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Here's Why BioNTech Gained 34.8% in June

By Maxx Chatsko – Jul 8, 2020 at 10:05AM

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One of the world's leading coronavirus vaccine efforts reported promising progress.

What happened

Shares of BioNTech (BNTX -1.27%) rose 34.8% last month, according to data provided by S&P Global Market Intelligence. The German biopharma announced progress in efforts to develop a safe and effective vaccine against SARS-CoV-2, the coronavirus that causes COVID-19, with partner Pfizer.

In mid-June, BioNTech announced it had received access to roughly $112 million in debt financing from the European Investment Bank. Two weeks later, the development-stage company announced a $250 million private placement from Temasek, a leading investor in living technologies.

The momentum accelerated on the first day of July, when BioNTech and Pfizer announced early results from a vaccine candidate that suggest it triggers the intended immune responses against SARS-CoV-2 in humans. As of the first week of July, the pharma stock has delivered a year-to-date gain of 105%.

A businessman pointing up and to the right as a rickety wooden arrow displays overhead.

Image source: Getty Images.

So what

BioNTech is developing a pipeline of messenger RNA (mRNA) drug and vaccine candidates. When SARS-CoV-2 began spreading across the globe earlier this year, the company wasted little time deploying its technology platform against the virus. That earned it a lucrative partnership with Pfizer, catapulted it onto the radar of investors, and brought a stream of cash into the business to support its efforts.

The balance sheet received an influx of capital in June, although it was well stocked before the month began. The German biopharma ended March with $495 million in cash. At the time first-quarter 2020 results were announced in mid-May, the company expected to earn an additional $236 million in equity investments from partners Pfizer and Fosun Pharma by the end of June. That's all in addition to the aforementioned June haul comprising $250 million from the private placement from Temasek and access to another $112 million in debt from the European Investment Bank.

Now what

Due to all of the moving parts and dates of fund settlement, it's difficult to precisely estimate how much cash BioNTech might have had at the end of the second quarter, but it's clear the business has the financial flexibility and support from partners to succeed. Now the company only has to deliver successful results in the clinic, manufacture hundreds of millions of doses, and distribute them across the world. That won't be easy, but the business is well positioned to succeed.

Maxx Chatsko has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

BioNTech SE Stock Quote
BioNTech SE
BNTX
$128.35 (-1.27%) $-1.65
Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$44.08 (-1.10%) $0.49

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