BioNTech SE Q1 FY2020 Earnings Call

Thank you for standing by and welcome to BioNTech’s First Quarter 2020 Operational Progress and Financial Results Conference Call. At this time, all participants are in listen-only mode. There will be a presentation followed by a question-and-answer session. I must advise you the conference is being recorded today, Tuesday the 12th of May 2020. I would now like to hand the call over to the Vice President, Investor Relations and Business Strategy, Sylke Maas. Please go ahead.

Thank you for joining us today for BioNTech’s First Quarter 2020 Update Call. Before we start, we encourage you to view the slides for this webcast as well as the financial results press release issued this morning, both of which are accessible on our website, in the investors section. As shown on Slide 2, during today’s presentation, we will be making several forward-looking statements. These forward-looking statements include but are not limited to the timing for enrollment and completion and reporting of data from our clinical trials and then potentially registration later of certain of our clinical trials and the impacts of the COVID pandemic on our business and our financial outlook. Actual results could differ from those we currently anticipate. You are therefore cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this conference call and webcast. Speaking and available for questions today will be Ugur Sahin, Chief Executive Officer; Özlem Türeci, Chief Medical Officer; and Sierk Poetting, Chief Financial and Operating Officer. Ryan Richardson, Chief Strategy Officer, is available for the Q&A session. I’ll now hand the call over to Ugur Sahin, BioNTech’s CEO.

Thank you, Sylke. It’s a pleasure to welcome you to our first 2020 conference call. I will start with a few introductory remarks about our quarterly and recent highlights. I will then provide an update on our COVID-19 program. Özlem Türeci will provide a brief pipeline update before handing the call over to Sierk Poetting, who will review our financial results and provide an update on our manufacturing-scale activities. I will then make a few closing remarks on the outlook for 2020 before opening up the call for your questions. I wanted to start by quickly highlighting the significant progress we have made since the beginning of the year despite the ongoing COVID-19 pandemic. Slide 3 illustrates our vision of building a global next-generation immunotherapy company. Our strategy is to utilize our suite of novel therapeutic platforms to fully exploit the potential of the immune system. We are advancing a pipeline of potentially first-in-class immunotherapies for the treatment of cancer and infectious diseases. The most recent coronavirus vaccine program, which we named Project Lightspeed, shows the speed and flexibility of our mRNA vaccine technology. We have invested significantly in our manufacturing capabilities in the mRNA and cell therapy areas, which is a key pillar of our long-term strategy. I am incredibly proud that we have been able to quickly generate GMP-grade clinical drug supply for multiple vaccine candidates for our ongoing COVID-19 vaccine trials. Finally, as we outlined in our last call, we quickly implemented a three-point plan to manage the impact of the COVID-19 pandemic on our clinical programs. To date, that plan has been successful and expectations for clinical trial timelines have not changed substantially since our last update. This week, we achieved an important milestone with the close of the acquisition of Neon Therapeutics. Neon offices in Cambridge, Massachusetts will now serve as our U.S. headquarters and the hub for the US research and development site. This has provided an immediate R&D footprint in the US. As we have highlighted previously, the acquisition brings novel neoantigen-based T cell therapies and deep expertise in the development of neoantigen therapies, with both vaccine and T cell capabilities. We are pleased to report that Neon recently received a clinical trial authorization from the Dutch health authority for NEO-PTC-01, which we have now named BNT-221. The drug candidate is a personalized neoantigen-targeted T cell therapy derived from patients’ peripheral blood mononuclear cells or PBMCs consisting of multiple T cell populations targeting the most therapeutically relevant neoantigen from each patient’s tumor. The initial Phase I clinical trial of BNT-221 will be in patients with metastatic melanoma who are not responsive to checkpoint inhibitors. We will focus on the integration efforts in the coming months and look forward to providing additional detail in the coming quarters. Now, let’s move to Slide 4. I’m proud of our progress towards developing a vaccine to prevent COVID-19 infection to combat the pandemic. Since the beginning of the Project Lightspeed in late January, we have selected four vaccine candidates and initiated clinical trials in the US and in Europe following a fast and rigorous preclinical testing program that included a number of studies in animal models as well as many, many assays. The first cohorts in both the US and Europe have now been dosed; and we expect first clinical data in the late June and July timeframe assuming that our trial will progress as planned. The clinical trial materials for these trials have been manufactured at our state-of-the-art GMP-certified mRNA manufacturing facilities in Europe. In parallel, we are working closely with Pfizer to scale up manufacturing for global supply capacity to provide worldwide supplies. Our goal is to be in a position to produce hundreds of millions of doses beginning in 2021, along with Pfizer, if our vaccine program is successful in trial. Slide 5. I want to provide a quick overview on the mRNA technologies being utilized for BNT-162. On April 23, we hosted a webcast that provided a detailed overview of the science behind our program. A replay of that event is available on our website, in the Investor Relations section for those that missed it and would like to know additional details. Our mRNA vaccine for COVID-19 exploits a highly potent lipid nanoparticle or LNP mRNA vaccine product. We believe that mRNA vaccines are highly suited for this challenge because, first, mRNA vaccines have been shown to be highly immunogenic and induce neutralizing antibodies as well as a T cell response. Second, messenger RNA is a naturally occurring molecule with well characterized safety properties as well as defined biopharmaceuticals with high purity and animal free. We believe that our vaccines may offer several advantages over traditional vaccine approaches, including the ability to precisely design and manufacture them rapidly and in large quantity. We believe that our vaccine program is differentiated in several key aspects. The first is that our program utilizes multiple mRNA formats. Two of our four vaccine candidates include a nucleoside-modified mRNA backbone, one includes uridine-containing messenger RNA, and the fourth vaccine candidate utilizes self-amplifying mRNA. We expect that these different mRNA formats will produce different immunogenicity profiles, which could be relevant in determining the dose and dosing frequency ultimately required to generate immunity. Self-amplifying messenger RNA in particular has the advantage that it may allow for greater potency and potentially enable a single administration at a very low dose. Further, our program is differentiated in that we are bringing vaccines against two distinct targets into clinical testing. One is the full-length type protein of the virus, and the other is the much smaller optimized receptor-binding domain or RBD from the spike protein. To our knowledge, we are the only company currently in clinical testing with a vaccine targeting the RBD domain. Ultimately, we will need to wait for clinical data before we can draw some conclusions on whether this domain has advantages compared to the full-length antigen. I will now turn to Slide 6. I will provide an update on our ongoing global development program for BNT-162. As stated before, we have completed dosing for the first cohort in both our US and European Phase I/II trials. In both cases, BioNTech is the sponsor of these trials. The dose escalation portion of Phase I/II trials will include about 200 healthy subjects in Europe as well as 360 healthy subjects in the US. In both trials, the objective is to determine the safety, immunogenicity and the optimal dose level for our four messenger RNA vaccine candidates; and is evaluated in a single continuous study. The design of the US study has the advantage that it could allow us to move seamlessly into Phase II testing if the Phase I results are successful and allow us to immunize several thousand subjects. Both trials are currently enrolling healthy subjects between the ages of 18 to 55 and will target a dose range of at least 1 microgram to 100 micrograms. The study will assess the effects of repeated vaccination following a prime injection for the three vaccine candidates that utilize uridine-containing messenger RNA or nucleoside-modified mRNA. The fourth vaccine candidate, which contains self-amplifying mRNA, will be evaluated after a single dose as well as a prime-boost vaccine. All adults will only be immunized with a given dose level of a vaccine candidate once a testing of that candidate and the dose level in younger adults has provided initial evidence of safety and immunogenicity. We have a number of key objectives with our trial design. First, it is designed to accelerate the clinical development path to approval. Another objective is to gain insights into the immunogenicity of our vaccine candidates in different subject groups across multiple regions. The ultimate goal is to quickly identify a safe vaccine candidate that can prevent COVID-19. I will now hand over to Özlem to discuss key updates in our development program.

Thank you, Ugur. Today, I am going to provide key updates for our oncology pipeline since our last call. In our call at the end of March, we indicated those programs for which we expect delays due to the pandemic. There have been no major changes to our trial timelines since our last call. As the COVID-19 pandemic remains dynamic, we will continue to monitor the situation as it evolves and provide further updates accordingly. As Ugur previously mentioned, we made progress in our oncology clinical trials, and I’ll lead you through key updates to our clinical pipeline, as shown on Slide 7. We have 11 product candidates in 12 ongoing clinical trials. We are planning to initiate two randomized Phase II trials for our FixVac candidates BNT-111 and BNT-113 in melanoma and in head, neck cancer, respectively. For BNT-111, our melanoma FixVac, we expect the next program update to be the publication of our interim Phase I trial data in advanced melanoma in a high-ranked peer-reviewed journal in the next few months. As we previously noted, we have held discussions with regulatory authorities regarding next steps and the design of the Phase II trial. Based on those discussions, we believe there may be potential for it to be registrational. We expect to evaluate BNT-111 in combination with a checkpoint inhibitor in patients who are checkpoint inhibitor experienced at baseline. We plan to provide a further update on the expected trial design in the third quarter of 2020. Moving on to our iNeST program, BNT-122, which is partnered with Genentech. On our last call, we indicated that a data update for the Phase I/II trial in multiple solid tumors was planned at the AACR annual meeting, which due to the COVID pandemic was rescheduled for August 2020 at that time. Since the AACR meeting has gone virtual, we now plan to present the data at the AACR Virtual Annual Meeting II in June. We expect abstracts to be available on May 15. The data to be presented in June will include safety and immunogenicity data in multiple solid tumor types. For BNT-122, two additional randomized Phase II clinical trials in the adjuvant setting are planned. The first adjuvant Phase II study will evaluate the efficacy, safety, pharmacokinetics, immunogenicity and biomarkers of BNT-122 plus atezolizumab compared with atezolizumab alone in patients with stage 2 to 3 non-small cell lung cancer who are positive for circulating tumor DNA following surgical resection and have received standard-of-care adjuvant platinum-doublet chemotherapy. For our next-generation checkpoint-immune modulatory program partnered with Genmab, the ongoing trial with BNT-311, the PD-L1x4-1BB dual body, continues to advance rapidly, as the expansion cohort has been initiated. Data from this Phase I/II trial in multiple solid tumors is expected in the second half of this year. We expect the updates to include dose escalation and safety data from the trial. We are excited about this program. We believe it has broad potential in a range of solid tumors, including those where checkpoint therapy is currently established but also more difficult tumors where first-generation checkpoint inhibitors have not been as successful. This bispecific antibody has outperformed conventional checkpoint inhibitors in preclinical animal models. We have seen strong evidence in the preclinical setting of its ability to amplify the effect of our vaccines as well. Finally, BNT-211, our CAR-T program targeting solid tumors, remains on track to go in the clinic this summer. This program combines our CAR-T therapeutic approach with our mRNA vaccination and uses our proprietary tumor-selective target Claudin 6. I will now hand the call over to Sierk to provide an update on our manufacturing scale-up activities and discuss our current financial results for the first quarter of 2020.

Thank you, Özlem. Before presenting the financial results, I would like to reiterate the measures that we put in place in order to mitigate the potential impact of the coronavirus pandemic on our operations, as we noted on our last call. We’ve put significant measures in place to protect supply chains, operations, employees and the execution of clinical trials. We have not seen any impact on our mRNA manufacturing, nor on our key manufacturing operations. BioNTech will continue to evaluate potential effects and provide updates as appropriate. Turning to Slide 8. We are currently manufacturing clinical trial material for the ongoing vaccine trials in the U.S. and Europe from our GMP facility in Idar-Oberstein, Germany and will soon be manufacturing in our Mainz, Germany facility as well. We started GMP manufacturing of mRNA in Idar-Oberstein and Mainz in 2011 and 2017, respectively, so these teams have substantial experience in doing so. We have already established 24/7 operations in Mainz, so we aim to start producing clinical trial materials soon around the clock for use in our global development program. We are also working closely with Pfizer to ramp up our manufacturing capacity for global commercial supply. On the BioNTech side, this will involve increasing capacity at our current sites in Germany. Pfizer will also utilize three of their existing manufacturing sites in the US, in Massachusetts, Michigan and Missouri, and also at a site in Europe. BioNTech and Pfizer have established joint teams to work on process and supply chain scale-up and network planning. Ultimately, our joint goal is to be in a position to supply millions of doses of our vaccine in 2020 and hundreds of millions of doses in 2021. Now I would like to summarize our financial results that are shown on Slide 9. Cash and cash equivalents as of March 31, 2020, were €452 million. An additional €217 million in equity investments and non-dilutive upfront payments are due in the second quarter of 2020 from Pfizer and Fosun Pharma. We are on track with our previous guidance of approximately €300 million net cash to be used for operating activities and investments into property, plant and equipment as defined in our 2020 base business plan prior to reflecting the impact of the Neon acquisition and our BNT-162 program. The majority of BioNTech development costs for our BNT-162 program in 2020 will be funded by Pfizer and Fosun Pharma via cost sharing, equity investments and upfront payments. We also anticipate additional funding to support our manufacturing scale-up for the BNT-162 program in 2020. Total revenue, consisting primarily of revenue from collaborative agreements, was €27.7 million for the 3 months ended March 31, 2020, compared to €26.2 million for the 3 months ended March 31, 2019. The increase was mainly due to revenues resulting from other sales transactions, i.e., development and manufacturing services sold to third-party customers, retroviral vectors for clinical supply and sales of peptides. Research and development expenses were €65.1 million for the three months ended March 31, 2020, compared to €57.2 million for the three months ended March 31, 2019. The increase was primarily due to an increase in headcount leading to higher wages, benefits and social security expenses; as well as an increase in expenses for purchased research services. General and administrative expenses were €15.8 million for the 3 months ended March 31, 2020, compared to €9.3 million for the three months ended March 31, 2019. This increase was mainly driven by higher legal expenses; an increase in headcount leading to higher wages, benefits and social security expenses; as well as higher expenses due to newly concluded insurance premiums. Net loss was €53.4 million for the three months ended March 31, 2020, compared to a net loss of €40.8 million for the three months ended March 31, 2019. Shares outstanding as of March 31, 2020, were approximately 226.8 million. With that, I will return the call back to Ugur for concluding remarks.

Thank you, Sierk. The first quarter of 2020 has brought extraordinary challenges, and I am extremely proud of how we as an organization have responded to these challenges. With the addition of BioNTech U.S. last week, we now have operations on both sides of the Atlantic. We have rapidly advanced our COVID-19 program and started dosing patients in Europe and in the US. We look forward to having data in the coming months from these trials. There are 11 product candidates now in the clinic. We have made significant progress towards our vision of bringing next-generation immunotherapies to patients. In the second half of 2020, we plan to release additional clinical data for six clinical programs. We plan to initiate multiple registrational trials pending regulatory approval. We look forward to updating investors and other stakeholders throughout 2020. We thank our shareholders for their trust and support. We will now take any questions you may have.

Thank you. Your first question comes from the line of Akash Tewari of Wolfe Research. Please ask your question.

Hey, guys. Thanks so much. This is in regards to your update on BNT-121. I think this was at ASCO earlier this year. We noticed one patient, I think this is patient seven. He got a complete response and died around month 24 after treatment, and so this was a 121-pembro combo. Can you give any additional color on the death of that patient, have you dived into that patient’s immune response or tumor mutation profile in order to understand the disease progression? Next question is I noticed on your self-amplifying formulation you’re choosing the full-length S protein as your antigen. Any color on why you chose the full-length S protein versus the receptor-binding domain? And on your BNT-122 trial for NSCLC, we noticed that you went into an adjuvant setting before the basket trials kind of read out. What type of signals were you seeing that allowed you to expand in that indication? Thanks a lot guys.

Okay. So let’s start with the question regarding the saRNA-related question, so we evaluated for each platform different immunogens, including the receptor-binding domain as well as the full-length stabilized spike protein. And for the saRNA, the full-length spike protein was significantly better. So just to remind you, the saRNA comes not only with some antibody response but also with a mixed T cell response, including CD4 and CD8 T cells, and the spike protein itself has multiple epitopes and more epitopes for T cell generation than the RBD domain. So in a nutshell, in benchmarking of the RBD and the spike domain for the self-amplifying mRNA, we felt that the full-length spike is a better immunogen for the saRNA. With regard to BNT-122, can you repeat your question? BNT-122 is iNeST, and we didn’t get the background of your question.

Yes. My apologies. Just we noticed that you announced an adjuvant trial in NSCLC. And I think you haven’t released the data from your basket study, so we were just wondering what type of signals did you see in your early clinical data that made you confident that you wanted to explore that setting?

Yeah. So the abstracts from our clinical trials will come out in a few days. What I can share is an observation which we had already published in our melanoma trials showing that patients with melanoma, even with post-metastatic melanoma, could be controlled with the vaccine and lack of relapses after application of iNeST. And we have now several indications also from the FixVac trial that patients with a lower tumor mass could be ideally suited for this type of vaccine and vaccine-checkpoint combination trials. The CTD positive population in lung cancer is a population which has occult metastatic disease. A metastatic disease is, by definition, relatively low tumor load. And we believe that this patient, therefore, will particularly benefit with regard to their disease-free survival or and metastasis-free survival rates. That’s the rationale behind that, and it’s not the only study in this setting. We will announce a second indication which will come with the same rationale.

Thanks so much.

Thank you. The next question comes from the line of Cory Kasimov of JPMorgan. Please go ahead.

Hey, thank you for taking my questions. This is Matthew filling in for Cory. My first question is about BNT-126 or BNT-162. For the initial Phase I data expected in June or July, how many patients should we anticipate, and should we consider this as an update on both safety and immunogenicity?

Yes. Yes, it’s both. So we started the trial on April 21 in Germany, and about two weeks later in the US. Both trials are recruiting now first subjects, and the number of subjects is accumulating. You know that the German study is going to recruit about 200 subjects. The US study in the initial stage is expected to recruit about 360 subjects. At the end of June, we will have data available for about 50, 60, or 70 subjects; and this will dynamically increase. And we will, of course, have data on the dose-dependent safety profile as well as dose-dependent immunogenicity profile.

Great. That’s super helpful. And then, I guess, in regard to the Phase II program, based on the comments in your prepared remarks, I am curious if we should expect this Phase II trial can start sometime in 2020 and that the trial size will be north of 1,000 patients?

Yes. So the trial, as indicated in the clinical trials website, is designed in a manner that it can seamlessly go from Phase I/II to Phase III, and this would also cover the recruitment of up to several thousand subjects, but it will depend on regulatory approvals to the end point.

Okay. Thanks for taking my questions.

Okay. You’re welcome.

Thank you. The next question comes from Daina Graybosch of Leerink. Please ask your question.

Hi. Thank you for the questions. Two for me, both on BNT-162. The first is on manufacturing, and I think you’ve spoken a lot about the mRNA manufacturing. I’d love to understand the limitation of lipid nanoparticle formulation and fill and finish in the scale-up and whether that depends on which of the mRNA technology platforms from you. And the second question is on the clinical strategy. I wonder if you could help us understand the seamless design; if you can talk about any predefined thresholds to move from Phase I to II to III; and whether there’s any plan to do some of the Phase III in parallel to Phase II? Thank you.

Daina, so to the first part of your question. You are aware that we are using four different RNA backbones or three different RNA backbones and have four candidates, and all four candidates have the same lipid nanoparticle technology and exactly the same formulation. So that means the upscaling of one candidate, the MP formulation for one candidate would also serve for the upscaling of the other candidates. We expect that the nucleoside-modified mRNA and the dose for the nucleoside-modified mRNA will be in the range between 10 to 100 micrograms, yeah, so that is more the higher end of dosing. And we expect that the dose of a potential active vaccine for uridine and self-amplifying RNA will be in the single-digit or even lower than single-digit concentration. So that means the challenge for upscaling for manufacturing for the different mRNA platforms are different scales. For the nucleoside-modified mRNA to scale, the manufacturing scale will be higher. We are prepared, together with our partner Pfizer, to be able to scale up to supply nucleoside-modified mRNA. Currently, we are addressing everything that is required, including the supply chain for manufacturing including nucleotides, lipids, enzymes and so on, to be able to deliver the scale that we have announced recently. If this scale can be produced for nucleoside-modified mRNA across the same scale, we’ll provide many more vaccine units than for the self-amplifying or uridine mRNA. The overall strategy for the clinical trial will be published in a few weeks. The overall strategy is to enable a clinical development plan which can give us at a certain time point full approval but might also be compatible with an earlier endpoint. And as you know, there are no official statements so far from regulatory authorities, from EMA or FDA regarding which kind of endpoint would be accepted, and therefore everything we can share at the moment would be speculation.

Okay. Thank you very much.

Thanks, Daina.

Thank you. The next question comes from the line of Navin Jacob of UBS. Please ask your question.

Hi. Thank you for taking my question. Can you hear me okay?

Yes.

Okay, perfect. Thank you. A question, there have been some emerging publications or pre-publications on potential mutations around the spike protein, including the receptor-binding domain. Wondering how you’re thinking about that and also wondering if you’re going to be publishing your preclinical data for BNT-162, please.

Yeah. So there are mutations also in the receptor-binding domain as well as in the other regions of the spike protein. So far, this has caused no structural changes but single amino acid changes, and these single amino acid changes might change the biology of the virus. So the virus may increase or reduce the affinity, or the disease biology may change, but this type of mutations is not expected to change the responsiveness, the overall responsiveness of the virus towards a vaccine. Immune responses that we are generating via vaccine, even if you use just a receptor-binding domain, are extremely polyspecific; hence single amino acid changes will not affect the neutralizing activity of the vaccine.

That’s very clear - go ahead. Sorry.

The second question regarding the preclinical publications, we expect it will take a few more weeks until we have a full data set. You are aware that we are always trying to have a deeply scientific publication not only showing preclinical data but providing also some sort of understanding, and therefore we expect that this will not happen in the next two months.

Perfect. Then last question, sorry, for me. I think I just missed it and it’s probably there in your slide, but could we get an update on timelines for the data update for BNT-312, your cellulose boost A antibody asset, please?

BNT-312... CA 19-9... The CA 19-9, just beginning 2020, was restarted in pancreatic cancers and other CA 19-9-positive tumors. We are collecting data. It might be that we update on the recruitment of patients into this trial late 2020, but we will not provide substantial updates for the clinical trials in 2020, but most likely mid-2021.

Thank you very much.

Yes. You’re welcome.

Thank you. The next question comes from the line of Arlinda Lee of Canaccord. Please ask your question.

Hi, guys. Thanks for taking my question. I had a few on 162. You talked about having, by the end of June, 50 to 70 subjects worth of data. I’m wondering how granular that data might be; and if you will have data from just the first candidate or some of the other candidates as well, and if there might be - on the granularity side, whether you might have enough granularity on the volunteer background. And as well, what kind of things are you looking for in order to move forward with one formulation versus or one candidate versus another one? Thank you.

Yeah. So as you know, the trial has started with the first candidate, which is the nucleoside-modified RBD domain. We have also started a second candidate, which is a uridine-based RNA, including also for RBD domain. We are going to start with the two other candidates in the time frame of the next two to three weeks. Based on this staggered approach, the data updates for these candidates will also be provided in a staggered manner. The US trial has started recruiting and the German trial also started to recruit subjects below the age of 55, and we will start recruitment of subjects older than 55 once we have safety data in the US available. So that means also the information regarding the immunogenicity and safety in subjects older than 55 will come with a certain kind of delay.

Thank you.

We will now take our last question from the line of Robert Burns of H.C. Wainwright. Please ask your question.

Hi, guys. Thanks for taking my question. Just one for me, if I may, regarding ASCO 2020. I noticed that it seems to be that there is going to be the presentation of our poster regarding BNT-111. I was curious as to what sort of incremental updates we can expect to see within the patients from that had metastatic lesions at baseline as well as whether we’re going to see any information on the patients that had no macroscopic tumor lesions at baseline? Thank you.

Yeah. So the planned publication for BNT-111 will consist of data that have been presented, I think, and last updated at the end of last year. We’ll provide mechanistic insights. We’ll provide deep immunological insights, and we’ll provide collected data how immune responses and other biomarkers correlated with objective responses and clinical control. This data provides also the basis for discussing with the FDA to start the randomized Phase II study, which is expected to start at the end of this year. We are still collecting data in patients who had no metastatic lesions at the beginning. So this data is a readout based on relapse-free survival. Those data are still maturing. We expect that this data update will happen in the second half of 2020, most likely in the upcoming meeting, either ESMO or SITC.

Thank you.

Yeah.

We have no further questions at this time. Please continue.

Okay. Well, thank you, everyone, for joining the call.

That concludes the conference for today. Thank you for participating. You may all disconnect.