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Is BioNTech a Buy?

By Zhiyuan Sun - May 22, 2021 at 6:40AM

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Up 300% since last May, can BioNTech further unlock value for shareholders?

If you invested $10,000 into BioNTech (BNTX 1.11%) stock upon its October 2019 IPO, that principal would have turned to about $125,800 as of May 21, 2021. That is several magnitudes better than the S&P 500 index's 42% return during the same period. 

Once a little-known underdog, BioNTech has now become a top-tier biotech company that is helping to vaccinate the world against the coronavirus. It is also at the forefront of tackling cancer with its line of therapeutics. Here's why biotech investors should definitely consider the stock. 

Woman receiving a vaccine at a drive-thru.

Image source: Getty Images.

A marvelous coronavirus vaccine 

In a recent study, Pfizer (PFE 3.77%) and BioNTech's coronavirus vaccine, Comirnaty, demonstrated 70% to 75% efficacy against the circulating (and more deadly) South African and Indian strains of the coronavirus.

The good news keeps coming. During another clinical trial, patients were found to have high rates of immunity with no severe side effects six months after receiving the second dose of the vaccine. What's more, a phase 3 investigation studying the vaccine's effects on teenagers (ages 12 to 15) demonstrated 100% protection against COVID-19. The U.S. Food and Drug Administration (FDA) approved the jab for use in this age group on May 10.

BioNTech is currently running clinical studies to determine if booster shots can improve the vaccine's effectiveness against variant strains. If successful, the company could see governments place more orders to administer 3rd or 4th doses to fully vaccinated individuals. 

As of May, it has shipped more than 450 million doses of its vaccine to 91 countries worldwide. The biotech, along with Pfizer, has received 1.8 billion vaccine orders this year. In addition, Canada and Israel have booked over 125 million doses of Comirnaty for 2022.

The company's Marburg, Germany site is currently the world's largest mRNA production facility in the world. Once vaccine programs complete, it can easily use that infrastructure to mass produce other mRNA therapeutics. It aims to produce at least 3 billion doses of coronavirus vaccines this year and over 3 billion next year.

A solid cancer pipeline

BioNTech currently has 14 anti-cancer candidates in 15 clinical trials. These range from mRNA cancer vaccines to antibodies, cell therapies, immunomodulators, and engineered cytokines (proteins that regulate immunity). This year, it has three mRNA vaccines entering phase 2 clinical trials that target melanoma as well as head and neck cancer. Meanwhile, two of its immunomodulators targeting solid tumors will have phase 1 data updates by the second half of 2021.

An amazing biotech 

During the first quarter of 2021, BioNTech's revenue increased to 2.048 billion euros, which is an astronomical increase over the 27.7 million euros it recognized in Q1 2020. The company also posted a 1.128 billion profit versus a net loss of 53.4 billion euros in last year's quarter.

BioNTech estimates that its coronavirus vaccine revenues could climb to as high as 12.4 billion euros by the end of the year based on its current supply contracts. That's pretty impressive for a company with a market cap of about $48 billion.

Some investors are spooked that BioNTech sales will fall off a cliff as the entire world reaches herd immunity against the coronavirus. Luckily, it has the strength of its cancer therapeutics to pick up where its vaccines left off. An immunotherapy that makes it to regulatory approval can have a valuation upward of $20 billion, so there's definitely a lot of potential in this field.

BioNTech plans to reinvest 800 million euros of its revenue back into research and development this year. That will be more than enough to keep its momentum going. Due to its great financials and budding pipeline, this is definitely a biotech stock to consider adding to your portfolio.

Zhiyuan Sun 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
$160.35 (1.11%) $1.76
Pfizer Inc. Stock Quote
Pfizer Inc.
$50.11 (3.77%) $1.82

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