June 22nd, 2022 | 13:01 CEST
Crisis investments? Pharmaceutical stocks in check: Bayer, XPhyto, Pfizer
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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.
Bayer: Bucking the trend strongly
Among pharmaceutical stocks, Bayer is a popular choice for investors. The reason: In addition to its health care business, Bayer has chemical and agricultural businesses. Recently, Bayer also won the fourth lawsuit surrounding the controversial crop protection agent glyphosate. As a result, the risk of further lawsuit cases is decreasing. In addition to crop protection products, Bayer also offers seeds, making it a bet on current shortages on the one hand and the growing world population on the other. Climate change also plays a role. The more challenging the situation becomes for farmers, the more likely they are to have to resort to new varieties that can also cope with heat and drought or are less susceptible to rotting in torrential rain.
Slowly but surely, it is becoming clear that the then-controversial takeover of Monsanto by Bayer was not a mistake. In the meantime, it even seems to be succeeding in positioning itself positively around the once-controversial deal: A few weeks ago, Bayer joined the Zero Hunger Private Sector Pledge, committing EUR 160 million to the fight against global hunger. The stock has gained around 9% in the past three months, successfully bucking the current negative trend. In the medium term, the value could attack its pre-Corona high of EUR 77 - provided that the big crisis does not materialize.
XPhyto: The share price falls, but the Company just keeps going
XPhyto also has an exciting business. The Canadian biotech offers diagnostics against oral diseases and also has rapid COVID-19 tests in PCR quality in its portfolio. Other mainstays are active ingredient carriers. Examples include active ingredient patches or small active ingredient carriers that patients can place under their tongues. The advantage of such carriers lies in their increased effectiveness. If active ingredients work equally well in lower doses, this saves costs. Such an approach is particularly widespread in the field of generics. The third pillar of XPhyto's business involves researching psychoactive substances such as mescaline. In this way, the Company aims to combat depression - according to market researchers at Data Bridge, the market for drugs to combat depression is expected to be worth USD 14.3 billion by 2028. Although psychoactive substances are still frowned upon in Europe in particular, the market in the USA has been opening up for years. Among others, visionary Christian Angermayer is investing in psychoactive substances.
However, if you look at XPhyto's share price, it is down 37% over three months. What has happened? While companies like Bayer can increase their sales and have a growing perspective, XPhyto is currently under pressure as a growth company. However, this does not detract from the operational progress: In May, the Company reported progress around a patch for treating Parkinson's disease. At issue is the effectiveness of the dosage form. Company representatives called the results "positive." Recently, Florian A. Sahr, an experienced pharmaceutical expert and project manager, joined the team. Sahr is considered an expert in transdermal and orally dissolvable dosage forms. With the latest developments, XPhyto is successfully advancing its bread-and-butter business. Investors with a weakness for growth stocks should keep an eye on the share - the business is evolving.
Pfizer: The success of others
Pfizer also continues to develop. It was recently announced that the pharmaceutical giant has acquired around 8% of the shares in the vaccine manufacturer Valneva. The aim is to drive forward the existing collaboration around the Lyme disease vaccine candidate VLA15. Although Valneva had recently weakened on the stock market, the investment is also seen as a vote of confidence in the biotech and pharmaceutical market - promising opportunities and up-and-coming products can be found even in companies whose share prices are tumbling. The cooperation with BioNTech has already had only positive effects for Pfizer, pushing the share price mightily during the pandemic. On a one-year horizon, the stock is up around 35%. Currently, Pfizer is in an exciting phase - if the value slips in the direction of EUR 40, the momentum could fade; above EUR 50, new momentum beckons.
Size matters! This could be the conclusion for investors looking for crisis-proof investments in pharmaceutical stocks. Both Pfizer and Bayer have recently performed well on the market, bucking the trend. However, Pfizer's investment in Valneva shows that the market is not always right. Smaller stocks also hold potential, even if the prices do not necessarily reflect this. Stocks such as XPhyto have been severely punished. They are indeed considered speculative, but it cannot be ruled out that prominent players will also recognize the intrinsic value of these small and highly specialized companies.
Conflict of interest
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