Valneva, Defence Therapeutics, MorphoSys - Blockbuster potential

Valneva - Waiting for EU approval

For Valneva, hopes for a blockbuster rest on the Corona vaccine VLA2001. While other companies have already achieved large sales, the French biotech company Valneva is late to the game. The advantage the Company has is in the nature of the vaccine. After Bahrain granted emergency approval on March 1, Thomas Lingelbach, chief executive officer of Valneva, said, "As the only double-adjuvanted, inactivated COVID-19 vaccine approved in Bahrain, VLA2001 will provide the Bahraini population and medical community with a differentiated vaccine option."

Unlike its competitors, Valneva offers a dead vaccine. Even though the active ingredient Novavax is titled the same, it is still protein-based only. With 1 million doses of VLA2001 sold in Bahrain, a blockbuster has not yet been created. Approval of the vaccine in Europe and the United Kingdom could bring the Company significantly closer to this goal. In Europe, the Company is hoping for approval this month. To this end, the questions recently sent to the Company by the EMA must now be answered.

If these answers are sufficient, the approval will likely be granted soon. The Company could then sell 27 million doses in 2022. It is still unclear how well the vaccine can be sold. Inevitable vaccination fatigue has set in, and demand for Novavax is falling short of expectations. The stock market, which pushed the stock up to EUR 16.20 following the Bahrain announcement, appears skeptical. At the moment, the share is trading at just EUR 13.80. Good news, such as the Lyme disease vaccine developed in cooperation with Pfizer, is currently falling flat in the challenging market environment.

Defence Therapeutics - Looking for suitable cooperations

The Canadian biotech company Defence Therapeutics is also working on a corona vaccine. It is administered nasally and has been successfully tested on animals. The Company has two business areas. One is the fight against infectious diseases such as Corona or HPV infections. The other is the immuno-oncology division, focusing primarily on breast and skin cancer. Both areas draw on the patented Accum biological drug booster platform. This makes it possible to use the active ingredients in a targeted manner, which multiplies the effect.

The advantage is that the Company does not have to manufacture the antibody-drug conjugates (ADCs) itself. The manufacturers of ADCs can benefit from Accum's technology, and even failed compounds that have had problems with dosing may still be able to become successful. Dr. Moutih Rafei, director and VP of research and development at Defence Therapeutics, confirmed this in a recent interview. The Company is currently preparing for Phase 1 clinical trials of AccuTOX against skin and breast cancer. Tests have shown that the drug can fight 9 different tumors. To accelerate the process, on February 16, the Company announced a collaboration with CATO SMS, which has over 30 years of experience in clinical trials.

In parallel, the Company is trying to find suitable partners with whom it can jointly develop special preparations. Since tests repeatedly show that the Accum platform works successfully in various application areas, cooperation should only be a matter of time. Especially since the growth prospects in the markets where the Company is currently active are excellent. For a deeper insight, check out the analysis from researchanalyst.com. On February 14, the stock closed the price gap from May 2021, providing the low for the year at 3.20 Canadian dollars (CAD). Currently, the stock is trading at CAD 4 and moving sideways. Should cooperations be announced, the share has some upside potential. The high in 2021 was CAD 8.15.

MorphoSys - Continues to fall

The former German biotech highflyer MorphoSys is now only a shadow of its former self. The reason is a restructuring of the business from a contract research organization to a pharmaceutical company. The Company's founder decided to leave the Company when this idea was more challenging to implement than expected. The acquisition of Constellation Pharmaceuticals for EUR 1.5 billion had an even worse effect. To raise the financing, the Company gave away its silverware. A large part of the licensing income no longer belongs to the Company.

Instead, it owns Constellation's two product candidates: pelabresib and CPI-0209. Pelabresib is in phase 3 clinical trials and combats myelofibrosis. CPI-0209 is in Phase 2 clinical trials and is intended to target advanced tumors. If it succeeds in reaching market maturity, the investment in Constellation could pay off in the end. The Company has another candidate, tafasitamab, in phase 3 trials. Its current flagship cancer drug Monjuvi is lagging behind big expectations. In 2022, sales for the drug are expected to climb to USD 110-135 million.

Due to the high costs in phase 3 trials, 2022 will also be challenging. This gloomy outlook is also reflected in the share price, which has formed a flawless downward trend. Those who speculated on a countermovement have so far been regularly disappointed. The share is currently trading at EUR 22.20. Market capitalization is now only around EUR 760 million. That is just half of what was paid for the takeover. The Company itself has now become a takeover target.

All three companies have the opportunity to produce a blockbuster. Valneva, which already has purchase agreements in its pocket, is the furthest along. Defence Therapeutics is very variably positioned through its Accum platform and can cooperate with many large companies. MorphoSys needs successful phase 3 studies to achieve the turnaround.