(I’ve updated my Pfizer thread with a new post btw.)
Biontech is my second pick for ‘obvious value play’ in the market right now. Again, it’s considered very unsexy by the market because ‘covid is so 2021’ right now. I hold some Biontech personally.
if you add up cash/receivables, it comes to a substantial fraction of the company’s present value (around $90/share IIRC vs $102 share price the other day. Currently $106).
ongoing revenue currently covers expenses and leaves some profit too. If you strip out the net cash, the effective PER is well under 10x on ongoing ‘post-covid-boom’ earnings.
(unlike many smaller companies in biotech), they have proved they can design, build and deliver a massively valuable service to humanity, using a novel approach, at a cheap price, and yet make a LOT of money doing so.
Like Pfizer, they stand to become the monopoly supplier of covid vaccines to the EU under current negotiations for the next 4-5 years.
Biontech have 26 big projects in the pipeline, mostly addressing cancers. Personally I really like the idea of a simple MRNA injection that magically teaches your body how to find and wipe out tumours. Much nicer than chemotherapy, radiotherapy, or surgery! There have already been very nice results vs melanoma from a Moderna candidate drug.
- if you like AI hype, they bought one of the biggest UK/european AI / Deep Learning companies (Instadeep) for $0.5 billion in January. And they are using that expertise wisely, for example using DL to try to determine which covid strains are likely to become dominant and dangerous globally from their RNA sequence + likely mutations, so they can develop vaccine updates effectively rather than chase unimportant strains.
Since it’s a value play, what might out the value / uncoil the value spring? New strain of covid, success of a trial, EU negotiations? Random market noise?
In the past few years, the price has swung from around $115 to $180 a few times randomly. This is the cheapest it has been in the vaccine era, yet they have far more money in the bank than before. So it’s actually cheaper than it was at $115 on previous dumps.
It’s an unusual play, not many companies have this much cash, a diverse set of targets for pharma approaches, a proven track record of delivery and a super low share price.