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Blue Water Vaccine (Nasdaq: BWV) recent IPO on Nasdaq

Blue Water Vaccines, Inc.(Nasdaq: BWV) a biopharmaceutical company developing vaccines, recently announced the pricing of its initial public offering of 2,222,222 shares of its common stock at a public offering price of $9.00 per share. The company (Nasdaq: BWV) has grown up exponentially since the IPO share has been offered. If we look at the past trends and market analysis the share price is expected to grow even further. blue water vaccines Nasdaq

The following financial analysis is the comparison between the two companies Blue Water Vaccine (Nasdaq: BWV) and Moderna (Nasdaq: MRNA) both are biotechnology companies focused on delivering vaccines and medicine which will assist in preventing infectious diseases.

As per the Annual accounts, Blue Water Vaccine is spending on the building of influenza S. pneumoniae induced AOM norovirus-rotavirus and norovirus-malaria. Blue Water Vaccine (Nasdaq: BWV)

Both the companies are incurring high costs on the development of new vaccines which could be potential next pandemic strain. Blue water vaccine is typically incurring expenses on the development of new vaccines such as the BWV-102 Stand-Alone H1 Vaccine, to address potential pandemic zoonotic H1 strains and BWV-201 Streptococcus pneumoniae (S. pneumoniae) Vaccine or AOM. As per the Annual accounts, Blue Water Vaccine is spending on the building of influenza S. pneumoniae induced AOM norovirus-rotavirus, and norovirus-malaria. Apart from the above two there are some other Vaccine are also in the pipeline which are Universal Flu shots, Norovirus/ Rotavirus, and Norovirus/ Malaria.

On the other hand, Moderna has famously made a vaccine for Covid 19. There are several vaccines which are in pipeline for the treatment of Covid-19 vaccine which will deal with the number of covid different variants such as Beta, Delta, Beta Variant plus wild type, Beta plus Delta variant, Omicron variant, Omicron plus wild type, and next generation (2.5 c). In addition, there are five different types of flu vaccine for the adults. In all Moderna has 25 different vaccines under development with different IDs.

Hence, both the companies are working under the betterment of the future and make the world a better and healthy place to live. But the growth potential is more on the BLUE WATER VACINNE as they are working on the development of unique Vaccine where as Moderna is working more on Covid 19 which is already been dealt with and now clearly seen as a less threat around the world. Most countries has already lifted the ban when it comes to covid restrictions.

The share price for Blue Water Vaccine at Nasdaq as of now when this article is being written is trading at $ 61.92 and the share price for Moderna at Nasdaq is of $ 176.59 Source: Yahoo Finance.

Thesis:

From the investor's point of view both the companies are incurring heavy operating losses, but it is understandable as there are no substantial revenues incurring either for both companies. For Blue water Vaccine there are no revenue reported in the company financial statements. The same is the situation with the Moderna they have some Grant Revenues, also they are selling their products worldwide and have some collaboration revenue. Whereas BWV are incurring expenses in developing the product and their product is not yet marketed. They are preparing the solution for the future challenges world might face as per the scientist of BMV.

The Vaccine they are making (S. pneumoniae) Vaccine or AOM. The Global AOM rate is 10.85% or 709 million cases per year and which will affect the children under 5 years

Research and Development Costs:

Both the companies are spending heavy funds on Research and Development, and the R&D expenses are increasing on yearly basis.

R&D

FY 2021

FY 2020

FY 2019

Blue Water Vaccine

 $   1,325,030

 $      524,908

 $     60,174

Moderna

 $   1,991,000

 $   1,370,339

 $  496,309

The above graph shows that Moderna is spending more heavily on Research and Development Expenses as compared to Blue Water Vaccine, but the rise in R&D is higher side on the BWV as from 2019 – 2020 the increase is of 772.32% and from FY 2020-2021 the increase is of 152.43% whereas If we compare the same results with Moderna the increase in FY 2020 is of 176.11% and in FY 2021 this increase is only of 45.29%. Therefore, clearly, the results shows that BWV are increasing the R&D costs aggressively. To have a fast result. This also because Moderna has now established its product in the market and now they are making steady sales and income from it. On the other hand, the product upon which BWV are working is yet to be introduced in the market and in future one can expect high demand for the same.

CASH Reserves to R&D Expense for BWV:

Here let’s see the Cash Reserves the BWV has over the years against the R&D. The following table has been taken from the annual accounts of the BMV.

FY

2021

2020

2019

Cash Equivalent

 $   1,928,474

 $   4,308,821

 $ 6,050,751

R&D

 $   1,325,030

 $      524,908

 $     60,174

The percentage for R&D for FY 2019 was 0.99% where BWV has excessive cash and not much R&D Expenses were incurring. In the FY 2020 it increases to 12.18% and in the FY 2021 it increases to 68.71% where BMV are using their Cash in the development of new products. The main liquid funds have been utilized in seeking licenses as well. The significant increase in the percentage for 2021 is due to company incurring significant losses and this will continue to incur for the foreseeable future as well. However, when the vaccines they are making goes into the market it where BMV will be able to make income which is like the case for Moderna.

As per the annual accounts of BMV they have completed Initial public Offerings (IPO) on February 23, 2022, and through this they were able to raise additional $ 17.2 million.

The BWV has made an agreement with the Oxford University Research Agreement for which they have paid $ 554,802 to Oxford. They are also in agreement with the St. Jude Children Hospital under they are obliged to pay royalties and other payments when they will reach specific targets.

As BWV is expected to incur continued losses for foreseeable future, they are expected to raise additional cash through debt financing. If due to some reasons they are not able to raise debt, then company will look to overcome expenses.

FY

2021

2020

2019

Cash Reserves

 $   1,928,474

 $   4,308,821

 $ 6,050,751

Total operating Expenses

 $   3,417,334

 $   1,622,069

 $    880,232

The Total operating expenses of the company has also increased over the years as the increase in FY 2021 is of 110.68% and in FY 2020 it was 84.28% from previous years. These expenses mainly consists of General and administrative expenses and Research and Development Expenses. No significant break up of General and Admin expenses have been given but they might consist of Office, Salary and admin expenses. As mentioned BMV management does plan to lower these expenses if no significant cash has been raised in the upcoming years.

The Current ratio for the FY 2021 is at 1.88 times as compared to 66.94 and 79.97 times in the FY 2020 and FY 2019 which means company still have enough assets to pay out its liabilities if they fall due.

The Accounts payable of the company has increased significantly in the FY 2021 to 747.65% which is due to payments for purchasing of different licenses and other administrative cost.

Earnings per Share:

The EPS for the Blue Water Vaccine currently is -1.01 as compared to Moderna having an EPS of 28.29.

There are no Price Earnings Ratios available for the BWV and the management have not announced any dividends which is again understandable as the company is not generating any revenues.

The below chart taken from Yahoo finance shows the performance of share price of BWV for the last three years and it shows that he share price is increasing. Therefore, it might be a good option to invest in this company.

Summary:

Biotech research and the company investing in the biotech research are the future, as in the upcoming years world will continue to face different kind of challenges. To survive them significant research work is going on and Investors should invest and help these companies to grow. Companies like Blue water Vaccine which are developing significant medicine. We also have the example of Moderna which also incurred heavy losses but was able to make Income once they established the vaccines and able to be sold it. The same case should be except for Blue Water Vaccine.

Blue Water Vaccine: https://ir.bluewatervaccines.com/

Mordena: https://www.modernatx.com/

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