BioNTech vaccine boosts Platinum fund
The COVID-19 vaccine roll-out may be slow in Australia but exposure to one of its creators has boosted the Platinum European fund.
The firm’s Platinum European fund held exposure to German healthcare firm BioNTech which created a vaccine in conjunction with US pharma giant Pfizer. This had since been identified as the leading vaccine after cases of blood clots were found to occur after the rival AstraZeneca vaccine.
Shares in BioNTech had risen 171% over the past year to 14 July and managers Nik Dvornak and Adrian Cotiga said it had been the fund’s best performing stock in the last quarter.
“Demand is extremely strong for the BioNTech/Pfizer COVID-19 vaccine, which remains effective against all currently known variants of the virus and has a relatively benign side-effect profile.
“The same cannot be said for many competing vaccines, making it increasingly likely that BioNTech and US-based Moderna will dominate this market for another year or two at least. Investors are also reappraising the possibility that the success of mRNA-based vaccines against COVID-19 can be replicated with various other infectious diseases.”
However, the team had since reduced their weighting as the company’s value had doubled in the last three months to US$55 billion ($74 billion) and they were cautious of rivals appearing on the scene.
“We are mindful, however, that there are still many competing products under development and with such a large prize at stake, these aspirants will be well-funded and highly-motivated.
“The challenge for BioNTech is to successfully turn the prodigious cashflow that they are now receiving into new vaccines, both in the field of infectious diseases as well as oncology, their traditional area of focus.
“We have tremendous respect for the leadership team, who lack neither ambition nor vision. However, as investors we are somewhat circumspect about the risk/reward trade off at current valuations.”
The Platinum European fund had returned 25.3% over one year to 30 June, according to FE Analytics, versus returns of 24.3% by the Australian Core Strategies Europe sector.
AUTHOR
Laura Dew
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