What happened
Shares of the German coronavirus vaccine developer BioNTech (BNTX -0.27%) have climbed by more than 5.6% as of 12:07 p.m. ET on Thursday due to news released Wednesday evening that the U.S. government had signed a new supply agreement for 105 million doses of its Comirnaty jab. The company and its collaborator, Pfizer (PFE -0.12%), will be paid $3.2 billion when the government receives the doses it ordered, and the deal also includes the option to purchase another 195 million doses if needed.
The supply agreement also implies a price per dose that's 27% higher than what was negotiated in prior agreements.
So what
The deal is favorable for the company because it's an indisputable sign that its only commercialized product is still very much in demand, even when doses are priced more aggressively than in 2021. While Pfizer predicted earlier this year that it would sell around $32 billion worth of Comirnaty in 2022, signing another major purchase agreement means it could top that estimate.
Now what
If other nations follow the U.S. in securing additional doses in the coming days, it'll be another strongly positive development. Given that BioNTech and Pfizer recently reported that their omicron-specific booster candidate appears to be effective against the dominant circulating viral variants, more purchase orders seem likely.
Still, per the terms of its collaboration with Pfizer, BioNTech is entitled to half of the gross profits from sales of Comirnaty. So its net income will rise by only a fraction of the $3.2 billion payment in the quarter during which it delivers the doses and gets paid for them.
