BioNTech Earnings: Maintaining Our $143 Fair Value Estimate as Oncology Pipeline Remains Promising

We’re maintaining our $143 fair value estimate for BioNTech following first-quarter results that were in line with our expectations. Low seasonal demand for covid vaccines resulted in EUR 188 million in revenue, but we still anticipate EUR 2.5 billion in 2024 revenue based on covid vaccine sales and profit share from partner Pfizer, at the low end of management’s guidance. BioNTech swung to a net loss in the quarter due to lower revenue and heavy investment in research and development. The firm is continuing to ramp up R&D in a broad oncology pipeline that encompasses not only its in-house therapies based on its proprietary mRNA technology but also in-licensed CAR-T cell therapy, antibodies, and antibody-drug conjugates. While BioNTech’s mRNA technology has been well validated for covid, we think the firm is still in the process of building a moat, given weaker demand for covid vaccines and several higher-risk programs in oncology. That said, we think investors are underestimating the value of BioNTech’s pipeline at recent prices, as several programs look on track to launch beginning in 2027, with 10 registrational trials poised to be in progress by the end of 2024. We expect BioNTech to report net losses through 2026, but we think new launches will move the firm back to profitability by 2027.