New COVID outbreak in China: BioNTech, Cardiol Therapeutics, CureVac and Valneva shares in focus again in 2023

BioNTech - Pipeline filled. Is the big leap coming in 2023?

BioNTech is always keeping an eye on the pandemic, which has officially been declared over. The Mainz-based company, together with its partner Pfizer, had dominated the international vaccination scene from the very beginning and, together with Moderna, was able to achieve the greatest sales successes in the "vaccine" sector. More than 12 billion vaccine doses were produced worldwide, most of which were sold to the ordering governments. According to the latest available information, Germany is still awaiting orders for over 600 million vaccine doses. The German public does not know whether these will actually be delivered or whether they will be stockpiled at the cost of contractual penalties. However, the willingness to be vaccinated has decreased considerably. According to Statista, by November 13, 2022, some 63.5 million people in Germany, or 76.4% of the total population, had undergone a complete vaccination against the SARS-CoV-2 coronavirus. To date, however, only 12.8% have had a fourth vaccination; the personal attitudes of citizens have seemingly turned.

BioNTech has announced several times that it will invest the approximately EUR 20 billion cash in other research areas. Oncology research is also on the list. After the great economic success with COVID-19, the Mainz-based company can therefore be expected to come up with one or more new developments in the new year. A clinical study on a possible malaria vaccine candidate was started before Christmas. After a low of EUR 111 in the middle of 2022, the share price stabilized again at EUR 143 at the end of the year but was still down 30% for the year. Analysts halved the 2023 sales estimate compared with 2022 to EUR 8.7 billion from EUR 16.5 billion, and the bottom line is expected to be around EUR 3.8 billion. With a market capitalization of around EUR 34 billion and a P/E ratio of 9, the share is no bargain, but the Mainz-based company, with its strong investor Strüngmann, should always be on the radar.

Cardiol Therapeutics - Turning towards the heart

Cardiol Therapeutics Inc (CRDL) is a biotechnology company specializing in the research and clinical development of innovative therapeutic methods for the treatment of cardiovascular diseases. The Company's promising product candidate, CardiolRx (cannabidiol), is a pharmaceutically manufactured oral solution formulation clinically developed for use in heart disease. Cannabidiol is known to inhibit activation of the inflammasome signaling pathway, which is known to play an important role in inflammation and fibrosis associated with myocarditis, pericarditis and heart failure.

In December, the Company initiated a Phase II pilot study for the treatment of recurrent pericarditis. Commenting on this important milestone, Cardiol CEO David Elsley said, "Recurrent pericarditis is an inflammatory heart disease with symptoms such as stabbing chest pain, shortness of breath and fatigue that limit physical activity and quality of life for those affected. Data from patients enrolled in the study at our collaborating research centers will provide further information to support the use of CardiolRx as a novel therapy for this debilitating and often undertreated condition." The Company's Phase II pilot study is expected to enrol 25 patients at clinical centers in the United States that specialize in the treatment of pericarditis.

Cardiol is also developing a novel subcutaneously administered drug formulation of cannabidiol intended for use in heart failure, one of the leading causes of death and hospitalization in the developed world. In the US alone, the disease causes more than USD 30 billion in annual healthcare costs. Cardiol is making an important contribution to the research of this indication and its treatment.

The CRDL share price made a 50% jump upwards in December 2022 on high turnover. Currently, the share price is consolidating at around CAD 0.72. With a market capitalization of only CAD 45.8 million, the stock is well below the cash balance of CAD 65.5 million from the last financial report on September 30, 2022. The Company has no significant debt, so the calculated enterprise value is minus CAD 20 million. After research expenditures beyond CAD 50 million, the share price should be trading well above the CAD 2.00 level. The analysts at Leede Jones Gable rate the stock a "Speculative Buy" with a price target of CAD 4.50. If the studies also run well, Cardiol could be a top pick for 2023.

CureVac and Valneva - Why should shareholders still have these stocks on their list?

Things have been quiet around vaccine researchers CureVac and Valneva. Both shares experienced a real Waterloo in 2022. Valneva had to give up 75%, and CureVac was down 83%. The problems of both companies were homemade. While Valneva took too much time to get an inactivated vaccine off the ground, at CureVac, it was the reduced efficacy of the vaccine developed that led to the short-term termination of research.
As a result, CureVac posted a pre-tax loss of EUR120.4 million in the first 9 months of fiscal 2022 (2021: EUR 407.9 million). Revenues declined to EUR 55.7 million in the same period. Together with the British pharmaceutical company GlaxoSmithKline, however, CureVac continues to research flu vaccines. A total of four Phase 1 trials have been initiated for these. The new vaccine candidates are based on CureVac's second-generation mRNA scaffold and are currently being tested as booster vaccines. The trials are expected to deliver clinical data in the first quarter of 2023.

French-Austrian Valneva has responded operationally very strongly to the COVID-EU setback. By downsizing its business units, annual savings of about EUR 12 million are now expected. 20 to 25% of the 750 employees worldwide are to be made redundant. In the first 9 months, Valneva more than tripled revenues to EUR 249.9 million (previous year: EUR 69.8 million). Below the line, the loss was reduced to around EUR 99 million, compared to EUR 228 million in the previous year. The Group reaffirmed its sales target of EUR 340 to 360 million for the full year. The forecast is based on the expectation of a sustained recovery in travel vaccines. In addition, further payments are expected for the delivery of the inactivated Corona vaccine.

After the heavy losses in 2022, a technical recovery coupled with speculative buying related to the new Corona wave is likely to be possible for both stocks.

Research efforts in vaccines and cardiovascular disease are extensive and costly. For the competing protagonists, good refinancing is necessary. Precisely this is available at BioNTech and Cardiol Therapeutics.