February 24th, 2022 | 11:30 CET
SYNLAB, XPhyto, Novavax - How long will the Corona boom last?
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The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
SYNLAB - High sales thanks to increased PCR and antigen tests
One beneficiary of the Corona Crisis is the German laboratory services provider SYNLAB. The Munich-based Company had only sought its way onto the stock exchange floor at the end of April 2021, after achieving sales of EUR 2.2 billion in 2020. According to an estimate by rating agency Fitch, overall sales growth in that year, which was solely attributable to the Corona pandemic, was around 30%. With the IPO, in which over EUR 770 million was placed, the Company raised around EUR 400 million through the issue of new shares.
According to analysts at Deutsche Bank, the Bavarians achieved sales of around EUR 190 million in January 2022. At the same time, the original plans for the full year envisaged sales of EUR 500 million. Even if the test volume should decrease again in the coming months, it can thus be assumed that the sales forecast will be exceeded. Deutsche Bank increased its price target to EUR 27. Nevertheless, the market was relatively unimpressed and sent the stock towards the issue price of EUR 18 in the wake of the negative stock market sentiment. For long-term oriented investors, these are good entry opportunities.
XPhyto Therapeutics - Is the 25-minute PCR test a blockbuster?
The German-Canadian bio-accelerator XPhyto Therapeutics Corp. is also a beneficiary of the Corona Crisis. In addition to its two mainstays of "psychedelic active ingredients" and "innovative dosage forms," the diversified Company has developed a rapid PCR test that delivers a reliable result within 25 minutes - without the need to send the samples to a laboratory. This rapid PCR test is suitable for all applications where a result with the speed of an antigen test but with the certainty of a PCR test is desirable, such as at airports, on cruise ships or for visitors to highly sensitive areas such as hospitals or nursing homes.
Following the approval of the rapid test procedure in December, XPhyto has strongly concentrated its sales activities given the market potential here. For example, Drahoslav Zdarek, who was previously responsible for marketing and sales within Europe at Israel's Teva Pharmaceutical for 13 years, was hired as sales manager for the continent. In addition, the first distribution agreements were concluded - with the Company digitallifecare GmbH, an operator of Corona test centers, and a pharmacy association in southern Germany. All this is supported by the new Head of Business Development, Roland Spiess, who was previously responsible for annual sales of EUR 200 million as Chief Financial Officer of Wörwag Pharma.
The Company is also stepping on the gas internationally. In January, a distribution agreement was signed with TechUnit s.r.o. to launch the PCR rapid test on the Czech market. In a second step, the Company will then take care of further marketing in Slovakia, Ukraine and Russia.
Novavax - Celebratory mood
When one thinks of successful stocks in the wake of the Corona pandemic, BioNTech comes to mind. But, the share of Novavax, the US vaccine developer, has fared much better in percentage terms, even though the Company can only deliver its first vaccine doses now. Thus, the stock has increased tenfold from around USD 9.50 in March 2020 to currently USD 95, while BioNTech's shares have "only" quadrupled from around USD 40 to USD 160 in the same period.
Despite the good news from BioNTech on current tests with the Omicron variant of the coronavirus and the prospect of the imminent delivery of a specially adapted vaccine, the Mainz-based Company is currently having a difficult time on the stock market. Novavax, on the other hand, is benefiting from the fact that its vaccine, Nuvaxovid, can finally be delivered. Many see it as a "miracle cure" for those who have so far refrained from vaccination for fear of the novel mRNA technology or vector vaccines.
But Nuvaxovid is a "wonder drug" even for Novavax: the Company has never before managed to develop a finished active ingredient in its more than thirty-year history. Jeffries analysts see great potential for the vaccine. They point to its advantageous clinical profile and to the commitments made so far to purchase around 1.7 billion doses. The analysts' recommendation is a 'Buy' with a price target of USD 198.
The pandemic is evolving into an endemic, but there is still a long way to go before it ends. Reaching people who have so far rejected vaccinations and fast, reliable testing methods will remain important goals in the near future. In this respect, the Novavax and XPhyto papers are certainly interesting at this stage. Given the PCR rapid test's great potential and because of XPhyto's other mainstays, we see great opportunities. SYNLAB also offers a favorable entry opportunity.
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.
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