While Pfizer is often given credit for developing the first coronavirus vaccine, one should not forget that it was developed together with BioNTech (BNTX.US). Pfizer released solid Q1 earnings on Tuesday and boosted the vaccine revenue forecast. However, while the news should also be positive for BioNTech, the company's stock trades over 20% lower week-to-date! Let's take a closer look at what drives BioNTech shares!
Pfizer boosts vaccine revenue forecast
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Open real account TRY DEMO Download mobile app Download mobile appPfizer and BioNTech began to work on coronavirus vaccine in mid-January 2020 and at the beginning of November they have announced that their product has effectiveness of over 90%. It was the first Covid-19 vaccine with positive results from clinical trials and high reviews made it popular among patients and governments. Pfizer continues to sign new supply deals and the company said that it now has agreements in place that will yield $26 billion in vaccine sales this year, up from $15 billion in the previous guidance. Pfizer now expects 1.6 billion vaccine doses to be delivered this year. It seems to be good news for BioNTech as this hints at potential guidance boost from BioNTech as well.
BioNTech said in its 2020 annual report released on March 30, 2021 that it expects $9.8 billion in vaccine revenue this year, assuming that around 1.4 billion doses will be delivered.
Why did BioNTech shares drop this week?
However, while Pfizer stock has managed to finish Tuesday's trading more or less flat, it was not all rosy for BioNTech - share price plunged over 15% on the day Pfizer released its earnings. Markets were dropping hard on Tuesday so strong sell-off on BioNTech shares may have been a result of the overall risk-off moods. Nevertheless, a hit BioNTech stock took shortly before the end of Wednesday's Wall Street session and is taking today during German trading has a very strong reasoning behind it - the United States said they would support vaccine patent waiver at World Trade Organization.
Allowing more companies to use current coronavirus vaccine patients would be beneficial for the global economy as it would speed up the vaccination process and economic reopening. However, companies who hold patents currently would be at disadvantage. It remains to be seen whether such a waiver would be implemented and whether current patent holders will be entitled to some kind of compensation. Still, even if they do, their market share would likely be reduced as more competitive pricing would arrive.
Q1 2021 earnings report to be released next week
Key event to watch for BioNTech investors is the Q1 2021 earnings report release scheduled for May 10, 2021. Median estimates compiled by Bloomberg point to a massive growth. Quarterly revenue is seen coming in at €1.707 billion, up from €27.7 million in Q1 2020. Net income is seen at €860 million, up from a net loss of €53.3 million in Q1 2020. As we have said earlier, it looks likely that the company will decide to boost full-year vaccine revenue outlook following a similar move from Pfizer. Given that the patent waiver idea is only starting to gain traction, company's management may not have anything to say on the matter during the release.
US-listed shares of BioNTech (BNTX.US) took a hit shortly before the close of the US session yesterday. German-listed shares of the company continue to drop today, trading around 30% below all-time highs. Pre-market trades hint at US-listed shares opening near yesterday's low at $161 mark. In such a situation, the nearest resistance zone to watch can be found ranging between 38.2% retracement and $170 handle. In case declines continue to deepen, share price may look towards the support zone at 50% retracement.
Source: xStation5
