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June 23rd, 2022 | 11:35 CEST

Takeover fantasy: +50% in Valneva shares, and what are BioNTech and Defence Therapeutics doing?

  • Biotechnology
  • Pharma
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Tension is rising in the biotech sector as the takeover merry-go-round spins faster and has now hit Valneva. Pfizer's entry caused the stock to explode 50% in three trading days. Earlier, Pfizer had announced it would acquire migraine specialist Biohaven for USD 11.6 billion. Other pharmaceutical giants are also active: Halozyme wants to swallow Antares Pharma, a specialist in urology and endocrinology, for USD 960 million. The acquisition of Sierra Oncology is costing GlaxoSmithKline around USD 1.9 billion. Like Valneva, Defence Therapeutics is about to start important trials and could attract a major partner. A takeover of BioNTech is unlikely, but the flagship German biotech should also benefit from improved sentiment in the industry. The coming week should be operationally exciting for shareholders.

time to read: 3 minutes | Author: Fabian Lorenz

Table of contents:

    Defence Therapeutics: With a full pipeline in the takeover carousel

    Things could get exciting for Defence Therapeutics in the coming months. The shares of the Canadian biotech company have lost significantly in the stock market quake of recent weeks. Yet it has an innovative platform and a full product pipeline with positive study results already reported most recently at the end of May. Three clinical trials are to be started by the beginning of 2023. This could be the right time for a pharma giant to get its foot in the door with a first investment - similar to what Pfizer just did with Valneva. Fittingly, the investment bank Canaccord Genuity outlined the Company's current situation in a detailed study the day before yesterday. Perhaps to excite a potential partner?

    The goal of Defence Therapeutics is to develop universal vaccines. To that end, the Canadians have developed an AccumTM drug booster platform. The platform, patented in the USA, allows antibody-drug conjugates (ADC) to be introduced into the diseased cells. The advantage: an up to 10-fold stronger effect compared to conventional ADC-based drugs. Based on the AccumTM platform, Defence Therapeutics is researching vaccines in oncology and infectious diseases, among others. From the cancer pipeline - including a cervical cancer vaccine - three clinical trials (phase 1) are scheduled to start by early 2023. Research is also being conducted into a universal vaccine against a wide range of cancers, giving the Company opportunities in a market worth billions. According to estimates, the vaccine market for immuno-oncology alone is expected to grow to around USD 105 billion by 2027. Also of interest is a COVID-19 vaccine, which has already led to a high level of protection in rodents. The golden days in this market may be over, but indications are that regular vaccinations will be useful- similar to influenza. The highlight of Defence Therapeutics is that the vaccine could presumably be offered as a nasal spray and thus set itself apart from the competition.

    BioNTech: New momentum?

    When it comes to COVID-19 and cancer research, BioNTech naturally comes into play. Indeed, the Company is not a takeover candidate; the founders and major shareholders seem to be too long-term oriented for that, and the market capitalization of around USD 30 billion also speaks against it. But the share should also benefit from the improved environment even if Goldman Sachs had renewed the rating to "Neutral" last week. The price target of USD 206 is clearly above the current price of the BioNTech share at USD 123. BioNTech has an extensive product pipeline to grow organically. In addition, Goldman brings BioNTech into play as an acquirer if an opportunity arises to exploit synergies. The biotech group has the necessary capital. The COVID-19 vaccine is also expected to generate billions in revenue this year.

    From an operational point of view, things will get exciting at BioNTech in the coming week. On June 29, the Wiesbaden-based company will host a virtual conference. There, there will be an update on the ongoing development work. In addition, BioNTech plans to provide insights into the scientific and technological innovations of the Company's own research engine.

    Valneva: Thanks to Pfizer +50% in three days

    Valneva shows how strongly takeover fantasies can drive a share price. Last Friday, the share was still trading at just under EUR 8. Then came the news that Pfizer would be taking a stake, and by Tuesday, the share had shot up to over EUR 12. So 50% in three trading days. And yesterday, in a weak market environment, the share fell just below the EUR 12 mark. Specifically, the deal calls for the US pharmaceutical group to pay around EUR 90.5 million for an 8% stake, corresponding to a shareholding price of EUR 9.49. In addition, milestone payments have been agreed upon. The entry is due to Valneva's Lyme disease vaccine candidate. Its Phase 3 trial is scheduled to start in the third quarter of the current year. Valneva sees blockbuster potential for the vaccine. As a result, investors' disappointment over the flop with the planned COVID-19 vaccine has evaporated for the time being. Because of the longer-than-planned approval and cancelled orders with the EU, Valneva shares had crashed by almost 80% from their high of around EUR 30 at the end of 2021.

    The acquisitions and investments by Big Pharma bring momentum to the biotech market. After the significant share price losses, BioNTech and Defence Therapeutics should also benefit from this. In the medium term, both will depend, of course, on the study results. Valneva's share price is already a good 20% above Pfizer's entry price. Since yesterday, the share has taken a healthy breather.

    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.

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    Der Autor

    Fabian Lorenz

    For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.

    About the author

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