US biotechs under pressure – Where opportunities now lie: BioNTech, Pfizer, and Vidac Pharma

US biotech association NSCEB: Bright minds must be bold

The US has always been important for research and development. Leading minds from all over the world spend at least a few semesters in the States. Many stay or move there later. The reason: The research opportunities are diverse, the country has always been considered a cultural melting pot, and salaries for researchers in the US are unimaginable in countries such as Germany. Handelsblatt recently reported that at the University of California alone, there are 168 researchers with annual salaries ranging from USD 1 to 3.4 million. In Germany, scientists are paid according to collective agreements, and the opportunities to supplement their income are limited. Only the most idealistic among the best in their field are satisfied with a salary grade of W3, which ranges from EUR 7,500 to 9,160 per month.

But when the freedom of research is threatened, discontent grows – even in the US, the biotech mecca of the world. In March, historian Timothy Snyder turned his back on Yale and moved to Toronto, Canada. Now, NSCEB Commissioner Ro Khanna is emphasizing the importance of a functioning research landscape for the development of the US: "*We must encourage the best and brightest minds in biotechnology to be bold. American ingenuity is being stifled by outdated regulations in this sector. *Only Congress can open the door to a biotech future led by the US."** Khanna even brings up the growing rivalry with China – it seems like an attempt to align the biotech association's mission with the Trump administration's agenda.

Brain drain in the US: Are Israel, Canada, Australia, and the UK benefiting?

And how are major industry representatives responding? After Matthew Memoli, acting director of the National Institutes of Health (NIH), requested a comprehensive list of all NIH-funded research projects related to mRNA technology, experts fear cuts in mRNA research. So far, major industry players such as BioNTech and Pfizer have not responded to the cuts and impending restrictions on mRNA research in the US with public criticism or political statements. Instead, both companies are continuing their development programs in the field of mRNA-based vaccines and continue to communicate positive study results and the next steps in research and development. Regional diversification, present at both Pfizer and BioNTech, should also help justify a wait-and-see approach for now.

However, if the US scientific community remains under pressure, this is likely to be reflected in a lack of investment. Biotechnology companies from Switzerland, Canada, Australia, and Israel could benefit from such a development and attract more capital. At the German Biotech Days, which took place in early April in Heidelberg, interest groups were already promoting biotech destinations outside the US. An exciting industry representative is London-based company Vidac Pharma, which also has a branch in Israel. Vidac Pharma focuses on the development of innovative oncological and onco-dermatological therapies. The central research approach is to target the abnormal metabolism of cancer cells in order to normalize it and stop their proliferation.

Vidac Pharma scores with promising candidates and Prof. Herzberg

The two most important products are an ointment (VDA-1102) for an early form of skin cancer and cutaneous T-cell lymphoma, and the active ingredient VDA-1275, which targets solid tumors and has shown strong synergistic effects with chemotherapeutic agents already on the market in preclinical studies. The Company's CEO is Prof. Max Herzberg, who is considered one of the founding fathers of the Israeli biotech industry. His charisma could help convince researchers from the US to join Vidac Pharma. Even Israel and the UK could attract bright minds. Both countries score highly with low regulation for researchers. BioNTech, for example, is deliberately pushing ahead with a cancer research program in the UK.

The fact that established pharmaceutical and biotech companies have come under pressure since the beginning of the Trump era and that smaller stocks could benefit is also underscored by the performance of BioNTech, Pfizer, and Vidac Pharma shares over the past six months. While BioNTech and Pfizer lost 20% and 14%, respectively, Vidac Pharma's market value rose by almost 90% over the same period. The biotech world is in flux – the cards are being reshuffled. Investors should keep an eye on promising stocks that operate outside the US.