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A Look Into Pfizer/BioNTech's BNT162b2 Phase I Data And Pfizer's Valuation Moving Forward:

Sep. 12, 2020 9:31 AM ETPfizer Inc. (PFE)BNTX
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Tech, Healthcare, Semiconductors

Seeking Alpha Analyst Since 2016

Ohio State University, class of 2019 (B.S., Biology). Northeast Ohio Medical University, class of 2023 (M.D.). Here to follow healthcare and tech.        


  • BNT162b2 is Prizer/BioNTech’s most promising candidate (and most advanced, in terms of regulatory approval).
  • Promising Phase I data has been reported, with the 10μg and 30μg doses providing SARS-CoV-2 neutralization titers that were higher than those found in serum of recovered COVID-19 patients.
  • Phase III testing is underway in the US.
  • It is exceptionally hard to draw conclusions on Pfizer's valuation and how much value a COVID-19 vaccine would add to Pfizer.

Pfizer/BioNTech's BNT162b2:

BNT162b2 is Pfizer(PFE)/BioNTech’s(BNTX) most promising COVID vaccine candidate. Pfizer has began Phase III testing in the US with 30μg doses. They are on track for regulatory review by the end of October, with approval meaning the vaccine could roll out as early as November. They, along with Moderna, are among the most advanced (in terms of regulatory approval) US candidates. They are moving on to Phase III testing with the 30μg dose, according to a July 27th press release. The vaccine involves 2 doses, 21 days apart.

On August 20th, data for BNT162b2 was published along with data from BNT162b1, as the two candidates were in competition (internally) for advancement. BNT162b2 was chosen due to its milder side effect profile, particularly in older adults.

The 30μg dose for BNT162b2 provided subjects with SARS-CoV-2 neutralization titers that were higher than those found in serum of recovered COVID-19 patients, across all age groups. As shown in the image below, in 18-55 year olds these titers reached 3.8x the levels found in recovered COVID patients. In 65-85 year olds, these levels reached 1.6x the levels found in recovered COVID patients.

BNT162b2 vs BNT162b1"Immunogenicity of BNT162b1 and BNT162b2. Participants in groups of 15 were vaccinated with the indicated dose levels of either BNT162b vaccine candidate (n=12) or with placebo (n=3) on Days 1 and 21. Responses in placebo recipients for each of the dosing groups are combined (P). The 28-day blood collection is 7 days after the second vaccination. Sera were obtained before vaccination (Day 1) and 21, and 28 days after the first vaccination. Day 35 is shown only for the 10 µg and 30 µg BNT162b1 (18–55 years) groups. Human COVID-19 convalescent sera (HCS, n=38) were obtained at least 14 days after polymerase chain reaction confirmed diagnosis and at a time when the donors were asymptomatic. 50% SARS-CoV-2–neutralizing geometric mean titers (GMTs). LLOQ is 20. Each data point represents a serum sample, and each vertical bar represents a geometric mean with 95% CI. The numbers above the bars are the GMCs or GMTs for the group. Arrows indicate timing of vaccination (blood draws were conducted prior to vaccination on vaccination days)" (Walsh et. al, 2019)

Neutralizing antibody (NAb) titers (levels) are one way we quantify the ability to mount an immune response against a pathogen. It is unknown exactly how levels of NAbs correlate to protection against COVID, but generally, higher levels are thought to be better. The team addressed this in their publication;

"Third, although the serum neutralizing responses elicited by the vaccine candidates relative to those elicited by natural infection are highly encouraging, the degree of protection against COVID-19 provided by this or any other benchmark is unknown" (Walsh et. al, 2020)

Another way we look at the response to a vaccine is through its CD4+ and CD8+ T-cell responses (collectively called a 'cell-mediated response'). Some have argued this is more important than NAb titers (sometimes referred to at the 'humoral response'). It is generally considered that an effective vaccine should elicit both a humoral and a cell-mediated response.

Most advanced vaccine candidates so far have displayed a cell-mediated response. Pfizer's BNT162b2 has not yet shared information on this, although BNT162b1 elicited these responses. This limitation was addressed this in the phase I publication;

"This study and interim report have several limitations [...] we do not yet know the relative importance of humoral and cellular immunity in protection from COVID19. Although strong cell-mediated immune responses (TH1-biased CD4+ and CD8+) elicited by BNT162b1 have been observed and reported from the German trial, cellular immune responses elicited by BNT162b2 are still being studied and will be reported separately. We anticipate that the full-length spike encoded by BNT162b2 will present a greater diversity of T-cell epitopes than does the much smaller RBD encoded by BNT162b1. This may lead to stronger and more consistent cellular responses to BNT162b2." (Walsh et. al, 2020)

What conclusions can an investor draw from phase I data?

Relatively few. The phase I data for BNT162b2's 30μg dose included 12 people (see below image). They are about to test this on ~30,000 people, and results from that trial are much more important. It's hard to conclude anything from a sample size of 12 people. I think we can confidently say that the vaccine elicits some immune response, and isn't acutely reactogenic. As AZN's hiccup has recently showed us, new concerns can emerge as a candidate is tested on a larger population.

I have included the breakdown of their phase I participants below.Disposition of participants

Image Credit: Walsh et. al, 2019

For Pfizer, talk of this vaccine has largely failed to move the needle for their stock price. In comparison to their $50-billion in revenues, the vaccine may not remarkably change their cash flows. If approved by the FDA, the US government has bought 100 million doses for $1.95 billion (to be split between PFE and BTNX). After that $1.95 billion is split, Pfizer will be sent home with $975 million in revenue. But how do we adjust for the probability that the vaccine will fail in phase III trials? What is the probability that it succeeds?

A probability-adjusted model might assume they have a 50-60% chance of success with this candidate. In the American market alone, that values this asset at $480-$580 million for FY2020, with the possibility of more purchases in FY2021 worth $2.4-$2.9 billion (their contract with the government includes the option to buy up to 500 million more doses at the same price of $19.50 each). Evercore ISI analyst Josh Schimmer estimated the pre-tax profit margin on a vaccine to be 50%, but admitted it may be higher.

More variables come into consideration when looking at FY2021 and beyond - will we be able to stamp out COVID? Will it become endemic to the human population? Will immunity only last for a couple years and require constant booster vaccinations? These questions make modeling the value of a COVID vaccine exceptionally difficult.

I am not significantly changing my valuation of PFE based on their COVID-19 vaccine trials. Their drug pipeline and current portfolio should be more important to an investor.

Full phase I data may be found at:

Walsh, E. E., Frenck, R., Falsey, A. R., Kitchin, N., Absalon, J., Gurtman, A., ... & Swanson, K. A. (2020). RNA-Based COVID-19 Vaccine BNT162b2 Selected for a Pivotal Efficacy Study. medRxiv.

Analyst's Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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