Company Reports

We’re maintaining our $143 fair value estimate for BioNTech following first-quarter results that were in line with our expectations. Low seasonal demand for covid vaccines resulted in EUR 188 million in revenue, but we still anticipate EUR 2.5 billion in 2024 revenue based on covid vaccine sales and profit share from partner Pfizer, at the low end of management’s guidance. BioNTech swung to a net loss in the quarter due to lower revenue and heavy investment in research and development. The firm is continuing to ramp up R&D in a broad oncology pipeline that encompasses not only its in-house therapies based on its proprietary mRNA technology but also in-licensed CAR-T cell therapy, antibodies, and antibody-drug conjugates. While BioNTech’s mRNA technology has been well validated for covid, we think the firm is still in the process of building a moat, given weaker demand for covid vaccines and several higher-risk programs in oncology. That said, we think investors are underestimating the value of BioNTech’s pipeline at recent prices, as several programs look on track to launch beginning in 2027, with 10 registrational trials poised to be in progress by the end of 2024. We expect BioNTech to report net losses through 2026, but we think new launches will move the firm back to profitability by 2027.

We’re lowering our BioNTech fair value estimate to $143 from $177, following fourth-quarter covid-19 vaccine revenue that was lower than we expected due to Pfizer’s additional inventory write-offs as well as steep increases in guidance for operating expenses and capital expenditures in 2024. While BioNTech’s oncology pipeline spans several promising technologies and indications, we’re frustrated with the firm’s slow progress with its mRNA-based oncology programs, and we are still uncertain about the differentiation of the firm’s recently acquired, later-stage antibody programs. By 2033, we still see potential for more than EUR 5 billion in sales of its mRNA-based products (EUR 3 billion in vaccines and EUR 2 billion in oncology) as well as more than EUR 3 billion in sales of its antibody-based oncology therapies, led by products that could offer potential improvements on Bristol’s Yervoy and AstraZeneca/Daiichi Sankyo’s Enhertu. However, with the earliest launches coming in 2026 and significant spending on clinical trials and commercial infrastructure in the meantime, we don’t expect the firm to turn a profit again until 2027. At recent prices, we think shares remain undervalued, as we think the market does not appropriately value covid vaccine profits and the multiple potential oncology drug launches starting in 2026. That said, we think the firm is still in the process of building a moat.

BioNTech, founded in 2008 in Germany, has become a key player in the development of personalized mRNA cancer treatments. The emerging biotech's first commercial vaccine, for covid, received its first authorization in December 2020, and its early-stage pipeline and mRNA technology platforms have caught the eye of several large pharmaceutical companies, resulting in collaborations and partnerships. BioNTech has also used cash from its covid vaccine profits to acquire rights to a more diversified pipeline of biologic drug candidates in oncology, with launches potentially starting in 2026.

We’re maintaining our $177 fair value estimate following BioNTech’s Jan. 9 presentation at the J.P. Morgan Healthcare Conference. We think the firm is on track to meet our EUR 4.3 billion revenue forecast for 2023, which incorporated Pfizer’s reduced expectations for COVID-19 vaccine sales (BioNTech books half of Pfizer’s gross profit as revenue) and is in line with BioNTech management’s EUR 4 billion guidance. Management also provided new guidance of approximately EUR 3 billion in revenue in 2024, which is ahead of our EUR 2.3 billion forecast. We continue to expect advancing oncology programs, both internal and in-licensed, to significantly boost research and development expenses beginning this year, as more studies enter 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.

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.

We’re lowering our BioNTech fair value estimate to $177 per ADR from $202 following Pfizer’s decision to reduce its full-year 2023 guidance for COVID-19 vaccine sales to $11.5 billion from $13.5 billion. We had previously lowered our assumed BioNTech COVID vaccine revenue (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, 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. However, we have now lowered our BioNTech COVID vaccine 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 vaccines this season.

BioNTech, founded in 2008 in Germany, has become a key player in the development of personalized mRNA cancer treatments. The emerging biotech's first commercial vaccine, for COVID-19, received its first authorization in December 2020, and its early-stage pipeline and mRNA technology platforms have caught the eye of several large pharmaceutical companies, resulting in collaborations and partnerships.

BioNTech, founded in 2008 in Germany, has become a key player in the development of personalized mRNA cancer treatments. The emerging biotech's first commercial vaccine, for COVID-19, received its first authorization in December 2020, and its early stage pipeline and mRNA technology platforms have caught the eye of several large pharmaceutical companies, resulting in collaborations and partnerships.

We're lowering our BioNTech fair value estimate to $202 per ADR from $217 following second-quarter results that were lower than our expectations and that called into question our COVID-19 vaccine profit share estimates for the full year.

We’re maintaining our $217 fair value estimate for BioNTech 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.

BioNTech reported EUR 17.1 billion in COVID-19 vaccine revenue in 2022, slightly ahead of its EUR 16 billion-EUR 17 billion guidance and well ahead of our EUR 16 billion forecast. This was down from EUR 18.9 billion reported in 2021. Guidance for 2023 COVID-19 vaccine revenue of around EUR 5 billion is well below our prior forecast for EUR 10.6 billion, and we have lowered our forecast to account for renegotiated contracts, lower demand, and a transition to a commercial market (rather than government contract-based market) in the United States. However, rather than a two-year step down in sales in 2023 and 2024, which we had previously modeled, we now see 2024 revenue as potentially flat, with potential for growth from COVID-19 vaccine demand and new oncology launches in 2025 and beyond. We’re maintaining our $217 fair value estimate.

We’ve raised our fair value estimate for BioNTech to $217 from $205 following solid third-quarter results, as we have raised our assumed U.S. prices for booster doses of BioNTech and partner Pfizer’s COVID-19 vaccines beginning in 2023. Management raised its 2022 revenue guidance to EUR 16-17 billion, the high end of its prior range, due to uptake of the bivalent booster and higher prices. The updated guidance is in line with our prior forecast of EUR 16.2 billion in revenue for the full year, as Pfizer/BioNTech have been able to better support the initial bivalent vaccine launch than Moderna (which has had temporary supply constraints).

BioNTech, founded in 2008 in Germany, has become a key player in the development of personalized mRNA cancer treatments. The emerging biotech's first commercial vaccine, for COVID-19, received its first authorization in December 2020, and its early stage pipeline and mRNA technology platforms have caught the eye of several large pharmaceutical companies, resulting in collaborations and partnerships.

BioNTech, founded in 2008 in Germany, has become a key player in the development of personalized mRNA cancer treatments. The emerging biotech's first commercial vaccine, for COVID-19, received its first authorization in December 2020, and its early stage pipeline and mRNA technology platforms have caught the eye of several large pharmaceutical companies, resulting in collaborations and partnerships.

We are maintaining our $205 per share fair value estimate for BioNTech despite weaker second-quarter results and continued foreign exchange headwinds weighing on the U.S.-listed share price, as we still expect COVID-19 vaccine revenue for the year of more than EUR 18 billion, above the firm’s reaffirmed guidance of EUR 13-17 billion. BioNTech’s share of COVID-19 vaccine revenue in the second quarter was EUR 3.2 billion, down significantly from the EUR 6.4 billion BioNTech recorded in the first quarter during the first omicron wave. We expect third-quarter sales will also remain lower and relatively consistent with the second quarter, as larger contracts are increasingly focused on the omicron variant-adapted vaccines that should be available beginning in October. BioNTech and partner Pfizer have a new $3.2 billion U.S. contract for such boosters that will largely be recorded in the fourth quarter, and we expect the majority of Europe’s remaining contract for 2022 could also be invoiced in the fourth quarter (although given the size of Europe’s order, we would not be surprised if some orders spilled into 2023). Overall, we see BioNTech shares as undervalued, but we still see BioNTech and mRNA peer Moderna as in the process of building moats with their mRNA technologies, given the number of other competitors looking to seize on RNA's therapeutic potential with other technology platforms.

We're not making any changes to our Moderna or Pfizer/BioNTech fair value estimates following a U.S. Food and Drug Administration advisory committee meeting on June 28 that was supportive of adapting mRNA-based COVID-19 vaccine booster shots to contain an omicron-based component. The committee voted 19 to 2 in favor of a strain change, with some members citing as part of their rationale the waning efficacy (55%, according to Centers for Disease Control and Prevention data presented at the meeting) of approved boosters against hospitalization from BA.2 omicron subvariants. Most committee members supported the use of a bivalent vaccine that would offer protection against both the ancestral (original) SARS-CoV-2 virus as well as the BA.1 subvariant of omicron, rather than switching to an omicron-adapted vaccine. Data presented by Pfizer and Moderna were generally supportive of using this bivalent approach, as duration of protection appears to be longer with such vaccines (based on six-month data from Moderna's beta-adapted bivalent program).

We're maintaining our $205 fair value estimate for BioNTech following solid first-quarter results. Foreign-exchange headwinds are weighing on the U.S.-listed shares, but we've also slightly increased our pricing assumptions for vaccine sales, countering any valuation impact. BioNTech and partner Pfizer's COVID-19 vaccine, Comirnaty, drove BioNTech's top line to nearly EUR 6.4 billion, with 750 million doses sold globally in the quarter. As of mid-April, Pfizer and BioNTech contracts for the year continued to total 2.4 billion, although U.S. orders are still uncertain as fall seasonal boosters are likely but not yet funded by a government order. We expect BioNTech will book revenue of nearly EUR 18.9 billion this year, ahead of the EUR 13 billion-EUR 17 billion guidance and factoring in some additional U.S. purchases as well as higher prices in international markets.

BioNTech reported full-year 2021 results that were slightly higher than our expectations, with nearly EUR 19 billion in revenue beating the firm's coronavirus vaccine revenue guidance (EUR 16 billion-EUR 17 billion) and our own overall revenue forecast (EUR 17.5 billion) due to omicron-driven sales in the fourth quarter. We've slightly increased our fair value estimate to $205 from $200 after factoring in a combination of lower 2022 COVID-19 vaccine revenue guidance (EUR 13 billion-EUR 17 billion), higher expected research and development expense guidance than what was built into our model, and also our expectation for a more substantial ongoing market for COVID-19 vaccines beyond 2022. We expect Pfizer/BioNTech's omicron-adapted vaccine could generate positive data in April and reach the market on a wide basis this fall. We're encouraged by BioNTech's progress with the rest of its pipeline beyond COVID-19, and look forward to data for several oncology programs including solid tumor CAR-T program BNT211 (data in April and in the second half of 2022), Genmab-partnered bispecific antibody programs BNT311 and BNT312 (phase 1/2 efficacy data by early 2023), and personalized mRNA vaccine BNT 122 (phase 2 melanoma data in the second half of 2022). While BioNTech's mRNA technology and diversified pipeline of other forms of oncology therapeutics have significant potential, we think the firm has yet to carve out an economic moat.

BioNTech, founded in 2008 in Germany, has become a key player in the development of personalized mRNA cancer treatments. The emerging biotech's first commercial vaccine, for COVID-19, received its first authorization in December 2020, and its early-stage pipeline and mRNA technology platforms have caught the eye of several large pharmaceutical companies, resulting in collaborations and partnerships.

We're raising our BioNTech fair value estimate to $200 from $177 per share after incorporating Europe's recent COVID-19 vaccine option exercise for 2022, Pfizer's latest update on contracted COVID-19 vaccine sales for 2023, and a small placeholder for potential profit share on an mRNA-based shingles vaccine. Despite BioNTech's massive success with its mRNA-based COVID-19 vaccine, we think the changing competitive landscape, uncertain virus evolution, and many unknowns for safety and efficacy of this technology beyond COVID-19 all create too many questions to grant BioNTech an economic moat. That said, with a recent shareprice pullback, we now see shares as relatively fairly valued. We now assume that BioNTech will book COVID-19 vaccine revenue from its Pfizer gross profit share of EUR 17.3 billion in 2021 and EUR 19.1 billion in 2022, followed by a step down in sales in 2023 and EUR 1 billion annually beginning in 2024, to account for continued COVID-19 vaccinations in vulnerable (mostly elderly) populations. We assume Glaxo's Shingrix is capable of generating $5 billion in annual sales by 2025, creating a large potential market for Pfizer/BioNTech if their mRNA-based vaccine is able to differentiate. While it could be a tall order to surpass Shingrix on efficacy (97% efficacy after two doses), mRNA-based vaccines could avoid manufacturing delays that limited Glaxo's Shingrix sales ramp.