3 reasons to sell BioNTech and buy Moderna

In a few years the dust will settle in the mRNA arena. Only a single gladiator will remain standing. Lying in the dirt will be the headless corpse of the loser. An organism too weak to survive in the Colosseum of Business.

Here’s why you should bet on Moderna to win the fight.

1. Moderna is actually spending their Covid-19 cash to fuel growth

While BioNTech’s cash pile is larger, they seem either unwilling or unable to spend it. Moderna is spending close to $3 billion a year on their mRNA projects. Their pipeline is fat and they’re even in bringing in cash on collaboration projects from companies like Merck.

BioNTech is only spending about $441 million per year on operations. That’s not even 15% of what Moderna is spending. It’s pathetic given they’re sitting on $20B in cash. Is it because BioNTech is too cheap to secure deals? Or is it because being a big pharma company is new to them and they don’t know how to navigate these waters?

Either way, Moderna is putting more irons in the fire. They’re doing deals and spending cash to fuel growth. BioNTech is sitting around doing not much at all.

Moderna executives understand that having a giant cash pile doesn’t increase revenues. Once Covid-19 is gone they’ll need new sources of revenue.

If this was a conflict between two warring nations, who would you bet on? The country with a $3 billion dollar defense budget, or the country that struggles to spend $440 million while its Commander-in-Chief rides a bicycle to work?

2. Moderna’s market cap is higher

Moderna has a market cap of $56 billion while BioNTech only has a market cap of $32 billion. That’s almost double. If this ratio holds through an extended biotech bear market, or a total collapse of Covid-19 vaccine sales, Moderna will have an easier time raising money.

They can borrow against their shares or even issue new ones. Companies with smaller market caps have less options when things get tough. Sometimes they even have to sell the company for parts.

3. Moderna issues more press releases

While this might seem like an arbitrary indicator, more press releases means more things are happening. Moderna is just up to more stuff than BioNTech. It costs money to issue a press release and Moderna is willing to pay because they’ve got lots going on and because news exposure is important.

So far in 2022, Moderna has issued about 95 press releases.

BionTech has only issued about 65.

This also means that Moderna executives understand that a portion of a stock’s value is based on hype. Excitement. Momentum. “We have lots going on over here. Look at us because we’re awesome.”

BioNTech seems to have less going on. People who have less going on in their lives can be perceived as boring. Same with companies. I avoid investing in boring companies because they tend to flatline for years.

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