Cardiol Therapeutics, Novo Nordisk, Bayer - Pharma stocks in focus

Analysts optimistic: Cardiol Therapeutics on track for success against pericarditis

Acute inflammation around the heart is not an age-related issue. Just recently, young US country singer Carly Pearce had to significantly scale back due to a diagnosis of pericarditis. Pericarditis is an inflammation of the pericardium, the tissue that surrounds and protects the heart muscle. This tissue hardens, leading to an unusual accumulation of fluid. Symptoms such as fever, coughing, and an irregular heartbeat can occur and may even become life-threatening.

In order not to endanger her health, the 34-year-old singer must not allow her heart rate to rise above a certain level - a challenge for a performer who gives a lot of energy on stage. Especially during emotional songs such as "We Don't Fight Anymore", Pearce uses her Apple Watch to check that her heart rate does not skyrocket. Despite these challenging conditions, Pearce remains optimistic and reports a slow but steady improvement in her condition.

The global market for pericarditis treatments is showing an investor-friendly trend. According to a recent market analysis by Market Research Future, the volume was estimated at USD 3.48 billion in 2023. Experts are forecasting robust growth for the coming years. The market is expected to grow from USD 3.74 billion in 2024 to an impressive USD 6.09 billion by 2032. This corresponds to a compound annual growth rate (CAGR) of 5.56% over the forecast period from 2024 to 2032.

These are good prospects for the Canadian biotechnology company Cardiol Therapeutics. The Company is focusing on the development of anti-inflammatory therapies for the treatment of heart disease. Their leading candidate, CardiolRx™, is currently in a Phase II study for the treatment of recurrent pericarditis.

The researchers want to investigate several aspects: They are testing whether the drug is safe and well tolerated. One of the main objectives is to determine whether CardiolRx™ relieves pain, which patients rate on a scale of 0 to 10 after 8 and 26 weeks. In parallel, blood tests will measure whether the drug reduces inflammation in the body. The study is also investigating whether CardiolRx™ can prevent relapses of the disease and whether patients can reduce their intake of other medications, particularly cortisone, as a result.

According to Refinitiv, institutional investors are showing increasing interest in the Company. Baader Bank Aktiengesellschaft, for example, recently acquired a new position worth USD 59,000. In total, institutional investors now hold 12.49% of the Company's shares.

Analyst firms remain optimistic on Cardiol Therapeutics’ future. Canaccord Genuity Group recently raised its price target from USD 6 to USD 8 and confirmed its "Buy" recommendation. HC Wainwright also reiterated its "Buy" rating with a target price of USD 9. In total, six analysts recommend the share as a "Buy"; one even rates it as a "Strong Buy". Roth Capital maintains its "Strong Buy" recommendation for the stock.

Novo Nordisk benefits from Ozempic hype: Half-year results show strong growth

The Danish pharmaceutical company Novo Nordisk has presented its interim results for the first half of 2024. Revenue increased by 24% to EUR 17.80 billion, which corresponds to growth of 25% at constant exchange rates. Net profit increased by 16% while operating profit grew by 18% to EUR 7.74 billion. President and CEO Lars Fruergaard Jørgensen is pleased with the growth, which was mainly driven by increased demand for GLP-1-based diabetes and obesity treatments.**

This is largely due to the 'vanity fair' of Hollywood and Montecito celebrities. Ozempic, a drug originally developed to treat Type 2 diabetes with the active ingredient semaglutide, has caused a stir in the US celebrity scene. Its popularity stems from its effective weight loss results, achieved through increased satiety and slower gastric emptying. The simple weekly application by injection and quickly visible results make it particularly appealing. After some celebrities, like Oprah Winfrey and Robbie Williams, shared their positive experiences publicly, a full-blown Hollywood trend emerged, turning Ozempic into a lifestyle drug for weight loss.

However, off-label use in non-diabetics is controversial, as it can have side effects and impact the availability of the medication for diabetic patients. These side effects include diarrhea, hair loss, a gaunt face, and muscle loss. Experts emphasize that Ozempic cannot replace a balanced diet and regular exercise as the basis for a healthy lifestyle and warn against the uncritical use of the drug purely for cosmetic purposes.

As long as the company meets all compliance and regulatory requirements, Novo Nordisk is unlikely to be troubled by the prominent off-label use. The Company has raised its guidance for revenue growth to 22-28% at constant exchange rates (CER) while operating profit growth is now expected at 20-28% (CER).

Bayer reports subdued business development in Q2 2024

Despite a challenging market environment, Bayer increased its revenue in the second quarter of 2024, while net income declined. Adjusted for currency and portfolio effects, Company sales rose by 3.1% to EUR 11.144 billion. EBITDA before exceptionals fell by 16.5% to EUR 2.111 billion, mainly due to an unfavourable product mix.

In the Agriculture Segment, sales increased slightly by 1.1% to EUR 4.981 billion. EBITDA before exceptionals fell by 27.7% to EUR 524 million. The Pharmaceuticals division recorded sales growth of 4.5% to EUR 4.605 billion, driven by new products such as Nubeqa™ and Kerendia™. Nubequa™ is used to treat prostate cancer. Kerendia™ is used to relieve symptoms of chronic kidney disease in Type 2 diabetics. Consumer Health recorded a 5.3% increase in sales to EUR 1.458 billion.

CEO Bill Anderson emphasized progress on strategic priorities, particularly in the pharmaceutical pipeline. Bayer plans to launch two new drugs in 2025: Elinzanetant and Acoramidis.

The Company confirmed its outlook for 2024 but expects results for Crop Science to be at the lower end of the forecast range. The revenue forecast for Pharmaceuticals was raised slightly. Those interested in learning more about Bayer's achievements in the current half-year report can find details in the video "90 days in 90 seconds" by CEO Bill Anderson.

Cardiol Therapeutics shows promising developments in the growing market for pericarditis treatments. The Company is in an emerging phase with its Phase II study for CardiolRx™. Despite a slight downward adjustment of earnings expectations, analysts remain optimistic, reflected in the "Buy" and "Strong Buy" recommendations. Novo Nordisk is experiencing strong growth, driven by the success of its GLP-1-based diabetes and obesity drugs like Ozempic. The Company increased its revenue by 24% and has raised its full-year forecast. Bayer, on the other hand, shows a more subdued business performance. Although the Company was able to increase its turnover slightly, profits declined. The agricultural business, in particular, is facing challenges. There were positive developments in the pharmaceuticals business, particularly with new products like Nubeqa™ and Kerendia™. In terms of stock performance, Novo Nordisk stands out with strong revenue and profit growth and an upgraded forecast, likely boosting its stock price. Cardiol Therapeutics shows potential but is still at an early stage. Bayer probably has the weakest stock market performance of the three companies due to mixed results and challenges in some business areas. Meanwhile, CEO Bill Anderson continues to address issues left by his predecessor, Baumann, who left behind considerable disarray.