Valneva, Cardiol Therapeutics, Novavax - Is the Corona emergency brake coming?

Valneva - First orders, but approval still pending

Valneva is betting on an inactivated vaccine against Corona. The market is there, as 25% in Germany are still not vaccinated. Indeed, partly because they are currently rejecting the new mRNA approach, as there are no long-term studies on it yet. On the other hand, the dead vaccine approach has been tried and tested for decades and usually has only minor side effects. The vaccine VLA2001 is in phase 3 clinical trials and has shown better antibody and tolerability results than AstraZeneca.

On November 18, the Company presented its third-quarter figures. Sales increased to EUR 69.8 million in the first nine months, up 19%. In total, Valneva has EUR 247.9 million in cash, which secures research and development for the time being. Sales will increase significantly next year, according to the November 10 announcement. The EU has secured 60 million doses of the vaccine, with 27 million to be delivered as early as 2022. That is contingent on the drug being approved by the EMA.

In addition to the Corona vaccine, the Company has other interesting preparations in the pipeline, such as a Lyme disease vaccine. The market capitalization of EUR 2.2 billion is currently the lowest compared to all other vaccine manufacturers. For this reason alone, one should take a closer look at the share, which is currently trading at EUR 21.66. From a chart point of view, the share has already digested the capital increase of EUR 102 million and is preparing to test its annual high of EUR 25.20.

Cardiol Therapeutics - Capital increase executed

Cardiol Therapeutics (Cardiol), traded on NASDAQ, focuses on developing anti-inflammatory therapies for cardiovascular diseases using highly purified cannabidiol. Cardiac problems are on the rise due to Corona, and with the fourth Corona wave flaring up, there will be more patients again. In a clinical trial, the US Food and Drug Administration (FDA) has approved treating hospitalized COVID-19 patients with CardiolRX, Cardiol's lead product.

The Company most recently, in one day, completed a USD 50.2 million capital raise in exchange for the issuance of 16.35 million shares at USD 3.07. In addition, there was a half warrant with an exercise price of USD 3.75. The money will allow the Company to complete the Phase 2 study of CardiolRX in acute myocarditis and heart muscle regeneration. On October 25, the Company got the green light from Health Canada to proceed with the phase 2 study there too. In addition, the LANCER trial to prevent heart problems in COVID-19 patients may be expanded to Brazil, Mexico and Canada.

Since the Company still had just over USD 26 million in cash at the end of June, the capital increase (KE) came as a bit of a surprise and sent the stock price plummeting. The share is currently trading at USD 2.27, USD 0.80 below the price paid by the investors at the beginning of November. The same pattern could be observed in May with the last KE, before the price rose from USD 2 to almost USD 5. For investors to see a plus on their investment by the end of the year, the price must exceed USD 3.07. So there may be a lot of potential here in the short term.

Novavax - Approval applied for in many countries

Before the Corona pandemic, Novavax was a penny stock. The Company had dabbled in vaccines before but had yet to get one approved. With Corona, everything changed when they tried to develop an inactivated vaccine for Corona. Novavax's advantage, like Valneva's, could be in persuading vaccine skeptics to get vaccinated since the dead vaccine method is considered proven. The Company filed for regulatory approval in Europe and the Philippines on November 17.

The data from the phase 3 clinical trial is impressive. The vaccine is considered safe and was tested on 14,039 people. Over a quarter of the subjects were over 65 years of age, which is still the most vulnerable group to COVID-19. Nearly 45% of all test participants had at least one relevant previous illness. Infections were prevented by 89.7%, according to the manufacturer. There were a total of 5 severe courses, all of which occurred in the placebo group. Side effects were also relatively low at 0.5%.

The market capitalization is around USD 14 billion. The stock is currently trading at USD 191.10 and peaked at USD 331.68 in early February. If it succeeds in gaining approval in Europe and the other countries where it has been filed, the share can certainly make further gains. Rising Corona numbers will help the Company as pressure grows to convince the unvaccinated to vaccinate. With the dead vaccine, that would be possible.

All three companies are benefiting from rising Corona numbers. Valneva is in the final stages of the phase 3 trial. The market valuation is still moderate when compared to Novavax. Cardiol Therapeutics can research and develop in peace due to the capital increase. The expansion of the LANCER trial suggests positive results. Novavax has applied for approval in the EU. If successful, this would be the first inactivated vaccine manufacturer to be approved in the EU.