March 6th, 2024 | 07:00 CET
Cardiol Therapeutics is on the upswing - When will BioNTech and Evotec follow suit?
In the world of biotechnology, the stock market often resembles a rollercoaster ride where investors and companies need to be firmly strapped in. The volatility of biotech companies can include dizzying highs and lows driven by the research and development of new medical treatments and therapies. A single positive report of clinical trial results or regulatory approval of a breakthrough drug can send a company's share price soaring, sending investors and companies into euphoria overnight. This happened recently with Cardiol Therapeutics. When can Evotec and BioNTech announce a success?
time to read: 4 minutes
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Author:
Armin Schulz
ISIN:
CARDIOL THERAPEUTICS | CA14161Y2006 , BIONTECH SE SPON. ADRS 1 | US09075V1026 , EVOTEC SE INH O.N. | DE0005664809
Table of contents:
Author
Armin Schulz
Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.
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Cardiol Therapeutics - Receives Orphan Drug Designation
Last year, Cardiol Therapeutics' shares were trading below the cash level. Since October 23, 2023, it has been on an upward trajectory, and with the announcements in 2024, the stock has truly taken off. This year started with the news that the Company achieved over 50% of patient enrollment for the ARCHER study, which is investigating the effects of CardiolRx™ in acute myocarditis. As a result of this news, the share price of Cardiol (CRDL) climbed back above USD 1 on the NASDAQ, thus again fulfilling the requirements for listing on the US technology exchange. On February 15, a significant milestone was then announced.
Cardiol Therapeutics received Orphan Drug Designation from the FDA for its lead drug CardiolRx™ for the treatment of pericarditis, including recurrent pericarditis. This drug is currently being evaluated in two Phase II clinical trials. The Orphan Drug Designation provides potential market exclusivity for 7 years as well as tax credits and is dedicated to rare diseases in the US. As there is currently only an expensive therapy available for recurrent pericarditis, CardiolRx™ has significant potential upon approval. Every year, around 38,000 patients in the US are affected by recurrent pericarditis, often suffering from the disease for more than two years and incurring considerable medical costs.
CardiolRx™ could provide a much-needed, effective and potentially less expensive treatment alternative. On February 21, patient enrollment for the Phase II MAvERIC-Pilot study investigating CardiolRx™ in recurrent pericarditis was completed. The initial results are expected in the 2nd quarter of this year. For those who want to learn more, the Company presentation from the 10th International Investment Forum on February 21 is recommended. The share price has risen by more than 220% since last October. The share has recently consolidated and is currently trading at USD 1.76.
BioNTech - When will the turnaround come?
After the sales figures for BioNTech's Corona vaccine fell significantly, the share price also dropped. The share has been trading at its lowest level since April 2021, and the market capitalization is approaching the Company's cash position, which is over EUR 17 billion. Even in 2024, the Company still aims to generate around EUR 3 billion in revenue from the sale of its COVID-19 vaccine. In addition, the Company has a large oncology pipeline with more than ten pivotal trials to be launched this year. The market is currently completely ignoring this fact.
BioNTech aims to be ready for the market launch of potential cancer treatments by the end of 2025. The Company is currently conducting several late-stage studies, such as for the treatment of specific types of breast cancer with the innovative antibody-drug conjugate BNT323/DB-1303. In addition, a collaboration with Autolus Therapeutics was announced to further develop advanced T-cell therapies. This partnership promises to expand BioNTech's pipeline with cost-effective, targeted cell therapies and strengthen its US supplier network and manufacturing capabilities.
BioNTech's financial exposure to potential vaccine-related damages remains low as the EU Member States will bear these costs. Most recently, a claim for damages of EUR 150,000 was rejected. Nevertheless, the BioNTech brand could be damaged by the wave of lawsuits. However, the approval of a cancer drug would likely change the sentiment. But first, the Company has to deliver. This explains the free fall of the share, which is currently trading at around EUR 80.92. If the market capitalization falls to around 17 billion, the risk would be further reduced due to the cash reserves.
Evotec - Share remains under pressure
The situation at Evotec is somewhat different. After the CEO, Werner Lanthaler, unexpectedly resigned for personal reasons, although his contract ran until March 2026, the share price collapsed. Whether the resignation was actually due to physical and mental exhaustion or whether it was due to the delays in reporting share transactions by the Executive Board and the corresponding report in Manager Magazin remains unclear. In any case, the timing of the sales casts a negative light on the former CEO.
Despite the recent progress made through several strategic partnerships that have the potential to revolutionize the treatment of various serious diseases, the stock remains battered. With an additional USD 25 million financing from Bristol Myers Squibb, Evotec will further expand its research in the field of neurology. In addition, Evotec is intensifying its efforts to develop innovative therapies for inflammatory bowel diseases by partnering with the Crohn's & Colitis Foundation. This partnership focuses on the development of new treatments for Crohn's disease and ulcerative colitis.
In a further collaboration, Evotec has expanded its relationship with Advanced BioScience Laboratories to develop a third antibody for the treatment of HIV. This expansion builds on a successful previous collaboration and is supported by public funding from the US government. Most recently, Evotec's commitment to developing new anti-infectives against tuberculosis and malaria is supported by a grant from the Bill & Melinda Gates Foundation in the amount of approximately EUR 3.1 million. The share is currently testing the EUR 13 mark for the second time and trading at EUR 13.32. A double bottom could be the starting signal for a rebound.
The stock market does not always act rationally. Exaggerations in one direction or the other can occur, especially in the biotech sector. Cardiol Therapeutics traded below cash despite the fact that the lead drug CardiolRx™ is currently in 2 Phase II trials. The Orphan Drug status enabled the share to achieve its turnaround. At BioNTech, the hype surrounding the COVID-19 vaccination is gone. Investors are currently showing little interest in buying, although the market capitalization is almost covered by cash and cash equivalents. The Evotec share price plunge came out of nowhere. The resignation of the CEO is still lingering, and even positive news has not yet been able to turn the tide.
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