Key Points

  • German biotech BioNTech developed the Pfizer coronavirus vaccine candidate.
  • Pfizer agreed to partner with BioNTech in March to further develop the investigational coronavirus vaccine.
  • BioNTech and Pfizer submitted their vaccine candidate's application for Emergency Use Authorization (EUA) this morning, Nov. 20.

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A year ago, you might not have heard of BioNTech (BNTX -0.83%). Shares of the German biotech were trading at about $20 as it worked on investigational messenger RNA (mRNA) therapies for infectious diseases and various types of cancer. Since then, its shares have soared more than 390%, and the company has become a fixture in everyday conversation -- at least for those closely following the coronavirus vaccine race.

That's because BioNTech is the developer behind Pfizer's (PFE 1.80%) coronavirus vaccine candidate. BioNTech created the investigational product based on its mRNA technology. In March, the clinical-stage biotech company signed a co-development agreement with Pfizer, in which the two agreed to work together to bring a vaccine through trials and to market. Let's take a closer look at what's happened so far and what may be on the horizon.

A researcher injects vaccine in the arm of a clinical trial participant.

Image source: Getty Images.

The power of mRNA

BioNTech's investigational vaccine isn't like traditional vaccines. Instead of introducing weakened virus into the body, it uses the power of mRNA. The vaccine candidate's mRNA instructs the body to create a protein from the virus. The body's immune system then creates antibodies to this protein, and those antibodies eventually fight off potential infection. There are other companies in the race developing mRNA vaccines. The most noteworthy is Moderna (MRNA 0.68%), which shares the lead with the Pfizer/BioNTech team.

So far, mRNA technology has proven to be a winning strategy. The investigational vaccines of BioNTech and Moderna have both produced positive clinical trial data. Most recently, BioNTech and Pfizer said that in an analysis of phase 3 data, their vaccine candidate was 95% effective in preventing COVID-19. The study enrolled more than 43,000 participants. The companies also said they've gathered the two months of follow-up safety data required by the U.S. Food and Drug Administration (FDA). The pair announced early this morning that they would submit an application for EUA to the FDA today.

A potential EUA and/or an eventual approval could be big for BioNTech for two reasons. First, it will provide the company with its first marketed product. It has about 28 programs in the pipeline, but so far most of them are pre-clinical or in phase 1 studies. Only one program, a treatment for metastatic melanoma and solid tumors, is in phase 2 studies. So product revenue isn't right around the corner, unless regulators approve BioNTech's coronavirus vaccine.

Technology that works

And here's the second reason success of the coronavirus vaccine program is important: It would show that BioNTech's mRNA technology works in humans. This technology is used in most of the company's other pipeline programs, so a success here would suggest that the rest of BioNTech's treatment candidate will be effective. That could help the company land further partnerships with bigger biotechs or pharmaceutical companies and attract investment.

The company's share gains this year reflect the optimism and excitement surrounding its coronavirus vaccine program. The stock is up more than 195% so far. At the same time, Pfizer is only up about 20% since it announced its partnership with BioNTech back in March. Like other clinical-stage biotech companies in the vaccine race, BioNTech's share performance has been guided by coronavirus vaccine news. In this case, it's been positive.

Conversely, any potential negative news could be extremely damaging. Investors know that companies with many products on the market, such as Pfizer, won't depend on a potential coronavirus vaccine for revenue. That's why their shares aren't as reactive to related news.

Will the company's stock market winning streak continue? The answer to that will depend on whether the FDA approves its potential vaccine's EUA application. It also will depend on the vaccine's ability to capture market share. Considering the program's progress so far, it's likely BioNTech will continue to be a much-talked-about biotech stock for at least several months to come.