February 2nd, 2023 | 18:04 CET
Bulging pipeline at BioNTech, Cardiol Therapeutics - what is the problem at Aurora Cannabis?
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"[...] Accum™ helps us target active ingredients precisely to the origin of infections or diseases. [...]" Sébastien Plouffe, CEO and Director, Defence Therapeutics
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.
BioNTech: Bulging pipeline, strong cash
BioNTech is known to us all as a problem solver during the Corona pandemic. The vaccines from Mainz conquered the whole world and still bring the Company rich cash flows today. However, BioNTech has long since focused on new projects. At the center of its commitment: anti-cancer agents. With a modular multi-platform approach, BioNTech wants to exploit synergies and advance several projects simultaneously. A look at the details reveals a promising picture: Eight projects are in the preclinical phase, another 19 are in Phase I, five are in Phase II, and one is in Phase III. In addition to further developments of the Corona vaccines, BioNTech now has many cancer-related projects in its portfolio: From skin cancer to prostate cancer to cancers of the head or even growths on the pancreas - BioNTech covers many different diseases.
BioNTech is advancing projects on its own account or in collaborations. In addition to Pfizer, these include universities and other pharmaceutical companies such as Genentech, Fosun Pharma and Sanofi. Despite the promising pipeline, the share has only been moving sideways in recent months. The current level could be a solid entry point for the long term - BioNTech has many projects and generates substantial cash thanks to the Corona vaccines. This also gives plenty of room to buy suitable biotech companies if necessary.
Cardiol Therapeutics: Rare diseases as sales guarantor
One company that is currently more at the level that BioNTech was a few years ago is Cardiol Therapeutics. The Canadian biotech has developed a cannabidiol-based compound designed to cure inflammation of the heart. Just recently, Cardiol Therapeutics enrolled its first patient in a Phase II trial for pericarditis (inflammation of the heart sac). The research portal researchanalyst.com took a close look at the market for existing drugs and stated that the existing ARCALYST™ solution is costly at around USD 6,000 per application, of which up to four applications are typically required. Pericarditis usually occurs after viral infections and often leaves scarring that can be considered permanent damage.
Because pericarditis is considered rare, Cardiol could benefit from special market protection if approved. So-called orphan drugs typically receive ten-year patent protection to encourage investment against rare diseases. Furthermore, Cardiol Therapeutics is working on a study around myocarditis and advancing a subcutaneously administered active formulation against heart failure. Thanks to a financing round of about USD 50 million closed more than a year ago, the Company is adequately funded and can move forward with its projects. However, the numerous new shares from the financing have not done the share price any good - the share is currently at the bottom. Investors looking for comeback opportunities and who find the projects promising can take initial speculative positions. On February 15, the Company will participate in the 6th International Investment Forum (IIF). Registration for the live event is free.
Aurora Cannabis: Market saturated
The Aurora Cannabis share has also experienced a weak development. This is mainly due to overcapacity: At Aurora Cannabis, the plants are just sprouting. Although the cannabis market in North America continues to grow, companies like Aurora are in the red. Other industry players are feeling the same way. The growing supply of medical and lifestyle cannabis in North America is creating pressure in the industry. Companies that merely grow cannabis, but do little processing or refining, are paying the price. The outlook for Aurora Cannabis is rather negative.
Even though cannabis is taking on a growing role as a medicinal herb, investors need to look closely. In its natural form, cannabis is largely interchangeable. In the form of CardiolRx™, as Cardiol Therapeutics calls its active ingredient, value creation should not be a problem if drug regulators approve. While companies such as BioNTech must almost be considered conservative investments due to their cash flows and broad product pipeline, investors tend to take a more opportunity-oriented approach to Cardiol Therapeutics. However, investors should keep the associated risks on their radar.
Conflict of interest
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