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In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Crazy Stocks

Is BioNTech Making Money?

Many investors are curious about BioNTech (NASDAQ: BNTX) because BioNTech and Pfizer Inc. (NYSE: PFE) are testing a possible vaccine for the coronavirus.

To explain, Pfizer and BioNTech are examining data from the Phase 1½ tests of a BNT162 mRNA-based vaccine, a press release reveals. Currently, the program is testing four experimental vaccines.

Each of the vaccines uses antigen to encourage human immunity to the SARS-CoV-2 virus. The SARS-CoV-2; or COVID-19 virus causes the coronavirus. The BNT162 program is part of the U.S. federal government’s Project Warp Speed effort to develop a coronavirus vaccine.

BioNTech and Pfizer could manufacture One billion COVID-19 vaccine doses

On 1 July 2020, BioNTech and Pfizer claimed all the volunteers for the Phase 1½ test of the BNT162 vaccine had developed COVID-19 antibodies, The New York Times reports. The development of antibodies is a sign that a vaccine works.

BioNTech developed the mRNA vaccine with Pfizer and the Chinese drugmaker Fosun Pharma, The Times reveals. The three companies claim they can make hundreds of millions of BNT162 vaccine doses by the end of 2020 and up to a billion BNT162 vaccine doses by the end of 2021.

Hence, BioNTech and its partners could manufacturer market one billion doses of a pharmaceutical that governments will purchase with tax money. In addition, I think governments will force people to use the vaccine.

Forced Vaccination is coming

Governments will force people to use the vaccine because of the coronavirus death rate.

For example, Worldometers estimates the coronavirus killed 610 people in India on 4 July 2020. Additionally, Worldometers calculates coronavirus killed 172 people in the USA, 155 people in Brazil, 168 people in Russia, 141 people in Chile, and 654 people in Mexico on the same day.

I think those numbers will force governments to use whatever means necessary to vaccinate citizens. For example, the military could herd unvaccinated people into concentration camps. However, they will immediately release anybody who gets vaccinated. Politicians will take such steps to avoid catastrophes such as the 133,755 American coronavirus deaths, Worldometers estimated on 7 July 2020.

Forced coronavirus vaccination will benefit BioNTech because it could develop a coronavirus vaccine.  Hence, BioNTech could make money from forced vaccination.

What is BioNTech?

BioNTech SE – ADR (NASDAQ: BNTX) is a German company that develops and markets individualized therapies for cancer and other diseases.

Although BioNTech’s focus is cancer, they can use its technology for other purposes including vaccines. To elaborate many cutting-edge cancer treatments reprogram the immune system to kill cancer cells. Hence, BioNTech develops and markets immunotherapies.

Similarly, vaccines reprogram the immune system to resist viruses and diseases. Thus they could use BioNTech’s technology in vaccines. BioNTech can develop vaccines because vaccines are immunotherapies.

There is strong American interest in BioNTech because its stock trades on the NASDAQ under ticker symbol BNTX.

Does BioNTech Make Money?

BioNTech reported a -$65.39 million quarterly operating loss and a -$58.90 million common net loss on 31 March 2020.

However, those numbers appear to cover the period between 30 September 2019 and 31 March 2020. Hence, the losses could be for a six-month period rather than a three-month quarter.

Conversely, BioNTech reported making a $24.07 million quarterly gross profit on quarterly revenues of $30.52 million on 31 March 2020.Thus, BioNTech loses money, but it can generate a gross profit.

Interestingly, BIoNTech can generate some cash. BNTX reported a quarterly ending cash flow of $498.2 million on 31 March 2020. That number grew from $194.98 million on 30 September 2019.

Is BioNTech generating cash?

Conversely, BioNTech reported an operating cash flow of -$60.33 million on 31 March 2020. Thus, BioNTech’s operations are not generating cash.

Instead, BioNTech is raising money through debt and investments. For example, BioNTech reported receiving $250 million in private placement investments from Temasek Holdings on 29 June 2020.

The private placement investment consists of four-year mandatory convertible notes, a BioNTech press release reveals. That means BioNTech has to pay Temasek within four years.

In addition to the private placement, BioNTech had $500.10 million in cash and short-term investments on 31 March 2020.

BioNTech is a speculative investment

I consider BioNTech (NASDAQ: BNTX) a speculative investment because there is no evidence that its immunotherapies make money. Mr. Market, however, disagrees.

Mr. Market paid $63.27 for BNTX shares on 2 July 2020 and $69.34 for BioNTech on 7 July 2020. That number grew from $38.50 on January 2, 2020. Moreover, BioNTech’s share price hit a high of $92 on 18 March 2020.

Thus, there is a strong interest in BioNTech because it could develop a coronavirus vaccine. In addition, cancer is still a growing problem.

In fact, the International Agency for Research on Cancer (IARC) estimates there were 17 million fresh cancer cases and 9.5 million cancer deaths worldwide in 2018. Moreover, IARC projects those numbers will grow to 27.5 million cancer cases and 16.3 million cancer deaths by 2040.

BioNTech is a stock to watch

Hence, there is a growing market for BioNTech’s products. Thus BioNTech is worth investigating if you are looking for a pharmaceutical stock with growth potential.

However, I think Pfizer (NYSE: PFE) is a better stock for ordinary investors seeking to cash in on a coronavirus vaccine. For instance, Pfizer will pay a 38₵ dividend on 30 July 2020, while BioNTech pays no dividend. Thus, you could earn income from Pfizer but not from BioNTech.

In the final analysis, I consider BioNTech a stock to watch, not a value investment.