The COVID-19 pandemic fast-tracked the approval process for one of the most groundbreaking advancements in healthcare: mRNA technology.
With the accelerated timeline granted for the vaccines, the proof of concept that biotechnology companies usually take decades to come up with only took about six months to develop and launch to the public.
Aside from Moderna (MRNA), another company has been on the frontline of this breakthrough technology since the beginning: BioNTech (BNTX).
One of the possible reasons BioNTech is not quite a household name compared to Moderna is its partnership with Pfizer (PFE).
Since the pandemic broke, Pfizer and BioNTech have joined forces to develop their COVID-19 vaccine, Comirnaty.
Needless to say, it’s easy to get lost in the headlines when you are partnered with a globally known brand.
Other than Pfizer, which handles the bulk of the Comirnaty’s manufacturing in the US, BioNTech has been collaborating with Novartis (NVS) and Sanofi (SNY) to meet the demand for roughly 100 million doses of its vaccine in Europe.
This will be on top of the 750 million doses that BioNTech itself will manufacture in its German plant.
Merck (MRK) has also pledged to double down on their supply of the lipid nanoparticles, which are used to deliver the custom-designed mRNA that allows Comirnaty to work as a vaccine.
In terms of revenue, Pfizer and BioNTech have a 50:50 division of profits.
Priced at $19.5 for the two-dose regimen, Comirnaty is estimated to bring in roughly $15 billion in revenues for 2021.
Given the 50:50 split, BioNTech is expected to earn at least $7.5 billion from this deal.
However, this number could still rise since the current price is expected to get a boost in the next few years.
On top of that, the German company is projected to boost its Comirnaty earnings from its deal with Fosun Pharma. The two companies recently inked a 34%–40% profit share agreement with Fosun Pharma for the distribution of the COVID-19 vaccine in the Chinese market.
Aside from the impressive efficacy of Comirnaty against COVID-19, BioNTech recently announced that the vaccine is also effective against the new UK and South African COVID variants, B.1.1.7 and B.1.351.
Given their similar technology, Moderna demonstrated practically the same efficacy as BioNTech’s candidate.
Meanwhile, AstraZeneca (AZN) and Oxford’s vaccine were shown to be less effective against the South African strain.
As for Johnson & Johnson (JNJ) and Novavax (NVAX), the two vaccine candidates have demonstrated less than 60% efficacy against the original virus.
As things stand, Moderna, Pfizer/BioNTech, AstraZeneca/Oxford, JNJ, and Novavax are expected to account for roughly 80% of the COVID vaccine market in the next five years at least.
After five years, this particular market will be valued at no more than $15 billion.
This means that BioNTech can expect over $5 billion in sales from Cominarty per annum within that time frame.
Hence, it comes as no surprise that BioNTech has been building its portfolio to fuel long-term growth.
Prior to the pandemic, the German company was focused on oncology.
While most of the resources have been diverted to the vaccine efforts for its COVID-19 program, BioNTech’s oncology lineup remains up-and-running.
One of the most exciting candidates in its pipeline is its FixVac vaccine, which is a treatment for practically all kinds of solid tumors.
It is currently under trial for advanced melanoma, HPV, non-small cell lung cancer, prostate cancer, and head and neck cancer.
Two more vaccines in the works are for HIV and tuberculosis.
For these candidates, BioNTech has been collaborating with the Bill & Melinda Gates Foundation.
These are potentially lucrative sectors, with the HIV treatment market valued at $31 billion and the tuberculosis market at $1.2 billion.
Aside from the vaccines, BioNTech aims to advance at least six pre-clinical programs into Phase 1 this year.
Another promising candidate is its melanoma therapy, BNT111, which is projected to challenge Merck’s best-selling Keytruda and Bristol Myers Squibb’s (BMY) Opdivo.
For context, Keytruda generates roughly $11 billion in sales annually, while Opdivo rakes in $7 billion every year.
While the details have yet to be ironed out, BioNTech’s work on treatments for head and neck cancers gained the attention of Regeneron (REGN). What we know so far is that the two companies are looking into developing a combination therapy, which could lead to as many as three oncology programs advancing to Phase 2 this 2021.
BioNTech has also been active in developing its personalized cancer treatments pipeline.
Its most promising platform, INeST, offers treatments that are custom-made to specific patients based on their unique genetic profiles and predisposition to various kinds of treatments.
BioNTech has found a partner in Genentech (DNA) in the development of this technology, with the companies intending to split the expenses and profits 50:50.
If successful, BioNTech and Genentech could provide the world with vaccines that can prevent cancer, destroy cancer cells, and stop the growth of tumors.
This is an extremely promising sector. In the US alone, there were almost 1.8 million people diagnosed with cancer in 2018, with more than 600,000 of them dying in the same year.
More alarmingly, the incidence rate is rising. This means that the demand for novel treatments represents a lucrative market.
Another step that BioNTech has taken to corner the oncology sector is its all-stock acquisition of Neon Therapeutics (NTGN) in January 2020.
This is a telling move in terms of the direction BioNTech plans to take in the future.
There are only a handful of companies working in the personalized cancer vaccines space. The notable names on the list include Moderna, Merck, CureVac (CVAC), and of course, Neon Therapeutics.
The fact that BioNTech merged with another big name in this space shows just how serious the German biotechnology company is at establishing dominance and even possibly a monopoly of the field.
The pandemic dragged the previously under-the-radar mRNA technology out of the laboratories and into a real-world scenario faster than any biotechnology could have ever anticipated, and probably have even hoped for.
Although very few investors outside of the biotech bubble knew of BioNTech when it joined Nasdaq in October 2019, even at the time, the company had extremely strong credentials.
In fact, its market valuation of $3.4 billion made BioNTech the third biggest biotech company to ever join the exchange. At the time, the company was trading at roughly $15 per share.
Now, BioNTech is priced at $90 per share and has a market capitalization of over $21.6 billion.
Given the endless applications of mRNA technology, however, both Moderna and BioNTech hold the potential to reach revenues and even market capitalizations that could rival the success stories of Facebook (FB), Tesla (TSLA), and even Google (GOOG).
Looking at its pipeline and the deals it secured for its COVID-19 vaccine, it’s reasonable to say that BioNTech can reach a target share price of roughly $200 by the end of 2021.
