Since its IPO last October, the stock price of COVID-19 vaccine and oncological treatment developer BioNTech (BNTX 0.25%) was up by more than 489% as of market close on Oct. 27. That's phenomenal considering the S&P 500 only gained 15% during the same period.
Now that the COVID-19 vaccine race is approaching the stage where some competitors could cross the finish line, investors are beginning to demand results from developers in the biotech sector. Fortunately, BioNTech remains one of the best coronavirus stocks in terms of vaccine potential and room for its stock to run even more.
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A highly promising coronavirus vaccine candidate
Pfizer (PFE +0.30%) and BioNTech's messenger RNA COVID-19 vaccine candidate (BNT162b2) is currently nearing the end stages of its phase 3 clinical trial, with top-line data expected by late October or early November; the companies are already submitting data on a rolling basis in their quest for regulatory approval in Canada and the European Union. If BNT162b2 looks effective enough, Pfizer expects to file an Emergency Use Authorization with the U.S. Food and Drug Administration within the coming weeks. The two companies will split the gross profits of the vaccine equally.
BioNTech and Pfizer have signed supply agreements with the E.U., U.K., U.S., Japanese, and Canadian governments for at least 450 million doses of BNT162b2 collectively, with options to supply an additional 600 million doses. The companies are targeting a combined production capacity of 1.3 billion doses by the end of 2021. The German Federal Ministry of Education and Research has also granted BioNTech 375 million Euros for the development and scale-up of its COVID-19 vaccine candidate.
A robust immunotherapy pipeline
That promising COVID-19 vaccine candidate isn't BioNTech's only focus. It's also investigating 11 candidates in 12 clinical trials with an emphasis on immunotherapies -- treatments that fight diseases by stimulating or suppressing the body's own immune system. Most of its immunotherapy candidates are in preclinical testing or phase 1 trials against indications such as solid tumors, head and neck cancer, ovarian cancer, pancreatic cancer, and melanoma.
When it comes to weighing the prospects of early-stage biotechs, investors should pay attention to whether or not their clinical programs have the backing of large-cap sector players, as these have teams of analysts and scientists tasked with spotting promising therapeutics. BioNTech excels in on that criteria. Its current research and development partners include Sanofi (SNY +0.95%) for its intra-tumor mRNA therapeutic and Regeneron Pharmaceuticals (REGN +2.61%) for its melanoma vaccine.
What's the verdict?
Right now, BioNTech has more than enough funds on its balance sheet to carry its coronavirus vaccine development program to fruition -- over $1.4 billion in cash and investments, compared to a net loss of 141.7 million Euros in the first half of 2020. If BNT162b2 is approved, BioNTech would generate more than $1 billion of revenue for every 100 million doses of the vaccine it sells together with Pfizer, at a price tag of $20 per dose and per its 50-50 partnership with the blue-chip pharma.
Overall, BioNTech's $20 billion valuation is more than justified. In fact, it's a solid investment choice based on its immunotherapy pipeline alone. And even if coronavirus vaccines don't do well in commercialization (perhaps due to oversupply issues and logistical difficulties), the company should at least recoup enough cash from its COVID-19 program to advance its other candidates. For investors looking for a safe bet on a coronavirus vaccine, BioNTech is a stock they will not want to miss.
