MorphoSys, NanoRepro, Barsele Minerals, Agnico Eagle - Dramatic turnaround as early as 2022!

MorphoSys - A promising setup for the coming year

The chart of the biotech-pharma Company has been drawing a long-lasting tale of woe ever since the hoped-for growth driver Constellation Pharmaceuticals was acquired for a whole USD 1.7 billion. At that time, the market capitalization of MorphoSys shares was still around EUR 2.5 billion. Today, the merged group is valued at only EUR 1.17 billion on the stock exchange. Consequently, the MorphoSys share marked a new annual low of EUR 31.50 in December. Now, a strong countermovement, is the tide turning?

Management is now speaking out at the end of the year. In addition to current study results, there are even indications of a return to profitability in the statements. In an interview with Börsen-Zeitung, CFO Sung Lee said: "We want to become the next big name in European biotechnology. By 2025, we can have two drugs on the market in hematological oncology."

Thus, from the pipeline, in addition to Monjuvi, perhaps pelabresib could have gained approval by then. MorphoSys only recently published further trial data on the US subsidiary's main hopeful. The drug pelabresib is currently being researched in the fight against myelofibrosis, a rare bone marrow cancer for which treatment has so far been limited. Data from a phase 2 trial presented at the American Society on Hematology (ASH) congress included more patients and a longer follow-up period. The latest results also give MorphoSys confidence in Phase 3, which is already underway.

The widely followed biotech stock jumped to the top of the gainers list with plus 8% on the announcements. From a chart perspective, MorphoSys could now actually be bottoming out. However, the initial spark to significantly higher prices would technically only occur after overcoming the resistance at about EUR 42. Until then, there is still a gap of 20%. Momentum and RSI are currently turning positive, and the 50-day line is waiting at around EUR 37.50. All in all, the scenario around MorphoSys is worth speculating in our opinion because the heavily battered stock could well become the focus of a larger pharmaceutical company.

Barsele Minerals - Good progress with Agnico Eagle in Sweden

For 2022, from today's perspective, one should also look at the Canadian explorer Barsele Minerals in Sweden. The country has shown itself to be a friendly jurisdiction towards the mining industry for years. It also enables smaller commodity companies to push ahead with corresponding exploration projects. The Company's promising property is located about 600 km north of Stockholm, in the mining region of Västerbottens Län in northern Sweden.

Together with mining giant Agnico Eagle Mines Ltd., the Company is currently working on the development of a deposit with recoverable metals such as silver, lead, zinc and nickel. There is promising news about the 2021 exploration program, which was carried out with the 55% joint venture partner Agnico Eagle. The mining giant can prospectively acquire another 15% in the Barsele project by completing a pre-feasibility study. Barsele does not have to spend any cash until de facto completion, conserving capital reserves.

Between January and December 2021, Agnico Eagle staff and contractors conducted office and field exploration activities. Diamond drilling conducted from June 2 to July 29 on the 34,533-acre property returned a total of 3,094 meters in 18 completed core holes. Since the end of 2015, a total of 158,439m of overburden has thus been intersected and core taken from a total of 422 drill holes. Assay results show both polymetallic VMS deposits and intrusive hosted orogenic gold deposits. The structurally linked gold mineralized lodes occur mainly in a granodiorite bedrock and to a lesser extent in volcanic and sedimentary rocks. Work will continue in 2022, and Barsele is highly satisfied with the results to date.

Barsele is managed by the Belcarra Group. The management is convinced of the project's economic potential, and the current market value of around CAD 51 million reflects this expectation. Based on the present potential, a takeover may also be on the cards in 2022.

NanoRepro - The market understood this differently

We had not expected this. At the beginning of the week, NanoRepro received a massive sales and profit warning. In the current year, according to new findings, the Marburg-based Company only expects sales of EUR 160 to 175 million, after a low EUR 16.9 million in 2020. EBITDA is expected to increase from EUR 4.7 million to EUR 36 to 48 million, i.e. a tenfold increase at the peak.

Sounds good, but this significantly reduces the annual forecast from late summer. Management estimated sales of between EUR 250 and 400 million at that time, with the EBITDA forecast at EUR 60 to 100 million. The justification provided speaks of a sharp drop in demand for Corona rapid tests, which has had a lasting impact on NanoRepro's business. With Omicron, however, the pace has noticeably picked up again.

Unabated, the Company plans to continue to focus strongly on rapid tests in 2022. The forecast for 2022 is sales of EUR 100 to 150 million, of which current orders already cover EUR 42 million, and EBITDA is expected to be EUR 25 to 37 million. Of course, these forecasts are also subject to the anticipation of further pandemic development. In addition to the rapid test offering, NanoRepro intends to complement and expand its portfolio to include products for a post-pandemic world in its quiver. One consolation: For 2021, NanoRepro plans to pay a dividend of EUR 0.50 for the first time.

The Marburg-based self-diagnostics Company has so far been seen as a profit driver of the pandemic and was one of the stock market darlings in 2021 due to its good positioning in the self-testing market. At its peak, the share price rose to EUR 22.40 in March, but it is falling below the EUR 7 mark with the current news. The investment deal with Viromed is also not working out. Here there were different fantasies due to investment reports. However, the strategic growth scenario no longer seems to be in focus. Therefore, caution at the platform's edge because even the one dividend payment in 2022 does not protect against further price corrections.

The stock market does not like disappointments and loves positive surprises. At MorphoSys and NanoRepro, we see the effects immediately. Double-digit movements are typical in such an environment. At Barsele Minerals, the project progress is convincing. It could become really interesting again in 2022.