If you had bought $ 10,000 in BioNTech (NASDAQ: BNTX) on the date of its IPO in October 2019, it was worth investing more than $ 68,820 as of December 16. There is one main reason for the spectacular run. BioNTech and its development partner, Pfizer (NYSE: PFE), successfully developed a coronavirus vaccine (BNT162b2) and received emergency use approval from the U.S. Food and Drug Administration on Friday, December 11th.
It is the first coronavirus vaccine in the U.S. to have late-stage efficacy data and enter the public domain through a regulatory license. Currently, many investors are keeping an eye on Pfizer’s stock due to its steady income, strong profit margins, share payments, and long-term status as a giant in the pharma industry. I think, however, that BioNTech would be better for growth investors looking for greater benefits. Here are two reasons for.
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1. Large revenue potential
Pfizer and BioNTech have a 50-50 partnership, in which total profits and costs from the BNT162b2 trade will be divided equally between the two. The benefits of this arrangement will be much more apparent in BioNTech’s case than Pfizer’s, given its market potential at $ 30 billion compared to the pharma giant’s $ 228 billion. The vaccine currently has over 670 million prescriptions of the two companies from 13 countries and the EU and active options to deliver another 500 million doses.
Based on a $ 19.50 per dose price tag, it would mean BioNTech would have up to $ 6.5 billion in future revenue in the bag (after equal split).
In addition, countries that have already ordered vaccines could use their options to purchase hundreds of millions more doses. By next year, Pfizer and BioNTech expect to scale production capacity to 1.3 billion doses. Assuming they can sell successfully, it would mean that BioNTech stock is currently trading for as little as 2.4 times revenue.
Tens of billions in sales are not as big as Pfizer, but it is great news for a company like BioNTech that has never brought a product to market.
2. Heavy mRNA pipeline
The success of the messenger RNA (mRNA) vaccine could prove a concept for other BioNTech research programs. For example, the company is in partnership with Sanofi (NASDAQ: SNY) and Regeneron Medications (NASDAQ: REGN) to advance mRNA intratumor therapy (BNT131) and mRNA melanoma vaccine (BNT111), respectively. Both candidates showed early therapeutic symptoms with favorable safety profiles.
In total, BioNTech has 11 results in its oncology pipeline undergoing 12 clinical trials. Most of them will pass the level 1 exam in 2021.
Even if only one of these candidates is successful, that would mean a huge increase for BioNTech stock. To date, large-cap biotechs are buying out smaller companies with newly FDA-approved cancer treatments for between $ 5 billion to $ 21 billion. Keep in mind, that valuation is mostly for companies with only one approved cancer drug in their pipeline.
I think one of the best variations among BioNTech is among the coronavirus vaccine stock for the above reasons. It is certainly not too late to buy some shares for investors with the mind of “buying high and selling even higher”.