Why BioNTech Stock Sank Today

What happened

Actions of BioNTech (NASDAQ: BNTX) were down 10.4% as of 3:18 p.m. EST Tuesday. The drop came after Bank of America analyst Tazeen Ahmad downgraded the stock to a neutral rating after a buy.

So what

It’s best not to overemphasize upgrades and downgrades of Wall Street analysts, although understanding the reasoning behind their views can be helpful.

In this case, Ahmad believes that BioNTech will face increased competition for BNT162b2, the COVID-19 vaccine that German biotechnology has developed with its big American partner, Pfizer (NYSE: PFE). BNT162b2 has not yet been approved or granted Emergency Use Authorization (EUA), but that may change soon.

Ahmad is right that BioNTech and Pfizer will likely be in competition with several other players. Modern, for example, could win the EUA for its COVID mRNA-1273 vaccine soon after BNT162b2. AstraZeneca and Johnson & johnson may not be too late with their respective vaccine candidates. The two big drugmakers intend to make their coronavirus vaccines available at cost during the pandemic, which could give them an edge over BioNTech and Pfizer.

On the other hand, the success of BNT162b2 will give BioNTech an influx of cash to invest in the advancement of its other candidates. Additionally, the validation of the company’s messenger RNA (mRNA) approach could bode well for its other mRNA programs.

Now what

What really matters now for biotechnology action is not an analyst’s opinion. Instead, the most important thing is the pending regulatory decisions for BNT162b2. A Food and Drug Administration advisory committee is due to review the EUA’s filing for the COVID-19 vaccine on December 10. The FDA is expected to make its decision shortly thereafter.