BioNTech Investor Fortunes Rise and Fall on Headlines, Pacts and Funding

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BioNTech (NASDAQ:BNTX) has been getting increased investor attention due to its work on vaccine development against the novel coronavirus. So far in the year, BNTX stock has almost doubled. Let’s take a closer look at what investors may expect from the shares of the Mainz, Germany-headquartered firm in the next three-plus months.

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As of Sept. 16, the number of globally reported COVID-19 infections is close to 30 million. The outbreak has already killed almost 1 million people worldwide. Therefore, global citizens and governments would like to welcome the news that a potential cure against the disease is ready for commercialization. Billions of people throughout the world would eventually need to be inoculated against the virus.

There are over a dozen global companies, like BioNTech, in the hot race to develop a cure. Founded in 2008, it is an immunotherapy company, working on therapies for cancer and other serious diseases. Its expertise lies in messenger ribonucleic acid (mRNA) vaccine development. Messenger RNA transmits instructions to the body to produce proteins against a given disease. BioNTech was relatively unknown in the public eye before the Covid-19 pandemic.

BNTX Stock Gets Boost from UK Pact

The biotechnology company has recently been partnering with Pfizer (NYSE:PFE) to develop a vaccine. Earlier in July, the U.K government signed an agreement with the two companies to purchase 30 million doses of the potential mRNA vaccine. BNTX stock jumped more than 13% in the two days following that July 20 announcement.

Earlier in September, the two companies announced, “they have submitted an amended protocol to the U.S. Food and Drug Administration to expand the enrollment of their Phase 3 pivotal COVID-19 vaccine trial to up to approximately 44,000 participants.”

Over the course of the year, the German government has awarded BioNTech, as well as CureVac (NASDAQ:CVAX), money to continue their work against the disease. The company thus has plenty of cash at hand.

Ebb and Flow of Investor Euphoria

The 52-week range of BNTX stock has been $12.53 (Oct. 14, 2019) – $105 (March 18, 2020). In other words, as many stocks worldwide were hitting 52-week low in mid-March, BioNTech investors were jubilant.

Yet in a matter of weeks, the shares were down to the $40 level. After range-trading between $40 and $50 until late June, BNTX stock made another fast move up to go over $100 in late July on the strength of that UK news. Now the shares are hovering around $67.

As readers would have noticed, BNTX stock is highly volatile while the price is dependent on short-term news flows. Thus investor euphoria or pessimism can ebb and flow very fast. Market participants also realize until there is regulatory approval, it is not prudent to run into conclusions.

Companies in the race are bound by strict regulatory requirements as well as ethical concerns. Safety of the drug is of utmost concern, even if it means a delay in development. BioNTech is one of the companies that has signed the COVID-19 Vaccine Maker Pledge, which says

“We, the undersigned biopharmaceutical companies, want to make clear our ongoing commitment to developing and testing potential vaccines for COVID-19 in accordance with high ethical standards and sound scientific principles.”

Furthermore, there are hardly any promises in vaccine development. Kate Bingham, chair of the U.K.’s Vaccine Taskforce, has recently said,

“The fact that we have so many promising candidates already shows the unprecedented pace at which we are moving. But I urge against being complacent or overoptimistic. The fact remains we may never get a vaccine and, if we do get one, we have to be prepared that it may not be a vaccine which prevents getting the virus, but rather one that reduces symptoms.”

The Bottom Line

Joint efforts by BioNTech and Pfizer may come to successful fruition in the coming months, which could possibly push the share price of both BNTX stock and PFE stock to new highs. However, any delays in the process could also mean declines in either stock, especially in BioNTech, as the shares are volatile.

After all, biopharma investing comes with high risks and returns. For now, much of the news might be already priced into BNTX stock. Until there is the hope of regulatory approval, the shares may not be able to make new highs.

Those investors who would like exposure to BNTX stock, but are not ready to commit capital fully to the shares may also consider buying an exchange-traded fund (ETF). Examples would include Loncar Cancer Immunotherapy ETF (NASDAQ:CNCR), ETFMG Treatments, Testing and Advancements ETF (NYSEARCA:GERM), and Virtus LifeSci Biotech Clinical Trials ETF (NYSEARCA:BBC).

On the date of publication, Tezcan Gecgil did not hold (either directly or indirectly) any positions in the securities mentioned in this article.​

The author has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation. She also publishes educational articles on long-term investing.

The post BioNTech Investor Fortunes Rise and Fall on Headlines, Pacts and Funding appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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