background
BioNTech’s billions in profits are now in the past. The pharmaceutical manufacturer, investors and the city of Mainz have to cope with everyday life. The company seems to have the fewest problems with it.
How does a company tell its investors that sales have plummeted 80 percent in one year? By telling them about promising plans for the future. Yes, BioNTech did the best deal in the company’s history with the corona pandemic, but it should have always been clear that this would have been a huge but temporary windfall.
At the beginning of May, the World Health Organization declared the international health emergency caused by the corona pandemic to be over. So it shouldn’t have surprised anyone that manufacturers of corona vaccinations suddenly made less money: after 3.7 billion euros in the first quarter of 2022 in the same period a year later, only 500 million. This also had an impact on the stock market. Not as noticeable as the earnings, but very hard for investors, BioNTech stock plummeted. Anyone who bought at the high of 326 euros currently has just under a third of their investment in their portfolio at 98 euros.
Back to the roots
For the time after the Corona exceptional situation, the Mainz-based company has numerous pillars on which the business is to be stabilized. Some of these pillars were in place long before the pandemic. BioNTech is returning to what the researchers were already concentrating on before Corona and calls 2023 a transition year. Because while BioNTech only became known to the general public as a result of the pandemic, the company was founded much further back: Ugur Shahin, Özlem Türeci and Christoph Huber founded BioNTech in 2008, and since that time the doctors have been developing individualized cancer immunotherapies.
branch of research mRNA
Their vaccines and medications are based on ribonucleic acid (RNA). The so-called messenger RNA (mRNA) is intended to enable the immune system to take action against genetic defects that occur in tumors. Rolf Hömke, research spokesman for the Association of Research-Based Drug Manufacturers (VfA), explains it like this: “Cancer cells have gene mutations that make some of their proteins look different to those of healthy cells. Normally, the immune system notices these modified proteins on its own and kills the cells in question before there are many of them. But in people with cancer, the immune system ‘overlooked’ them.”
According to Hömke, individualized active ingredients carry mRNA for these modified proteins, which originate individually from the patient’s cancer cells. The messenger RNA ensures that the body produces more of these modified proteins. The immune system notices this and is activated to take action against everything that carries these modified proteins – including the tumor.
Further need for booster vaccinations?
BioNTech’s Corona vaccination was also based on this technique. Now the goal of the research team is to make the process effective against many other diseases as soon as possible. But is this enough to appease investors?
Diverting research and concentrating fully on the development of a corona vaccine for a while was risky for BioNTech – but, says Hömke, it was a huge success. “The first mRNA vaccine brought in profits for the company, which can now flow into the work of the actual research areas and make BioNTech independent.”
These actual research areas relate to cancer therapies, but also the very complex tuberculosis research and the fight against infectious diseases such as influenza, dengue, HIV, Lyme disease, shingles, genital herpes, yellow fever or malaria. At the same time, the corona vaccine is being further developed and adapted.
Hömke suspects: “There will continue to be a need for a vaccine against Covid-19 worldwide, but to a lesser extent than in the pandemic years 2020 to 2022. Because there is hardly any need for basic immunization with several vaccinations.” However, many experts reckoned that there would be a need for booster vaccinations for certain target groups.
A lot of competition in cancer therapy
Despite all this extensive research, Hömke qualifies, “In terms of company value, it must not be overlooked that BioNTech is anything but alone in these research fields. There are different types of cancer drugs that use mRNA. None of these drugs have been approved so far. ”
BioNTech is working on mRNA drugs against pancreatic cancer and a common form of lung cancer. According to the PharmaProjects Database, an international database for drug development projects, 229 pancreatic cancer drugs are currently being tested in patients or are pending approval. Many of these are already approved for other types of cancer. The competitive situation in the therapy of lung carcinoma is similar.
BioNTech itself is already in the phase of clinical studies with several active ingredients and considers them to be promising – “with approval potential”. A sales structure is already being set up in the USA for some oncological products.
Studies moved abroad
BioNTech has recently started looking for foreign partners for its studies. For many years, Germany was in great demand for the studies on patients necessary for the approval of medicines. In the meantime, Germany is no longer considered unrestrictedly suitable for this in the industry.
BioNTech also chose a UK research facility for its clinical trials this year, saving time and money there. According to Hömke, it often takes up to a year in this country before all contracts are negotiated and all permits are granted, so that the first patients can finally be treated in the study.
Analysts see potential
Stock market analysts assess the entire research environment and pass on their recommendations. The thesis of the “transitional phase”, which a BioNTech spokesman himself issued last month, also seems to have caught on with the analysts. Their forecasts often decide the weal and woe of listed companies.
Zhiqiang Shu, biotechnology analyst at Berenberg-Privatbank, bases his assessment entirely on the publications of the World Health Organization: The WHO classifies an update of the Covid vaccine as recommendable. “We believe that this should have a positive effect on the manufacturers of mRNA vaccines. We consider the probability of persistent mutations in SARS-CoV-2 to be very plausible, which is why the annual update of the vaccine is recommended.”
Shu calls the BioNTech vaccine “best-in-class with the largest market share in the world. Vaccines against coronavirus represent a multi-year commercial opportunity.” The analyst also expects that the proceeds from the Covid-19 vaccines will particularly accelerate the development of cancer vaccines and some of the programs will reach their final phase in one to two years.
There are risks
Despite all the reports of success, the analyst also sees negative influences on the future of the company. “Severe side effects have been observed with its Covid-19 vaccine BNT162, FixVac BNT111 (a cancer drug) is failing pivotal trials in advanced metastatic melanoma, and other clinical-stage programs are not showing the desired activity.”
In addition, there is a legal dispute with the Tübingen-based competitor CureVac, which accuses BioNTech of patent infringements and demands compensation for the infringement of intellectual property rights. It’s about the pioneering work on mRNA technology in the 1990s. Even the Nobel Committee has already dealt with the question of whether Curevac founder Ingmar Hoerr or the former BioNTech researcher Katalin Kariko can be considered the discoverers of the technology. This dispute, according to Shu, is a risk for BioNTech’s stock market value.
Critical shareholders do not discharge the board
The BioNTech board will also have to listen to questions about its global solidarity at the general meeting. The umbrella organization of critical shareholders, together with Bread for the World and Oxfam, will submit a motion not to relieve the board of directors. The background, according to Leonie Petersen, Head of Global Health and Vaccination Justice at Oxfam, is that BioNTech, despite high sales and government funding, is not doing enough to ensure equitable global access to the Covid-19 vaccine. “In Germany, the Covid 19 pandemic seems almost forgotten, but people in low-income countries still do not have the same access to vaccines.”
Last March, the company delivered the first of several planned vaccine production containers to Rwanda, where Covid-19 vaccine and later perhaps also vaccine against malaria and tuberculosis are to be produced in Rwanda. According to Petersen, however, it has not yet been clarified “whether the project will be handed over to the African partners and produced at cost price.”
With Kigali in Rwanda, BioNTech is then represented on almost every continent and continues to grow. According to BioNTech, more than 4,500 employees from 80 countries are working “on an innovative pipeline”. The Mainz-based pharmaceutical company has so far successfully launched one product and is currently working on more than thirty others.