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July 5th, 2022 | 11:14 CEST

Strong signs at BioNTech and Defence Therapeutics, and Valneva closes the gap!

  • Biotechnology
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****Without question, the future belongs to biotechnology. The record-breaking development of vaccines, tests and drugs in the wake of the Corona pandemic, which broke out more than two years ago, showed how important this sector is for humanity. Biotechnology stocks are consolidating strongly despite being established as a critical future technology. The NASDAQ Biotech Index has lost about 40% since last summer, creating attractive entry opportunities for investors at a significantly reduced level.

time to read: 4 minutes | Author: Stefan Feulner

Table of contents:

    Defence Therapeutics bottoms out

    The Canadian biotechnology company Defence Therapeutics was hit even harder than the broad index. The developer of the patented Accum™ platform has lost around 75% of its value since its high in September 2021 and currently has a market capitalization of just EUR 52.15 million. In contrast, according to a recent study by the analyst firm Canaccord Genuity, the development is more than promising. Analysts Tania Armstrong-Whitworth and Greg Beaman see the Canadians as a company developing solutions to improve the intracellular delivery of biological therapeutics. Based on its patented Accum™ platform, DTC has built a pipeline of therapeutic candidates, including cancer, HPV and COVID-19 vaccines, antibody-drug conjugates (ADCs), and novel small molecules. All programs are currently in the preclinical stage, but management expects to initiate three Phase 1 trials by early 2023.

    Now, compelling preclinical results have been reported for the use of AccuVAC-PT007, a protein vaccine used in conjunction with Accum™, against cervical cancer. Using the Accum™ platform, Defence developed AccuVAC-PT007, a protein-based vaccine that targets the oncogenic protein of the HPV virus. Defence Therapeutics CEO Sebastian Plouffe expressed that "currently available HPV vaccines are only for preventive protection against the HPV virus. Our vaccine is not only easier to produce as it is based on a single protein, but its dual action makes it particularly interesting as it can be used both preventively and for treatment against the same tumor type."

    Defence Therapeutics has a unique selling point due to its Accum™ technology, which is patented until 2037 and can be used for different diseases. Thus, share price losses could be recovered quickly in the future if trial results are successful.

    Dr. Moutih Rafei, VP Research & Development and Director presented recently in an IIF Special Edition on Defence Therapeutics.

    BioNTech builds a foundation for the new wave

    The chart picture for the Mainz-based vaccine manufacturer BioNTech has brightened considerably in recent weeks. After the biotech company, which markets the mRNA-based vaccine Comirnaty with its US partner Pfizer, achieved a twelvefold increase in its share price to USD 464 since the pandemic outbreak in March 2020, it then consolidated strongly since mid-August last year. However, the correction may have ended, and the conditions for a new Impulse Wave have been created. This is supported by both the successful test of the 78.6% Fibonacci retracement and the formation of a double bottom at USD 133.23, representing the course high for 2020. Also rising and with buy signals are the trend-following indicator MACD and the relative strength indicator RSI on a weekly basis. The first target should be the closing of the price gap at USD 194.61.

    Among other things, the positive price performance was driven by the US government, which ordered at least 105 million doses of the Corona vaccine Corminaty from BioNTech and its partner Pfizer. The equivalent value thus amounts to more than USD 3.2 billion. The target populations for the vaccine, to be delivered in late summer, are children and adults. Pfizer CEO Albert Bourla announced that the focus is on vaccines against the Omicron variant. Concerning the latest order, which should already become relevant for sales in the 2nd half of the year, the US investment bank Goldman Sachs raised the price target from EUR 206 to EUR 209 and reiterated the investment rating "neutral". Deutsche Bank's research, on the other hand, reiterated its price target of USD 180 and confirmed its "hold" verdict.

    Another run down at Valneva

    The joy over the entry of the US pharmaceutical giant did not last long on the stock market. After Pfizer announced the acquisition of a good 8% stake in French-Austrian biotech Valneva for EUR 90.5 million via a capital increase, the stock shot up more than 60% to EUR 14.80. Since then, however, the stock has been mercilessly sold off again. Currently, the share price is quoted at EUR 10.02. It is quite probable that the torn price gap after the Pfizer party at EUR 8.40 will be closed.

    In total, the US paid EUR 9.49 per share. Valneva intends to use the proceeds from the equity investment to finance its Lyme disease vaccine, which is scheduled to enter the third and thus final phase of clinical development in the third quarter of this year. A partnership between the two parties has already existed since 2020, with Valneva previously covering 30% of development costs, but the renewed deal is expected to see that share grow to 40%. In contrast, the French receive between 14% and 22% royalties from Pfizer. Previously, these started at 19% in the agreement. In addition, the biotech could receive performance-based milestone payments of up to USD 100 million. Pfizer hopes to file for FDA approval by 2025.

    Biotechnology is considered a key future technology, and it is impossible to imagine modern life without it. Nevertheless, the sector corrected sharply in recent months. BioNTech could complete its bottoming phase, and a test of the low for the year is quite likely for Valneva. Defence Therapeutics has unique selling points and is interesting in the long term due to its patented technology.

    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

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

    Related comments:

    Commented by André Will-Laudien on December 5th, 2022 | 12:43 CET

    Attention biotech stocks: Bayer, BioNTech, Defence Therapeutics and Morphosys - These stocks look good!

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    After months of selling off, they are back: biotech stocks! A strong turn on the NASDAQ quickly flushed the beaten-up stocks back to the top of the hit lists. With COVID out of the spotlight, companies are returning to their long-term research lines. These have been heavily focused on cancer in recent years, and now there is even groundbreaking news on metastasis. BioNTech has thus already gained more than 40% since the October low. Morphosys, on the other hand, lost another 40% after an Alzheimer's study failed to deliver valuable results. It is worth taking another look at the sector.


    Commented by Nico Popp on November 30th, 2022 | 13:33 CET

    Advances in the fight against cancer: Arcus Biosciences, Gilead Sciences, Defence Therapeutics, BioNTech

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    Commented by Fabian Lorenz on November 30th, 2022 | 13:31 CET

    Biotech stocks in focus: Morphosys, Evotec, Bayer, BioNxt Solutions

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    Biotech stocks have struggled in 2022. In Germany, BioNTech has overtaken the previous heavyweights Morphosys and Evotec in record time. Morphosys shocked investors with data on its Alzheimer's hope. Analysts lowered their thumbs, and short-sellers discovered the stock for themselves. Evotec has been quiet this year. Analysts think the valuation is attractive, but meeting earnings guidance in the current year is not a given. BioNxt shares have jumped recently, and if the positive newsflow continues into 2023, a re-rating is possible. At Bayer, the pharmaceuticals division is also developing positively. Conclusion: investors should position themselves for the biotech year 2023.