A few years ago, BioNTech (BNTX 3.78%) wasn't exactly a household name. Since then, however, this biotech company has been closely linked to a product that has at least been mentioned in every household -- and that's the coronavirus vaccine.
Big-pharma Pfizer joined forces with BioNTech in the early days of the pandemic to develop and commercialize the product. Today, this vaccine -- Comirnaty -- is a leader. In fact, it accounts for 70% of vaccine doses distributed in the U.S. and European Union through early February.
BioNTech shares revenue with Pfizer. But the vaccine is such a megablockbuster that the deal still injects billions of dollars into BioNTech's coffers. BioNTech reported more than $15 billion in revenue for the first nine months of 2021, and its shares have reflected these successes.
Let's find out how much you would have today if you had invested $10,000 in this biotech company two years ago.
A fivefold increase
On February 14, 2020, BioNTech stock closed at $30.75 a share. Two years later, it closed at $155.10. If you had invested $10,000, your stake would now be worth $50,407. And if you had sold your shares at BioNTech's peak back in August, you would have made more than $135,000.
In both cases, you would have reason to celebrate. Now, however, you might be wondering if there's more to gain by holding onto BioNTech shares -- or buying more. The stock probably won't climb as quickly as it did in the earlier stages of the health crisis, but I don't think gains are over for vaccine stocks -- especially players that are already market leaders and have strong pipelines.
BioNTech and partner Pfizer expect Comirnaty to generate $32 billion in revenue this year. We also have reason to be optimistic about revenue next year.
The companies have advance purchase agreements signed for vaccine deliveries through 2023. For example, the European Union has ordered as many as 1.8 billion doses to be delivered by that time. And beyond? Vaccine revenue may remain strong.
Pfizer CEO Albert Bourla said in the company's recent earnings call that the world probably won't eradicate the virus "in the foreseeable future." This means we'll continue to need vaccines and boosters. And the BioNTech/Pfizer team are preparing updated versions to handle new variants.
A new Pfizer collaboration
Beyond the coronavirus program, BioNTech is working on a variety of candidates that could represent significant future revenue. The company recently joined forces for a third time with Pfizer. (The two also are working on an mRNA-based flu vaccine candidate that's in phase 1 studies.)
The latest is this: BioNTech and Pfizer are collaborating on a shingles vaccine candidate and aim to launch clinical trials in the second half of this year. Pfizer is offering BioNTech an upfront payment of $225 million as part of the deal.
BioNTech also has advanced several oncology candidates into phase 2 studies. These programs are fully owned, so if they reach commercialization, BioNTech won't have to share revenue. And the commercialization of the coronavirus vaccine should help BioNTech move forward with other candidates on its own -- for two reasons.
First, BioNTech has gained experience and knowledge through the process. And second, it's gained in resources. I mentioned the major revenue above, and BioNTech also has a cash level of about $2.7 billion. This should help the company advance projects through the pipeline to market.
BioNTech also is looking good for the following reasons: It's trading at only about four times forward earnings estimates. And free cash flow and return on invested capital are on the rise.
BioNTech may not deliver the same returns to investors this year as it did over the past couple of years, but that's OK. In fact, there's some very good news here. BioNTech is proving that it has what it takes to be a solid long-term investment. By this, I mean a company that's able to generate strong revenue and profit over time -- and reward investors with share performance over time, too.