15. June 2021 | 13:15 CET
CureVac, Cardiol Therapeutics, Bayer: Healthcare for the portfolio
Biotechnology and pharmacology offer us great opportunities. For decades, the world has suffered from a few serious diseases: cancer, cardiovascular disease, Alzheimer's, diabetes and others. Where previously only symptoms were treated, there is now the prospect of a cure thanks to new processes. Even if it still takes a little time to reach market maturity: the innovative companies are already on the market, investors can invest.
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ISIN: NL0015436031 , CA14161Y2006 , DE000BAY0017
CureVac: Will this share become a value opportunity?
The share of CureVac has come under the wheels in recent days. The reason: the german mRNA specialist and prospective vaccine manufacturer fell further behind the competition in the race for effective vaccines against Covid-19. Most recently, the process was delayed even further. In the market, this caused a sell-off. In the meantime, CureVac is valued at about the same level as Novavax. However, the latter Company does not rely on innovative mRNA technology but protein-based nanoparticles. This process has far fewer potential applications than mRNA technology.
CureVac is a leader in mRNA and has many years of experience. It could be helpful when it comes to vaccines against other diseases, such as cancer. Currently, the share has fallen out of favor with the market. However, this does not necessarily mean anything in the long term. Today, the share price is burdened by the fact that CureVac will continue to depend on alliances with pharmaceutical giants or the capital market when investing large sums, while the ruble is already rolling at its competitor BioNTech thanks to vaccine sales. In the short term, this may put further pressure on the CureVac share. However, as soon as the sell-off comes to an end, CureVac will become interesting again - the mRNA technology and the Swabians' expertise gathered in this field are too promising.
Cardiol Therapeutics: Good for the heart, soon on the Nasdaq?
While CureVac's stock is weakening right now, Cardiol Therapeutics has already bottomed out. Cardiol Therapeutics focuses on the active ingredient cannabidiol, which is found in the cannabis plant. However, the team around CEO David Elsley does not believe in being a cannabis company. Cardiol Therapeutics is a biotechnology company that uses cannabidiol (CBD) to treat potentially fatal inflammatory processes in the heart. The approach stems from an article in the Journal of the American College of Cardiology that showed CBD could reverse fibrosis in the heart.
At the end of April, Cardiol Therapeutics announced the start of a Phase II / III outcome study with high-risk patients admitted to hospital with Covid-19. The aim is to test the effect of the unique CBD formula on high-risk patients. If the pandemic comes to an end, the study results can also be used for a regular approval process to treat inflammatory heart disease. Cardiol Therapeutics has already achieved promising interim results and is currently preparing for a listing on Nasdaq. The Company expects this to bring new attention from investors. Currently, the Company, which is targeting one of the most serious diseases of our time, is valued at only about EUR 93 million. Comparable companies on the Nasdaq could make significant gains after their listing and reach values in the billions. (Read also the interview with Cardiol CEO David Elsley).
Bayer: A dividend stock without a lot of frills
While companies like CureVac or Cardiol Therapeutics are primarily concerned with growth, Bayer is considered a solid pharmaceutical and chemical company. The pharmaceuticals division accounts for just over 40% of Bayer's sales; only the seed business is more important. Last year, Bayer benefited from its solid market position despite the pandemic. Although the performance of agricultural products was poorer, this area, in particular, is once again in demand because of rising prices. Nevertheless, the stock is moving sideways at best. In three months, the stock has gained just 2%. Over a year, the stock has lost 16.6%. Bayer may not have much growth potential, but it is active worldwide and offers a healthy dividend of more than 5%.
Bayer, CureVac and Cardiol Therapeutics show that there is good money to be made in drugs and related products. While Bayer is anything but dynamic as a top dog, the Company certainly offers a home to conservative dividend hunters. Those looking for short-term growth opportunities, however, are better off with Cardiol Therapeutics. The fight against heart disease is gaining in importance, especially in connection with Covid-19. In addition, there is the planned Nasdaq listing. CureVac also has long-term potential, but there is no catalyst to help the share price get off the ground in the short term.