BioNTech SE Q2 FY2023 Earnings Call

Welcome to BioNTech's Second Quarter 2023 Update Call. I would like to hand the call over to Dr. Victoria Meissner, Vice President of Strategy and Investor Relations. Please go ahead.

Thank you. Good morning and afternoon. Thank you for joining us today for BioNTech's second quarter 2023 earnings call. As a brief reminder, the slides to accompany this call and the second quarter 2023 press release that was issued this morning can be found in the Investors section of our website. As outlined on Slide 2, you can see all our forward-looking statements disclaimer. Additional information about the statements and other risks are described in our filings made with the U.S. Securities and Exchange Commission. Forward-looking statements in the call are subject to substantial risks and uncertainties. We speak only as of the call's original date and we undertake no obligation to update or revise any of these statements. On Slide 3, you can find the agenda for today's call. Today, I'm joined by the following members of BioNTech's management team, our CEO and 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, Victoria. A warm welcome to all the call participants. We appreciate your continued support. Today, I will summarize our second quarter 2023 highlights and priorities before I pass the call over to my team to provide some further details. Let me start reiterating our 2023 strategic priorities that we set at the beginning of the year and highlight our recent progress executing against that. We pursue our priority to expand and sustain our COVID-19 leadership with Pfizer by advancing our next-generation and combination vaccine candidates and by advancing key commonality features. During this quarter, we received recommendations from regulatory authorities and the World Health Organization on the composition of the adapted COVID-19 vaccine for the 2023-2024 fall season. Based on these recommendations, we, together with our partner Pfizer, have submitted regulatory packages for the Omicron XBB.1.5-adapted monovalent COVID-19 vaccine to the U.S. FDA, EMA, and other regulatory agencies. We have also kicked off commercial launch activities for the Omicron XBB.1.5-adapted monovalent COVID-19 vaccine. Our second 2023 strategic priority is to accelerate our oncology pipeline and initiate multiple trials with registrational potential. Our new collaborations with DualityBio and OncoC4 complement our pipeline with multiple mid to late-stage clinical programs that will help us to achieve this goal in the near term. In the second quarter at the ASCO Annual Meeting, we and our respective collaboration partners presented three new clinical datasets that Ozlem will cover later. Further, jointly with our partner OncoC4, we began a pivotal Phase III trial evaluating the next-generation anti-CTLA-4 antibody candidate BNT316 as a second-line treatment for patients with non-small cell lung cancer. Our third strategic goal is to initiate and accelerate clinical programs with high medical need in infectious diseases. We are expecting multiple data readouts for our mRNA-based vaccine candidate in the second half of this year. In summary, we continued our focus execution against strategic priorities in the second quarter and look forward to additional progress in all three of these areas in the remainder of this year.

Thank you, Ugur. I'm delighted to speak with everyone today and to provide our pipeline update. Starting with our COVID-19 vaccine. We expect that as SARS-CoV-2 continues to evolve and the risk of severe COVID-19 disease and death continues, there will be persisting demand for vaccine boosting and vaccinations, especially for at-risk and immunocompromised groups. Omicron XBB sub-lineages currently account for the majority of COVID-19 cases globally and are significantly different from prior circulating SARS-CoV-2 lineages, including Omicron BA 4, 5, and the original SARS-CoV-2 strain. Although Omicron BA 4, 5 adapted bivalent vaccines provide some protection against a range of outcomes from XBB-related COVID-19, evidence suggests that a vaccine better matched to currently circulating sub-lineages can provide further improved protection against symptomatic disease and severe COVID-19. XBB lineage viruses have reduced neutralization in comparison to earlier Omicron lineages but have similar neutralization profiles to each other. The EMA and other health authorities provided guidance highlighting that updated vaccines targeting Omicron XBB.1 sub-lineages may help to maintain protection against COVID-19 during the upcoming fall and winter season when COVID-19 case rates and hospitalizations are expected to increase. We submitted regulatory applications for our Omicron XBB.1.5 adapted monovalent COVID-19 vaccine for individuals six months of age and older. The applications include data suggesting that the Omicron XBB.1.5 adapted monovalent COVID-19 vaccine may generate improved responses compared to the current Omicron BA.4-5 adapted bivalent COVID-19 vaccine.

Thank you, Ozlem, and a warm welcome to everyone who dialed into today's call. Before we go into the financial details for the second quarter and the first half of 2023, I'll start with giving you an overview on some key financial figures. Our total revenues reached EUR 1.4 billion for the first half of 2023 and are in line with our expectations, with Q2 being the expected weakest quarter in the year. Our COVID-19 vaccine revenues are as stated and expected before, heavily influenced by seasonal effects, especially now as we have summer in our biggest markets in the Northern Hemisphere. As previously outlined, the revenue development for COVID-19 vaccines is expected to mimic a flu-like setting. I will go into more details concerning our financial guidance in the course of the call, but want to emphasize already now that acknowledging the uncertainties related to the seasonal effect, we reiterate our 2023 COVID-19 vaccine revenue guidance of around EUR 5 billion for the full 2023 financial year. With EUR 1.4 billion in revenues, we ended the first six months of 2023, with an operating result of EUR 91.1 million and generated earnings per share on a fully diluted basis of EUR 1.28...

Thank you, Jens. I'll now provide a brief summary of the commercial outlook for our updated COVID-19 vaccine launch and provide an update on our acquisition of InstaDeep before concluding with our strategic outlook for the remainder of the year and beyond. I would like to touch on our key readiness activities that have put us in a strong position to execute on our planned launch this fall. On the back of the regulatory recommendation for an XBB.1.5 adapted monovalent vaccine, we and Pfizer have made more than 40 regulatory submissions in key geographies around the world. We are on track to begin vaccine distribution once regulatory approval is received with first shipments expected from September onwards. We believe Comirnaty is positioned to maintain its leading position in multiple key geographies. Most of the world will continue to be supplied under existing pandemic booster contracts, including our contract with the European Union, our largest contract, which was recently renegotiated to extend over a period of four years. In the United States, we expect our first major commercial market opening where we will leverage Pfizer's commercial capabilities. We announced that our acquisition of InstaDeep has closed following receipt of all required approvals. With the acquisition, we add world-class AI and machine learning technologies and research capabilities to accelerate and enhance our broader strategic vision. The acquisition will bring over 290 data scientists, ML engineers, and tech professionals to our team, positioning us to lead in this disruptive new field. We aim to develop novel therapeutic and vaccine product candidates with increased speed and efficiency. We will operate InstaDeep as an independent technology subsidiary of BioNTech.

Yeah. Thank you for the question. I have one ONC-392. The Phase 3 that you’ve started, I forgot the name of it, is different in design from the Phase 2 in some of the inclusion, exclusion criteria. And I wonder if you could talk about why the differences and why you started decided to go forward now in a Phase 3 with single-agent CTLA4 rather than gathering more data and doing a combination study with PD-1 or any other agents in this pretty hard to treat and difficult to do trial setting?

Daina, hi. It's Ugur. Thank you for the question. So as you know, the Phase1/2 study collected data in different combinations. We have seen single compound activity in non-small cell lung cancer in patients who had received and progressed under first-line checkpoint location treatment. They showed an encouraging objective response rate of around 35%. We do not see an added benefit in combining that with the current status quo, which is chemotherapy, and therefore decided in favor of a clean safety profile to go with a single compound alone. The patient population that has been selected for the study reflects historical patient populations with regard to the inclusion and exclusion criteria.

Hi. Good morning and thanks so much for taking my question. Just a point of clarification, as you think about the rest of the year for COVID vaccine sales, I know you talked about the difficulties involved in really getting a sense for the trends, but when you decided to maintain guidance, what key factors are you taking into account that gives you confidence that sales will be at least close to, if not at the EUR 5 billion mark?

Yeah, I'll start, Tazeen and then Jens can also chime in here. So, the starting point here was that we are expecting the total volume of COVID vaccines in the fall to be down... So we factor that in. However, we also expect that in the US we're going to see a commercial market opening, so a higher price point. So we along with Pfizer have talked about a gross price in the $110 to $130 range. That's our expectation.

Yeah. Two questions if I can. One on the pipeline and the other more financially related on the pipeline, BNT122 first line metastatic melanoma. It seemed a bit conspicuous in terms of the absence of mentioned in the press release and prepared comments. I do see it in the pipeline table. Have your expectations for this trial changed that we should still be expecting updates in the balance of this year?

Yeah. Thank you for the question. As you know, we are continuing to gather data, and we do intend to provide an update before the year end, though I think it is likely that there won't be a full data update. So more to come on that.

Hi. Thank you. So I have a question on self-amplifying RNA. I know that you had been developing a few programs with your self-amplifying RNA and it's kind of not center stage anymore, but several other companies that are earlier in their cancer vaccine development are using self-amplifying RNA and kind of singing its praises. So I was just wondering if we could expect self-amplifying RNA to occupy some more of the spotlight and maybe be advanced in some programs coming up in the future.

Yeah. Thank you for the question. As you know, we have two mRNA amplification program self-amplifying mRNA programs, and we are working on an improved approach to overcome limitations. We will report at the end of this year on progress with this platform.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.