Covid Vaccine Companies in the Limelight

Covid Vaccine Companies in the Limelight

den 21 april 2022 författare Carlsquare

Western stock markets have generally been negative so far this year. Still, some sectors have managed to buck the trend. For example, large pharmaceutical companies have shown some (minor) gains, partly due to good defensive qualities. However, within biopharma, the “covid vaccine companies”, e.g., Moderna and BioNTech, have been a spot of weakness.

In 2021, Pfizer and BioNTech’s Comirnaty vaccine became the fastest-selling drug of all time, bringing in some USD 37bn of revenue. Since the peak in the autumn of 2021, Moderna and BioNTech shares have dropped almost 70 per cent. One reason is probably fears of falling sales as the majority of European and North American populations are considered fully vaccinated.

In recent months, the shares have bounced on the news of the severe lock-down in large Chinese cities. Neither Comirnaty nor any other mRNA-based vaccine is yet approved for mainland China, and domestic vaccines (based on attenuated viruses) appear less efficient. The current situation points to a need for further vaccination roll-out in China and other parts of the world. A possible market approval in China for Comirnaty this year could boost the outlook for BioNTech. New variants such as Omicron pose a challenge, but clinical trials for Omicron-adapted vaccines are underway, and the first clinical results should be imminent (previous guidance: April).

For Comirnaty, the order book for 2022 is 2.4bn doses vs 2.6bn in 2021, and BioNTech has guided for EUR 13 to EUR 17bn of vaccine revenues for the current year. By the end of 2021, the company had about EUR 14bn in cash and trade receivables, and the shares are currently trading at Enterprise value to Sales (EV/S) of 2x and a Price to Earnings (P/E) of about 5x (Source: S&P Capital IQ). Besides covid vaccines, BioNTech has a broad pipeline of oncology projects.

From a valuation perspective, BioNTech shares thus appear like an affordable hedge against renewed pandemic fears. The low valuation and strong cash flow make the company a possible takeover target. However, in the short term, the upcoming clinical results will likely determine the direction of the shares.

In recent weeks, momentum in the shares has waned, and the shares are trading at MA50, a critical support level. In a positive scenario, the USD 200 level is a reasonable target (MA100).

BioNTech (in USD) from April 19, 2021, to April 19, 2022

Source: Infront and Carlsquare. Note: Past performance is not a reliable indicator of future results.

BioNTech (in USD) five-year weekly chart

Source: Infront and Carlsquare. Note: Past performance is not a reliable indicator of future results.

 

The full name for abbreviations used in the previous text:

EMA 9: 9-day exponential moving average

Fibonacci: There are several Fibonacci lines used in technical analysis. Fibonacci numbers are a sequence of numbers in which each successive number is the sum of the two previous numbers.

MA20: 20-day moving average

MA100: 100-day moving average

MA200: 200-day moving average

MACD: Moving average convergence divergence

Important notice

This information is neither an investment advice nor an investment or investment strategy recommendation, but advertisement. The complete information on the trading products (securities) mentioned herein, in particular the structure and risks associated with an investment, are described in the base prospectus, together with any supplements, as well as the final terms. The base prospectus and final terms constitute the solely binding sales documents for the securities and are available under the product links. It is recommended that potential investors read these documents before making any investment decision. The documents and the key information document are published on the website of the issuer, Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany, on prospectus.vontobel.com and are available from the issuer free of charge. The approval of the prospectus should not be understood as an endorsement of the securities. The securities are products that are not simple and may be difficult to understand. This information includes or relates to figures of past performance. Past performance is not a reliable indicator of future results.

2023-02-01 13:46:46

 

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