Just bought BVNRY, Bavarian Nordic A/S. They’re the only company with an approved monkeypox vaccine.
They were trading at $6.25 yesterday, I got in at $10.09. The book value was $34.97, tangible book $7.48, NCAV $5.22. But they were losing money. They probably won’t be any more.
Their market cap at $10.09 is $1.42B USD. If we end up having to vaccinate the world for monkeypox, even if only half the western world gets the vaccine that’s still around 750M people. It’s a two dose vaccine, so that’s 1.5B doses. They recently sold doses to the US at $23 a dose. If they can’t produce that much (likely), they’re going to have to cut a deal like BNTX and let a major pharma company produce it. BNTX got 50% of the revenue. Say it’s a little less and they make $10 a dose. That’s potentially $15B USD. That’s $106.58 per share.
Add that to the book value and the current share price, you get $137.81.
The catch: they lost about $9 per share over the last 12 months, or $1.26B USD. If they vaccinated half of all five year olds each year in the developed world on an ongoing basis, that’d be in the ballpark of 15M doses per year, or $150M to $300M in profit depending on whether they were still selling distribution rights.
So this could very well be a one time massive windfall situation, but it still has the potential to be a 10-15 bagger.
On the other end of the spectrum, the US exercised options for $300M worth of doses, but that’s only enough to vaccinate 6M people. If you just see western countries stockpiling enough to do ring vaccination of say 10% of their populations and replenish those stockpiles, the company would turn profitable and at the very least I’d expect them to pop to around their book value of $35. And the downside should only be around $5-6 per share, so this is a pretty good asymmetric bet IMO.