges – will soon make the next price jump. This is because the market capitalization remains modest at under EUR 40 million, the coffers are full due to the recent capital increase, and the news flow is positive. The biotech company's drug development focuses on the administration of its drugs in the form of advanced oral dissolvable films (ODF) and transdermal patches. This is intended to make it easier for patients to take their medication compared to injections and tablets.

BioNxt has formulated clear strategic goals for 2025 to advance the sublingual drug delivery platform and bring innovative therapies closer to market approval. The lead development program in the BioNxt portfolio is expected to enter clinical trial preparation in the current year. This is a sublingual cladribine product (BNT23001) for the treatment of multiple sclerosis (MS). BioNxt is convinced that its proprietary cladribine product offers a significant advantage over the tablet form for patients suffering from dysphagia (difficulty swallowing). Cladribine generates billions in sales; chances are good that BioNxt will get a piece of the pie.

In addition, the product pipeline is to be further expanded. Sublingual therapies and research into additional applications for the Company's proprietary sublingual delivery technology are to be advanced. In line with this, BioNxt will transfer its R&D activities to the Gen-Plus Contract Research and Development Organization (CRDO) in Munich on March 1, 2025. The specialized laboratory equipment, spread over more than 1,000 square meters, is expected to significantly reduce preclinical research times, improve formulation accuracy, and optimize the development of next-generation therapies.

New strategic partnerships with pharmaceutical and biotechnology companies, as well as new investors, could also lead to price jumps. BioNxt plans to actively explore the market this year.

Evotec: The stock market dislikes uncertainty

The shares of Germany's Evotec are also currently consolidating. However, the news flow in the coming weeks is likely to be less positive than for BioNxt, and thus, the chances for the next price jump are also lower.

As the management board announced in January, the corporate strategy is currently being reviewed. The results are not expected to be presented until the publication of the figures for 2024 in April. The past few years have shown that a different strategy is needed. At the end of 2021, Evotec shares were still trading above EUR 40. Since then, they have lost ground bit by bit, trading below EUR 6 at times in 2024. Due to takeover rumors and a more or less serious takeover attempt, it briefly rose above EUR 10 again. Currently, Evotec's shares are trading between EUR 8 and EUR 9.

Most recently, analysts at Warburg had issued a positive statement. There is still turnaround potential. However, the implementation is likely to take longer and cost more than the capital market assumes. Nevertheless, the stock remains a "Buy". The analysts' price target is still as high as EUR 14.

Valneva: Is there more to come after 50%?

The speed at which biotech stocks can sometimes rise has been demonstrated by the Valneva share in recent weeks. Since mid-January, the stock has gained more than 50%. Initially, an order from the US Department of Defense lifted the French biotech company's spirits. A minimum purchase agreement worth USD 32.8 million was signed for the vaccine IXIARO against Japanese encephalitis. Delivery is to take place within the current year and could be increased.

Then, last week came the next big announcement. Valneva received market approval for its Chikungunya vaccine IXCHIQ in the UK. The necessary approval has been granted by the UK Medicines and Healthcare products Regulatory Agency (MHRA). In addition to the UK, IXCHIQ has already been approved in the EU, the US, and Canada. Further approval procedures are already underway. According to Valneva, the vaccine produces a rapid and sustained immune response that lasts for at least three years. Chikungunya fever is a tropical infectious disease caused by the Chikungunya virus, which is transmitted by mosquitoes and is accompanied by fever and joint pain.

Due to the rally, Valneva is once again valued at more than EUR 500 million. Whether the current reports justify this is questionable, to say the least.

The healthy consolidation of BioNxt's shares could soon come to an end. The Company is well financed, has promising products in the pipeline, and clear targets for 2025. At Evotec, there will be further uncertainty until April about the state of the biotech company after the disastrous year 2024 and how it should proceed. And the stock market does not like uncertainty. Valneva has made a strong comeback. However, the current valuation appears ambitious again.