December 15th, 2021 | 11:35 CET
Valneva, XPhyto Therapeutics, Pfizer - Corona is far from defeated
Table of contents:
Valneva - Poor study results weigh on shares
Vaccine manufacturers are the biggest winners from the Corona pandemic. Valneva is betting on a so-called dead vaccine against the virus. This conventional vaccination method could make it easier to convince vaccination skeptics to vaccinate. The approach with dead vaccines has been practiced for decades and usually causes only minor side effects. The EU already secured 60 million doses of the VLA2001 vaccine in November, although it is still in phase 3 clinical trials.
On December 2, there was a setback when a Southampton study was published that evaluated seven different vaccines for safety and efficacy as boosters. There were no limitations on safety; however, for efficacy, the vaccine did not meet predefined criteria for a minimal clinically meaningful difference in people vaccinated with two doses of Pfizer-BioNTech. It remains to be seen whether the EU will approve the vaccine.
The Company responded immediately and issued a press release. It pointed out that the participants had received the booster vaccination relatively early, and thus the results had been negatively affected. The Company itself will set up a heterologous study and administer the booster vaccine only after 6 months. Nevertheless, the news came too late for the stock. It fell by more than 20% after the study announcement. At its peak, the share price fell from EUR 27.80 to EUR 19.60. A comprehensive analysis of the Company can also be found at researchanalyst.com.
XPhyto Therapeutics - Acquires 3a-diagnostics
Since rapid tests are free of charge again in Germany, demand increases significantly. Here, XPhyto Therapeutics comes into play. Together with 3a-diagnostics GmbH, XPhyto Therapeutics has developed a PCR test that delivers results within about 25 minutes after sample collection. Thus, this test has a clear time advantage over conventional PCR tests, which require 4 to 6 hours in the laboratory alone to obtain a result. Therefore, it is ideal for all areas of application that require rapid results, such as airports or hospitals that need a quick diagnosis for accident victims.
On November 29, the Company closed a private placement of 7 million Canadian dollars (CAD). CAD 4.5 million was raised through the issuance of shares at CAD 1 each. CAD 2.5 million was raised through a convertible debenture, which is convertible into shares at CAD 1.25 and bears interest at 8%. The money was used to finance the acquisition of 3a-diagnostics, which was announced on December 6. Peter Damouni expressed his satisfaction with the strategic acquisition, saying, "The integration of a highly innovative European biosensor development company puts XPhyto at the forefront of the point-of-care rapid testing industry, an explosively developing and technology-driven sector." 3a-diagnostics additionally has a pipeline of biosensor screening tests for a wide variety of viral diseases.
In addition to diagnostics, two other business units exist at XPhyto. First, the Company develops innovative drug delivery systems. Secondly, the Company is involved in psychedelic agents that could combat mental illness. More detailed information about the different business areas can be found in the analysis on researchanalyst.com. Currently, the focus is on the diagnostics area, where demand is now highest. The share has been in a downward trend since mid-February and is presently quoted at CAD 1.10. In February, the price was still at CAD 3.45. As soon as the Company can report larger orders for PCR tests, opportunities will arise.
Pfizer - Acquisition of Arena Pharmaceuticals
For Pfizer, the collaboration with BioNTech has more than paid off. The German Company was the first to present an effective vaccine called Comirnaty against the Coronavirus. For Pfizer, the active ingredient is an absolute goldmine. More than 50% of sales are attributable to the vaccine. Now that more booster vaccinations are needed, and the first children between the ages of 5 and 11 are being vaccinated, it can be assumed that this trend will continue for the time being. Not only have sales climbed significantly but so have profits.
The profits were invested in the acquisition of Arena Pharmaceuticals on December 13. The deal cost the Group USD 6.7 billion. It paid a premium of over 100% to Friday's closing price. Arena's expertise in inflammation and immunology ideally complements Pfizer's portfolio. The drug Etrasimod, a potential blockbuster, is in a phase 3 trial, which is very promising. The sales potential is estimated at over USD 1 billion in a fast-growing market.
Despite the business doing well, the stock has not performed nearly as well as BioNTech. Since the low in the first Corona wave in March 2020 of USD 26.43, the share has more than doubled and is currently trading at USD 55.20. In the coming quarter, the Company will pay a dividend of USD 0.40. Calculated over the year, the dividend is about 2.9%. The takeover may give rise to new fantasies, but one should wait for a setback before entering the market.
All three companies can profit enormously from the Corona Crisis if the tests are successful and marketed accordingly. Valneva is waiting for EU approval and can then start shipping. XPhyto Therapeutics has three mainstays. At the moment, the rapid PCR tests are most marketable. The share should pick up as soon as a larger order comes in. Pfizer is a well-known pharmaceutical company that will make its way even without Corona. Nevertheless, profits are rising here as well during Corona.
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