The idea of artificial intelligence in medicine may frighten some, but it looks like a great play to others like BioNTech (NASDAQ:BNTX), who recently arranged to augment its own stance in artificial intelligence tools. Investors are happy with this move so far, as BNTX stock is up significantly in Tuesday afternoon trading.
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BioNTech already owned a portion of InstaDeep, a British firm focused on artificial intelligence development. Now, in a deal valued at around $680 million, BioNTech stands to pick up the rest of the shares it doesn’t already own. The firm will pay around $243 million upfront and then pay off the rest based on how well InstaDeep does down the line. BioNTech will pay the sum in a mix of cash and stock, and it’s the single biggest deal that BioNTech has seen yet.
So what does a drug maker do with AI? Reports note that the move will dovetail nicely with BioNTech’s plans to create new measures for drug discovery, as well as develop the next generation of cures and vaccines for other diseases. Given that InstaDeep will also provide AI services to other clients, it’s also likely to provide a new source of cash flow for BioNTech to put to use as well. InstaDeep’s current crop of AI tools can provide help with scheduling, transport issues, and more. This should prove welcome in a world where the supply chain is in shambles.
Overall, Wall Street is happy with BioNTech’s outlook as well, with a Moderate Buy consensus rating. With an average price target of $207.78 per share, BioNTech stock has 35.77% upside potential.
