Several biotech stocks were big winners last year, with the race to develop COVID-19 vaccines in full swing. German biotech BioNTech ((NASDAQ: (BNTX))) was one of them. But can the company deliver another strong performance this year? In this Fintech Zoom Live video recorded on Jan. 13, 2021, Healthcare and Cannabis Bureau Chief Corinne Cardina and Fool.com writer Keith Speights discuss what 2021 might have in store for BioNTech.
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Corinne Cardina: All right. Let’s talk about BioNTech. This is a $26 billion German company founded in 2008. So it’s not too much older than Moderna (NASDAQ: MRNA). BioNTech stock went up 148 percent in 2020. It’s actually run by a husband and wife duo, which I love. They sold their last company for almost two billion dollars back in 2016. It seems like they’ve got a recipe for success that they are following.
They kind of came to the partnership with Pfizer (NYSE: PFE) because they were already collaborating with Pfizer on a potential flu vaccine. They are working on that, COVID happened and they teamed up to do what they did. BioNTech brought the MRNA expertise to the project. Pfizer, of course, has plenty of experience and clinical trials, drug commercialization, all that.
BioNTech bills itself as a next-generation immunotherapy company. Not only is it a pioneer in the MRNA space, but it also has some T-cell programs that’s part of the immune system.
So let’s talk about BioNTech biggest growth prospects, starting with their COVID-19 vaccine with Pfizer. It’s actually dubbed Comirnaty. It’s like a [inaudible] mRNA COVID community and immunity, apparently. [laughs]
Keith Speights: Corinne, which do you think is easier to say?
Corinne Cardina: I’m just going to.
Keith Speights: Comirnaty or BNT162b2?
Corinne Cardina: That’s true, it’s true [laughs]. They apparently worked with a naming agency, I think they can get their money back because if I’m not crazy about Comirnaty [laughs].
Anyways, let’s talk about their manufacturing capacity. Obviously right now, the JP Morgan Healthcare Conference is going on. BioNTech‘s leadership presented there and gave some exciting news that they’re actually going to be scaling up their production capacity. What do we now know about how much vaccine they can make Keith?
Keith Speights: They were saying, “were” being the operative word, they were saying that they could produce around 1.3 billion doses. Now though, like you said, their executive teams at the JP Morgan Healthcare Conference, they are now saying they’re scaling up their capacity to produce around two billion doses this year.
Of course, that’s enough to vaccinate a billion people across the world, and so they’ve teamed up with partners to help produce this. They have six global manufacturing sites. They’re opening up a new one in Germany, I think, next month, and so that’s good news for BioNTech and Pfizer as its partner, to boost the number of doses they can produce, because I suspect they’ll sell every dose that they can make.
That’s very good news for them and of course, they’re also looking at expanding opportunities for the vaccine itself. They’re looking at potentially receiving authorizations and ultimately approvals to vaccinate children, for pregnant women. They’re looking at making it more shelf-stable by reformulating it to address some of the ultra cold storage requirements. They’re working on a freeze-dried version that at least a Pfizer executive has said could come out this year, and they’re looking out to roll out a six dose vial so that would be more easy-to-store. They’re doing a lot of things that could up their potential market grants. BioNTech is going to have a lot of potential with this Comirnaty, or however you pronounce it.
Corinne Cardina: Absolutely. Obviously, a big difference between the Moderna vaccine, and this one is that Pfizer and BioNTech have teamed up. Do we know anything about how they are agreeing to share the profits, is it 50-50?
Keith Speights: Yeah. At first when Pfizer and BioNTech announced their partnership, actually when they first announced it early last year, they said they hadn’t even worked out the financial details, that it would come later. But they were so excited to work together they just move forward and that’s always fun to see.
Corinne Cardina: It’s like getting married without a pre-nup.
Keith Speights: Yeah. But then later on, and I don’t think they came out and just officially had a press release that said this per se, but it was revealed through some documents from the companies that they are splitting the proceeds 50-50.
I do know that BioNTech has to pay back some of the development costs, some of the 50 percent share of the development costs back to Pfizer because Pfizer was running the money upfront for all of that. They won’t make all of their 50 percent share because of having to pay back some of that money. But it’s a 50-50 split.
I mentioned Bernstein Ronny Gal earlier. Ronny Gal estimates that this vaccine will make more than $14 billion this year, so BioNTech could be looking at $7 billion or so if his estimation is correct.
Corinne Cardina: Another difference is that while Pfizer and BioNTech have signed supply agreements with the US government, I don’t think they got upfront money from Operation Warp Speed the way that Moderna did.
Keith Speights: That’s right. Pfizer actually made a big deal out of that several months ago, that “we were taking the risk on this, this wasn’t Uncle Sam taking the risk”, and they were correct. They did not receive any upfront money from Operation Warp Speed. They received a supply deal, a purchase order, basically. The money doesn’t begin to flow in from what I understand and reading through their documents, it doesn’t begin to flow in until they’ve shipped 100 million doses. We know that 100 million doses haven’t been shipped yet, so they haven’t seen the money flow in yet, but it’s just a matter of time before some big bucks will be coming their way.
Corinne Cardina has no position in any of the stocks mentioned. Keith Speights owns shares of Pfizer. The Fintech Zoom has no position in any of the stocks mentioned. The Fintech Zoom has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
