Pfizer, BioNTech COVID-19 Vaccines Fast Tracked by FDA

On July 13, partners BioNTech BNTX and Pfizer PFE announced that the U.S. Food and Drug Administration granted two of the companies’ vaccine candidates against SARS-CoV-2 the fast track designation, which expedites review for approval. The two candidates selected for the designation are BNT162b1, for which we saw positive data released last week, and BNT162b2. Given the continued spread of the virus and the need to move as quickly and safely as possible into a phase 3 study, we expect no-moat BioNTech and wide-moat Pfizer to move one of these candidates into phase 2b/3 (planned to start as early as this month). We have no indication of how the two remaining candidates have fared in human trials, including the self-amplifying mRNA vaccine, but executives from Pfizer implied the self-amplifying technology could be useful for the next generation of vaccine development against SARS-CoV-2. BioNTech shares are trading well above our maintained $40 per ADR fair value estimate as investor enthusiasm for the vaccine and the company’s technology platform mounts.

Both BNT162b1 and BNT162b2 utilize the same mRNA vaccine technology but contain different genetic material. The nucleoside-modified mRNA (or modRNA) candidates encode antigens for the receptor-binding domain (RBD) of the spike protein and the full-length spike protein, respectively. Moderna, which is developing a mRNA vaccine that encodes the full-length spike protein, received FDA fast track designation in May following positive early data. Other vaccine candidates using adenovirus vectors (including one from AstraZeneca and Oxford University and one from Johnson & Johnson) code for the full spike protein as well, making BNT162b1 a differentiated candidate with its focus on the RBD only. We expect additional data for BNT162b1 from the German phase 1/2 study to be announced later this month.

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