J.P. Morgan Healthcare Conference On a Rally Week-COVID Vaccines based on mRNA Platform
COVID Vaccine availability drives the market and the global economy.
The Vaccine market is huge with a long term need because of more viruses.
The U.S COVID vaccine rollout is a massive undertaking with logistics, data management and public health challenges ahead.
Here are some notes on BioNtech and Moderna from the slide presentations and their WEB sites.
The Biotech rally resumed this week as investors and traders digested the news updates and still found reasons to buy. Why sell anything? The small cap momentum driven XBI was up to $152 for the week trading near its all time high near $155 and up 29.4% over 6 mos. The IWM hit $210 on Friday just shy of the 52 week high of $214 and up 41.5% over 6 mos. These two ETFs trade in tandem The IBB with more large cap holdings in hit the $161 level also at all time highs,
Life science stocks have enjoyed a resurgence since March 2020 because of solutions that help deal with the pandemic particularly vaccine and diagnostics . Many of the current breakthroughs in developing vaccines and therapeutics came about as result of genome sequencing. It was only two years ago that vaccines were perceived as a low growth market with many disappointing technical and marketing results and even hit by anti-VAXrs. Now as the government and private investors provide unlimited funding to fight COVID triggering funds flowing into many other life science ventures. One such new technology that has recently exploded is based on mRNA. I will not go into RNA technology just say that the two approved COVID vaccines were developed in record time and the mRNA platforms appear to have broad potential beyond COVID. mRNA is an information molecule and has potentially created a new class of medicines and a more efficient platform for development. But the global need for vaccines will require more successful companies so competition from new vaccine aproavals is welcomed. We are focused on two mRNA platform companies, BioNTech (BNTX) and two companies close to U.S. approval: JNJ and Astra Zeneca (AZN). We own them both.
Both BNTX are MRNA are difficult to “buy and hold” so unless you bought in April 2020 or even in September you are behind the trading curve. They are “momentum” stocks so strength begets strength. Both companies have made compelling detailed scientific presentations at the JPM Healthcare Conference and you should have a vaccine stock in your portfolio. But how to play them is not easy because fundamentals are overvalued and the news cycle creates volatility.
Here are some assumptions on the COVID vaccine stocks going forward:
- The mRNA platform vaccine companies BNTX and MRNA are the apparent leaders in product rollout and technology..
- Follow milestones on the ramp-up and actual vaccine delivery as supply shortages will continue.
- AstraZeneca (AZN) and Johnson and Johnson (JNJ) vaccine milestones are expected next but these companies are larger and less leveraged to vaccines revenue.Pfizer is partner with BNTX.
- The epidemiology of COVID disease is fluid .The focus for now is the vaccine rollout and supply.
Moderna (MRNA) Price 1/15 $130, one year Range $21-169, Market Cap `$52B, Revenues $246M.
Messenger RNA, or mRNA plays a fundamental role in human biology transferring instruction stored in DNA to make proteins in every living cell. The Moderna approaches is to use mRNA medicines to instruct its own cells to produce proteins that could fight disease.
In its last business update on January 11, the Company announced three new Infectious Disease vaccine development programs for seasonal flu, HIV and Nipah virus. The “Modalities” or applications of the Moderna mRNA platform are expected to be broad, encompassing not only prophylactic vaccines but cancer vaccines, intratumoral immuno-oncology and specialized therapeutics. Clinical trials are underway for COVID-19 vaccines for adolescents, Cytomegalovirus (CMV) and Zika virus. Cancer vaccine trials are also underway for solid tumors and Melanoma.
Moderna can supply up to 1B doses in 2021 and 1.2B doses in 2022.
Update Chart 1/19
BoNTech (BNTX) SE Price $101, one year range $28-131 Market Cap $24B, Revenues (Pfizer)
BioNTech a German Company is partnered with several large biopharma companies focused on immunotherapy of cancer treatments with an mRNA platform. The Company is fully integrated with manufacturing capabilities. The pipeline is broad primarily early stage but includes immuno-oncology such as melanoma, prostate, ovarian and breast. Data updates are expected for their pipeline win 2021:Phase 2 FixVac melanoma and head and neck cancer. BioNTech has a broad R&D program focused on “harnassing the immune system to fight human disease.”
The Company is partnered with Pfizer for manufacturing of mRNA vaccines. The vaccine called COMIRNATY is authorized for US and EU with 32.9 M doses shipped and has reported 95% efficacy from clinical trials. Manufacturing capacity is planned for 2B doses in 2021 in sis manufacturing sites including Pfizer. COVID-19 is likely to become an endemic disease and the vaccine can be re-engineered for mutating viral variants.
Vaccine deliveries have recently slowed according to Pfizer (PFE) and BNTX pending manufacturing changes to boost scale-up. The Pfizer-BioNTech COVID-19 mRNA vaccine has been authorized for emergency use under the EUA.
Update charts 1/19
Investing in these companies is a long term play on mRNA technology for infectious disease and immuno-oncology. Near term risk is based on execution of their vaccine rollout.