April 4th, 2023 | 17:04 CEST
Race against cancer: BioNTech, Bayer, Defence Therapeutics
Table of contents:
"[...] Accum™ helps us target active ingredients precisely to the origin of infections or diseases. [...]" Sébastien Plouffe, CEO and Director, Defence Therapeutics
At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
BioNTech: Dominating the German biotech sector
A few years ago, BioNTech could be mentioned in the same breath as Qiagen, CureVac or Morphosys. Today, the Mainz-based company towers above them all. The success of the Corona vaccine has given the Company a dominant market position. Researchers from the Rhine have around EUR 13.8 billion in cash on hand, not including outstanding receivables from partner Pfizer of around EUR 7 billion - and can therefore invest in the future like hardly any other company. But that is not all. While many biotechs have to raise capital through equity financing, BioNTech still has billions of euros in vaccines. According to Handelsblatt, BioNTech currently has a turnover of around EUR 36 billion, which is two and a half times as much as the entire German biotech sector. When looking to the future, these starting conditions are outstanding: BioNTech can invest in research at a time when many biotechs are having to tighten their belts due to poor financing conditions - and should further expand its supremacy.
Established pharmaceutical companies like Bayer are also likely to look south along the Rhine with envy. While Bayer seems torn between its seed division and a stronger commitment to the health sector, at BioNTech, everything revolves around the fight against cancer. Nevertheless, there are also positive developments at Bayer: In the past quarters, Bayer stepped on the cost brakes, expanded its sustainability strategy and moved a stroke drug into a clinical phase III study. Add to that a dividend yield of more than 4% - this is pleasing for conservative investors, but the payout also shows that Bayer's organic growth potential seems limited.
Bayer: Business seems saturated
The pure comparison between Bayer and BioNTech favours the Mainz-based company. But Bayer is also solidly positioned - only the perspective for growth could be better in the comparatively saturated business with seeds and health products. The situation is different at BioNTech: its portfolio includes several blockbusters in the field of cancer alone - no wonder the Company is already valued at almost EUR 30 billion. An alternative to BioNTech with a much lower market capitalisation in the low three-digit million range could be the share of Defence Therapeutics. With Accum™, the Canadians have a versatile technology for transporting active agents into diseased cells in their portfolio. Several Phase I trials are expected to be launched in the coming quarters alone.
Defence Therapeutics: Accum™ as a sought-after multi-tool
The projects of Defence Therapeutics involve therapeutic vaccines against various types of cancer, the use of Accum™ in a potentised variant under the AccuTOX™ brand as a chemotherapeutic agent, and a protein-based vaccine against the HP virus, which can trigger cervical cancer. Defence Therapeutics has advanced all projects in parallel in the past months and gained prominent support in various areas. For example, the renowned City of Hope hospital in the Los Angeles area is accompanying the application process for clinical trials of AccuTOX™, and the well-known Canadian biotech incubator CQDM, which is associated with large pharmaceutical companies, is jointly financing a new cancer vaccine platform with Defence.
At a time when biotech companies, such as BioNTech, are increasingly outpacing the competition, the principle for classic pharmaceutical companies is "stick with it". Companies such as AstraZeneca have already made acquisitions in recent months and taken over innovative biotech companies. As with Defence Therapeutics, the focus was primarily on innovative processes such as mRNA or drug delivery. Since Defence Therapeutics' technology is considered highly flexible, the Canadians could also come into the focus of large corporations. Defence has already convinced the French state-owned group Orano and announced a cooperation in the field of nuclear medicine a few weeks ago - here, too, Accum™ is expected to showcase its capabilities.
Investors are currently spoilt for choice. The only thing that seems certain is that biotech companies have growth on their side thanks to innovative technology compared to classic pharmaceutical companies. While the valuations of BioNTech already seem ambitious, the share price of Defence Therapeutics still contains a fair amount of scepticism. For speculative investors, however, it is worth taking a closer look at the up-and-coming growth stock, which was only recently included in the CSE 25 Index.
Conflict of interest
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