August 16th, 2021 | 11:20 CEST
Defence Therapeutics, Moderna, Evotec - Bet on the front-runners!
Health is our most important asset. Biotech companies that protect it save not only human lives but also reap high profits. The price development of many biotech stocks over the past few months has been breathtaking. Investors are advised to focus on the frontrunners, as the market position gained as a first mover, the leadership position in a niche or innovative solution, will enable the companies to keep their competitors at bay for a long time to come.
time to read: 3 minutes
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Author:
Carsten Mainitz
ISIN:
DEFENCE THERAPEUTICS INC | CA24463V1013 , MODERNA INC. DL-_0001 | US60770K1079 , EVOTEC SE INH O.N. | DE0005664809
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Author
Carsten Mainitz
The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
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Defence Therapeutics - The ADC pioneer
Biotechnology Company Defence Therapeutics focuses on therapeutic methods to fight cancer and to develop vaccines against infectious diseases. The Canadians are driving an innovative approach. Based on the Company's proprietary Accum platform, the next generation of vaccines and ADC (Antibody Drug Conjugates) preparations are being developed. This process is considered particularly promising for cancer therapy. Recently, the Company was able to announce a significant success. The developed vaccine AccuVAC-PT001 showed serum cross-reactions with the spike protein of several SARS-CoV-2 variants in laboratory tests in vaccinated animals.
Most notably, the highest efficacy was observed with the currently rampant Delta variant. Through the vaccine, an effective infection blockade of the parent strain was achieved. Further laboratory trials are underway to verify the neutralizing ability of the antibodies generated. The long-term goal is to develop a booster vaccine that blocks both virus transmission and immune evasion by further mutation.
In order to strategically optimize the Accum platform and the clinical trials, the biotechnology Company recently brought a highly experienced consultant on board. PharmaLex GmbH's subsidiary, Biopharma Excellence, is a leading pharmaceutical consulting firm with expertise in all areas from development to regulatory affairs and biopharmaceutical collaborations with a focus on regulatory matters in Europe, the United States and Japan.
Through Accum's technology, Defence Therapeutics expects to shorten treatment duration with fewer side effects while increasing efficacy through targeted drug positioning. The promising fields of cancer therapy and the fight against Covid-19 address huge markets. If successful, the market capitalization should increase significantly from the current value of CAD 226 million.
MODERNA INC - Tailwind from FDA approval
The US biotechnology company specializes in discovering and developing therapeutics and vaccines for infectious, autoimmune, and cardiovascular diseases. Like BionNTech/Pfizer, Moderna is a pioneer in the fight against Covid-19 with its mRNA preparations. Now the business development is getting another tailwind. The US Food and Drug Administration (FDA) recently approved the third vaccination with Covid-19 vaccines from Moderna and BionNTech/Pfizer for immunocompromised adults.
The booster vaccine is intended for people who have undergone organ transplants, undergoing chemotherapy, and for patients whose immune systems are severely compromised. Moderna is valued at USD 157 billion at share prices of USD 390. The Company's high profitability results in a moderate valuation of the stock. The 2021 P/E ratio is only 13, while the 2022 P/E ratio is 16.
EVOTEC SE - Growth scenario intact
Active pharmaceutical ingredient researcher Evotec is entirely on track to achieve its annual targets. The benchmark for 2021 is sales of EUR 550 to 570 million, an increase of up to 14% compared to the previous year and an increase in operating income (EBITDA) to EUR 105 to 120 million from EUR 107 million.
With the recently published half-year figures, however, the Hamburg-based Company disappointed at the profit level. Although sales rose by almost a fifth to just under EUR 280 million, EBITDA fell by nearly 25% to EUR 36 million due to higher investments and increased expenditure on research and development.
However, investors should not overestimate this snapshot. The medium-term growth trajectory is right. As a contract researcher, Evotec benefits from high demand from pharmaceutical companies and academic institutions. In addition, the Company has expanded its drug development activities in recent years. Closed alliances and acquisitions also accelerated growth. In 2025, sales are expected to rise to more than EUR 1 billion and EBITDA to at least EUR 300 million. Evotec shares have almost doubled in the last 12 months. The Company is currently valued at around EUR 7 billion.
Biotech stocks have been among investors' favorites in recent months. With the three stocks presented, investors can bet on the continuation of the success stories. The question is whether to do this with heavyweights like Moderna and Evotec or with still relatively young but very innovative companies like Defence Therapeutics. Should the Canadians achieve a breakthrough, a revaluation of the share is on the cards.
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