What Can BioNTech Do for an Encore?

Stock Market

BioNTech (NASDAQ:BNTX) stock is sitting on a 48% gain in 2021. And over the last 12 months BNTX stock is up over 168%. The reason is that the company, in partnership with Pfizer (NYSE:PFE), was the first to market with a Covid-19 vaccine.

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However the significance of the vaccine is about more than the speed at which it came to market. The vaccine was the first mRNA vaccine to receive even an Emergency Use Authorization (EUA). And as the vaccine rollout expands, there is mounting evidence that the vaccine is effective and – just as importantly – safe.

But if investors are expecting double digit gains to continue, than they should be asking what BioNTech can do for an encore. The company is expecting to deliver up to 1 billion additional Covid-19 vaccines in 2021 through its own manufacturing network.

A Decade of Research is Paying Off

One year ago, many investors were hearing about mRNA vaccines for the first time. However, BioNTech’s ability to get a vaccine candidate to market in the timeframe it did was no accident. The company has been on a 10-year journey to “develop a broad toolbox of mRNA technology platform.”

While this may not mean the floodgates will open, the company has one heck of a proof of concept. And this could open up many more mRNA breakthroughs. In fact, the company recently announced breakthrough research on a potential treatment for multiple sclerosis based on the same mRNA technology used in its Covid-19 vaccine.

The Pipeline Will Take Time

A fact that’s impossible for investors to ignore is that BioNTech has an ample pipeline. In the company’s last earnings report (delivered in March) it indicated that it has 13 oncology drug candidates and 14 ongoing trials.

However, another fact that is impossibl e to ignore is that the company has no candidates that will be immediately available. Only one candidate is currently in a Phase 2 trial, although the company does say it will have multiple candidates entering Phase 2 trials in 2021.

That being said, this is not Operation Warp Speed. The Food & Drug Administration (FDA) will not have the urgency of a global pandemic to move any of these candidates to the front of the line. Which means it’s likely to be 2023 at the earliest before the company has another successful candidate on the market.

In fact, in the company’s own words: ”Our goal is to launch several additional products in oncology and infectious disease here over the next five years.”

That doesn’t mean investors should stay away from BNTX stock. It simply means that the only revenue generator for the foreseeable future will be the company’s Covid-19 vaccine. And that may be enough. In addition to the one billion vaccines BioNTech plans to deliver this year, it projects that there may be a continuous market if, as expected, Covid-19 becomes an endemic disease requiring booster shots.

Evaluate BNTX Stock With Your Head, Not Your Heart

I find myself in a dangerous place with BNTX stock. I’m genuinely rooting for the company and the possibilities of mRNA technology. The company’s CEO Ugur Sahin describes himself as a cancer physician. And to date, he has not sold any stock despite owning about 20% of the company.

But I can’t deny that BioNTech may find it difficult to grow revenue. Yes, 2021 will undoubtedly be better than 2020 with four full quarters of vaccine revenue. But you could say that is priced in BNTX stock already.

And analysts on TipRanks rate the stock as a “moderate buy” with a consensus price target of $114.67, about a 6% dip from the stock’s current level. I see BNTX as a hold as well, and I don’t fault you if you also want to believe it can be more.

On the date of publication Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. He has been writing for Investor Place since 2019.