Why BioNTech Stock Jumped Today

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What happened

Shares of BioNTech (NASDAQ:BNTX) closed Monday’s trading session 8.6% higher, lifted largely by two developments.

First, on Monday, BioNTech announced a collaboration with Crescendo Biologics to develop immunotherapies for treating cancer and other diseases. And second, Pfizer (NYSE:PFE) CEO Albert Bourla said in an interview on CNBC that a new version of its COVID-19 vaccine that is designed to target the omicron variant would be ready by March. Pfizer and BioNTech are again working together to develop the omicron-specific vaccine.

Image source: Getty Images.

So what

From a financial perspective, bringing a vaccine that specifically targets the omicron variant could be more important to BioNTech in the near term. It remains to be seen what the demand might be for such a vaccine version. However, Bourla said that some national governments have already expressed the desire for it to be available as quickly as possible, and that it has already begun producing the adapted vaccine even as studies of it continue.

Over the longer term, though, the collaboration with Crescendo could also be important for BioNTech. The company plans to use Crescendo’s Humabody fully human heavy-chain antibodies in developing immunotherapies. 

BioNTech is paying $40 million upfront to Crescendo, part of which is in cash and part as an equity investment in the small company. Crescendo will also be eligible for development, regulatory, and commercial milestone payments of up to $750 million. In addition, the company stands to receive tiered royalties on any potential future sales of products developed via the collaboration.

Now what

The fortunes of vaccine makers throughout 2022 — including BioNTech — will likely hinge largely on how long their inoculations’ efficacies hold up against the omicron variant. If efficacy begins to wane later this year and COVID-19 cases increase again, BioNTech and Pfizer could receive additional large orders for their vaccine.

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