BioNTech Earnings: Shares Remain Undervalued as Investors Await Oncology Pipeline Data

We’re maintaining our $217 fair value estimate for BioNTech BNTX following first-quarter results that fell in line with our expectations. BioNTech reported revenue from COVID-19 vaccine Comirnaty (largely from its gross profit share with partner Pfizer) of roughly EUR 1.3 billion, representing an 80% decline from the first quarter of 2022 as demand and contracts for COVID-19 vaccines dissipate. Management maintained guidance for full-year revenue of EUR 5 billion, and we are maintaining our own forecast for EUR 6.5 billion, as we expect significant sales in the second half of the year from new U.S. contracts to cover high-risk individuals this fall. BioNTech’s largely early-stage cancer pipeline is requiring additional investment in research and development, but we still expect that COVID-19 vaccine profit share could allow BioNTech to remain profitable as it advances its oncology and infectious disease programs. We’re watching for progress with some of the firm’s more advanced oncology programs, particularly personalized cancer therapy BNT122. Moderna and Merck recently reported positive data from their own adjuvant melanoma personalized cancer therapy and are planning to move to phase 3 this year. Although BNT122 is focused on later-stage, metastatic melanoma, where efficacy could be weaker (we expect data this year), BioNTech also has an ongoing phase 2 program in adjuvant colorectal cancer (phase 2 data expected in 2024) and plans to begin a phase 2 trial in adjuvant pancreatic cancer later this year, based on earlier positive data. We’re also intrigued by the firm’s decision to move into antibody-drug conjugates with the recent DualityBio collaboration as well as the new late-stage CTLA-4 antibody from OncoC4, although we think both areas are competitive, and we’re waiting for more data before incorporating them in our model. We think BioNTech is still in the process of building a maintainable competitive advantage in the novel mRNA market.