Evotec, Rheinmetall, Vidac Pharma: Buy recommendation, cancer revolution, or price collapse?

Vidac Pharma: Next Big news on the path to multiplication

Vidac Pharma's stock has staged a textbook turnaround in the second half of 2024. The biotech company's shares soared from EUR 0.185 at the end of June to EUR 1. While this rise was likely too much, too fast, the share continued to hold above EUR 0.60. And given the positive news flow and takeover speculation, the chances are good that the price will continue to rise in the coming year. According to analysts at Germany's Sphene Capital, a significant multiplication from the current level is possible. The analysts' price target is EUR 4.90, citing Vidac's promising progress in developing an entirely new class of cancer treatments.

The analysts' price target is based on the assumption that Vidac Pharma will receive approval for the current core product VDA-1102-AK. VDA-1102 has already proven to be safe and effective in the treatment of cutaneous T-cell lymphoma, for which Vidac has completed a Phase 2a proof-of-concept study. In addition, Vidac Pharma has already been granted a broad and exclusive patent by the US Patent and Trademark Office (USPTO) that provides comprehensive protection for the mode of action of the two oncology and onco-dermatology candidates VDA-1275 and VDA-1102 (Phase 2b clinical trial for AK and Phase 2 trial for cutaneous T-cell lymphoma). The patent protects the use of Vidac's novel active ingredients to reverse the malignant metabolism of cancer cells and restore normal cell function.

On Monday this week, the next big news followed: Vidac announced that the US Patent Office had extended patent protection for the active ingredients of its oncology drug candidates to include lymphomas that are metastases of prostate cancer, pancreatic cancer, and a variety of other indications and forms of administration. Vidac CEO Prof Max Herzberg commented: "The evidence that Vidac's two drug candidates have revolutionary potential in a variety of tumors is growing, and the extension of our US patent is confirmation that we are on the right track. We expect to achieve a number of value-enhancing milestones in our clinical research next year."

Rheinmetall heads into 2025 as an analyst favorite

Rheinmetall has also treated shareholders to rising share prices this year. In the current year, the shares of Germany's largest defense company have roughly doubled. Over the past five years, the share price has risen by around 500%. As with Vidac Pharma, the chances are good that the rally will continue in 2025.

The order books are full to bursting. Even if Donald Trump finds a way to end the war in Ukraine, it is expected to only have a short-term impact on the share price. Even the Green Party announced defense spending of more than 2% of GDP in its election manifesto presented this week. And globally, too, the signs point to rearmament.

Analysts also expect the Rheinmetall share to continue its upward trajectory. According to marketscreener.com, 13 of 15 analysts recommend the share as a "Buy", while the remaining 2 recommend the share as a "Hold". Most recently, Deutsche Bank confirmed its "Buy" recommendation, with analysts forecasting Rheinmetall to grow by more than 20% in the coming year and see the DAX share as fairly valued at EUR 700. JPMorgan analysts recently even confirmed their price target of EUR 800. Rheinmetall's shares are currently trading at around EUR 615.

Evotec: Headed for a price slide or a price jump?

While confidence is high for Vidac Pharma and Rheinmetall heading into 2025, the mood around Evotec remains gloomy. For the biotech company and its shareholders, 2024 was a year to forget. The disputes surrounding the long-standing CEO were followed by reduced forecasts, a change of management board, the start of a restructuring, and a questionable takeover attempt.

Although the stock recovered quite a bit from its low for the year of around EUR 5.30 in mid-October and is currently trading just under EUR 9, it still remains down almost 60% for the year. Evotec's business model was considered to be less risky than that of other research-based biotech companies. Analysts' opinions are deeply divided when it comes to the question of how the stock will perform in the coming year.

Most recently, Warburg Research reiterated its "Buy" recommendation. According to the analysts, Evotec is well-diversified, and its reorganization focusing on profitability over revenue growth is the right strategy. As a result, Warburg includes Evotec in its "Best Ideas 2025," with a lofty price target of EUR 14 - the highest among all analysts. The Evotec bear is Deutsche Bank, which argues that the restructuring will take longer than many investors currently anticipate. They believe the share price is currently too high and only inflated by the withdrawn purchase bid from Halozyme. Deutsche Bank considers Evotec fairly valued at EUR 4 and currently rates the share as 'Sell'.

In the biotech sector, Vidac Pharma is a strong candidate for significant price gains in 2025. If the positive news flow continues, considerably higher prices are realistic, and takeover speculation could quickly become more concrete – especially since there were several transactions in the cancer segment in 2024. In contrast, Evotec will likely remain uncertain for the time being. At Rheinmetall, investors should expect a sharp correction should a ceasefire be reached in Ukraine.