BioNTech Earnings: Lower Fair Value Estimate Assumes Return to Profit in 2027

We’re lowering our BioNTech fair value estimate to $143 from $177, following fourth-quarter covid-19 vaccine revenue that was lower than we expected due to Pfizer’s additional inventory write-offs as well as steep increases in guidance for operating expenses and capital expenditures in 2024. While BioNTech’s oncology pipeline spans several promising technologies and indications, we’re frustrated with the firm’s slow progress with its mRNA-based oncology programs, and we are still uncertain about the differentiation of the firm’s recently acquired, later-stage antibody programs. By 2033, we still see potential for more than EUR 5 billion in sales of its mRNA-based products (EUR 3 billion in vaccines and EUR 2 billion in oncology) as well as more than EUR 3 billion in sales of its antibody-based oncology therapies, led by products that could offer potential improvements on Bristol’s Yervoy and AstraZeneca/Daiichi Sankyo’s Enhertu. However, with the earliest launches coming in 2026 and significant spending on clinical trials and commercial infrastructure in the meantime, we don’t expect the firm to turn a profit again until 2027. At recent prices, we think shares remain undervalued, as we think the market does not appropriately value covid vaccine profits and the multiple potential oncology drug launches starting in 2026. That said, we think the firm is still in the process of building a moat.