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BioNTech: A Promising Investment Opportunity

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BioNTech, one of the leading companies involved in the development of Covid-19 vaccines, has faced setbacks in 2023. However, its strong financial position makes it an appealing investment option, similar to what renowned value manager Benjamin Graham would have favored.

The shares of Covid vaccine manufacturers, including BioNTech, Pfizer (BioNTech’s partner), and Moderna, have experienced a decline due to growing doubts about the demand for these vaccines. These concerns were validated last week when Pfizer reduced its sales guidance related to Covid. Currently, BioNTech’s stock is trading at around $104, significantly lower than its peak of $447 in 2021.

Those skeptical about BioNTech argue that profits from Covid vaccines, its sole commercial product, will decline in 2024. Additionally, they believe that the company’s drug pipeline lacks excitement. As a result of these factors, J.P. Morgan recently downgraded its rating on BioNTech’s stock to Underweight.

However, unlike many other biotech companies struggling with cash burn, BioNTech is expected to remain profitable in 2024. Furthermore, the company’s focus on oncology treatments could prove more promising than anticipated by some investors. It is worth noting that BioNTech has expressed its commitment to responsible financial management and avoiding extravagant expenditures.

What sets BioNTech apart is its substantial cash reserves, amounting to over $18 billion – almost three-quarters of its current market value, which stands at $25 billion. Investors are, in essence, paying a mere $7 billion for access to BioNTech’s established Covid franchise and promising drug pipeline.

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