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March 20th, 2023 | 09:37 CET

Evotec, Defence Therapeutics, Morphosys - Movement in the biotech sector

  • Biotechnology
  • Investments
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Is a new wave of takeovers starting in the biotech sector? Already last year, acquisitions by Big Pharma were expected to increase, but these largely failed to materialize. However, this could accelerate in the current year. On the one hand, pharmaceutical companies, such as vaccine manufacturer Pfizer, have deep pockets and need new innovations for their product portfolio; on the other hand, second-tier stocks are attractive targets due to the strong correction.

time to read: 3 minutes | Author: Stefan Feulner

Table of contents:

    David Elsley, CEO, Cardiol Therapeutics Inc.
    "[...] As a company dedicated to developing treatments for rare heart diseases, we see this as an opportune moment to contribute to the fight against heart disease and make meaningful strides in improving heart health worldwide. [...]" David Elsley, CEO, Cardiol Therapeutics Inc.

    Full interview


    Defence Therapeutics - Entry into a new market

    The positive news continues for the Canadian biotech company, and its patented platform technology is becoming increasingly popular. With the so-called Accum technology, the innovator is working to develop the next generation of vaccines and ADC products. The Accum platform has been developed and tested in vitro and in vivo in animals to optimize intranuclear drug transport in several US FDA-approved antibody-drug conjugates or new conjugates under development.

    The technology allows precise transport of vaccine antigens or ADCs in the intact form to target cells. Based on Accum, Defence Therapeutics has already developed plans around therapeutic vaccines against cancer, a vaccine against infections with the HP virus, which also has potential for acute therapeutic use, and the chemotherapeutic AccuTOX.

    In conjunction with cooperation with the French state-owned group Orano, the Company is now entering the radiopharmaceutical market. Here, the Accum technology will serve as a radionuclide-antibody conjugate. Instead of a drug, a radioactive emitter is moved into the vicinity of the cell nucleus of tumor cells. This is intended to cause the emitter to damage the cancer cell's nucleus to the point of cell death. For a recent update, you can read here.

    Sebastien Plouffe, CEO of Defence Therapeutics, looks forward to the continued progress of Acccum's expanding pipeline and added: "We have a long experience or relevant expertise related to the development and deployment of our AccumTM platform technology, including in the therapeutic use of antibody-drug conjugates, and we strongly believe that Orano, with its international expertise, using Defence's technology for targeted intracellular drug delivery to improve efficiency in targeting cancer cells, can make a significant contribution to the development of the next generation of radioimmunoconjugates."

    Evotec - Successful partnership

    In 2018, Evotec and Bristol Myers Squibb entered into a long-term partnership in the field of molecular glues. Bristol Myers Squibb is considered a leader in this field due to its unique compound library of Cereblon E3 Ligase Modulators. This strategic alliance aims to discover and develop a leading pipeline of Molecular Glue Degraders for various therapeutic indications. This will leverage all of Evotec's proprietary PanOmics and PanHunter platforms as well as AI/ML-based drug discovery and development capabilities. In May of last year, the collaboration was extended for an additional 8 years as the partnership is proving extremely productive in generating a promising pipeline of Molecular Glue Degraders.

    Evotec has significantly increased its efforts to develop promising compounds since the extension. The partnership continues to pursue discovering and developing a leading pipeline of novel Molecular Glue Degraders targeting high-value targets in oncology and beyond. Performance- and program-based successes now triggered USD 75 million in payments.

    Canadian bank RBC left its rating on Evotec at "outperform" with a price target of EUR 28. The drug discovery company's latest news on milestone payments represents a good start for the current year, and there is now upside potential for earnings estimates.

    Morphosys - Down to earth

    Shareholders of the biotech company from Planegg were only briefly in a celebratory mood when the share started a countermovement after the better-than-expected figures. Then the US investment bank JPMorgan came on the scene and found several points of criticism. For example, analyst James Gordon further lowered his Monjuvi forecasts for 2022. On the critical cancer drug candidate pelabresib, no groundbreaking news is expected until early 2024. The "underweight" rating was reiterated, as was the price target of EUR 11.

    Following the skeptical analyst opinions, the biotech stock lost more than 3% and is now trading again near the previous week's low of EUR 13.98. A break below the low at EUR 13.47 would pave the way to last year's low at EUR 11.80.

    Dr Jean-Paul Kress, CEO of Morphosys, takes a less negative view of the current situation. During the financial release, he commented, "In 2023, we will continue to prioritize the Phase III study for pelabresib in myelofibrosis in order to be able to publish topline results in early 2024 and to investigate the potential use of pelabresib in other myeloid diseases. We remain committed to developing and bringing to market novel therapies designed to be safer and more effective for cancer patients, and we look forward to the future."

    Despite better-than-expected numbers, Morphosys shares were again punished. Evotec's partnership with Bristol Myers Squibb flushes USD 75 million into the Hamburg-based company's coffers. Defence Therapeutics announced a far-reaching cooperation with the French state-owned group Orano.

    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.

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    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

    Related comments:

    Commented by André Will-Laudien on February 20th, 2024 | 07:30 CET

    Takeover fever in the biotech sector! Will MorphoSys now be followed by Defence Therapeutics, Evotec and Bayer?

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    It has happened: Novartis is bidding for MorphoSys. Once again, a long-lasting and persistent rumour mill eventually confirms itself. Those who remained loyal to MorphoSys despite heavy selling last fall have now made a profit of over 300%. If we turn the analytical magnifying glass on the sector, we can see that the speculative biotech stock market segment has started to move again since the challenging year 2023. Hopes of falling interest rates in the near future, along with several other M&A hopes, have led to steady inflows into listed bio-ETFs, resulting in fund managers having recently adjusted their weightings upwards. We analyze which stocks are currently making the loudest noise.


    Commented by André Will-Laudien on February 16th, 2024 | 07:00 CET

    MorphoSys and Cardiol Therapeutics in upward mode, while Bayer and Pfizer are in slow mode

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    The biotech sector has made a very differentiated start to the new year. While the old favorites are barely moving, the second-line stocks MorphoSys and Cardiol Therapeutics are making a real splash. At Bayer, the bad news just won't go away, and despite a successful major takeover, Pfizer has not yet found its forward gear. After a rally of almost 15% in December, the Nasdaq Biotechnology Index (NBI) has taken a pause in the current year. Now, everyone is waiting for the first interest rate cut by central banks. Inflation is already falling, and the negative economic data for the Eurozone is increasing. The ECB would normally be in demand. What should investors urgently keep an eye on?


    Commented by Armin Schulz on February 12th, 2024 | 07:00 CET

    MorphoSys, Defence Therapeutics, Bayer - Biotech and Pharma suddenly back in focus

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    Biotech ETFs have been on the rise since the end of October 2023. German biotech companies were able to raise more funds again last year. There are increasing signs that the tough times for investors in biotech and pharmaceutical companies are over. There is also growing activity on the takeover side. Most recently, the takeover bid from Novartis shifted the focus to companies in the healthcare sector. The Swiss pharmaceutical company wants to acquire MorphoSys for EUR 2.7 billion and thus fill up its oncology pipeline. We have selected three companies from the biotech and pharma sectors and examined their current situation.