July 11th, 2023 | 07:30 CEST
Returns thanks to e-prescription and co.: Redcare Pharmacy, BB Biotech, Cardiol Therapeutics
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"[...] As a company dedicated to developing treatments for rare heart diseases, we see this as an opportune moment to contribute to the fight against heart disease and make meaningful strides in improving heart health worldwide. [...]" David Elsley, CEO, Cardiol Therapeutics Inc.
Redcare Pharmacy: Already on course for growth
The stock of Redcare Pharmacy is currently experiencing a special boom. The Company, which until last spring was still called Shop Apotheke, is currently benefiting from the upcoming electronic prescribing. Medical practices can now digitally send prescriptions directly to pharmacies for the convenience of their patients. In this way, patients save themselves a trip to the pharmacy. Mail-order pharmacies, such as Redcare Pharmacy, are likely to benefit more than average since they also deliver medications. Previously, it was sometimes complicated to send prescriptions to mail-order pharmacies. For patients who rely on strong pain medications, the limited validity of prescriptions for controlled substances also posed challenges. All this is expected to change starting in 2024. Redcare Pharmacy, as a leader in the mail-order pharmacy market, should benefit.
Redcare Pharmacy has already grown in recent quarters and expanded its logistics locations. The pharmacy is also likely to score points with customers due to fast turnaround and possible preferential delivery when medications are in short supply. The Company currently still generates nearly 80% of its sales in the DACH region, but is also positioned internationally. The share has recently marked a new annual high and now also has long-term upward potential. In the short term, however, the value could be overheated.
BB Biotech: Dividend despite red figures
The example of Redcare Pharmacy shows which recipes for success work in the healthcare sector. Portfolio Manager Matviyenko of Jennison Associates recently cited "consumer-centric innovation" and "technologies that improve the patient experience" as keys to company success in a market commentary. For many years, a perennial biotech favourite on the German stock exchange floor has been BB Biotech. The investment company offers a high level of expertise in this field and invests in promising projects. In return, shareholders receive an attractive dividend beyond the 7% mark and access to potential blockbusters. However, the Company has not always been profitable in recent quarters. Some holdings BB Biotech has shifted. The stock is trending down - the market does not know how to value the story around BB Biotech due to the large number of holdings.
Cardiol Therapeutics: Biotech stock with almost CAD 50 million in the register
In contrast, the situation is quite clear for cardiac specialist Cardiol Therapeutics. The Company has an eventful history behind it and, with CardiolRx™, has an active ingredient in its portfolio that promises positive effects in inflammatory heart diseases with simultaneously low side effects. The share is currently trading at EUR 0.73, significantly below its record level of EUR 3.88 from the fall of 2021. What has happened in the meantime? Shortly after the share peaked, Cardiol Therapeutics raised around USD 50 million from investors in a capital increase. The associated dilution of shareholdings disappointed some existing shareholders and caused a sell-off.
Operatively, however, things continued steadily for the Company. Within the next 12 to 24 months, Cardiol Therapeutics plans to complete a Phase II study around CardiolRx™ in the context of pericarditis, complete the recruitment phase of patients for the Archer study, which is investigating the effect of CardiolRx™ in myocarditis, as well as advance a subcutaneous application form of the compound in the adapted formulation in heart failure. The Company believes it is well positioned for all activities thanks to the capital increase in 2021. In retrospect, investors can even see the measure as a stroke of luck - a corresponding capital measure would probably be more difficult to implement today. The share trades on the Nasdaq and is thus on the radar of professional investors and pharmaceutical companies. If things continue to progress operationally, Cardiol Therapeutics' current share price level could be a promising starting point.
While Redcare Pharmacy has already done well as a profiteer of e-prescribing and BB Biotech suffers from being an investment company, the story with Cardiol Therapeutics is clear: Here, an experienced company that has already convinced professional investors once, just needs to complete its projects successfully. The current valuation of CAD 70.8 million with a cash balance of just under CAD 50 million could be a good starting point for speculative investors.
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