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January 20th, 2022 | 12:14 CET

Evotec, Defence Therapeutics, Formycon - Who will benefit from Omicron?

  • Biotechnology
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The Coronavirus has shown that without biotechnology and ongoing research, we are relatively defenseless against the whims of nature. What would have happened if novel technology had not been available to produce potent vaccines in a very short time? Would our intensive care units have been as crowded as they were in Italy at the beginning of the pandemic? Would hospital triage be the norm today? No one can say for sure, but history has shown how epidemics - such as the Spanish flu - have claimed many lives in the past.

time to read: 4 minutes | Author: Carsten Mainitz

Table of contents:

    Evotec - Targeting more scourges of humanity

    With the emergence of the SARS-CoV-2 virus, German biotech Evotec also came into focus. Would the Company join the global race to develop a vaccine? The Hamburg-based company has been involved in all sorts of funding and basic research initiatives, such as the ACTIV initiative, which was set up in part to accelerate clinical trials. But no direct vaccine research has been conducted within its network of partners. Instead, in the interim, the Company has remained committed to alternative therapeutic areas with high unmet medical needs, such as neurology, oncology, and infectious and metabolic diseases.

    In this field, the Company recently announced an interesting alliance. In the future, the Company will join forces with the US pharmaceutical group Eli Lilly in the search for active ingredients to treat metabolic and chronic kidney diseases and diabetes. With a total value of up to USD 1 billion, the project is initially scheduled to run for three years. The Hanseatic Company will receive progress payments for research programs selected by Eli Lilly, as well as milestone payments. In securing the contract, Evotec benefited from its good preparatory work: the biotech specialist had already spent years building up a proprietary patient database for metabolic and renal diseases using multi-omics analyses of bio database samples. If one or more developed drug candidates are commercialized, staggered royalties will also be offered.

    For Evotec investors, this announcement comes at precisely the right time, as the share price had weakened somewhat in recent weeks. After the announcement of the deal, the share turned north. Analysts also see the announcement as positive. RBC left its rating at "Outperform" with a target price of EUR 50. They are thus somewhat more optimistic than their colleagues, who see the price target on average at around EUR 44. However, this still corresponds to a respectable price potential of more than 25%.

    Defence Therapeutics - ADC specialist ahead of Phase I trial of breast cancer drug AccuTOX

    ADC specialist Defence Therapeutics (ADC = Antibody Drug Conjugates, i.e. the "piggyback" antibody-drug combination) opened in 2022 with a great announcement. The Company reported the final step of the preclinical phase for the breast cancer drug candidate AccuTOX had been initiated. To this end, Eurofins Advinus Limited, a leading contract research organization, has been contracted to conduct a GLP (Good Laboratory Practice) study. Upon successful completion, Defence Therapeutics will submit an Investigational New Drug (IND) application to the FDA and Health Canada to commence a Phase I clinical trial.

    The lead molecule developed on the Accum platform technology (Background in an analysis at has shown satisfactory results in trials with more than nine different tumor cell lines of murine and human origin (lymphoma, melanoma, breast, colon and non-small cell lung carcinoma). The lead molecule now identified had manifested itself as the most effective in tests against more than 50 variants.

    According to Fortune Business Insights, the global market for breast cancer drugs is expected to reach USD 38.5 billion by the end of 2026, representing a compound annual growth rate since 2018 of about 10.2%. So far, the share price has not reacted much to the announcements from Canada. It seems investors are currently a bit cautious on biotech stocks and prefer to wait for the final approval of AccuTOX as a new investigational drug. It should be approved by the middle of 2022. Currently, the Company, listed on the Toronto, Frankfurt and Stuttgart stock exchanges, is valued at around CAD 180 million.

    Formycon - When will the slumber end?

    The importance of a positive news flow is shown by the Munich-based biosimilar developer Formycon. Formycon was able to announce at the beginning of December that the exclusive marketer of its active ingredient FYB201 (biosimilar to Genentech's eye drug Lucentis) Bioeq had, in turn, found a marketer for the MENA region (Middle East - North Africa). It also announced that a study of the COVID-19 drug FYB207 with the Technical University of Munich had implied a high efficacy against all pathogen variants, including Omicron. As a result, the share price shot up by more than 50% within a week.

    Since then, however, there has been no further news from the Company, and the share price has fallen back to its old level. Over the year, this represents a loss of around 22%. But investors should keep in mind that the Company is only sleeping on the outside. A lot is happening in the background. For example, the approval application for FYB201 has been with the FDA for quite some time. An approval decision is expected by the middle of the year. By then, at the latest, Formycon's share price will start to move again.

    Biotechnology is indispensable for our present and, in particular, our future life due to the increasing aging of our society, stronger external influences, and the evolution of humanity, which is increasingly less characterized by selection. mRNA, ADC and biologics are essential technologies. Each of the companies presented has blockbuster potential. As projects progress, the risk decreases, but so does the opportunity for investors. In this sense, Defence Therapeutics, which is relatively in its infancy, is the company with the greatest share price potential.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

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    Der Autor

    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.

    About the author

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