With Moderna getting much of the COVID-19 vaccine attention lately, there is another comparable investigational product not as much in the limelight. Germany-based BioNTech, backed by a billionaire and now Pfizer, may actually have some advantages. How come its stock price hasn’t appreciated as high as Moderna’s?
This is a question that some are raising, including Keith Speights with investment website The Motley Fool. The press around Moderna (NASDAQ: MRNA) thrives and even the director of the National Institute of Allergy and Infectious Diseases (NIAID) call the vaccine “quite promising.” Investors have loved the company rewarding it with a $61.50 share price (as of June 1, 2020), equaling a $22.8 billion market capitalization despite the fact that the company has no marketable products. Just the other day the company’s CFO and CSO made $30 million thanks to timely trades executed as part of their trading plan.
mRNA: State-of-the-Art Life Science-based Technology
One reason investors like Moderna is that its products are designed via state-of-the-art mRNA-based technology. Mr. Speights nicely summarizes the potential of this approach involving an ingenious way to use messenger RNA to carry instructions to ribosomes (build protein-making factories) to customize the building of proteins to produce the proteins mirroring those of COVID-19 triggering the human immune system to react, creating antibodies to fight off the virus. Although there are no approved mRNA-based vaccines (and that represents risk that is potentially mitigated by some other vaccine types in the race such as CanSino Biologics’ Ad5-nCoV), the consensus—and data thus far—evidences real potential for the mRNA-based approach.
The mRNA Dark Horse?
Could BioNTech (BNTX), another mRNA-based COVID-19 vaccine developer, actually have some advantages over Moderna? For BioNTech billionaire investor Thomas Struengmann, a successful COVID-19 vaccine would be a “dream come true.”
Although Moderna got off to a faster start as measured in weeks, could BioNTech have some advantages? Mr. Speights lists some potential points to consider:
Big Pharma Partnerships: Money, Manufacturing & Distribution Wherewithal
BioNTech partnered with multinational pharmaceutical company Pfizer, which affords the German biotech access to vast amounts of money, talent, resources and manufacturing capacity. Although Moderna has raised $483 million from the U.S. government alone (BARDA), it must dilute itself to go raise additional rounds of capital—which is just what it found itself having to do. In China, BioNTech has done the same thing—strategically aligning with a major pharmaceutical company called Fosun, for money, manufacturing capacity, and distribution wherewithal.
Hedging the Bets with Multiple mRNA-based Vaccine Products
While Moderna hunkers down to drive existing studies forward with a specific study model based on one study vaccine, BioNTech in fact has developed four vaccine candidates simultaneously. Using differing groupings of mRNA configurations and target antigen, this approach may turn out to be superior in that it helps the company identify the optimal vaccine faster.
Speights shows that investors have clearly favored Moderna in that their share price has been driven up to over 160% for 2020 while BioNTech’s share price has only increased by a modest 40% by comparison. As The Motley Fool writer neatly points out, Moderna’s market capitalization, almost double that of BioNTech, benefits from this for what essentially is a few weeks head start. Does this make sense?
If Not the Maven then Time & Data
When this author attended law school he was schooled in corporate finance by a hedge fund expert who happened to be a law school professor. He told us with some humor of course that only “The Maven”—one who could speak directly with the higher power—could know what the true value of some asset should be. Well, that’s the same case here. The Motley Fool acknowledges that it’s not possible to know which vaccine will be successful, let alone whether the mRNA-based approaches contemplated will ultimately work. Only time and unfolding data will tell. Perhaps multiple companies will figure it out?
Summary of the Race
CanSino Biologics (CASBF) now in Phase II has also been selected by Canada as its first attempt at a national vaccine. Do they know something we don’t? Moderna, of course, has moved into Phase II, and Oxford and AstraZeneca, co-developing AZD122, move full throttle not only with Phase II but $1 billion of U.S. federal money in hand—although there was some questions about some preliminary research data. While Chinese vaccine developers Beijing Institute of Biological Products/Sinopharm gear up for Phase III with Sinovac, others also move along at a healthy rate. There are, of course, dozens of others—over 70 total COVID-19 vaccine candidates.