BioNTech is steering away from its fading COVID-19 business toward oncology, the pharmaceutical industry’s largest therapeutic area by annual sales. A Motley Fool analyst sees a promising cancer pipeline led by the drug pumitamig, but argues the stock looks too expensive to buy at current levels.
The vaccine that made BioNTech famous no longer defines its future. The company co-developed Comirnaty, one of the best-selling COVID-19 vaccines, with Pfizer, yet vaccination rates have fallen sharply amid several factors, including tighter market regulations. Its coronavirus business has struggled as a result, steering the company toward a much larger opportunity.
Why oncology is the prize
Oncology outranks even the fast-growing weight-loss market by annual sales, making it the industry’s largest therapeutic area. Cancer ranks among the world’s leading causes of death, and by some estimates one American in three will be diagnosed at some point. By some estimates, the cancer therapeutics market could be worth $516.2 billion by 2035, expanding at a 9.3% compound annual rate. Regulators often grant cancer medicines special designations that can speed approval, and these drugs often command high prices and can be administered over years.
Pumitamig leads the pipeline
BioNTech is running more than 25 phase 2 or phase 3 oncology trials. Its most closely watched candidate is pumitamig, developed with Bristol Myers Squibb, a bispecific antibody that binds two targets at once to direct the immune system against cancer more effectively than conventional antibodies. The Motley Fool describes it as a potential “Keytruda killer”, a challenger to Keytruda, currently the best-selling cancer drug. The drug is being tested across lung, kidney, breast, liver, colon, and rectal cancers. The analyst sees it well-positioned for approval within a couple of years and, eventually, generating well over $1 billion in annual sales. Beyond cancer, the biotech is developing vaccines for tuberculosis and HIV.
The catch is the price
Here the analyst turns cautious on the stock’s valuation. BioNTech carries a market value of $23.2 billion against just $3.3 billion in trailing-12-month sales, and that revenue figure is declining. The company is not consistently profitable, and the market appears to be placing heavy faith in the pipeline. The analyst argues the shares look unattractive at current levels and suggests waiting for the stock to fall before buying.
Source: The Motley Fool
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