Hopes for the swift development of a vaccine for the coronavirus got a boost on Monday.
BioNTech (BNTX) announced that it will begin a global clinical development program called Project Lightspeed, for its COVID-19 mRNA-based vaccine, BNT162, in late April 2020. Fortunately, BioNTech’s coronavirus vaccine program also got the hand it needs.
The company has struck a strategic clinical development and commercialization deal with biotech Fosun Pharma. The China -based firm will retain the vaccine’s commercialization rights in China, while BioNTech will keep the rights for the rest of the world. The company will receive a $50 million investment from Fosun, in return for a holding of 1,580,777 shares in BioNtech (implying a price of $31.6 per share). On top of the welcome development, BioNTech also disclosed that it is currently in advanced talks with Pfizer concerning further development of the Vaccine outside China. Deal terms were not disclosed.
In reaction, BioNTech shares skyrocketed as much as 90% in today’s trading session. The surge adds up to a massive return of over 400% since BioNtech’s market debut in October.
Despite the positive developments, H.C. Wainwright’s Robert Burns is not entirely convinced. The analyst said, “Due to significant uncertainty around the possible long-term utilization of a COVID-19 vaccine, we do not currently include potential revenue from BNT162 in our valuation and, therefore, view it as a possible driver of future upside.”
Burns maintains a Hold rating on BNTX shares, with a price target of $30 a share. Following the biotech’s mercurial ascent today, the figure suggests downside of 55%. (To watch Burns’ track record, click here)
The rest of the Street hasn’t caught up yet, either. BioNtech’s Moderate Buy consensus rating breaks down into 2 Buys and 3 Holds. The average price target is slightly higher than Burns’, but at $33, implies the stock will drop by 50% over the coming months. It will be interesting to see, if the analyst community updates its models on BNTX, following the latest developments and accompanying mouth-watering performance.
Overall, the company joins a host of other biotechs currently in the race to find a vaccine. As the markets have tumbled alarmingly since the coronavirus outbreak begun, the stocks in the space have been of the few to post significant upside, often appearing like lone green ships in a sea of red.
BioNTech, though, has some catching up to do, if it hopes to be the first to market with a solution. On Monday, the National Institutes of Health (NIH) initiated trials with a coronavirus candidate co-developed by NIH and fellow biotech Moderna (MRNA).
Which of these two vaccine makers is now the better pick for investors in light of the recent news?
As it turns out, Wall Street is picking MRNA as a winner. With 6 Buy ratings vs 2 Holds assigned over the last three months, the stock earns a ‘Strong Buy’ consensus rating. Adding to the good news, its 32.57 average price target puts the upside potential at 16%. (See Moderna stock analysis on TipRanks)