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September 7th, 2023 | 08:00 CEST

Biotech with tailwind - Newron Pharmaceuticals, Defence Therapeutics, BioNTech

  • Biotechnology
  • Pharma
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There is a lot of activity in the biotechnology sector, even though the broadly diversified Nasdaq Biotech Index reflects this with a performance of only 1% since the beginning of the year. In addition to the increasing number of acquisitions by Big Pharma, promising technologies from second-tier companies are performing extremely well. Furthermore, the surging COVID-19 statistics are instilling hope in vaccine producers as they aim to revive their slumping sales.

time to read: 3 minutes | Author: Stefan Feulner

Table of contents:

    BioNTech - Booster for the balance sheet

    BioNTech's half-yearly financial results proved disappointing following the significant decline in the COVID-19 pandemic and the return to normalcy. But right now, medical experts warn of another harsh Corona winter due to rising case numbers. Just in time, BioNTech and its US partner Pfizer are launching its vaccine adapted to the current Omicron variant XBB.1.5. The vaccine will be available in medical practices as early as September 18.

    The vaccine received approval by the European Medicines Agency (EMA) last week. According to the Standing Committee on Vaccination (STIKO), a booster is recommendable for all who are 60 years or older or belong to a high-risk group. This high-risk group includes anyone aged six months and older who is at particular risk for a severe course of COVID-19 as a result of an underlying medical condition. For healthy individuals aged between 18 and 59, Stiko recommends only a basic immunization consisting of three "immunological events."

    The Medicines and Healthcare products Regulatory Agency also gave its counterpart the green light. Like the other COVID vaccines, the vaccine is also marketed under the brand name Comirnaty and is licensed for use in individuals aged 6 months and older, the Medicines and Healthcare products Regulatory Agency (MHRA) said.

    After falling more than 45% to a one-year low of USD 95.50, BioNTech shares managed to start a countermovement in the overarching downtrend to a level of USD 125.83. The next broad resistance lies in the area of USD 128.75. In their current study, the analysts at Jefferies do not believe that the German biotech flagship has any further upside potential. Although the target was raised from USD 108 to USD 111, the target zone is around 9% below the current stock price.

    Defence Therapeutics increases visibility

    With a market capitalization of CAD 146.53 million, the Canadian biotech company is still largely unknown to the broader investor community despite its patented, scalable platform technology and diversified product portfolio. This year alone, for example, Defence Therapeutics expects to initiate two Phase I trials against cancer as well as crucial results from a comparative study around mRNA vaccine.

    The Canadian biotech company is focused on developing next-generation vaccines and ADC products using its proprietary and patented Accum™ technology. The technology has the distinct advantage of ensuring the precise transport of vaccine antigens or ADCs in an intact form to target cells, significantly improving efficiency and, thus, efficacy against diseases such as cancer or infectious diseases.

    To increase its reach and thereby raise awareness, Defence Therapeutics will be featured on the nationally broadcast knowledge show Viewpoint, hosted by actor Dennis Quaid. Viewpoint will showcase Defence Therapeutics' cutting-edge research activities, clinical trials and therapeutic biotechnology innovations to more than 170 television stations across the US on September 18, where it will be available as programming content for an entire year. In addition, Defence Therapeutics has produced a commercial to air nationally on the Fox Business Network during prime time on Thursday, September 7, 2023, and Sunday, September 10, 2023.

    Shares of the Vancouver-based company were able to regain the CAD 3.00 level after a month-long consolidation. If the resistance at CAD 3.30 is overcome, the annual high at CAD 4.85, marked in January, should be tested again.

    Newron Pharmaceuticals - Profit-taking after figures

    With a performance of 240%, the biopharmaceutical company, which focuses on novel therapies for diseases of the central and peripheral nervous system, clearly outperformed the benchmark. The Italians relied primarily on its hopeful Evenamide, which is about to start the approval-relevant Phase III trial. In this trial, Evenamide is to be used as an add-on therapy in patients suffering from treatment-resistant schizophrenia. In addition, the Company is also evaluating the compound in patients with chronic schizophrenia who have an inadequate response to their current antipsychotics but are not classified as treatment-resistant. Study 008A continues to enrol patients, with results expected between late 2023 and early 2024.

    With a solid cash cushion of EUR 17.1 million, development work should be secured well into 2024. In addition, Newron was able to show revenues from licensing income and revenue sharing of EUR 5.5 million in the first half of the year. This was offset by research and development costs of EUR 5.7 million. Administrative costs amounted to EUR 4.1 million. Below the line, the Italians published a loss of EUR 7.0 million.

    Several analyst firms have a positive outlook on the further development of the biotech company. In its recent study, Rx Securities issued a "Buy" rating with a price target of CHF 6.00. Meanwhile, Baader Helvea Equity Research estimates the fair value of Newron Pharmaceuticals at CHF 7.20, representing a potential upside of nearly 30% from the current price.

    The biotech sector is on the move. In addition to numerous acquisitions, smaller companies like Defence Therapeutics and Newron Pharmaceuticals are facing decisive months. The increase in Corona cases could boost the revenues of vaccine manufacturer BioNTech after a weak first half of the year.

    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

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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