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January 5th, 2023 | 06:35 CET

It is the year 2023 and COVID is back! BioNTech, Bayer, Defence Therapeutics, Morphosys - Which stocks stand up to the virus from China?

  • Biotechnology
  • Covid19
  • Cancer
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The next COVID wave is raging in China. The situation is no less dramatic today than in 2019 because until now, only vaccines produced in the country may be administered to locals in China. Before Christmas, however, the German government obtained permission to have Germans in China vaccinated with the active ingredient from BioNTech and immediately had the first doses flown out to Beijing. Yesterday, the EU discussed a joint reaction to the current conditions in China. German medical officials are calling for mandatory Europe-wide testing of all people entering the country and are warning of a new, dangerous virus mutation due to the large numbers of infections. Investors are therefore taking the vaccine experts back into focus.

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

Table of contents:

    Dr. Moutih Rafei, Director and VP of research and development, Defence Therapeutics
    "[...] At the end of 2022 or the beginning of 2023, we plan to start a Phase I study around each of our activities against breast cancer and skin cancer. [...]" Dr. Moutih Rafei, Director and VP of research and development, Defence Therapeutics

    Full interview


    BioNTech and Bayer - Blockbusters in the pipeline

    The EU has offered its help to China to contain the pandemic. The EU Commissioner for Health, Stella Kyriakides, has made a corresponding offer to the leadership in Beijing, but the Middle Kingdom has yet to respond. The EU department did not provide information on the number of vaccines offered or the manufacturers. Nevertheless, BioNTech will likely be back at the top of investors' minds regarding COVID-19. With the mRNA vaccine "Comirnaty", the Mainz-based company has generated around EUR 20 billion in net cash flow in 2021/22 and can now focus on the next blockbuster with full pockets. A clinical trial for a novel malaria vaccine was started shortly before Christmas. BioNTech's market capitalization of EUR 34 billion is 60% cash backed, with a promising pipeline.

    Bayer is one of Germany's flagship cancer research companies. The pharma division is specifically committed to the development of precision oncology, as it benefits from major advances in the field of molecular diagnostics. Next-generation sequencing, for example, enables the detection of genome alterations that promote tumor growth and provides important information about how likely a patient is to respond to treatment. For Bayer, the pharmaceuticals and health sectors continue to be the earnings pearl in the Group. In the last nine months, it earned EUR 5.6 billion (EBITDA).

    Full-year figures will be published on February 28. Bayer shares ended the 2022 stock market year with a maintained price of around EUR 48 and are now heading towards EUR 50 at the start of the year. With an estimated 2023 P/E ratio of 7.2 and a dividend yield of 4.5%, the stock still has plenty of room to run.

    Defence Therapeutics - With ACCUM(TM) technology through the nose against lung cancer

    The Canadian biotech specialist Defence Therapeutics (DTC) has developed a patented technology with its ACCUM(TM) platform, which gives great hope in current cancer research because the combination of mRNA technology with modern methods of delivery to affected cells is a real advance within recent research. Defence Therapeutics has now completed a preclinical study using the intranasal formulation of AccuTOX in animals with existing lung cancer. The study showed that administration of AccuTOX as a combination therapy with the immune checkpoint inhibitor anti-PD1 dramatically reduced the number of lung nodules compared to untreated or anti-PD1 treated control animals. This 50% reduction in cancer nodules in animals with existing lung tumors was achieved with a treatment schedule of only six doses administered over two weeks with the AccuTOX anti-PD1 combination.

    "We are very excited about the versatile use of AccuTOX as a cancer therapy. Not only has the compound shown great potential in the treatment of solid tumors, but we now have data showing that it can be further adapted and administered via the intranasal route to treat lungs with metastatic tumors, offering new hope for lung cancer patients," said CEO Sebastien Plouffe.

    Defence Therapeutics is also showing early success with its ACCUM(TM) technology in solid tumors. It will be interesting to see what other pipeline the Company can come up with in 2023. The share price has risen considerably in the last three months, but the market capitalization is still low at EUR 69 million. Technically, however, a significant bottoming took place in October, and the share price is now striving further upwards. Defence Therapeutics has blockbuster potential!

    Morphosys - Despite new downgrades, the share price has turned

    Morphosys presented a real disappointment in November. The Alzheimer's hopeful Gantenerumab could not meet expectations even on the second attempt. After the great trial success of Biogen with the product Lecanemab, the shock of the investors, in this case, was striking. The share collapsed by over 40% within 48 hours, from EUR 21 to EUR 13. However, according to statements made by CFO Sung Lee on the fringes of the Equity Forum in Frankfurt, Morphosys currently still has liquid assets of around EUR 1 billion. The current market capitalization is only EUR 463 million. In December, the stock also hit a 20-year low of EUR 11.85.

    For the Munich-based company, everything now revolves around the two cancer drugs, Monjuvi and Pelabresib. And here, sales are also rather bumpy, with profits only mentioned from 2025 onwards. The mood is correspondingly poor and further analysts lowered their expectations. Most recently, there were three downgrades from Deutsche Bank, Goldman Sachs and JPMorgan, and the short ratio is still relatively high. None of this is an incentive to buy - but the mood for the share is so bad that, technically, it can only go up. Yesterday, the value rose again above EUR 14.20 with high turnover. Traders stay put as momentum increases and bet on a 100% turnaround in 2023! In any case, install a safety stop at EUR 11.80.

    For most biotech stocks, the past year was no bed of roses. Accordingly, the recovery potentials are now good to assess. Whether COVID is a trigger again has yet to be discovered. What is certain is that the focus will continue to be on the century-long task of combating cancer. Bayer, BioNTech, Defence Therapeutics and Morphosys have significant research pipelines in this area and have recently made some progress.

    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") currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a "Transaction"). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
    In this respect, there is a concrete conflict of interest in the reporting on the companies.

    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 also 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

    Related comments:

    Commented by Fabian Lorenz on November 30th, 2023 | 07:10 CET

    Biotech Alert! Morphosys, Bayer, BioNTech and Defence Therapeutics

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    Morphosys is not for the faint-hearted. After unclear study results, the stock gave up its annual gains within a few days. Analysts are also divided on what the future holds. On December 10, the study details will be released, hopefully shedding light on the situation. Bayer shareholders are currently seeing dark clouds. The stock plummeted from EUR 40 to EUR 30 in a short time. Is the dividend now at risk, or is the entire company in jeopardy? There is a slew of positive news for Defence Therapeutics. Can the stock break out of its sideways trend? A potential partner for the Canadians could be BioNTech. The German biotech favourite is working with full coffers on cancer vaccines. However, analysts remain cautious.


    Commented by Armin Schulz on November 29th, 2023 | 06:30 CET

    MorphoSys, Cardiol Therapeutics, Bayer - Where will the rebound start first?

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    2023 was a challenging year for pharmaceutical and biotech companies. After the boom years of the Corona pandemic, many companies went into a tailspin. But not just vaccine manufacturers were hit; others were dragged down too. The markets are currently volatile. MorphoSys has seen a peak gain of 145% since the beginning of the year - but is currently only up 35%. Cardiol Therapeutics has also gained over 140% and has recently consolidated. The share is currently up 74% since the beginning of the year. Only Bayer's performance curve is pointing downwards. The share is currently worth 34% less than on January 2. We look at where the rebound will start first after the consolidations.


    Commented by Fabian Lorenz on November 23rd, 2023 | 07:40 CET

    Buy now? Morphosys, Siemens Energy and Desert Gold share

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    What do renewable energies, biotech and gold have in common? Shares from these sectors have predominantly experienced significant losses in 2023. Morphosys, Siemens Energy and Desert Gold are examples of this. However, the underperformers in the current year are often among the top performers in the upcoming year. Can this apply to these three shares? In the case of Morphosys, the latest study data has been confusing, and the share has given back its gains of the year. Analysts are now expressing their views. Siemens Energy has lost over 30% of its value due to operational problems, and the price targets of the experts vary widely. Explorer Desert Gold has been quiet recently. Is it the calm before a price jump? In any case, the share is anything but expensive.