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Developing a COVID-19 Vaccine to Save the World

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Valuing Digital Business Designs and Platforms

Part of the book series: Future of Business and Finance ((FBF))

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Abstract

The containment of the human and health disaster of the COVID-19 pandemic progressed from a priority to an imperative for global politics in the early 2020s. It became fast clear that the development and global rollout of Sars-CoV-2 vaccines with high efficacy might be the most promising strategy to vanquish the coronavirus. Firms like BioNTech or Moderna developed in record time, based on their novel mRNA technology, such vaccines with outstanding efficacies. The mRNA approach is thereby a poster boy of knowledge-based platforms. The starting point of this chapter is the comparison of the different biotechnology approaches and contenders addressing COVID-19. Thereafter, BioNTech’s and their co-operation partner Pfizer’s 10C Business Designs will be decoded, as the two partners developed the first approved vaccine to combat COVID-19. Based on the understanding of the working mechanisms of the mRNA Business Design, the platform strength of mRNA approaches will be evaluated along the eight platform value drivers, as developed within Chap. 1. The platform strength evaluation includes also a detour on how mRNA approaches might offer platform-bridging approaches like for immuno-oncology. Finally, the financial valuation of BioNTech is derived by applying the Reverse DCF concept embedded in a “jo-jo deceleration” picture-of-the-future scenario.

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Notes

  1. 1.

     SARS stand for severe acute respiratory syndrome.

  2. 2.

     COVID stands for coronavirus disease.

  3. 3.

     Eli Lilly’s antibody-based therapy bamlanivimab was granted an emergency use authorization (EUA) by the responsible US medical care regulator FDA. Besides, Regeneron Pharmaceuticals applied as well for an EUA for its antibody cocktail Regn-CoV2 which proved a significant reduction of viral load in medical test series.

  4. 4.

     In contradiction to prescriptive medicine, over-the-counter (OTC) drugs may be bought without a prescription. Nevertheless, end consumers can only buy those products exclusively in a pharmacy which acts for OTCs as a third-party intermediary.

  5. 5.

     Federal Ministry of Education and Research

  6. 6.

     In 2019 and 2020 especially from Genentech Inc. as partner for the neoantigen immuno-therapy vaccine “INeST” and Pfizer for the joint mRNA-based influenza vaccine program BNTN161

  7. 7.

     In the Reverse DCF subchapter, a more detailed breakdown of delivery volumes and revenue estimates is provided.

  8. 8.

     A 50:50 gross profit sharing was agreed between the two co-operation partners (Sahin, 2021).

  9. 9.

     At a spot foreign exchange rate of $1.2/€

  10. 10.

     This revenue forecast includes expected revenues from direct COVID-19 vaccine sales to customers in BioNTech’s territory (Germany, etc.), expected revenues from vaccine doses manufactured by BioNTech for sales to collaboration partners like Pfizer and Fosun Pharma, expected sales milestone payments from collaboration partners, and expected revenues related to share of gross profit from COVID-19 vaccine sales in the collaboration partners’ territories.

  11. 11.

     R&D expenses included purchased R&D services, which were initially incurred by Pfizer and charged to BioNTech in line with the partners collaboration agreement.

  12. 12.

     Defined for BioNTech as non-current interest-bearing loans and borrowings, other non-current financial liabilities, current interest-bearing loans and borrowings, and other current financial liabilities

  13. 13.

     Alternative pictures-of-the-future developed for BioNTech’s Reverse DCF valuation have been the “awake from a nightmare” pictures-of-the-future framing a full vaccination immunization and fast Sars-CoV-2 deceleration scenario and the “long Covid doom” pictures-of-the-future describing a challenging scenario of multiple infection rounds due to variant strains and uncoordinated vaccine response policies around the globe. Those two alternative pictures-of-the-futures will be briefly discussed in this subchapter, but not separately used for the Reverse DCF.

  14. 14.

     The potential order volume of up to 1.8 bn Sars-Cov-2 vaccine doses includes a fixed agreed order volume of 0.9 bn jabs of BioNTech/Pfizer’s vaccine for 2021–2023 and an option for the EU to buy an additional 0.9 bn jabs. Assuming an average price per dose of 14–15€, the deal would be worth up to €27–28 billion.

  15. 15.

     Additionally, as in the scaling period, the actual marginal tax rate of 31% and cost of capital of 6.5% are assumed.

  16. 16.

     This revenue forecast includes expected revenues from direct COVID-19 vaccine sales to customers in BioNTech’s territory (Germany, etc.), expected revenues from vaccine doses manufactured by BioNTech for sales to collaboration partners like Pfizer and Fosun Pharmaceuticals, expected sales milestone payments from collaboration partners, and expected revenues related to share of gross profit from COVID-19 vaccine sales in the collaboration partners’ territories, whereas the latter contribute most to the company’s consolidated revenues.

  17. 17.

     Further distinct working capital positions included in the valuation, based on BioNTech’s capital market reports and Business Design, are as current operating assets working cash and inventories and as operating liabilities accounts payables and contract liabilities.

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Authors and Affiliations

  1. Augsburg University of Applied Sciences, Augsburg, Germany

    Thorsten Feix

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  1. Thorsten Feix
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Feix, T. (2021). Developing a COVID-19 Vaccine to Save the World. In: Valuing Digital Business Designs and Platforms. Future of Business and Finance. Springer, Cham. https://doi.org/10.1007/978-3-030-83632-0_2

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