What happened

Shares of BioNTech (NASDAQ:BNTX) were skyrocketing 46.4% higher as of 11:07 a.m. EDT on Wednesday. This huge gain came after the biotech announced Tuesday that it and Pfizer (NYSE:PFE) would collaborate on developing a novel coronavirus vaccine

So what

BioNTech and Pfizer were already partners. The two companies signed an agreement in 2018 to collaborate on development of flu vaccines based on messenger RNA (mRNA). However, this week's expansion of the collaboration between BioNTech and Pfizer is an even bigger story because of the intense global focus on finding a way to slow the spread of the novel coronavirus and the disease that it causes, COVID-19.

Coronavirus vaccine bottles

Image source: Getty Images.

At this point, the financial details of the coronavirus collaboration haven't been worked out. That's not concerning, though. BioNTech and Pfizer now have a letter of intent in place related to the co-development and distribution (outside of China) of a coronavirus vaccine. 

Now what

BioNTech and Pfizer will start working together immediately on the coronavirus vaccine program. The companies plan to conduct research in both the U.S. and Germany. They expect to finalize the financial details of the agreement over the next few weeks.

Most importantly, the collaboration should accelerate the development of BioNTech's experimental COVID-19 mRNA vaccine, BNT162. This vaccine should begin clinical testing by the end of next month. But while BioNTech's shares are on a tear right now, look for significant volatility with the biotech stock as other companies make progress with their own novel coronavirus vaccine programs.