BioNTech SE Q4 FY2021 Earnings Call

Good morning and good afternoon, and thank you for joining us today to review BioNTech's fourth quarter and fiscal year 2021 operational progress and financial results. A few housekeeping items before we start. I invite you to view the slides that accompany the webcast and the fourth quarter and full year 2021 press release, both of which were issued this morning and can be found in the Investors section of our website. As outlined on slide two, during today's presentation, we will be making several forward-looking statements. These forward-looking statements include, but are not limited to our current COVID-19 vaccine revenues, as these figures include figures that are derived from preliminary estimates provided by our partners; our estimated financial results for 2022, the continued global demand for our COVID-19 vaccine or target vaccine production capacity for 2022 and beyond; our ability to supply our COVID-19 vaccine; the plans expressed in our pipeline programs and the timing for enrollment initiation, completion and reporting of data from all clinical trials; the timing of our ability to obtain and maintain regulatory approval for our product candidates and other risks described in our filings made with the US Securities and Exchange Commission, including our most recent Annual Report on Form 20-F. 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 today, shared today during this conference call and webcast. Also note that slide three and four provides details on the important safety information regarding our COVID-19 vaccine. Finally, you can find our agenda for today's call on slide five. It's my pleasure to introduce the members of BioNTech's management team participating in today's call. I'm joined today by our CEO, Co-Founder, Ugur Sahin; Ozlem Tureci, our Chief Medical Officer and Co-Founder; Jens Holstein, our Chief Financial Officer; and Ryan Richardson, our Chief Strategy Officer. I would like to turn the call over to Ugur Sahin.

Thank you, Sylke. Good morning and good afternoon, and a warm welcome to all the call participants. We appreciate your continued support. Today, I'm delighted to point out a few key fourth quarter and full year 2021 highlights and priorities before I pass the call over to my team to go through some further details. We will then open the call for questions. Since our company was founded in 2008, we have followed our vision to harness the immune system to fight human diseases. The COVID-19 pandemic has provided us with a unique opportunity, not only to help protect well over 1 billion people with our first product, but also accelerate our long-term vision to bring the next generation of immunotherapy to patients. BioNTech integrates the full spectrum of competencies for biopharmaceutical drug development covering discovery, translational research, development, GMP manufacturing, and commercial capabilities. We are pursuing a multi-platform strategy powered by a technology-agnostic innovation engine, coupled with strong leadership and competencies in powerful emerging technologies. And we are rapidly expanding and advancing a diversified product pipeline of immunotherapies that address multiple high medical need oncology and infectious disease indications. We are building a 21st century immunotherapy powerhouse with a mission anchored by a strong sense of our global social responsibility. We seek to make a positive impact on global health and democratize access to cutting-edge medicines. 2021 was a year of historic impact that BioNTech has made on human health and the economy around the globe. We ended the year with a strong fourth quarter, demonstrating our commercial execution and clinical pipeline advancement. Together with our partner, Pfizer, we have delivered approximately 2.6 billion doses of our COVID-19 vaccine to more than 160 countries as over the end of last year. The global deployment of our vaccine has likely saved millions of lives and is helping people all over the world find their way back to a more normal way of living. By the end of 2021, as part of our commitment to equitable access to COVID-19 vaccines globally, we provided more than 1 billion doses, approximately 40% of our COVID-19 vaccine supply globally, to low and middle-income countries. We are committed to providing more than 2 billion doses to lower and middle-income countries by the end of 2022. It has also been an active year for our oncology pipeline. During 2021, we expanded and advanced our clinical pipeline extensively with multiple novel oncology platforms entering the clinic. We have five ongoing randomized Phase II trials across a range of solid tumor indications. This includes our FixVac, iNeST bispecific antibody program. We advanced four new platforms into first-in-human studies comprising of our mRNA-encoded RiboCytokines and RiboMabs, our next-generation CAR-T cell therapy and our NEOSTIM ex-vivo T-cell therapy. We acquired multiple assets and forged collaborations to complement our existing technologies and capabilities. Given the scope of transformation efforts, we have grown our global organization to more than 3,000 employees and expanded our footprint to include new offices in the U.S., Europe, and Asia. Taken together, our advancement and expansion has built the foundation for our 21st-century immunotherapy powerhouse. We are well-capitalized to continue rapid pipeline advancement and global expansion in pursuit of our mission. The COVID-19 vaccine supplies in 2021 reported full-year revenues of approximately €19 billion, and a diluted earnings per share of €39.63. It is a historically unique moment to advance the next function of immunology to transform medicine, and we are well positioned to seize this once-in-a-generation opportunity. Our strategy aims to drive therapeutic innovation through our first-in-class therapeutic technology platform that includes mRNA vaccines, gene and personalized T-cell therapies, targeted antibody therapeutics, and next-generation immunomodulators. We believe that infectious diseases are a long-term growth pillar for BioNTech.

Thank you, Ugur. I'm delighted to speak with everyone today. Our achievements to date have positioned BioNTech well for continued success in 2022. This is also supported by a solid financial foundation, backed by a strong order book for 2022, which already includes 2.4 billion doses. We continue to broaden the label of our COVID-19 vaccine gaining approval in the US and EU for a two-dose primary regimen for children aged five to under 12 years. As for adults, with the emergence of the Omicron variant, a third vaccine dose may also be needed in the pediatric age group to prolong protection, and we are evaluating a booster dose in the 5 to 12 years old as well. In children, 6 months to under 5 years of age, we are evaluating the primary regimen of 3 doses. Data on the first dose are expected in April 2022 in this age group, and we have begun a rolling emergency use application submission with the FDA and with other regulators. The EU product information has been updated to include use of the vaccine during pregnancy and breastfeeding, based on the large body of data showing no increase in pregnancy complications or risk to breastfed infants. Regarding booster vaccines, we have received approval in the US and EU for a first dose in individuals 12 years of age and older. This week, we have received the approval from the FDA for the expansion of emergency use authorization to include a second booster dose of our COVID-19 vaccine to individuals aged 50 years and older, who have previously received a booster of any authorized COVID-19 vaccine. Our global manufacturing network continues to grow. We are building state-of-the-art manufacturing facilities in Africa and Asia to ensure sustainable local supply. As Ugur mentioned, the BioNTainers initiative is designed to rapidly build modular and scalable vaccine production nodes. We continue to closely monitor the impact of the Omicron variant and other new variants of concern. The development of an Omicron adapted vaccine is part of our comprehensive development program for variant-adapted vaccines. We are well on track with the development of an Omicron adapted vaccine, which we started in early December 2021. We are conducting clinical trials with this vaccine in support of a potential regulatory submission and expect to have the first data from these trials in April 2022.

Thank you, Ozlem, and a warm welcome to those of you on the phone. I'll start my section by presenting the key highlights for the 2021 financial year, which you can find on Slide 25. The 2021 financial year has been an extraordinary one, which also becomes visible by looking at our key financial highlights. Our total revenues reported for the 2021 financial year reached €19 billion and included €18.8 billion COVID vaccine revenues exceeding our guidance of €16 billion to €17 billion. We ended our 2021 financial year with an operating result of €15.3 billion and generated earnings per share on a diluted basis of €39.63. We ended the 2021 financial year with €2.1 billion of cash and cash deposits, as well as trade receivables of around €12.4 billion. This year was made remarkable by our vaccine's widespread distribution and the absolute demand amidst the ongoing pandemic. For the 2022 financial year, we are providing estimated COVID-19 vaccine revenues of approximately €13 billion to €17 billion, considering uncertainties in the evolution of the virus and continued demand for vaccination programs. Our capital expenditures for the 2022 financial year are expected to be in the range of €450 million to €550 million. This includes extending our R&D and production facilities to enhance our digitalization initiatives. We look forward to a year of further growth and investment in our capabilities.

Thank you, Jens. Turning to Slide 33. I'd like to highlight five key areas of strategic focus in 2022. We will continue to invest significantly in our COVID-19 vaccine program. We expect multiple data updates throughout the rest of the year, including data from our Omicron-based vaccine for which we are on track to finalize the data package for potential submission to regulators. This year, we plan to continue our rapid pipeline expansion with data updates expected for up to three additional oncology and infectious disease programs. We are currently investing to build out our global development organization to support continued pipeline expansion that will include the preparation of potential registrational trials. We also expect to further strengthen and extend our international presence. This will include expansion of our teams and capabilities in the United States, Europe, Africa, and Asia. Finally, we expect to remain active on the corporate development front. Already this year, we have announced a diverse set of new collaborations with Pfizer, Regeneron, Medigene, and Crescendo. We will continue to invest in our manufacturing infrastructure and digital capabilities.

Thank you. Your first question today comes from Cory Kasimov from JPMorgan. Please go ahead, your line is open.

Hi, guys. Thank you for taking my question. A question for you on the COVID vaccine front, at what point are you expecting the U.S. market to transition into a private pay environment versus the current government contracts? And what kind of impact do you expect this could have on overall market dynamics? Thank you.

Yes, Cory. Yes, I think it's difficult to say, because the market is so dynamic with variant developments and of course, Omicron being specific to that. There's lots of things that could happen. The U.S. government may order more or we may go to a distinct private market dynamic. I think it's simply too early to say.

Great. Good morning, guys. Thanks for taking my question. As it relates to frequency of the need for booster dosing, can you give us some clarity on how you're thinking about it? Over here in the U.S., it does seem like they are recommending a second booster for certain age groups of the original vaccine, but how much protection do you think that getting a booster from the original is going to confer for Omicron and B2 versus a more specific booster that you're working on right now? Thank you.

Tazeen, thank you very much for this question. The recommendation of additional boosters is actually based on the current data which is being produced by us, other groups and also the real-world data, which shows that with Omicron emerging, the immune response needs an additional booster. It's very difficult to predict how frequent such boosters would be needed because that really depends also on newly upcoming variants, the potential to wait or partially wait immunity and need to be simply monitored as long as we are in this still very dynamic situation.

Great. Good morning. Thanks for taking the question. I was wondering if you could just comment on how you think about durability of boosters with Omicron and sub-variants. Obviously, Moderna has talked about multivalent boosters as potentially having better durability. I wonder if you see the same thing with your booster and just how you think about monovalent versus multivalent boosters in terms of durability? Thanks.

Yes. So it is still early to come to a conclusion. However, we believe that this Omicron being now almost 99.5% of all variants worldwide, there is currently no clear need for a combined vaccine. It is important to evaluate also the exposure of the experienced immune system to Omicron spike. We believe that it could even be a disadvantage to come up with extreme variants because we would dilute the effect of a purely Omicron-based approach.

Thank you for joining today's call. We look forward to speaking with you in the future.