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February 9th, 2022 | 12:22 CET

MorphoSys, Defence Therapeutics, Valneva, CureVac - Find the bio blockbuster!

  • Biotechnology
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The biotech sector is a highly dynamic growth market within the equity universe. It is characterized by investment volumes of unprecedented size, which is also the reason for the high innovation rate characteristic of the sector. Price reactions to positive or negative surprises can be very volatile, and these tendencies are often exacerbated by the intervention of stop orders or the occurrence of derivative slippage. Vaccine manufacturers were down over 50% across the board, as the pandemic is being traded as a phase-out. The vaccination rate does not appear to be increasing significantly. Where are the opportunities for investors at the moment?

time to read: 4 minutes | Author: André Will-Laudien
ISIN: MORPHOSYS AG O.N. | DE0006632003 , DEFENCE THERAPEUTICS INC | CA24463V1013 , VALNEVA SE EO -_15 | FR0004056851 , CUREVAC N.V. O.N. | NL0015436031

Table of contents:

    MorphoSys - No noticeable recovery so far

    Biotech company MorphoSys is targeting further growth with its important cancer drug Monjuvi in the US for the year just started. Net product sales are expected to increase to between USD 110 million and USD 135 million. According to preliminary figures, Monjuvi generated revenues of USD 79.1 million last year. Due to the completed development phase, the gross margin for the drug is expected to reach an outstanding 75 to 80% this year.

    Research and development spending on other projects is again expected to increase at MorphoSys in 2022, reaching EUR 300 million to EUR 325 million. The reason for the increase is the high costs for ongoing Phase 3 registration studies. For the so-called overhead costs such as sales, administration and general, the Group estimates EUR 155 to 170 million in expenses. Management does not expect significant cash revenues from milestone payments this year. The revenue side must show that the high costs can be covered.

    The MorphoSys share also started the new stock market year cautiously after a historic price loss of almost 70% in 2021. At the beginning of February, the stock is again down around 10%, with market capitalization falling below EUR 1 billion, which is only a third of the level before the acquisition of Constellation Pharmaceuticals.

    The experts are not yet in complete agreement. The US investment bank Morgan Stanley downgraded the papers to "Equal weight" with a price target of EUR 50. Only 5 of the 15 analysts listed by Bloomberg still vote "Buy", including Berenberg Bank and the investment house Stifel. From a chart perspective, the only hope now is the breakout line of EUR 22 from 2012. That is where the great MorphoSys story began. Our tip: Watch the stock and only consider a buyback when sales increase significantly and prices exceed EUR 30.

    Defence Therapeutics - This can be the surprising year 2022

    Cancer research has a significant impact on our lives. If medicine were to achieve a breakthrough here, humanity's average life expectancy would move up a few places. Unfortunately, however, this is not yet the case. At least research has been delivering better and better results in recent years. Hopes are high that effective cancer therapy can be found in the next 2 to 3 years.

    Defence Therapeutics (DTC) is a publicly-traded biotech company based in Canada working to enable precise transport of antigens or ADCs in the intact form to target cells using its proprietary platform ACCUM™. It is an enabling technology that can enhance the intracellular accumulation of various proteins of pharmacological interest in target cells of any type. The goals are to improve the efficiency and efficacy of vaccines and drugs against serious diseases such as cancer and various infections.

    To further demonstrate the versatility of ACCUM™, Defence's research and development team designed an HPV vaccine and compared its immunogenicity using a group of animals immunized with Merck's Gardasil-9. In comparison, AccuVAC-PT009 triggers an impressive 27- and 36-fold increase in antibody titer at 4 and 6 weeks, respectively, following immunization. This can be considered outstanding.

    According to Fortune Business Insights, the global HPV vaccines market is expected to reach a value of USD 12.7 billion by 2027, representing a compound annual growth rate (CAGR) of 16.3%. In 2019, the sales volume was only USD 3.8 billion. DTC stock has gained about 50% since its launch in Germany. In January, it came under some pressure due to the sell-off within the sector. With a market capitalization of only EUR 122 million, Defence could become a bio-blockbuster in 2022 if it is successful. In addition, Defence is "facing collaborations", as reported by the portal.

    CEO Sébastien Plouffe will present the latest developments of Defence Therapeutics at the International Investment Forum (IIF), which opens its virtual doors on February 17, 2022. (Registration)

    Valneva versus CureVac - Which biotech hopeful to favor?

    Valneva and CureVac are among the losers in the biotech sector in the stock market year 2022, which is just beginning. Although Valneva performed brilliantly with more than 100% in 2021 due to the dead vaccine fantasy, the price has halved again since December. CureVac has disappointed across the board, landing in January back at its August 2020 IPO price of USD 16. Who now offers investors the greatest opportunities?

    French vaccine maker Valneva is in the spotlight primarily because of developments around its COVID-19 VLA2001 vaccine. But Valneva's pipeline has much more to offer. These include the vaccine VLA1553, a candidate vaccine against chikungunya. It is a mosquito-borne viral disease with a severe course widespread in Africa and Southeast Asia. The new vaccine could soon be ready for the market following a successful Phase 3 trial.

    At the beginning of 2021, the COVID vaccine CVnCoV from the Tübingen-based pharmaceutical Company CureVac entered the approval process. Unfortunately, CEO Franz-Werner Haas then announced on a conference call in October that they were withdrawing CVnCoV from the EMA approval process. The market had priced this in over the preceding months, but it sent the stock down another 50% by the end of January 2022.

    As frustrating as its first attempt at developing a vaccine against the coronavirus may have been, CureVac repeatedly stresses in press releases that it has not yet given up the fight against the pandemic. Indeed, at the end of January, the Company published a study in the journal Nature stating that initial tests in monkeys showed the efficacy of CureVac's new vaccine, CV2CoV, to be comparable to BioNTech's Comirnaty. However, the news fizzled out after a quick 20% rise in the share price.

    In the current highly volatile environment, the stock with the best news is preferred. If a corresponding approval comes, one should jump on the bandwagon as quickly as possible. However, a positioning before exact knowledge of the data situation is highly speculative.

    Investments in biotech stocks are subject to significant fluctuations. In principle, these securities belong only as an admixture in speculative portfolios. MorphoSys, Valneva and CureVac have so far largely disappointed. Defence Therapeutics could take off with successful clinical trials in 2022.

    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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