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BioNTech: Shares Remain Undervalued Despite Our Lower COVID-19 Vaccine Forecast

We assume vaccine demand will remain relatively steady at a trough level going forward.

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Key Morningstar Metrics for BioNTech

We’re lowering our fair value estimate for BioNTech BNTX to $177.00 per ADR from $202.00 following Pfizer’s PFE decision to reduce its full-year 2023 guidance for its COVID-19 vaccine sales to $11.5 billion from $13.5 billion.

We previously lowered our assumed revenue for BioNTech’s COVID-19 vaccine (which is largely a gross profit share from Pfizer plus sales in Germany and Turkey) to EUR 5.5 billion from EUR 6.5 billion. This was mostly due to gross margin pressure as Pfizer wrote off old vaccine inventory in the second quarter and launched the new XBB-targeting vaccine in September. We have now lowered our revenue estimate to EUR 4.4 billion, below BioNTech’s EUR 5 billion guidance, to account for lower-than-expected U.S. demand for COVID-19 vaccines this season.

Pfizer management indicated that its early data shows lower demand which is consistent with the roughly 15% vaccination rate for the bivalent booster last fall. We now assume demand will remain relatively steady at this trough level going forward. While we still assume the average net commercial price for COVID-19 vaccines in the United States for Moderna and Pfizer/BioNTech could be roughly $70, we think combined demand will be closer to 60 million doses (compared with our prior estimate of 75 million doses).

Progress with combination respiratory vaccines (influenza, RSV) could add upside to our valuation. We think BioNTech is in the process of building a maintainable competitive advantage in the novel mRNA market. 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, for which data in metastatic melanoma is expected later this year.

BioNTech Stock Price

Source: Morningstar Direct.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Karen Andersen

Strategist
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Karen Andersen, CFA, is a strategist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. She is responsible for biotechnology research.

Before joining Morningstar in 2005, Andersen received a master’s degree in business administration from Rice University, where she served as senior healthcare analyst for the M.A. Wright Fund and earned the distinction of Jones Scholar. She has scientific research experience in both academia (at Rice University and the University of Queensland in Australia) and industry (at Lexicon Genetics and a subsidiary of Genzyme).

Andersen also holds a bachelor’s degree in biochemistry from Rice University, where she graduated magna cum laude. She is a member of Phi Beta Kappa and holds the Chartered Financial Analyst® designation. She ranked first in the biotechnology industry, and had the highest score overall, in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

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