You know you live in interesting times when a clinical-stage biotech is thrust into the limelight on a global stage. That's what's happening with Moderna (MRNA 0.17%). Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases (NIAID), who has himself been in the limelight in recent months, even singled out the biotech days ago for what he called its "quite promising" COVID-19 vaccine candidate.

Moderna has deservedly received a lot of attention from the press and from investors. But there's another small biotech quietly working on a COVID-19 vaccine that's using the same approach as Moderna. This under-the-radar biotech just might even beat Moderna at its own game.

Gloved hands holding several coronavirus vaccine bottles


A common denominator

Moderna was founded in 2010 by venture capital firm Flagship Pioneering with a focus on developing therapies using messenger RNA (mRNA). However, that was two years after German biotech BioNTech (BNTX -2.55%) was formed. And BioNTech's focus was, you guessed it, mRNA therapies.

What's the attraction with mRNA development? It's important to first understand that proteins are the building blocks for everything the human body does. The instructions for building proteins are contained in DNA. Messenger RNA carries these instructions to ribosomes, which are basically protein-making factories.

The fascination with mRNA therapies is that they hold the promise to treat lots of different diseases. If mRNA could be customized, it could be used to deliver instructions to ribosomes to build the exact proteins needed to fight a disease such as a specific type of cancer. In addition, mRNA could be used to make proteins that mirror those of viruses. The body's immune system would then be spurred to create antibodies to battle the virus.

Cell nucleus with DNA and mRNA


Both BioNTech and Moderna have figured out how to harness mRNA to hopefully be able to achieve these goals. BioNTech's most advanced pipeline candidate is an mRNA therapy targeting the treatment of metastatic melanoma. Moderna's lead candidates are mRNA vaccines targeting cytomegalovirus (CMV) and cancer.

The COVID-19 race

Moderna got a head start over BioNTech in the race to develop a vaccine to immunize against the novel coronavirus that causes COVID-19. The biotech received funding from the Coalition for Epidemic Preparedness Innovations (CEPI) in late January 2020 to develop a COVID-19 vaccine candidate.

Development advanced very quickly. By March 16, the first patient was dosed in a phase 1 clinical study led by the National Institutes of Health (NIH) evaluating Moderna's COVID-19 mRNA vaccine candidate. That same day, BioNTech provided details for "Project Lightspeed," its program to develop a mRNA vaccine for the novel coronavirus. 

On May 18, Moderna reported preliminary results from the NIH-led phase 1 study that were encouraging. The company announced on Friday that its COVID-19 vaccine candidate has advanced to phase 2 testing. If all goes well, it could kick off a pivotal late-stage study in July. 

Meanwhile, BioNTech completed dosing for the first cohort of patients in a phase 1/2 clinical study of its mRNA vaccine candidate BNT162 in Germany on April 29. The first U.S. patients were dosed on May 5.

Healthcare professional giving a vaccine to a patient


BioNTech's advantages

Moderna still claims a lead over BioNTech in terms of how far clinical testing has progressed. But don't count BioNTech out by any means. Actually, the German biotech could have a few advantages over Moderna.

For one thing, BioNTech has a big partner -- Pfizer (PFE -0.97%). The two companies teamed up in mid-March to develop a COVID-19 vaccine. Actually, BioNTech has two big partners. It also formed an alliance in March with Chinese drugmaker Fosun Pharma to develop and market a COVID-19 vaccine in China.

BioNTech's relationship with Pfizer gives it plenty of money to fund its development efforts without having to dilute the value of its shares through a stock offering (a route that Moderna recently took). Pfizer also brings considerable resources to the table in navigating the regulatory approval process and a global manufacturing and distribution network.

Another potential advantage for BioNTech is that it isn't developing just one mRNA COVID-19 vaccine; it's testing four vaccine candidates simultaneously. Each of these candidates has a different combination of mRNA format and target antigen. This approach could enable BioNTech and Pfizer to identify the most promising vaccine candidate more quickly.

Sizing up the rivals

All of the attention for Moderna has driven its shares up more than 160% so far this year. At one point, the biotech stock was up as much as 300% year to date. BioNTech has also seen its share price rise, but by 40% -- a small jump in comparison to Moderna.

Moderna's market cap is nearly double BioNTech's. That's a hefty premium for a head start in clinical testing measured in weeks.

To be sure, there's no way to know if either of these biotechs will be successful with their mRNA COVID-19 vaccine programs. Even if they are successful in clinical testing, there are dozens of other drugmakers scrambling to develop their own COVID-19 vaccines that could also prove to be safe and effective. 

I like the potential for mRNA as a vaccine for COVID-19 and in fighting other diseases. My view is that Moderna's mRNA COVID-19 vaccine program is, to use Dr. Fauci's words, "quite promising." However, I think that BioNTech's program is also promising. It's way too early to pick a winner in this race. And don't be surprised if there are multiple winners.