Declaration of war on the pharmaceutical industry? Bayer, Novo Nordisk, and insider tip PanGenomic Health

PanGenomic Health: Share price could multiply

PanGenomic Health aims to start operations in the US this year. This offers great opportunities for shareholders in the still unknown stock, which is valued at less than EUR 10 million. After all, the US is the world's largest pharmaceutical and healthcare market. Many governments have already tried to reduce drug prices – and failed. Whether the new US Secretary of Health Robert F. Kennedy Jr. (RFK Jr.) will succeed is uncertain.

What is certain is that RFK Jr. has criticized the FDA for its "aggressive suppression" of vitamins and supplements. Instead, he is focusing on healthier diets, fewer ultra-processed foods, better nutrition guidelines in schools, and transparent food ingredients. To this end, he has launched the "Make America Healthy Again" initiative. PanGenomic, with its app-based, plant-based coaching, fits perfectly into this promoted preventive health culture.

Overall, the supplement industry is enthusiastic about many of the US Department of Health and Human Services' plans. They hope the regulatory environment for plant-based, non-prescription products will be positively influenced.

The environment for PanGenomic to commence its market penetration could hardly be better. PanGenomic connects two billion-dollar markets: digital health and personalized plant-based dietary supplements. To this end, an AI-based digital platform (app) has been developed. Nara.AI is a digital health advisor that provides information on the latest trends and study results in the industry and delivers AI-powered personalized recommendations for alternative health treatments, including dosage, monitoring, and adjustment. In addition to subscriptions and advertising, an integrated e-commerce store generates revenue. Management is confident that it will be able to attract a significant number of users in a short period of time through partnerships and marketing.

Bayer: Positive news from the US

The legal disputes surrounding Bayer's glyphosate and PCB in the US are currently being ignored on the stock market. Even the high net debt is not deterring investors from buying Bayer shares at present. Since the beginning of the year, the stock has gained nearly 40%.

The rise in the share price is certainly underpinned by positive company news. Most recently, the DAX-listed company announced that it had submitted a marketing authorization application to the US Food and Drug Administration (FDA). The application is for the contrast agent gadoquatrane. It is intended for use in contrast-enhanced magnetic resonance imaging (MRI) of the central nervous system (CNS) and other body regions in adults, children, and even newborns. The advantage is said to be a low dose of 0.04 mmol gadolinium (Gd) per kilogram of body weight compared to existing agents. This reduces the Gd content by 60% compared to the standard dose. The submission to the FDA is based on positive data from the Phase III QUANTI studies relevant for approval.

Dr. Konstanze Diefenbach, Head of Radiology Research and Development at Bayer, commented: "There is a growing need for medical imaging, partly due to the increasing number of chronic diseases such as cancer and cardiovascular disease. Patients can benefit from a dose reduction, especially those with chronic conditions who require multiple contrast-enhanced MRI scans throughout their lives." In the US alone, 40 million MRI scans are performed every year. In Europe, the figure is likely to be over 30 million.

Novo Nordisk: Court paves the way for increased revenue

While PanGenomic aims to help people stay healthy, Novo Nordisk is earning billions through weight loss. Novo Nordisk recently scored a success in the US with its blockbuster drugs Ozempic and Wegovy. The active ingredient in these medications, semaglutide, has been removed from the list of drugs in short supply, thereby prohibiting the production of copies. Compounding pharmacies had filed a lawsuit against this decision. After the FDA had already ruled in favor of Novo Nordisk, a federal judge has now also rejected the compounding pharmacies' application. As a result, these pharmacies are no longer allowed to offer cheaper versions of the obesity drugs, and Novo Nordisk's revenue is likely to continue rising.

Novo Nordisk's share price appears to be stabilizing between DKK 400 and 500. A significant reduction in the target price by JPMorgan recently led to a slight setback. Analysts pointed to a decrease in valuations across the entire pharmaceutical sector – likely due to growing uncertainties facing the industry in its former goldmine, the US market. In addition, earnings estimates for the coming year were revised downward. As a result, analysts lowered their fair value for Novo shares from DKK 1,000 to 650. Nevertheless, they continue to recommend the stock as "Overweight."

With its new administration, the US is also a source of uncertainty in the healthcare sector. PanGenomic Health is one of the companies that is likely to benefit from the government's plans. If it succeeds in capturing even a small share of the billion-dollar market, the stock has the potential to multiply in value. In contrast, Bayer has already performed well this year. The latest reports have been quite positive. Nevertheless, investors should keep an eye on legal disputes. At Novo Nordisk, the sharp decline in the share price appears to have come to an end. A rapid recovery is unlikely. However, the Danish company is a core investment in the pharmaceutical sector in the long term.