BioNTech (BNTX -2.02%) recently reported its first-quarter results. In this Motley Fool Live video recorded on May 12, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss the best news and the worst news from the German biotech's quarterly update.
10 stocks we like better than BioNTech SE
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and BioNTech SE wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of May 11, 2021
Keith Speights: We're going to switch to another vaccine maker, BioNTech, a German partner of Pfizer. BioNTech announced its first-quarter results on Monday. There are always a lot of numbers with any company's quarterly update, but what would you say were the best news and the worst news with BioNTech's Q1 results?
Brian Orelli: The best news is obviously the revenue, which was €2.5 billion, that's about $2.5 billion. It was up nearly 7,300 percent. But that's a silly comparison because you're comparing collaboration revenue in the year-ago to sales of its vaccine this quarter. So [laughs] 7,300 percent is nothing to be shy about. Most of the revenue was BioNTech's share of the gross profit from COVID-19 sales in Pfizer's territories, as well as sales milestone payments from Pfizer. They also made a little from sales in territories that are not covered under the agreement.
In terms of worse news, I think it's probably the cash situation. Despite making €1.1 billion in net income, the company actually ended the first quarter with less cash and equivalents than it did at the end of 2020. They had about €890 million versus €1.2 billion at the end of the year. It seems like they're spending on infrastructure. They're setting up a manufacturing facility in Singapore.
Investors, I don't think should be too worried about it. They have contracts for 1.8 billion doses and they've only delivered 450 million of those. They are still going to generate plenty of cash. Then as we've said, they're probably going to get more contracts for 2022 and even into 2023, so they're going to continue to generate cash and putting that money to good work.
Speights: I would expect BioNTech will report some other gaudy numbers, flashy numbers in the next few quarters as well, and some growth in the thousands of percentage points. You are right that the bad news probably was the decline in cash, but this company is going to make a lot more money over the next couple of years with its vaccine. I think the real question for BioNTech will be, how does it pivot from here?
I know the company is wanting to reinvest some of this cash that it's making from the COVID vaccine into other programs. I think the real question that will be for BioNTech, can it leverage this success and have some other candidates come forward?
Orelli: It almost needs some cash cushion to be able to do it. If we assume that COVID vaccines are going to wane at some point, that they're not going to be making billions of dollars per quarter. I think that if that's the case, then they probably need to get a stockpile of cash at some point, but they have a few quarters to worry about that.
