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Bioassociate is an Israeli company established in 2008 and operating in the life science arena. Bioassociate provides expertise-based consulting, research and analysis services to international life science companies and investment entities (investment banks, private and institutional... More
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  • Undervalued Biotech Stocks In Non-US Markets – Part 2 0 comments
    Aug 9, 2012 8:50 AM | about stocks: PFE, TEVA, JNJ, NVS

    In part 1 of this series, the Israeli stock exchange in Tel-Aviv has been brought as a sample of a market that accommodates several drug development and medical device companies with great upside, which can be found upon meticulous and informed research.

    In part 2 of the series, we will present additional undervalued attractive investment opportunities in Swiss and German stock exchanges.

    The Swiss/German market

    Similar to Israel, Germany and Switzerland are markets with strong Life Science industries and a home to a dominant pharma multinational (Teva in Israel (TEVA), Novartis and Roche in Switzerland and Germany respectively). Both countries boast a rich biotech scene, based on a flourishing academic research and an abundance of life sciences start-ups.

    All data is in $M (2011 data)

    Company Name

    Ticker

    Market Cap. (MC)

    Cash

    Cash/
    MC

    Lead product

    Sales in 2011

    Morphosys AG

    (MOR:GR)

    567.2

    188.1

    33%

    Ph2

    141.1

    Evolva Holding

    (EVE:SW)

    64.2

    22.7

    35%

    Ph2

    11.1

    Addex Therapeutics

    (ADXN:SW)

    64.0

    36.0

    56%

    Ph2

    3.7

    Cytos Biotechnology

    (CYTN:SW)

    54.5

    29.5

    54%

    Ph2

    1.6

    Newron Pharmaceuticals SpA

    (NWRN:SW)

    37.8

    5.4

    14%

    Ph3

    0.4

    Morphosys AG, a German biotechnology company, traded at $516m with almost $128m cash in their balance. The company's activities are based on a proprietary technology for generation of recombinant fully human antibodies. Morphosys operates three business segments: Partnered discovery of therapeutic antibodies; Proprietary development of therapeutic antibodies, and the AbD Serotec unit for development of monoclonal antibodies for research and diagnostic applications. Morphosys is currently advancing 4 proprietary therapeutic antibodies, the most advanced of which is in phase 2. The Partnered Discovery business segment operates via partnerships with multiple pharmaceutical and biotechnology companies, such as Pfizer (PFE), J&J (JNJ), Bayer (BAY) and Novartis (NVS), and includes no less than 16 clinical programs.

    Newron Pharmaceuticals is an Italian clinical-stage biopharmaceutical company traded in the Swiss stock exchange. Newron is engaged in discovering and developing new therapies for diseases of the Central Nervous System (CNS) and pain. The Company's lead molecule, Safinamide, which is out-licensed to Merck Serono, is undergoing phase III trials as adjunct treatment for Parkinson's disease. In addition to Safinamide, Newron's clinical development programs include Ralfinamide for neuropathic and inflammatory pain (phase 2b and 1 accordingly), HF0220 for AD (phase 2 ready), as well as 6 additional molecules at various stages of preclinical and clinical development.

    Cytos Biotechnology is a Swiss biotechnology company engaged in the development of therapeutic vaccines intended for treating and preventing common chronic diseases. These vaccines are designed to instruct the patient's immune system to produce desired therapeutic antibody or T cell responses that modulate chronic disease processes. The Company has built a pipeline of different Immunodrug candidates, of which five are in clinical development, led by CYT003 for allergic asthma, which is planned to start a large global Phase IIb program with in 2H12. Cytos' Immunodrug candidates are developed both in-house and together with Novartis, Pfizer and Pfizer Animal Health, among others.

    Addex Therapeutics, formerly Addex Pharmaceuticals, discovers and develops a class of small molecule drugs, called allosteric modulators. Its two lead products are being investigated in Phase IIa clinical testing: Dipraglurant (ADX48621, an mGluR5 negative allosteric modulator) is being developed by Addex to treat Parkinson's disease levodopa-induced dyskinesia (PD-LID), and ADX71149 (mGluR2 positive allosteric modulator) is being developed by its partner Janssen to treat schizophrenia. Addex also is advancing several preclinical programs, including GABA-BR PAM for pain, overactive bladder and other disorders; mGluR4 PAM for Parkinson's and anxiety; GLP1R PAM for type 2 diabetes; mGluR2 NAM for treating Alzheimer's disease and depression, and FSHR/LHR NAM for sex hormone dependent tumors and reproductive system disorders. In addition, Addex has discovery programs to identify allosteric modulators of receptor tyrosine kinase superfamily.

    Evolva Holding is a synthetic biology company engaged in the development of pharmaceutical, nutritional and other biotechnology products. Evolva uses biosynthetic technologies to create small molecule compounds and their production routes. Evolva is engaged in pharmaceutical (infectious disease and complications of diabetes) and in consumer healthcare and nutrition (food ingredients, personal care and crop protection). The company has partnered projects, as well as in-houseprograms in both areas.

    A "flat" bio world

    US bio-investors who seek high growth companies with great potential and an undervalued price tag can find them in several foreign stock markets. In this part of the series we presented only a few investment ideas for a strong portfolio. Unmet therapeutic need is omnipresent in the world and is addressed by global biotechs irrelevantly of geographic borders. Those who seek opportunity over the Atlantic can in fact see a greater upside for their bio-investment. Nevertheless, as with all investments, and in particular bio-investments, one should always look for the downside of investing outside of the US:

    1. Unsophisticated markets can lead to shortage in liquidity.
    2. Less stock floating - the less shares of floating stock are available, the more volatile a company's stock price is likely to be.
    3. Macroeconomic influences are more likely to impact smaller markets.

    In part 3 we will focus on the fast growing Chinese biotech market.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: quick-picks-lists Stocks: PFE, TEVA, JNJ, NVS
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