February 17th, 2021 | 10:39 CET
Cardiol Therapeutics, Formycon, Teva Pharmaceuticals: COVID in focus!
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Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Cardiol Therapeutics - Many ideas in the quiver
One troublesome combination is the combination of flu-like infections and inflammatory-related heart conditions, e.g., myocarditis. Cardiol Therapeutics is a Canadian pharmaceutical Company that has a potential answer to treating both heart complications due to COVID-19 and inflammatory heart disease. It involves the administration-friendly oral delivery of a proprietary CBD compound, CardiolRx™, to reduce inflammation. In this context, Cardiol works with appropriately high doses, which have already shown promising results in various test series, and a clinical phase 1 has already been completed.
A fascinating area of research for Cardiol is also "acute myocarditis." Acute myocarditis is the most common cause of sudden cardiac death in people under 35 years of age. The latest data from the Global Burden of Disease Study suggests that the prevalence of acute myocarditis is about 22 per 100,000 population. Some cardiologists have already taken a closer look, and Berlin's Charité Hospital is also on the list.
In the US and the European Union, compounds for rare diseases are eligible for accelerated marketing approval. There are other incentives, such as extended market exclusivity, to launch the resulting drug properly. Smaller companies often fail to do this because of the availability of appropriate investment budgets throughout the development timeline. This is not the case with Cardiol Therapeutics. So far, the Company has been able to refinance itself well, and the share price of CAD 4.80 at the beginning of 2021 was just below the high from 2020. In our opinion, the Company's attractiveness lies in the diversity and flexibility of the research topics, especially for current complexes of topics.
Formycon - The biosimilar expert shows muscles
Six weeks ago, biosimilar manufacturer Formycon drew attention with an application against COVID-19. A SARS-CoV-2 blocker developed by the Company, called FYB207, could completely prevent cells from becoming infected. SARS-CoV-2 and other coronaviruses use the receptor ACE2 on the surface of human cells as their main port of entry. Formycon's ACE2 antibody fusion protein effectively binds to SARS coronaviruses at precisely this point. At the time, the share price went through the roof, rising from EUR 36 to EUR 72, before consolidating to below EUR 55. Now the cards are being reshuffled.
The current share price development shows that the market at Formycon is currently carrying out a revaluation. The Covid-19 drug candidate FYB207 is again in focus. Should the production of the substance in large quantities work out faster than expected, analysts see a blockbuster potential of billions. That's because vaccinations are delayed and there is not yet sufficient evidence to determine whether mutants can be appropriately "vaccinated away." Formycon's drug alters the surface of the cells, preventing any flu viruses from docking. This is a unique approach to date.
In the second half of 2021, we believe that a clinical phase may already be underway. In turn, it could be that after successful market approval, another COVID drug can be used as standard therapy. The analysts at Nord LB raised their price target from EUR 45 to EUR 80 for the time being; the share was trading at EUR 72 yesterday. Still very interesting!
Teva Pharmaceuticals - Long forgotten, now interesting again
Teva Pharmaceutical Industries Limited is an Israeli pharmaceutical Company that operates globally and is considered the world leader in generic pharmaceuticals. The group is active in over 70 countries and generated nearly USD 17 billion in global sales in 2020 with almost 57,000 employees. Teva specializes in the development, production and distribution of pharmaceuticals such as specialty therapeutics, generics and over-the-counter medicines.
Teva has been worried about its capital structure for the past 2 years, with debt widely considered too high at USD 13.2 billion. Teva Pharmaceutical Industries Limited reported Q4 2020 earnings of USD 0.68 per share, beating analyst estimates of USD 0.62. Revenues rose 10% year on year, driven by higher operating income and a lower tax rate.
The generic drug maker's sales totaled USD 4.45 billion in the quarter, beating the consensus estimate of USD 4.36 billion. The pandemic led to lower demand for some products due to reduced activity by physicians and hospitals, primarily in North America. However, demand for some products related to the treatment of COVID-19 symptoms continued to increase.
Teva's share price made a low of below USD 5 in August 2019 and recovered to a stable USD 11 by 2021. Chart-wise, things are now getting exciting as a long-standing resistance at USD 13 is looming. However, the current market momentum is currently in favor of investing in pharmaceutical companies, which should support the positive trend for Teva. Collect cautiously!
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