How Much Is BioNTech's Increased Vaccine Production Really Worth?

BioNTech (BNTX -0.27%) recently raised guidance for the number of doses of its coronavirus vaccine that the biotech thinks it'll be able to produce this year. In this video from Motley Fool Live, recorded on April 5, Fool.com contributors Brian Orelli and Keith Speights discuss whether the increase will actually help the German drugmaker. Unfortunately, between a supply glut and the inability for developing companies to pay full price, the added capacity may not help BioNTech's bottom line that much.

Brian Orelli: Moving on to BioNTech, it reported fourth-quarter earnings last week. They produced a profit of 367 million Euros, that's about $432 million, they're expecting 1.4 billion doses of their vaccine under supply contracts, that equates to about $11.5 billion. The 2021 manufacturing capacity target was raised from 2 billion doses to 2.5 billion doses to be able to address increased demand. They're going from 1.4 billion contracts to 2.5. It seems like quite a bit of an upside, but obviously, we don't know what the price will be for those remaining potential doses. The average right now is about $8.20 per dose. Where do you think that revenue could go if they can get the full 2.5 billion doses?

Keith Speights: Well, if we assume that the price for the vaccine stays roughly the same as it is now, BioNTech could make around $20.5 billion from those 2.5 billion doses. That can make a pretty hefty amount of money if they achieve that full production and they get the current price.
I noticed that Pfizer's (PFE -0.12%) CFO stated a few weeks ago that he thinks there's a potential for price increases for BNT162b2 after the pandemic is over. If he is right, then it's possible that BioNTech can make even more money than $20.5 billion.

However, I started to look at this a few weeks ago when you start totaling all of the doses that the leading companies say that they are planning to produce in 2022, it's more than enough to vaccinate all adults in the world and that's not even counting the doses that the Chinese, Russian, and Indian vaccine makers are planning to produce.

I'm going to pull up an article I wrote last month, Brian. I looked at the capacity that Pfizer and BioNTech were saying they would produce in 2022, Moderna (MRNA -1.39%), Johnson & Johnson (JNJ 0.67%), AstraZeneca (AZN -0.25%), and Novavax (NVAX). Those are the leaders, three of those already are on the market in the U.S., AstraZeneca and Novavax probably aren't too far away. The total was 12.4 billion doses they are planning to produce next year. Of course, Johnson & Johnson's vaccine is a single-dose, so its number would vaccinate three billion people. But if you look at in total, just those manufacturers, those companies would make enough vaccines to vaccinate 7.7 billion people. World's population is 7.9 billion, and that number includes adults, children, everything, and so the vaccines aren't approved for younger kids yet.

Look, I think there's a possibility there could be a supply glut on the way with vaccines. If there's a supply glut, it's going to push prices down. I think it's very possible that in the future, BioNTech won't be able to get the price per dose that it's getting right now, and so that total revenue could be a lot lower than $20.5 billion. We'll just have to see. If I had to guess, I would just anticipate that they'll make a lot of money next year, I don't think it's going to be quiet $20 billion though.

Orelli: I think the other issue is that other countries that are left are going to be less likely to be able to afford the higher prices that the U.S. and other developed countries have been able to afford. I feel like the average price from here, even just looking at 2021, is going to go down compared to what they've been able to get there.

Speights: I agree. Even after the pandemic ends Johnson & Johnson and AstraZeneca are selling their vaccines at cost while the pandemic is going on. But even after the pandemic ends, and let's say those two companies up the prices of their vaccines, I still think market pressures are going to be at work and I think overall prices are going to go down.

Orelli: I agree.