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July 28th, 2022 | 14:20 CEST

Finding the next BioNTech: MorphoSys, XPhyto Therapeutics, Formycon - Who will make the breakthrough?

  • Biotechnology
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The Mainz-based biotech Company BioNTech has shown the way with Cormirnaty®: stringent research and adherence to milestones ultimately lead to success. The main and founding investors Strüngmann are still on board as long-term investors with over 40% even after the price correction. The mRNA technology is now mutating into the basis for a whole new class of drugs, and BioNTech could thus become a new German pharmaceutical giant. The brothers from Tegernsee know what they are talking about. Their start-up capital came from the first major exit after they sold their generic drug manufacturer Hexal, founded in 1979, to Novartis for EUR 5.65 billion in 2005. Since then, they have continued to invest in biotechnology through their family office. The challenge is to find the next BioNTech.

time to read: 4 minutes | Author: André Will-Laudien

Table of contents:

    MorphoSys - Sales expectation for cancer drug Monjuvi lowered

    The MorphoSys share has gone through a terrible development since the end of 2019. The completely overpriced acquisition of the US biotech company Constellation Pharma for the equivalent of USD 1.7 billion increased the share count and debt. With the acquisition, MorphoSys secured, among other things, two new cancer drugs that were then in mid- to late-stage clinical development.

    Increasing competition for the cancer drug Monjuvi currently makes the biotech Company MorphoSys more cautious for 2022. Group CEO Jean-Paul Kress did look at a "recovery in Monjuvi sales in the second quarter." But he added that "competition has increased, including recent approvals of additional second-line therapeutic options" for certain blood cancers. The Munich-based Company now only expects net Monjuvi product sales of USD 90 to 110 million for the USA in 2022, after previously USD 110 to 135 million.

    The market capitalization of MorphoSys today, at just under EUR 700 million, is not even half of the takeover price at the time. From a purely technical point of view, the value should not fall below the EUR 18.50 line again, in which case the hope of an incipient upward trend remains. Currently, the trend momentum is strengthening in the direction of EUR 22.50. On August 3, the figures for the second quarter will come, and then the share will quickly set its direction. Keep watch.

    XPhyto Therapeutics - Good pipeline and fresh money

    The bio-accelerator XPhyto Therapeutics has had a dismal 12-month performance. The share fell a full 70% to currently EUR 0.35. After a successful listing in Germany, the value temporarily rose to EUR 2.30. Unfortunately, the market readiness of a 20-min PCR test in the first and second Corona wave in 2020/21 was too slow to generate any significant purchase agreements or sales.

    At current levels, up to 10 million new shares and 5 million warrants will be issued at a package price of CAD 0.36. The Company intends to use the proceeds to further develop its most recently favored orally dissolvable (ODF) biosensor test for oral inflammation. Certain FDA-approved buprenorphine drugs prescribed for the treatment of opioid use disorder (OUD) and pain have recently been associated with numerous serious oral problems. The number of US adolescents and adults with OUD is estimated to be between 6.7 and 7.6 million in 2019. XPhyto is investigating the potential use of one or more of its ODF oral inflammation biosensor screening tests to detect buprenorphine-related dental problems. Despite the sometimes serious side effects, the FDA recommends continued use of these drugs because it says the benefits outweigh the risks. According to Coherent Market Insights (CMI), the global buprenorphine market is expected to reach USD 10.9 billion by 2027.

    For XPhyto, this would be an area where it could play to its strengths. Its biosensor screening products for inflammatory, bacterial and viral infectious diseases include: stomatitis, peri-implantitis, periodontitis, group A streptococcus, influenza A and COVID-19. This positions the Company in the global biosensor and oral health market, which is expected to reach USD 42 billion by 2027, according to Global Market Insights and e-magazine MedicalExpo. The Company's oral dissolvable inflammation screening test was registered in the EU in late 2021 and is currently approved for marketing and sale in Europe. The setup for XPhyto could hardly look better at the moment. Speculative investors should take action between EUR 0.30 and 0.40. The story is getting back on track.

    Formycon - With biosimilars to the next Strüngmann blockbuster?

    Formycon has made a chart breakout on the quiet. The Martinsried-based biosimilar experts have been on the move with good news for several months now. Interestingly, the share stood well on the sidelines throughout the NASDAQ sell-off.

    The developer of biotechnological copycat products, with a plus of 35% since the beginning of the year, is one of the winners on the German stock market. Thomas Strüngmann has recently joined the supervisory board. As with BioNTech, the Hexal founders are also major shareholders and will now presumably exert greater influence. This could bring the current product series forward more quickly.

    Approval procedures for the matching biosimilar to the blockbuster Lucentis are underway at both the European Medicines Agency (EMA) and the US Food and Drug Administration (FDA). The FDA's decision is expected as early as August 2, so the current share price strength in anticipation of this date is not surprising. In the event of approval, the US partner Coherus plans to launch the eye drug in the second half of 2022, and Lucentis will then have sales of USD 3.6 billion on the table. The share reached its all-time high from June yesterday at just under EUR 83. If it continues upwards with significant turnover, the sails are set for rapid rises towards EUR 100. Keep your eyes open and stay invested with a raised stop at EUR 78.

    The biotech sector is back on investors' lists after the recent sell-off. Some trends are still very speculative, but BioNTech and Formycon are already among the standard stocks. MorphoSys will still have to struggle with Monjuvi for a few months, but XPyhto Therapeutics could quickly move upwards.

    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

    André Will-Laudien

    Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.

    About the author

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