August 30th, 2023 | 07:00 CEST
Course Rockets of Yesterday - and Tomorrow: Innocan Pharma, BioNTech, Cardiol Therapeutics
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"[...] As a company dedicated to developing treatments for rare heart diseases, we see this as an opportune moment to contribute to the fight against heart disease and make meaningful strides in improving heart health worldwide. [...]" David Elsley, CEO, Cardiol Therapeutics Inc.
Buckle up! Innocan Pharma is on a roller coaster ride
A 50% increase in a week! That is how dramatically Innocan Pharma's share increased recently. But what does the Company actually do? The Company from Israel is dedicated to researching innovative medicines and offers CBD-based wellness products. The latter business area has recently brought the Company increasing sales and kissed the share awake. Yesterday, however, the gambler's stock paid the price for the steep surge and corrected.
While blue chips, such as BioNTech, are currently suffering from declining sales - the major vaccination wave in the wake of the pandemic is now slowing down a bit - small-cap companies in the biotech sector, especially in the initial quarters of market maturity, tend to be highly volatile and offer the opportunity for dynamic gains. However, it is all the more difficult for shareholders to extrapolate these sales increases and derive a trend for the future from them. Just as BioNTech's success did not continue endlessly, the growth of young biotech small caps is unlikely to be limited after the hype: New markets have to be developed at high cost and often pose new challenges.
Cardiol Therapeutics: Exciting biotech with abundant cash
A stock that stands for innovative active ingredients and offers therapies around CBD is Cardiol Therapeutics. Just like Innocan Pharma, Cardiol Therapeutics is listed on the Nasdaq and should, therefore, already be familiar to biotech insiders. Unlike the hype stock from Israel, Cardiol Therapeutics seized the opportunity a few years ago and implemented a mega capital increase of USD 50 million in the wake of the lively interest of North American investors. Today, the Company is still drawing on this capital and, thanks to the cash injection, is able to complete current clinical trials.
Cardiol Therapeutics is currently working on a multicenter Phase II study in the US in 25 patients with recurrent pericarditis and on a multinational Phase II study in 100 patients with acute myocarditis. What makes both projects unique is that Cardiol Therapeutics' therapies could qualify as a so-called "orphan drug". These drugs target rare diseases. To ensure that research is conducted into active ingredients for such rare diseases, companies are granted seven-year market exclusivity. The research portal researchanalyst.com considers triple-digit sales targets in the US and Europe to be possible" in view of this mix.
Cardiol Therapeutics: What's in it after -80%?
The share price of Cardiol Therapeutics has lost significantly since its high around USD 5 and is currently trading at just under a dollar. However, over the past quarters, a bottoming-out formation has emerged. Since Cardiol Therapeutics is solidly financed, the speculative stock could also be suitable for buy-and-hold investors - compared to other growth stocks that shimmy from one financing round to another, Cardiol has advantages thanks to its cash reserves. If positive results from the ongoing studies or good figures of the high-purity CBD preparations are added, the stock could celebrate its comeback.
Even BioNTech has no guarantee of success
Although a "comeback party", as also happened at Innocan Pharma, would also be accompanied by increased volatility at Cardiol Therapeutics, this should not matter to all investors already positioned or still buying at a favorable price. After steep price increases, it is only essential to rebalance even within a speculative portfolio and to reduce risks.
With BioNTech, too, it would have been a good idea to be sensible in the middle of 2021 and already think about the end of the pandemic. In the meantime, the share price seems to have found a bottom. Thanks to the pandemic billions, BioNTech is optimally positioned for new promising projects. **The Mainz-based company already has several of these in the pipeline - what will become of them remains to be seen. In this respect, all biotechs are similar - whether small-cap or large-cap.
Conflict of interest
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