October 10 marked the second anniversary of BioNTech's IPO. The NASDAQ debut of the German biotech company in autumn 2019 was quite spectacular: the Mainz-based company raised a gross USD 150 million from investors via the issue of American Depositary Shares (ADS). At an issue price of USD 15 per share, the immunotherapy company reached an impressive valuation of USD 3.4 billion, making it the third-largest biotech IPO on Wall Street in a decade. After BioNTech initially struggled to get off the ground, the ADS price doubled for the first time around two months after its debut. In particular, the prospect of success in immunotherapy, an innovative form of cancer treatment, boosted the listing.
At the time, no one could have guessed that the researchers led by the husband and wife team Ugur Sahin and Özlem Türeci would soon be making medical history. As the coronavirus spread to more and more countries in the early 2020s, BioNTech set to work. In cooperation with the US pharmaceutical company Pfizer, the company developed a vaccine in no time at all. Last December, the Covid-19 vaccine "BNT162b2", which is based on mRNA technology, received approvals in the USA, Switzerland and the EU within a few days. At that time, BioNTech shares were already trading at almost nine times the IPO price. And yet the stock was to advance into completely different spheres: On August 10, 2021, the stock peaked at USD 463.67 - at that time, the company had a capitalization of more than USD 112 billion.
After the top, the euphoria was over for the time being. In the meantime, BioNTech is "only" trading at just over half of its all-time high. In a way, the ADS came under increasing pressure as the global vaccination campaign progressed. At the same time, the figures for the first half of the year show how much demand there is for the vaccine for the time being. With its interim report, BioNTech presented an increased forecast at the beginning of August. The company aims to deliver a total of 2.2 billion vaccine doses in 2021, generating revenues of EUR 15.9 billion. Previously, management had expected EUR 3.5bn less. As the outlook was based on orders received as of July 21, business could actually be even better. As of the reporting date, the company had also signed supply agreements for more than a billion vaccine doses for 2022 and beyond. "Backlog is expected to continue to grow," BioNTech announced.
This assessment is also supported by the fact that several countries have now started to provide booster vaccinations. In Israel, more than 40% of the population has been given a "booster" dose. That's not pushing BioNTech stock any more than its well-stocked research pipeline is at the moment. In oncology alone, the company has 15 clinical product candidates. Nevertheless, the big question remains whether BioNTech can maintain its growth course beyond the Corona pandemic. Currently, analysts on average expect the earnings engine to lose significant momentum in 2023. Nonetheless, that would still put BioNTech at a level considered utopian at the time of its IPO. In 2019, the bottom line was still in the red (see chart).
Be that as it may, the correction in BioNTech stock has caused a marked increase in volatility. On a three-month horizon, the historical price fluctuation range is close to 90%. By comparison, the market-wide NASDAQ Composite Index has a volatility of 13.5% over the same period. The relatively high volatility of BioNTech gives the Softcallable Barrier Reverse Convertible a kind of yield "boost". Leonteq has issued two variants of this popular structure based on the mRNA specialist. In the product currency CHF, the guaranteed coupon amounts to 14% p.a. For the USD denominated alternative, the payout is 100 basis points higher. The barriers are uniformly set at 59% of the initial level. Early termination and redemption of the issue, which has a maximum term of twelve months, is possible for the first time after six months and three months later.
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