Sunday November 14, 2021
Despite record profit
Börse rates Biontech like bankruptcy candidates
By Diana Dittmer
The German biotech company Biontech presented bombastic results this week. Nevertheless, stockbrokers rate the company as if the lights would go out tomorrow. That is absurd.
The numbers are impressive: Biontech had delivered more than two billion doses of its corona vaccine Comirnaty by the beginning of November. The Mainz-based company only sells this in Germany and Turkey itself. In all other regions of the world, the American cooperation partner Pfizer is responsible for this.
According to the figures that Biontech published this week, sales in the first nine months amounted to a little more than 13.4 billion euros. For comparison: A year earlier, the company had just achieved sales of just under 137 million euros in the first three quarters. In the third quarter of 2021 alone, Biontech earned a net profit of 3.2 billion euros. In the first nine months, the net profit amounted to an incredible 7.1 billion euros. For the year as a whole, it should add up to more than 10 billion euros.
Biontech is worth $ 57.8 billion on the US technology exchange Nasdaq. Converted that corresponds to 50.5 billion euros. The price-earnings ratio (P / E) is therefore five or even a tick less based on the profit expected for this year. In the biotech industry, P / E ratios of 25, 30 or even higher are not uncommon. A P / E ratio of five for a technology leader in the biotech industry is, to put it mildly, economical. For comparison: Tesla, the technology leader in electric cars, has a PER of around 245.
Extremely high profits
Biontech is not rated as an innovative technology leader in a future market, but as if bankruptcy is soon to be feared. However, that is unlikely. Because billions of people are still not vaccinated. Biontech has to share this market with the other vaccine manufacturers. The Biontech vaccine cannot be used everywhere in the world due to the necessary cooling. But the market has swelled significantly due to the booster vaccinations. The vaccine is also being approved for younger and younger people. According to Pfizer, orders for 1.7 billion vaccines for next year have already been received. Since prices have risen slightly at the same time, Biontech should earn at least as much in 2022 as it did this year, and probably even a little more.
Nevertheless, there are of course reasons for the dramatic undervaluation. The most important is that Biontech is a one-product company. If the corona vaccine is no longer in demand, the company – as of today – no longer makes any sales. But even that is hardly to be expected. Because Sars-CoV2 has come to stay. People will probably need booster vaccinations even beyond the coming year – similar to the conventional flu. A background noise should therefore also be provided in the coming years.
Biontech stock has also suffered from Pfizer’s announcement that it has developed a drug that is highly effective in treating Covid-19. That is all well and good, but it does not make vaccination superfluous. Most people will not want to get Corona in the first place, even if it should be treatable at some point. You also go to dental prophylaxis, although broken teeth can be repaired.
Well-filled pipeline
After all, Biontech is working on a large number of other vaccines and drugs – especially against various types of cancer. The two Biontech founders Özlem Türeci and Ugur Sahin are extremely confident that various types of cancer can not only be treated in the future, but even cured. So far, the two researchers have not exactly attracted attention as loudspeakers.
Four active ingredients are already in the penultimate clinical test phase. Should one or more of them reach market maturity, Biontech could develop into the next Tesla in the biotech industry. The innovative basic technology, the messenger RNA, with Comirnaty passed its maiden test with flying colors. This at least increases the likelihood that other active ingredients based on mRNA will also work.
In principle, the future demand for the corona vaccine alone should justify the current evaluation of Biontech. All of the other active ingredients that the company is now working on with around 1,500 employees are, so to speak, free of charge.
In the stock market, it is always said that the financial markets function rationally and efficiently because all investors have access to the same information. That may be true in the long term. In the short term, however, there are always developments that do not seem really plausible. Biontech is the best example of this.