Some biotech stocks have been on fire during these COVID-19 driven times. Hardly a surprise, as these companies are at the forefront of finding a solution to the pandemic and bringing viable treatments, vaccines or adequate tests to market. Case in point: Vaccine maker BioNTech (BNTX), which has been mooted as the provider of a possible coronavirus vaccine, and has seen its shares rising 45% year-to-date.
Yet, despite liking the company’s vaccine program, Project Lightspeed, JPMorgan’s Cory Kasimov believes the current valuation is just about right.
Kasimov said, “We continue to view BNTX as a potentially disruptive company with access to multiple next gen platforms (especially within the field of oncology), but at this point we hesitate to assign more COVID-19 related value beyond what the market has already applied via platform validation/sentiment boost (and uncertain economics).”
Kasimov reiterates a Neutral rating on BioNTech shares along with a $33 price target, which implies 33% downside from current levels. (To watch Kasimov’s track record, click here)
Despite remaining on the sidelines, Kasimov applauds BioNTech’s “well thought out strategy that casts a wide net.”
The company is collaborating with Pharma giant Pfizer on clinical trials for 4 different COVID-19 vaccine candidates, with each one focusing on different mRNA formats.
A Phase 1/2 clinical trial to evaluate the first Lightspeed candidates to prevent COVID-19 infection, called program BNT162, received the go ahead from German regulators last week - the initial trial will take place in Germany, and will treat roughly 200 subjects, who will be given doses of between 1-100ug. More trials are expected in the US, EU and China later this year. According to the results, management will decide with which candidate (or candidates) to move forward.
“In terms of timelines to market, mgmt declined to comment on this given the early stage nature of their program and unknowns of what will be required for approval, a prudent approach in our view,” Kasimov opined.
Overall, Wall Street is evenly split between the bulls and those choosing to play it safe. Based on 4 analysts polled in the last 3 months, 2 rate BioNTech shares a Buy, while 2 say Hold. Notably, the 12-month average price target stands at $45.25, marking about 8% downside from current levels. (See BioNTech stock analysis on TipRanks)
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