German manufacturer has strong pipeline, but most drugs in early stages of testing
Investors may be wondering what comes next for BioNTech SE (NASDAQ:BNTX). That is, what does the German company have behind its Covid-19 vaccine, which it says will generate revenue of $11.5 billion this year.
It doesn’t appear any of its treatments are going to hit the market soon. BioNTech has a promising pipeline of drugs to treat cancer and infectious diseases, but most are in the early stages of development.
In the medium term, founder and CEO Ugur Sahin says BioNTech sees itself as an immunotherapy company. “We will be addressing inflammation, autoimmune diseases, and regenerative therapies,” he told the German publication Der Spiegel in an interview. “There will surely be some product candidates in those areas in the next year or two.”
Caption: BioNTech CEO Ugur Sahin says the company doesn’t need to be acquired by a member of Big Pharma to achieve its goals.
Shareholders hope BioNTech has enough in the tank to sustain its share price’s upward trajectory. Its stock has already shot up more than 150% to over $114 in the past year, giving the company a market cap of nearly $28 billion. As more people get vaccinated, sales of the Pfizer Inc. (NYSE:PFE)/BioNTech shot will inevitably slow down. But that doesn’t appear to be the case anytime soon.
BioNTech more than quadrupled its annual revenue in 2020 to an estimated $556 million. The company thinks that’s enough to fast-track its drug pipeline. This year, it expects at least four data updates from these medications, with up to three programs likely to move into phase 2 trials and six into phase 1 studies. Overall, BioNTech has more than 20 drug candidates and has treated more than 440 patients across 17 tumor types
BioNTech focuses on mRNA. This is a genetic technology that has long held huge promise, but has so far run into biological roadblocks. It is called synthetic messenger RNA, an ingenious variation on the natural substance that directs protein production in cells throughout the body, reports STAT News. By tweaking synthetic mRNA and injecting people with it, any cell in the body could be transformed into an on-demand drug factory.
Investors should keep in mind that it’s a fact of life in the pharma industry that the risk is high that many of the drugs in the early stages of testing often fall by the wayside. The possibility of eventually obtaining approval increases dramatically as the candidate moves into the more advanced stages of testing.
In July, BioNTech inked a collaboration deal with Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) for a clinical trial combining one of its product candidates and with one from Regeneron for the treatment of melanoma. The drug is the most advanced of five clinical-stage products of its type in BioNTech’s pipeline.
Sahin rejects the idea that BioNTech needs to be acquired by a member of Big Pharma to realize its goals, noting that Wall Street thinks the most logical buyer would be Pfizer, which he says has never even made overtures toward such a combination.
“We have the opportunity and the ambition to do it on our own,” he told Der Spiegel.”If we successfully market the Covid-19 vaccine, we will generate financial resources that we will reinvest. What we are working on now is a strategy that defines where we enter into partnerships and what we can handle on our own, also through acquisitions.”
Analysts appear to think BioNTech is fairly valued. They’ve assigned the stock an average target price target of just more than $112, with a high of $130 and a low of $103.
Disclosure: The author has no position in any of the companies mentioned in this article.
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About the author:
Barry Cohen has nearly 40 years experience in communications and marketing, the majority in senior positions at large international health care companies, including Abbott Laboratories and Bayer Inc.
He has contributed to a number of financial websites, writing primarily about the stocks of health care companies.
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