Although shares of biotech company BioNTech (BNTX +1.85%) have recently fallen along with most other stocks, the vaccine maker's performance over the past 12 months remains above that of the broader market. BioNTech has one thing to thank for this performance: the COVID-19 vaccine Comirnaty, which it developed in collaboration with Pfizer.
However, with the company's stock having already soared as much as it did since 2020 -- not to mention the fact that it isn't clear how much longer this pandemic tailwind will last -- is it worth it to purchase shares of the biotech today?
A major windfall
Based in Germany, BioNTech was originally founded in 2008 and made its debut on the stock market in the U.S. in late 2019. It was a relatively unknown company then, but its coronavirus-related work has helped raise its profile -- as well as improve its financial results. During the third quarter of 2021, the company reported 6.1 billion euros in revenue (about $6.9 billion), which was significantly higher than the 67.5 million euros (about $76.1 million) it reported during the year-ago period. The increase was, of course, primarily due to Comirnaty.
BioNTech and Pfizer equally share in the gross profits associated with sales of their vaccine. BioNTech also reported a net income of 3.2 billion euros ($3.6 billion); it had recorded a net loss during the third quarter of 2019. Importantly, BioNTech ended the third quarter with 2.4 billion euros ($2.7 billion) in cash and cash equivalents.
For fiscal 2021, BioNTech said it expects between 16 billion euros and 17 billion euros (or between $18 billion and $19.1 billion) in revenue from Comirnaty. The company's total revenue as of the nine-month period ended Sept. 30 was 13.4 billion euros ($15.1 billion).
Image source: Getty Images.
Setting itself up for the future
BioNTech isn't done benefiting from its coronavirus tailwind. According to its partner Pfizer, Comirnaty should generate roughly $32 billion in sales this year.
Even if the pandemic comes to a screeching halt after this year, BioNTech won't let all the money it's already generated from its coronavirus vaccine go to waste. And if revenue and earnings drop substantially once the pandemic ends, it's evident that the money already brought in from the vaccine has had a major impact on the company's future.
The important thing now for BioNTech is to prepare for life after COVID-19. The company initiated nine clinical trials last year across its oncology portfolio, including four phase 2 studies. In total, BioNTech currently has 19 oncology programs, most of which are internally funded. Investors can expect data readouts this year, and any positive results should send the company's shares soaring. With a balance sheet full of cash and promising programs, BioNTech has a lot to look forward to ahead.
NASDAQ: BNTX
Key Data Points
One of the most promising programs is BNT111, a potential therapeutic vaccine for melanoma. This illness remains one of the most dangerous types of skin cancer, and BioNTech argues that there's an unmet need in this area. It kicked off a phase 2 clinical trial for BNT111 in June. In November, the U.S. Food and Drug Administration granted the product the coveted Fast Track Designation, which is reserved for products that address a serious and unmet need; the designation will help speed up the review process for BNT111, once it gets to that point.
Even if the melanoma vaccine flops, BioNTech has many other candidates as well. The company seems well-positioned to launch several products on the market in the next five years.
What's your timeline?
BioNTech's shares have dropped by nearly 42% this year alone. This poor performance may be due in part to marketwide issues around impending interest hikes in the U.S., but investors may also be worried about the end of the biotech's coronavirus tailwind. While BioNTech's stock looks dirt cheap at the moment -- it's trading for just 3.8 times forward earnings compared to 10.9 for the biotech industry -- it's important to remember that earnings estimates beyond the next 12 months or so are likely to be unreliable. In my view, BioNTech will face difficult year-over-year comparisons starting next year, and that will negatively affect its share price.
Still, BioNTech has some of the things biotechs need to be successful: a pipeline full of promising candidates, and tons of cash to fund clinical studies without relying on dilutive forms of financing. That's why I believe this biotech stock is worth buying, at least for those investors willing to hold on to shares beyond the next couple of years.
