Why Investors Should Like BioNTech’s Latest Deal With Gilead


BioNTech (NASDAQ:BNTX) has begun to spend some of the cash generated by its COVID-19 vaccine. The German drugmaker recently announced an agreement with Gilead Sciences (NASDAQ:GILD) to acquire a research program and a manufacturing site. In this Motley Fool Live video recorded on July 21, 2021, healthcare and cannabis bureau editor-analyst Olivia Zitkus and Motley Fool contributor Keith Speights discuss what investors should like about BioNTech’s deal with Gilead.

Olivia Zitkus: Let’s hop over to BioNTech and Gilead. BioNTech partnered with Pfizer to make its COVID-19 vaccine, but it’s not just focused on that. It also has a bunch of pipeline candidates targeting cancer and creating cancer vaccines.

BioNTech recently announced that it was planning to acquire new technology in a manufacturing facility from Gilead Sciences located in the United States. What should investors make of this deal? Can you tell us a little bit more about it?

Keith Speights: Sure. BioNTech is buying Kite Pharma’s solid tumor neoantigen T-cell receptor research and development program, their platform. The company is also buying a clinical manufacturing facility that’s in Maryland.

Gilead, by the way, acquired Kite back in 2017, so Kite is a Gilead company. And I think investors really should like this move by BioNTech for a couple of key reasons.

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First of all, like you mentioned, BioNTech’s pipeline has a lot of cancer candidates in it. The company is really focused on oncology. If you look at BioNTech’s pipeline, I would say most of the candidates in that pipeline are oncology candidates. So picking up Gilead’s T-cell receptor program probably should help BioNTech as it wants to move into cell therapies and that’s a highly promising area, so I think investors should like that.

Then acquiring that Maryland facility gives BioNTech additional capacity to support U.S. clinical trials. BioNTech is based in Germany and so having that U.S. facility, is a really smart move for the company. I think this is a good deal overall.

On a broader level, though, I think this deal shows that BioNTech is ready, willing, and able to use its growing cash stockpile. Of course, that stockpile is growing because of the sales of its COVID-19 vaccine. But I think BioNTech is ready and is showing that it’s willing to invest and building its capabilities beyond COVID-19 and that’s good news long term for the company.

I suspect, Olivia, that we’re going to see more bolt-on acquisitions and licensing deals from BioNTech going forward as it just keeps on raking in the cash from this COVID-19 vaccine.

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Zitkus: Yeah. It’s so exciting to watch this company. It’s had a mammoth year. It’s up over 600 percent, up 200 percent year to date and I could talk about this medical and leadership team forever. I think it’s still important when you’re looking at a company like this to look at the people who are actually hands-on with the product.

Today the CEO and CMO of this company are a husband and wife duo, Dr. Uğur Şahin and Dr. Ozlem Tureci. Dr. Şahin is the CEO and Dr. Tureci is the CMO, and you’ve got one of the foremost experts on mRNA vaccines and then top discoverer of cancer antigens who was the CMO of Ganymed Pharmaceuticals, which was acquired by Astellas back in 2016. And that’s not to say that BioNTech will absolutely be acquired. But I like knowing that the people at the top know how to build products that could be acquired [laughs]. That’s what I like knowing.

Speights: Absolutely. You mentioned the couple. It’s rare that you see a family business in the biotech world, but BioNTech is really a family business.

Zitkus: I love it. They’ve got some great interviews out there. Lots of great podcast featuring the duo, both together and separately. I think it’s just so dynamic and it’s a great story in general. Very entertaining for biotech, in a world where everything takes a long time to come together and the pace is often, not quite breakneck. We’ve been spoiled over the past year with really fast developments, but I love their story. That’s awesome.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

View more information: https://www.fool.com/investing/2021/07/31/why-investors-should-like-biontechs-latest-deal-wi/

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