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April 23rd, 2024 | 07:00 CEST

TAKEOVER FEVER for biotech shares! Evotec, Bayer, Vidac Pharma - Who will follow Morphosys?

  • Biotechnology
  • Pharma
  • Innovations
  • Cancer
Photo credits: BASF SE

There is takeover fever in the biotech sector. Genmab recently announced the acquisition of ProfoundBio, the US biotech company developing ovarian and endometrial cancer drugs, for USD 1.8 billion. With Morphosys, the takeover carousel is also turning in Germany. Who is the next candidate? Evotec is often mentioned. Due to unauthorized insider trading, the biotech company's shares have come under fire this year and offer an interesting entry opportunity. Vidac Pharma also impresses operationally. The Company's new approach has the potential to revolutionize cancer treatment. The study results of the past few months are very promising. Bayer shares surprised investors yesterday as one of the day's winners in the DAX. Is the Leverkusen-based company's stock about to take off?

time to read: 3 minutes | Author: Fabian Lorenz
ISIN: EVOTEC SE INH O.N. | DE0005664809 , BAYER AG NA O.N. | DE000BAY0017 , VIDAC PHARMA HOLDING PLC | GB00BM9XQ619

Table of contents:


    David Elsley, CEO, Cardiol Therapeutics Inc.
    "[...] 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.

    Full interview

     

    Vidac Pharma aims to revolutionize cancer treatment

    Like ProfoundBio, Vidac Pharma is also active in cancer research. The biotech company, based in London and listed on the Stuttgart and Hamburg stock exchanges, develops drugs with the goal of reversing the abnormal metabolism of cancer cells and thus stopping their proliferation. This new approach has the potential to revolutionize cancer treatment. Although Vidac's research is not yet as advanced as that of ProfoundBio or BioNTech, it is only valued at around EUR 12 million. The opportunities for investors are correspondingly high, and a takeover would be relatively inexpensive. Vidac has already published numerous positive reports this year. If this trend continues, the share price is likely to surge.

    For example, Vidac's most advanced drug candidate, VDA-1102, continues to make progress. VDA-1102 is intended to combat mycosis fungoides - a cancer of the white blood cells known as lymphocytes. In January, positive interim results were reported based on 50% of test subjects. Approval for the second phase of the clinical Phase 2a trial has now been obtained. This phase of the trial is expected to last three to four months, meaning that final results are expected in the fourth quarter of the current year.

    Positive news about another drug candidate has also been reported this year. VDA-1275 demonstrates statistically significant efficacy as a monotherapy and synergistic effects in combination with two standard cancer therapies: sorafenib, a kinase inhibitor, and cisplatin, a widely used chemotherapeutic agent. Additionally, an immunological response has been observed. Human and murine 2D and 3D cell culture models showed statistically significant survival rates in lung, prostate, and colorectal cancer.

    Evotec: New partnership and waiting for the CEO

    At the beginning of the year, Evotec shareholders were caught unawares by the insider dealings of the long-serving CEO. The share has barely recovered from the sell-off from over EUR 20 to almost EUR 12. Operationally, however, things seem to be going well.

    A cooperation with Variant Bio to identify a best-in-class treatment for diseases caused by fibrosis was recently announced. Fibrosis is characterized by a pronounced and pathogenic accumulation of tissue matrix, leading to tissue degeneration in organs such as the liver and lungs. Despite its chronic nature, widespread impact on various organs, and significant disease burden, there is currently no cure for these conditions. The strategic partnership leverages Variant Bio's state-of-the-art genomics research platform and VB inference platform, as well as Evotec's extensive expertise in anti-fibrotic drug discovery. Under the terms of the partnership, Evotec is set to receive preclinical and clinical milestone payments as well as performance-based royalties.

    Analysts are also optimistic about Evotec's operational development. Although Deutsche Bank Research recently lowered the price target from EUR 20 to EUR 19, the share was nevertheless upgraded from "Hold" to "Buy" due to the current low price level.

    Bayer: Bottoming out completed?

    And what is Bayer doing? Apart from the legal proceedings and ongoing rumours, there is news from China. Bayer CEO Bill Anderson accompanied Chancellor Scholz on his trip to China as one of the representatives of German industry. In an interview with "Xinhua", Anderson spoke about investments in China, including the opening of an innovation platform for cell and gene therapy in Shanghai this year. Plans are underway to construct a new crop science facility in Zhejiang province and an innovation center for consumer health in Shanghai. Anderson said in the interview with "Xinhua": "The Chinese economy has proven to be very resilient. China is Germany's largest trading partner and one of Bayer's largest markets. I hope these relationships can continue to flourish for the benefit of the global economy and sustainable development."

    Yesterday, Bayer shares were among the daily gainers in the DAX. Despite this, the update from JP Morgan maintained a "Neutral" rating. The price target remains at EUR 34 and thus still offers around 25% upside potential. The analysts do not anticipate any negative surprises in the upcoming quarterly figures. However, the developments in the pharmaceutical business alone are not sufficient to become a real price driver. Uncertainties surrounding glyphosate continue to dominate.


    Evotec is a basic investment in the biotech sector, but the share is unlikely to burst until a new CEO is found. Will it be someone who makes the company pretty for a sale or develops it further? A speculative and exciting addition could be Vidac Pharma. The Company's news is positive; the fight against cancer is currently one of the hot biotech topics, and the share is a real bargain. Bayer is currently difficult to assess. The legal proceedings seem endless, the pharmaceutical pipeline is limited, and the cash register is low. A story for a sustainable upward trend looks different.


    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

    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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