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February 16th, 2022 | 10:59 CET

Valneva, Cardiol Therapeutics, Pfizer - Great opportunities after setbacks

  • Biotechnology
Photo credits: pixabay.com

First, vaccine maker stocks were pushed down by fears of a pandemic ending by the Omicron variant. Add to that a nervous and challenging market environment that has to deal with interest rate hikes and inflation. Late last week, news that Russia's invasion of Ukraine was imminent added further worry lines. All of this is weighing on the markets, but these setbacks also offer investors opportunities. Today, we analyze three turnaround candidates in more detail.

time to read: 4 minutes | Author: Armin Schulz
ISIN: VALNEVA SE EO -_15 | FR0004056851 , CARDIOL THERAPEUTICS | CA14161Y2006 , PFIZER INC. DL-_05 | US7170811035

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

     

    Valneva - Waiting for the breakthrough

    The French biotech company Valneva has developed an inactivated vaccine against Corona. Currently, the Company is waiting for approval in the EU, the UK and Bahrain. Valneva is the only manufacturer to have an inactivated, adjuvanted whole-virus vaccine candidate in clinical trials in Europe. It is a unique selling point that could pay dividends if the active ingredient is approved. Politicians are still trying to convince people who refuse to vaccinate to get vaccinated; they could succeed with Valneva's active ingredient VLA2001.

    Preliminary laboratory studies show that three doses of the active ingredient can neutralize the Omicron variant. The serum samples showed antibodies against all known virus variants and in 87% of the cases against Omicron. Operationally, things are going well. As evidenced by the figures presented on February 3, 2021, sales increased 216% to EUR 348.1 million. As of December 31, cash on hand was EUR 346.7 million. For 2022, management projects total revenues between EUR 430 million and EUR 590 million.

    There was also good news from the development pipeline on February 4. Positive study results were announced for the Lyme disease vaccine candidate VLA15, which is being developed in cooperation with Pfizer. The clinical phase 3 trial is expected to start before the end of this year, provided that the approvals are granted. The stock is currently trading at EUR 14.70, down 50% from its 2021 year high of EUR 29.70. If the news of the approval of the Corona compound comes, the stock will jump quickly.

    Cardiol Therapeutics - End of study approaching

    Corona infections can cause myocarditis, but there are also a small number of myocarditis cases after Corona vaccinations. Cardiol Therapeutics (Cardiol) is developing anti-inflammatory therapies for cardiovascular diseases based on highly purified cannabidiol. CardiolRX, Cardiol's lead product, is currently in two separate Phase 2 clinical trials. It was started with the LANCER study in hospitalized COVID-19 patients with pre-existing cardiac conditions. As of October 25, the biotech has FDA approval for the Phase 2 clinical trial in acute myocarditis.

    At the end of 2021, the LANCER study was expanded to include Brazil, Canada, and Mexico, indicating that the USA studies are going well. Raymond James analyst Rahul Sarugaser expects the trial to be completed in the next 2 months. If the trial is successful, emergency approval by the FDA for COVID-19 patients could beckon. This would be a milestone for the Company and could also positively impact the second clinical trial in acute myocarditis, the most common cause of sudden cardiac death in people under 35 in the US. On January 19, it was announced that it had recruited three specialists and thought leaders in cardiovascular medicine to join its scientific advisory board.

    Financially, the Company is in a good position since the USD 50.2 million capital increase last November and can easily fund the studies. On October 20, the stock, which trades on the Nasdaq, had still marked its 2021 high at USD 4.96. After that, the share weakened and fell to USD 3.41. Subsequently, the capital increase announcement came, and the share halved again and is currently quoted at USD 1.70. A bottom currently seems to be formed at this point. On February 17 at 3pm, CEO David Elsley will present the Company at the virtual International Investment Forum and answer investors' questions.

    Pfizer - Covid pill approved in China

    Pfizer partnered with BioNTech to grab a piece of the Corona pie. But just like the vaccine makers, the Company has suffered from possible endemicity from Omicron. However, since we will likely have to live with the virus going forward, money will continue to come to Pfizer. Most notably through the COVID-19 pill, called Paxlovid, that Pfizer has developed. China has passed on all foreign agents but now, for the first time, has approved a foreign product against Corona with the COVID pill. BioNTech's mRNA vaccine has not been approved for more than a year.

    As positive as the news about the approval of Paxlovid is, the most recent announcement that the development of Vupanorsen will be discontinued is terrible. The Company hoped to generate at least USD 3 billion in annual sales from this drug to reach its USD 15 billion sales target. The drug's efficacy was not high enough. Nevertheless, the group has other promising candidates in development and will acquire other companies, such as Trillium Therapeutics, last year.

    On February 15, the FDA will consider emergency approval of the Comirnaty vaccine for children 6 months to 5 years old. If approval comes, it will further strengthen profits in the Corona market. Since December 20, the stock has lost more than 20% at its peak and is currently trading at USD 49.80. The share should not trade lower, as otherwise, the upward trend would be broken for good. The next target would then be around USD 41.


    Even if the experts see a possible end to Corona, the virus will remain with us, similar to the flu. What the next variants will be like, nobody knows. Valneva may be able to capture the market of vaccine skeptics for itself if approval is successful. Something may happen here in the short term. In the case of Cardiol Therapeutics, many things are reminiscent of the first capital increase in 2021, when the share price was subsequently also below the price of the capital increase, only to suddenly explode. Positive study announcements can be a trigger here. Pfizer is broadly enough positioned to generate profits even without Corona. However, the smallest price jumps are to be expected here.


    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

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author



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