Why We Increased Our BioNTech Fair Value Estimate

We've raised our fair value estimate for BioNTech BNTX to $124 per ADR from $76 after raising our near-term sales estimates for Comirnaty/BNT162b2, the vaccine against SARS-CoV-2, as well as adding a recurring COVID-19-related revenue stream to our model. We've also lowered our cost of equity assumption from 11% to 9%, in keeping with biotech peers at a similar early commercial stage. Given the significant uncertainty surrounding the duration of the COVID-19 vaccine revenue stream, the success of the company's early-stage oncology and infectious disease pipeline, and the vaccine market competitive landscape, we think BioNTech is still in the process of building an economic moat. After accounting for the profit split with partner Pfizer, we expect BioNTech to book a gross profit of EUR 10.8 billion in 2021 and EUR 10.2 billion in 2022 from Comirnaty (up from our prior forecast of EUR 5.7 billion and EUR 2.5 billion). This assumes total global Comirnaty sales of $24 billion annually in 2021 and 2022, with first-time vaccinations accounting for nearly all 2021 sales and third-dose boosters accounting for two thirds of 2022 sales. We expect vaccine demand to be concentrated in 2021 and 2022, but we do include roughly $2 billion in Comirnaty sales annually beyond 2022 (EUR 1 billion in gross profit to BioNTech) to account for potential recurring use in vulnerable populations (infants and the elderly).

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