BioNTech (BNTX +0.61%) is the lesser-known member of the pair -- which also includes Pfizer -- that developed and marketed Comirnaty, one of the leading coronavirus vaccines on the market. However, it was originally BioNTech that created this clinical compound, which speaks highly to the biotech's innovative potential.
Still, like many other vaccine makers that made a fortune during the pandemic, with the passing of the state of emergency, BioNTech's stock has substantially underperformed the market this year. Should investors buy the dip on this biotech stock?
How bad are the financial results?
The COVID-19 pandemic was a rare event. Governments took it upon themselves to inoculate their populations by buying millions of doses of vaccines from companies such as BioNTech and Pfizer. The result is that BioNTech's financial results were impressive in 2021 and 2022, but the company's pace has slowed -- and even reversed -- this year. In the first half of 2023, BioNTech's revenue came in at 1.4 billion euros (about $1.5 billion).
In the first half of the previous fiscal year, BioNTech's top line was 9.5 billion euros ($10.1 billion). That's a massive decrease. On the bottom line, BioNTech's net income of 5.4 billion euros ($5.7 billion) for the first six months of 2022 turned into a net income of 311.8 million euros ($332 million). However, the good news is that BioNTech has plenty of cash on hand. As of June 30, the company's cash and cash equivalents came in at 14.2 billion euros ($15.1 billion), compared with 13.9 billion ($14.8 billion) as of the end of 2022.
That's a decent pile of cash for a company the size of BioNTech, whose current market cap is $22.5 billion.
Looking at BioNTech's pipeline
To bounce back from its recent sell-off, BioNTech will have to deliver solid clinical and regulatory progress. It would be even better if it does so outside the coronavirus area since it's currently hard to predict the specifics of vaccination rates that will determine BioNTech's revenue in that arena. To make that point even clearer, notice that Pfizer recently decreased its projected full-year revenue guidance for Comirnaty by $2 billion.
NASDAQ: BNTX
Key Data Points
Turning to BioNTech's pipeline, while the company does have many programs, most are in phase 1 or phase 2 studies. One of the only non-COVID candidates in the biotech's late-stage pipeline is a potential vaccine for the flu called BNT161. BioNTech is developing this product in collaboration with Pfizer. Why do we need new flu vaccines? Because the current options on the market are generally not very effective -- usually between 40% and 60%.
That's partly a problem Pfizer and BioNTech are trying to solve. Scientists have to figure out which virus strains will be dominant to get flu vaccines ready for the upcoming season. Since the manufacturing process is long, they do so well before the season arrives, which sometimes results in a vaccine that's not a good match against the most prevalent circulating strain.
Waiting to manufacture the vaccines closer to the flu season could help address this issue, and BioNTech and Pfizer are betting on exactly that since mRNA vaccines are faster to make. Since the flu still causes tens of thousands of hospitalizations and deaths every year, BNT161 could generate a decent amount of sales if it ever makes it to the market. Elsewhere, BioNTech started a phase 3 study for BNT316/ONC-392 as a potential monotherapy for non-small-cell lung cancer.
BioNTech is working on this program with OncoC4, a privately held oncology-focused clinical-stage biotech company. BioNTech plans on kicking off more late-stage clinical trials through the next year.
Lots of patience required
BioNTech should continue generating some sales from Comirnaty, and the company's respectable cash balance is a good sign that it can continue pushing programs through the pipeline without having funding problems. However, given the company's market cap, it is a bit worrying -- to me, at least -- that it hasn't had any wins in a non-COVID late-stage study over the past couple of years.
In my view, the company's market cap is too high, given its current lineup and pipeline. And although its programs look somewhat promising -- as its mRNA platform advances -- the price might not be right yet. I'd wait for the company to drop even more before initiating a small position in this biotech stock while keeping in mind that it could be a while before BioNTech fully bounces back from its recent troubles.
