MorphoSys, BioNxt Solutions, Pfizer - After the pandemic is before the pandemic

MorphoSys - Has the turning point been reached?

For a long time, MorphoSys was the flagship biotech company from Germany. The decline began when the company wanted to enter the pharmaceutical industry itself. The expense was underestimated, and after the expensive takeover of Constellation Pharmaceuticals, a long descent began. At the time, the purchase price was around USD 1.7 billion. By the end of 2022, the group only had a market capitalization of EUR 442 million. At times, the share price was even below cash. There have been increasing signs that the bottom might have been reached recently.

The figures for the first quarter were surprisingly positive. Group turnover was EUR 62.3 million, corresponding to a plus of 50% compared to the previous year. The hopeful Monjuvi also increased its sales figures by 17% and contributed EUR 19.4 million to the total turnover. On April 16, MorphoSys announced the 5-year result of the L-MIND trial, which was positive as it showed a prolonged and durable patient response to the drug. This increases the chances that oncologists will use Monjuvi in the future.

Another cancer drug, pelabresib, is in a Phase III trial. The recruitment has been completed earlier than expected, and the Company expects first results at the end of the year. Those who want to get a more detailed picture should attend the Company's presentation at the 7th International Investment Forum - IIF - on May 10. In the meantime, the share has clearly moved away from its low of EUR 11.80. Last Friday, the stock reached another high this year and exited Xetra trading at EUR 20.46.

BioNxt Solutions - Contract with an international pharmaceutical company

BioNxt Solutions focuses on 3 business areas. Firstly, the area of innovative dosage forms is covered by the subsidiary Vektor Pharma TF GmbH (VPTG). The second pillar is diagnostics, for which the subsidiary 3a-diagnostics GmbH is responsible. Both subsidiaries are based in Germany. Last but not least, there is the area of psychedelic agents, which could alleviate diseases such as depression etc. in the future. All business areas have one thing in common - the growth rates will be high in the coming years. In order to prepare for this, the Company announced the purchase of coating and cutting machines, which is intended to expand VPTG's commercial production capacities.

On April 24, the Company signed a development and production contract with an international pharmaceutical company. The contract covers the development of an orally soluble pharmaceutical product based on a technology platform developed by BioNxt Solutions. A first payment has also already been made. CEO Hugh Rogers said, "The expansion of commercial manufacturing capabilities is intended to complement the Company's in-house drug development programmes and provide additional high-value services to third-party customers preparing for commercialization. The contract signed today is the second such agreement in the past 12 months. We generally view this type of contracting activity as a significant business opportunity with high growth potential."

The Company has another iron in the fire in the innovative dosage form space with its rotigotine transdermal patch designed to help treat Parkinson's disease. This is supported by a court ruling from the US that the patent for the well-known Parkinson's patch Neupro is invalid. This makes it possible to bring imitation preparations onto the market more quickly. Those who want more information should read the analysis on researchanalyst.com. (https://researchanalyst.com/en/updates/bionxt-wins-customers-landmark-ruling-in-the-u-s-clears-the-way-for-rotigotine-patches) BioNxt Solutions will also be represented at the 7th International Investment Forum - IIF - on May 10 and will provide first-hand insight. The share, which was still available for CAD 0.45 at the beginning of the year, rose to CAD 0.85 by the end of March. Since then, it has consolidated and is currently trading at CAD 0.67.

Pfizer - Exceeds expectations

Pfizer is riding the wave of success due to its cooperation with BioNTech. Most recently, the figures for the first quarter were presented, which exceeded analysts' expectations. Sales were USD 18.3 billion, and earnings were USD 1.23 per share. While profits in 2020 were still at USD 6.6 billion, in 2022, they were a whopping USD 31.4 billion, mainly due to COVID drugs. But despite all the good figures, the share price has fallen by over 30% since mid-December. The main reason is skepticism that it will continue like this in the future.

Especially since some patents of sales drivers are expiring, generic companies could secure market shares in these areas. The Company is counteracting this by having new products in the pipeline and, at the same time, investing part of the profits from the last few years in mergers and acquisitions. The product pipeline should therefore be full. The case of a whistleblower in Texas, who accuses the Company of having manipulated the Comirnaty vaccine study, could cause trouble.

If this case ends up in court, it would be the next defeat for Pfizer. The attempt to make the study data inaccessible for 75 years already failed in court. The stock looks cheap compared to peers if you go by the price-to-earnings ratio, but the special situation and falling demand for Corona vaccines creates uncertainty. The share is currently trading around USD 38.49, near its low for the year at USD 38.02.

The market for biotech and pharmaceutical companies will continue to grow in the coming years. As an investor, one should note that the sector can be highly volatile. A wrong decision can lead to problems, as the example of MorphoSys shows. But here, a sustainable turnaround is possibly on the horizon. BioNxt Solutions is broadly positioned and is pushing ahead with its commercialization. If the launch of the rotigotine patch succeeds, the stock has a lot of potential. Pfizer has earned very well with Corona active ingredients in recent years. The task now is to confirm the results in the coming years, which may prove difficult.