BioNTech SE ADR BNTX

BioNTech Earnings: Maintaining Our $177 FVE Following Further Oncology Pipeline Boost

We’re maintaining our $177 fair value estimate following third-quarter results that put BioNTech on track to meet our recently updated forecast for 2023, which incorporated Pfizer’s reduced expectations for COVID-19 vaccine sales (BioNTech books half of Pfizer’s gross profit as revenue). While we added a couple of advancing or newly licensed oncology programs to our long-term sales forecast, we also significantly increased our assumptions for research and development expenses beginning in 2024, given the number of programs that BioNTech anticipates moving to pivotal trials. Despite this increase, we expect BioNTech to remain profitable during this period of investment prior to oncology drug launches, due to its emphasis on controlling costs. We see shares as undervalued, as we continue to think the market underestimates the long-term tail for COVID-19 vaccine sales as well as the potential for mRNA technology in oncology and BioNTech’s ability to build a more diversified oncology pipeline with multiple novel biologic and cell therapies. That said, we think the firm is still in the process of building a moat, given the mRNA vaccine competitive landscape and the high-risk nature of oncology drug development.