Evaluation of BioNTech.
Since I last looked at it, some basic assumptions have shifted. That is why it makes sense to me to carry out a new evaluation of BioNTech. At the time, I assumed that BioNTech would sell every dose of its vaccine it produces by 2023 and then sell 1 billion doses a year. I valued the company at a $ 100-120 billion ($ 400- $ 460) share price.
What's new?
1) BioNTech has started a joint venture with Fosun and has entered into a partnership in South Africa
2) Booster vaccinations are becoming a reality worldwide. Not only for risk groups but for large parts of the population
3) Updates in the pipeline. 3 new phase II studies this year. BofA estimates 3 of them with a 50% probability of success each
How does that work?
1) In the short term - and this may come as a surprise to some - not at all. Regardless of whether a deal is reached with China or not, BioNTech is unlikely to sell one more dose until 2023. From 2023 it could be slightly reflected in the Covid area. However, both partnerships are to be seen as long-term and strategic. BioNTech has now expanded its influence to Asia + Africa.
2) Booster vaccinations for everyone will increase margins in 2022 and 2023 as more doses are sold to rich countries. From 2024, more doses will also be needed for refreshments and against mutations. From 2024 there will probably be a worldwide demand for boosters of 5 billion doses (world - Russia, India & China). At the moment everything looks as if this need will be met by mRNA manufacturers. If only because the vaccine has to be adapted to mutations. First of all, I want to cautiously increase the annual consumption to 2 billion doses. The chances are good that the BioNTech vaccine will gain broader acceptance due to the lower price compared to Moderna and the global networking.
3) The focus will be more and more on the pipeline. In my old models, I valued the pipeline as such at approximately $ 18 billion ($ 72 / share). After the latest study updates, the BofA comes to the conclusion that there are some very promising candidates and see the pipeline at USD 25 billion. In addition, reference is again made to the income from the flu vaccine with Pfizer and the prospect of malaria / tuberculosis vaccines.
The medium and long-term perspective is becoming increasingly clear. The income for the next 3 years is already contractually fixed. The prospects beyond that - both in terms of Covid vaccines and other products - are clear to see. The medium-term income even increases due to the extended booster vaccinations and rising prices. If the market would actually recognize that and evaluate it fairly, one would have to mmn. apply a PER of 15. With an average profit of $ 15 billion USD per year (average over the next 5 years). In my opinion, a fair valuation would mean USD 225 billion (medium-term perspective 2022-2023). That's about $ 900 / share.
However, I am assuming that, at least this year, many will not manage to make the leap in BioNTech to see more than just the vaccine manufacturer. If only the vaccinations and boosters and rising prices are included in the valuation and the P / E ratio remains at 10, that would be 150 billion USD market capitalization or about $ 600 / share.
BioNTech is excellently positioned in the long term. The management in particular does a lot of things right in an almost frightening way and makes no mistakes. The plan of how the company should be built and what goal will be striven for was heard at the annual general meeting. From my point of view, it is more than a coincidence that a startup with mRNA technology saved the world from catastrophe and all major pharmaceutical companies have failed. The whole industry will be revolutionized by mRNA within the next 10-20 years. Probably it will benefit most of all humanity as a whole, who will get rid of some of the worst plagues. As an investor, you can participate. In the end, there is the very simple question behind it: Is BioNTech just a Covid vaccine and was that just luck? Or is there more to the company / technology? And as absurd as it may sound: The best proof from my point of view of how good BioNTech is is called Moderna. The vaccine from Moderna shows that BioNTech was not only lucky, but that mRNA technology is fast, reliable and effective. Not just with Covid. I believe that we are seeing the beginning of a new "mega-trend" that encompasses the entire health sector, triggered by new technologies and aging populations. But I think it's too early to stick a price tag on it. BioNTech has a good chance of using its pioneer status and becoming an important pillar$BioNTech SE(BNTX)$
Comments