Earnings Call Transcript - BNTX Q2 2020

Operator, Operator

Thank you for standing by, and welcome to the BioNTech second quarter 2020 operational progress and financial results call. I must advise you this call is being recorded today, the 11th of August 2020. And I would now like to hand the call over to the vice president, investor relations and business strategy, Sylke Maas. Please go ahead.

Sylke Maas, Vice President, Investor Relations and Business Strategy

Thank you for joining us today for BioNTech's second-quarter 2020 update call. Before we start, we encourage you to view the slides for the webcast, as well as the operational and 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 of enrollment, initiation, completion, and reporting of data from our clinical trials; the potential registrational nature of certain clinical trials; the impact of the COVID pandemic on our business and financial outlook; the timing for any potential emergency use authorizations or approvals for BNT162; the potential safety and efficacy of BNT162; and the ability of BioNTech to supply the quantities of BNT162 to support clinical development, and if approved, market demand, including our production estimates for 2020 and 2021. 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; Ozlem Tureci, Chief Medical Officer; Sean Marett, Chief Business and Commercial Officer; Sierk Poetting, Chief Financial and Operating Officer; and Ryan Richardson, Chief Strategy Officer. I now hand the call over to Ugur Sahin, BioNTech's CEO.

Ugur Sahin, CEO

Thank you, Sylke. It's a pleasure to welcome you to our second-quarter 2020 conference call. The last few months have been a game-changing time for BioNTech. The groundbreaking potential of our technologies, as well as our ability to quickly respond to new challenges and execute fast, has been on full display. One key highlight is the initiation of the pivotal Phase 2b/3 trial of our lead BNT162 COVID-19 vaccine candidate within six months of starting the vaccine discovery, preclinical, and clinical research program. In parallel to the COVID-19 program, we have continued to advance our oncology pipeline and broadened our base of strategic collaborations. I'm happy about the accomplishments we have made in the second quarter and would like to thank our entire team and also our partners for their tireless efforts and outstanding commitment. Slide 5 summarizes some of our key highlights since our last quarterly update. We reached a number of important milestones over the past few months. We continue to advance our clinical-stage pipeline. We now have 12 immunotherapies in clinical testing across three drug classes that include eight messenger RNA therapeutic programs, three antibody programs, and one small molecule immunomodulatory program. In July, we and Pfizer selected BNT162b2 as our lead COVID-19 vaccine candidate and initiated a pivotal Stage 2b/3 trial. We have made progress in ramping up our manufacturing capacities to support global supply. We have signed commercial supply agreements with multiple countries around the world for more than 250 million doses in 2020 and 2021. This also includes an option to purchase up to 500 million additional doses. All this is subject to regulatory approval. In parallel to our effort to bring the COVID-19 vaccine to the market as quickly as possible, we also continued to advance our oncology pipeline. Özlem will provide the key updates made on the call, including for our iNeST program, BNT122; or our BNT111 FixVac melanoma program. Here, we announced a new cooperation with Regeneron to combine BNT111 with Libtayo, an anti-PD-1, in a randomized Phase 2 trial, which we believe could have a registrational potential. Moreover, we significantly strengthened our balance sheet, bringing in commitments of approximately $1.1 billion in gross proceeds from non-dilutive upfront cash payments and equity and debt financing commitments. These accomplishments have strengthened our ability to advance our pipeline on multiple fronts and deliver on our longer-term vision to bring novel immunotherapies to patients across a range of diseases. Moving to Slide 6. I would like to touch on the importance of our strategic collaboration. This is important because these collaborations continue to play a crucial role in how we are building our business. Our partnerships extend our execution capabilities and global reach, and in some cases, provide us the access to external technologies, such as Genmab's DuoBody technology, which are highly complementary to our own. In the first half of 2020, we expanded our existing partnership with Pfizer to jointly develop our COVID-19 vaccine program. In addition, we have established a new collaboration with Regeneron in the oncology field. The important aspect here is that we have retained significant economics on our programs through these collaborations. Sean will provide some further details on the Pfizer collaboration later in our prepared remarks. In the case of the Regeneron deal, it is important to note that each party keeps 100% of the rights to its own product. That means that BioNTech has kept full product commercialization rights for BNT111 melanoma FixVac. On Slide 7, you'll see an updated version of our multi-platform immuno-oncology strategy. The cornerstone of this strategy is to leverage our immunotherapy expertise with new therapeutic approaches to target cancer and modulate immune response simultaneously. We believe the approach can produce multiple blockbuster product opportunities and also will enable the development of powerful combination treatment approaches which combine complementary mechanisms of actions. Despite the challenges associated with the COVID-19 pandemic, we have continued to execute our immuno-oncology strategy on multiple fronts. We are on track to initiate multiple late-stage trials for FixVac and iNeST product candidates. We are anticipating the first data update for our next-generation checkpoint immunomodulator, BNT311, a bispecific antibody targeting anti-PD-L1 and 4-1BB late this year. Furthermore, since our last earnings call, we have initiated a Phase 1/2 trial for our TLR7 agonist small molecule immunomodulatory program and expect to initiate first-in-human trials for two novel cell therapy approaches in the coming months, including BNT211, a first CAR-T cell therapy; and for BNT221, our neoantigen T cell therapy. As we have done in the past, we will continue to be data-driven in how we assess each product opportunity we take into clinical testing. I will now turn it over to Özlem to provide an update on our programs.

Ozlem Tureci, Chief Medical Officer

Thank you, Ugur. In the interest of time, I'm going to focus my remarks on the four programs highlighted on Slide 9. These include BNT111, our FixVac melanoma; BNT122, our iNeST program; BNT311, our anti-PD-L1/anti-4-1BB antibody; and BNT411, our TLR7 agonist. For further details on the status of other programs, please refer to our full quarterly update which was released this morning. So let's start on Slide 10 with BNT111, our melanoma FixVac program. As a reminder, BNT111 is composed of four non-mutated melanoma antigens: NY-ESO-1; MAGE-A3; tyrosinase; and a novel antigen from our own libraries, TPTE. In July, we published interim Phase 1 data in Nature from our ongoing Lipo-MERIT trial. The Lipo-MERIT trial is a multicenter open-label dose-escalation study to evaluate safety and tolerability of vaccinated patients with stage 3B-C and stage IV melanoma. Efficacy was evaluated in a subset of 42 checkpoint inhibitor experienced patients with a data cutoff in July 2019. As I reported earlier, at the data extraction date, three patients out of 25 in the FixVac monotherapy group experienced a partial response, seven patients showed stable disease, and one patient showed a complete metabolic remission of metastatic lesion. Of the 17 patients treated with the combination of FixVac, BNT111, and an anti-PD-1, six patients showed a partial response. Of note, at our target dose for the Phase 2 trial of 100 micrograms, we observed that five of 10 patients had a partial response to FixVac in combination with anti-PD-1 therapy. The publication in Nature summarized on Slide 11 highlighted extensive biomarker and immunological data. This supports the mechanism of action and the observed clinical activity of FixVac alone and in combination with anti-PD-1. Importantly, treatment with BNT111 resulted in the expansion and activation of circulating tumor antigen-specific T cells with memory function that exhibited strong cytotoxic activity against tumor cells. These vaccine-induced T cells displayed a Th1 phenotype. In 20 patients tested by post-IVS interferon-gamma ELISpot, all showed immune response against at least one of the used tumor-associated antigens. Most patients demonstrated CD4 or concurrent CD4 and CD8 T cell responses. In 50 patients tested by ex-vivo interferon-gamma ELISpot, which only captures high-magnitude responses, more than 75% of patients showed immune responses against at least one tumor-associated antigen, most of which were high-magnitude CD8-positive T cells. T cells ramped up within four to eight weeks to single-digit or low double-digit percentages of total circulating CD8-positive T cells. Under monthly maintenance treatment, the levels of T cells continued to slowly increase or remain stable up to over one year. Safety was assessed in 89 patients. Overall, FixVac treatment was well tolerated with no dose-limiting toxicity observed. Most common adverse events were mild to moderate transient flu-like symptoms, such as pyrexia and chills. As Ugur mentioned earlier, we recently announced a strategic collaboration with Regeneron and plan to pursue an accelerated development program for the combination of FixVac and Regeneron's anti-PD-1 agent, Libtayo, in the second-line treatment setting for advanced melanoma patients that have progressed after prior PD-1 blockade. Under the terms of the agreement, we and Regeneron have agreed to share development costs equally. If approved, each party will retain full commercial rights for their respective product and would record revenues related to its own product. We plan to initiate a randomized Phase 2 trial in the fourth quarter of 2020 and expect to provide more details on the study in the third-quarter 2020. Now, moving to Slide 12 to BNT122, our individualized neoantigen-specific immunotherapy, or iNeST, platform program, which is partnered with Roche/Genentech. A data update for the Phase 1a monotherapy and 1b combination with Tecentriq basket trials in multiple solid tumors was reported in June as part of our AACR virtual annual meeting, too. This is the first time that we have shown safety and immunogenicity data across different tumor types outside of melanoma. The patient populations in these cohorts were heavily pretreated, many with refractory and recurrent disease with a high proportion of low PD-L1 expressers. Treatment with BNT122 alone and in combination with Tecentriq was well tolerated, with the majority of adverse events being Grade 1 or Grade 2, and there were no dose-limiting toxicities. In the majority of patients treated with BNT122 alone and in combination with Tecentriq, ex-vivo T cell responses against multiple neoantigens were detected. We also detected BNT122-induced T cells in infiltrates of patient's tumors. In the Phase 1a monotherapy portion of the trial, 26 patients underwent at least one tumor assessment. One patient assessed with gastric cancer and metastatic liver lesions had a durable complete response and remains on study after one and a half years, and the rest of the patients had stable disease. In the Phase 1b combination portion of the trial, in 108 patients that underwent at least one tumor assessment, one patient had a complete response, eight patients had partial responses, and 53 patients had stable disease. We continue to believe that iNeST is well suited to earlier lines of therapy across a range of solid tumors. We have depicted our ongoing Phase 2 trial in first-line melanoma and our planned adjuvant clinical trial for iNeST on Slide 13. We expect to provide an enrollment update from the randomized Phase 2 trial of BNT122 plus pembrolizumab in first-line melanoma in the second half of 2020, and an interim data update is anticipated in the second half of 2021. We are going to start two Phase 2 studies in the adjuvant setting. One is in an IO-sensitive cancer type, namely evaluating the efficacy and safety of iNeST plus Tecentriq, compared with Tecentriq alone, in patients with early and adjuvant stage non-small cell lung cancer. The second study is in an IO-insensitive cancer type, namely a multisite open-label Phase 2 randomized trial to compare the efficacy of iNeST versus watchful waiting in patients with circulating tumor DNA-positive Stage 2 high-risk and Stage 3 colon cancer. Now, moving to Slide 14, to the two DuoBody programs we have partnered with Genentech.

Sean Marett, Chief Business and Commercial Officer

Thank you, Ugur. I will start by recapping our commercial arrangements with BNT162 with Pfizer and Fosun, depicted on Slide 22. Our collaboration with Pfizer involves co-development of a portfolio of COVID-19 vaccine candidates on a worldwide basis, excluding China. Upon approval, we will jointly commercialize the vaccine with Pfizer. As part of our preparation for commercialization, BioNTech is taking steps to establish a limited commercial infrastructure in a selected set of countries while leveraging Pfizer's commercial infrastructure and capabilities in the rest of the world, excluding China, as I just noted. In terms of financials, our collaboration with Pfizer is based on a 50-50 partnership. Both companies share development expenses and gross profits worldwide on a 50-50 basis regardless of which company distributes the vaccine in a given country. Furthermore, capital expenditures are funded by each party independently. In addition to the combined upfront payment and equity investment of USD 185 million, which BioNTech received in April, BioNTech is eligible to receive further development and sales milestones of up to USD 563 million. If reached, these milestones will come in addition to BioNTech's 50% share of gross profits generated. Our Fosun collaboration in China is also a co-development agreement. However, Fosun funds the majority of development expenses incurred in China and would take on commercialization responsibilities if the vaccine is approved. In addition to the combined upfront payment and the equity investment totaling USD 51 million, which was received in April, BioNTech is eligible to receive further development and sales milestones up to USD 84 million. BioNTech would also share gross profits on the sale of the vaccine in China.

Sierk Poetting, Chief Financial and Operating Officer

Thank you, Sean. Now, I would like to summarize our financial results for the quarter that are shown on Slide 25. Our total revenue, which primarily consists of revenue from our collaboration agreements, was EUR 41.8 million for the second-quarter 2020, compared to EUR 25.8 million for the second-quarter 2019. For the period of six months ended June 30, 2020, our total revenue was EUR 69.4 million, compared to EUR 51.9 million for the comparative prior-year period. The revenue from collaboration agreements overall increased due to the recognition of revenue from our new collaboration agreement signed with Pfizer and Fosun Pharma as part of our BNT162 vaccine program against COVID-19. The revenues from other sales transactions increased due to increased orders and include sales of diagnostic products, peptides, retroviral vectors for clinical supply and development, and manufacturing services sold to third-party customers. Research and development expenses were EUR 95.2 million for the second-quarter 2020, compared to EUR 53.4 million for the second-quarter 2019. For the six months ended June 30, 2020, total research and development expenses were EUR 160.3 million, compared to EUR 110.6 million for the comparative prior-year period. The increase was mainly 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 and development services, especially with respect to our BNT162 program. In addition, from the date of acquisition, our new U.S.-based subsidiary, BioNTech US Inc, contributed EUR 5.3 million to our research and development expenses. General and administrative expenses were EUR 18.8 million for the second-quarter 2020, compared to EUR 14.6 million for the second-quarter 2019. For the six months ended June 30, 2020, total general and administrative expenses were EUR 34.6 million, compared to EUR 23.9 million for the comparative prior-year period. This increase was mainly influenced by higher expenses for management, consulting, and legal services, as well as an increase in headcount leading to higher wages, benefits, and total security expenses. In addition, from the date of acquisition, our new U.S.-based subsidiary, BioNTech US Inc., contributed EUR 1.6 million to our general and administrative expenses. Net loss was EUR 88.3 million for the second-quarter 2020, compared to EUR 50.1 million for the second-quarter 2019. For the six months ended June 30, 2020, total net loss was EUR 141.7 million, compared to EUR 90.8 million for the comparative prior-year period. Turning to the balance sheet on Slide 26. BioNTech ended the second-quarter 2020 with cash and cash equivalents of EUR 573 million or $641.6 million. Additionally, we raised EUR 680.7 million or $762.2 million in gross proceeds from a private equity placement and our follow-on underwritten offering after the end of the second quarter. Considering these gross proceeds, the expected pro forma cash and cash equivalents balance at June 30, 2020, amounts to EUR 1.25 billion or $1.4 billion. Further, we announced a debt financing of up to EUR 100 million or $112 million from the European Investment Bank in June 2020. All financing transactions are subject to closing conditions that were not fulfilled before June 30, 2020, and did not have an accounting impact within the second-quarter 2020. As a result of increased spending related to BNT162, we now expect net cash used in operating activities and for purchases of property and equipment to be between EUR 450 million and EUR 600 million for the full-year 2020. We anticipate that existing cash and cash equivalents, the net proceeds from the recent underwritten offering and the expected net proceeds from the private investment announced in June 2020, will enable us to fund our operating expenses and capital requirements through at least the next 24 months.

Ryan Richardson, Chief Strategy Officer

Thank you, Sierk. Slide 27 outlines the key milestones we're focused on delivering as we look to the remainder of 2020. The first relates to our COVID-19 vaccine program, where the next major milestone is the Phase 2b/3 trial we are conducting with Pfizer. As Özlem mentioned, we expect to be in a position to seek regulatory review as early as October 2020. In the meantime, we expect to publish Phase 1 safety and immunogenicity data for BNT162b2 in the next few weeks. We also intend to publish preclinical data over the same time period. In addition, we anticipate three first-in-human data updates for our oncology programs over the course of the year, including for BNT114; BNT131; and our DuoBody program, BNT311. Data from our BNT114 FixVac Phase 1 study in triple-negative breast cancer has been accepted for an oral presentation at ESMO in mid-September. The Phase 1 study is a three-arm trial as a monotherapy and in combination with iNeST evaluating safety and immunogenicity. The data to be presented will include a preliminary analysis of immune responses in TNBC patients treated with iNeST. For BNT131, our mRNA intratumoral immunotherapy program partnered with Sanofi, we expect the data update for our Phase 1/2 trial in solid tumors in the second half of 2020. The study is a first-in-human multicenter open-label Phase 1 dose-escalation and expansion trial to evaluate safety, pharmacokinetics, pharmacodynamics, and antitumor activity of BNT131 both as a monotherapy and in combination with cemiplimab in patients with certain advanced solid tumors. The data to be presented will include safety, tolerability, and pharmacodynamic biomarker data. While updates for these programs will focus on safety and immunogenicity, we expect that our preliminary update for BNT311, our bispecific antibody, will also include top-line response data from our ongoing Phase 1/2 trial. And finally, we plan to initiate up to six additional studies from our oncology pipeline over the remainder of 2020. These include randomized Phase 2 trials for FixVac in melanoma and HPV16+ head and neck cancers; and for iNeST in adjuvant NSCLC and adjuvant CRC cancers. We also anticipate initiating first-in-human trials for our cell therapy programs, starting with our Claudin 6 CAR-T cell therapy, the first program to incorporate our CAR-T amplifying mRNA vaccine or CARVac approach. And with that, I'll hand it back over to Ugur for concluding remarks.

Ugur Sahin, CEO

Thank you, Ryan. I'm proud of what we have accomplished over the first half of 2020 and believe a tremendous opportunity lies before us. We thank our shareholders and partners for their trust and support. Let us open up the call for questions now.

Operator, Operator

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Your first question comes from the line of Tazeen Ahmad from Bank of America. Please ask your question.

Bill Maughan, Analyst

Hi. Good morning. This is Bill Maughan on for Tazeen. So two from me. First of all, how do you think about distributing the initial doses that are going to be manufactured later this year of the potential COVID vaccine, assuming approval? So the initial doses manufactured later this year and early next year given that the first manufacturing batches won't immediately cover all supply agreements. And then secondly, when you have to repay the Pfizer upfront investment out of profit sharing, can you help quantify what Pfizer has already put up in terms of operating investment? And what the pace of paying that back would be out of profit share and milestones? Thank you.

Ryan Richardson, Chief Strategy Officer

Yes. I'll begin by addressing the first question regarding distribution and then I'll pass it to Sierk for the second question. We are in a fortunate position with strong demand for the vaccine, as evidenced by the supply agreements we've announced so far. Some of these agreements require doses to be supplied in 2020, while others extend into 2021. By the end of 2020, we anticipate being able to provide up to 100 million doses, and we expect to significantly increase our capacity as we move into 2021. Although I can't share specific details at this moment, I am confident that based on the distribution agreements we've established, we will be able to distribute the doses we produce to the countries involved in those agreements. Sierk, would you like to address the second question?

Sierk Poetting, Chief Financial and Operating Officer

Yes. Happy to. Now, actually, in Q2, this was the first reconciliation that we did with Pfizer. And this quarter, we reconciled $20 million as the total net cost on the BioNTech side. Actually, this was the 50% of cost share for BioNTech in this quarter. So compared with the total program, still a small amount because it was ramping up in April and May and June so far. So $20 million was recognized as cost so far as our share.

Bill Maughan, Analyst

OK. And I guess how do you get to that $20 million with the large numbers that Pfizer has kind of put out in terms of what they're investing in their manufacturing?

Sierk Poetting, Chief Financial and Operating Officer

Yeah. So there's only a certain type of cost there, so not everything is shared 50-50. So investments into capacity is everybody's own cost. And what's shared is basically the development cost and scale up. So this is shared, and the $20 million is our part of the share. And so far, it's covered from our upfront that we received when signing the contract.

Operator, Operator

And your next question comes from the line of Cory Kasimov from JP Morgan. Please ask your question.

Matthew Holt, Analyst

Hey, guys. Thanks for taking my question. This is Matthew on for Cory. So I guess just wondering, for BNT162, if you can talk a little bit about how you maintain the integrity of a Phase 3 blinded trial if a large proportion of the BNT162 patients are expected to get fevers and other systemic AEs and what your view is on whether this could impact the ultimate outcome of the trial.

Ozlem Tureci, Chief Medical Officer

Yeah. So thanks for the question. First of all, as we indicated in the press release when we announced the selection of BNT162b2, we indicated that b2 is significantly better tolerated than b1, yes? So actually, only a little fraction of vaccinated individuals had fever. And with regard to the other symptoms, you might have seen that even placebo-vaccinated subjects have a number of background symptoms. So we believe that we have a very good overall situation to avoid any type of bias, mediated bias, by the understanding of the participant that he might, or she might, get the vaccine and not the placebo.

Matthew Holt, Analyst

Great. And then just wondering if you can walk us through your assumptions, or essentially what needs to happen for the Phase 3 program to get data and a potential regulatory filing in October. I guess maybe if you can help quantify how dependent this is on either enrollment or infection rates or what might be the key factor in the timelines.

Ozlem Tureci, Chief Medical Officer

Yeah. So this is the efficacy trial. That means at the end of the day, we are comparing the number of infections in the placebo versus in the treatment group. We are online evaluating the blinded session, the safety data. The trial is proceeding very well. It's even recruiting faster than anticipated. And the overall concept is to wait until we have a given predefined number of infection events and then do a first evaluation if there is a significant difference between the vaccine and placebo group. Yes. The event number, so we will have several options to evaluate different event numbers, yes. And based on that, based on the lower event numbers, you might be able to file already in October, yes. If the lower event numbers do not support a filing, we will have the opportunity to file four or six weeks later, based, of course, on the assumption that the trial is positive.

Operator, Operator

Your next question comes from the line of Arlinda Lee from Canaccord. Please ask your question.

Arlinda Lee, Analyst

Congratulations on all the progress. I have a couple of questions regarding 162. First, can you provide an update on the enrollment for the pivotal trial? Secondly, I understand that some of the net costs for the trials were previously communicated. What do you anticipate the costs will be for the remainder of the year? Additionally, regarding your oncology pipeline, I believe the speed and efficiency with which you have advanced 162 into the clinic underscores the strength of your platform. I am curious about your interest in pursuing additional collaborations and whether you have received any inbound inquiries.

Ugur Sahin, CEO

So maybe we start with the first question. I had difficulties to acoustically understand the second and the third question. So the recruitment, so my understanding is that the first question was related to how fast the recruitment happens for the pivotal trial. So we anticipate to recruit up to 30,000 subjects until mid of October. And at the moment, I can't tell you exact numbers, but the trial is recruiting better than what was modeled. So we are on track and even ahead. The second question. Can you repeat the second question just a little bit louder?

Arlinda Lee, Analyst

Yeah. I'm just trying to, I guess, figure out, on the cost-sharing, how much you might accrue by year-end.

Sierk Poetting, Chief Financial and Operating Officer

Yes, I can address that. As I previously mentioned, the net cost for BioNTech this quarter was $20 million. This was primarily due to clinical expenses, along with some preclinical research costs. Approximately half of this amount was related to clinical expenses. However, keep in mind that May and June only involved the Phase 1 trial, which meant that the subjects were more costly, and there were fewer of them. Therefore, you can expect significantly higher expenses in Q3. We will provide a more detailed update with the Q3 numbers, but I anticipate the total will be in the triple-digit millions.

Ryan Richardson, Chief Strategy Officer

I mean, maybe just to add to that, one point, which is we had previously guided, Arlinda, to EUR 300 million of spend for the year. And I think it's safe to say that we were tracking on that, excluding the Neon acquisition and the impact of COVID. So we've guided to EUR 450 million to EUR 600 million of net cash spend by the end of this year. So that delta there also gives you a sense for what the incremental amount could be.

Arlinda Lee, Analyst

Great. Thank you. And then I guess the third question was, basically, given you guys want to find the platform, I'm kind of curious about whether you've gotten inbound interest and what your appetite might be for additional strategic collaborations.

Ugur Sahin, CEO

So maybe I can take the question. Yes, of course. This project, of course, validates our ability to respond quickly to challenges and opportunities. It validates our technology. It validates the safety of our approach. And of course, it creates a lot of interest in future projects, and we are in discussion with our partners for additional opportunities coming up in 2021.

Operator, Operator

Our next question comes from the line of Shanshan Xu from Berenberg. Please ask your question.

Shanshan Xu, Analyst

Hi, thank you. Good morning, everyone. Congrats on the progress. I have a few questions regarding 162. I would like to gain a better understanding of the older adults and the signals observed in Phase 1 and 2. Additionally, could you qualitatively describe whether these findings align with the general belief that the immune response in this population is significantly lower than that of younger adults? Also, will the results from b2 related to older adults be included in the manuscript that you mentioned will be available in a few weeks?

Ugur Sahin, CEO

Yeah. So the first part of the question is older adult vaccine responses. So the size, I know there are no publications yet on any group about vaccine responses in elderly adults. But as you, as everyone can guess, immune response in elderly adults is weaker, yes, and was likely for any vaccine platform, weaker. The reasons. The reasons for that are twofold. It's the weaker innate immune response in elderly people. And the second is the reduced number of naive T cells and naive B cells in elderly. What we have observed is that a dose which is fully effective to induce a strong antibody and T cell response in younger population is too low in the elderly population. That's the reason why we increased the dose, yes, for our candidate b2. And with increase of the dose, we are well in the range of a fully effective immune response or what is expected to be a fully effective immune response. And of course, yes, the data will be published with the next upcoming manuscript.

Shanshan Xu, Analyst

And then do you have a plan to publish any results from other areas in c2?

Ugur Sahin, CEO

From other candidates? Yes, yes, yes. The other variants are in continued clinical evaluation with somehow lower priorities. We expect to have a first publication related to another variant in October, yes. And, yes, we will continue to share insights from this development program, which was not only just about selecting the first candidate but selecting the best candidate and also generating insight into the future generation of vaccines, which may come with lower doses. So where lower doses might result in the same type of immune response.

Shanshan Xu, Analyst

Great. That's helpful. And then finally, just quickly touching on the oncology program, BNT111. I remember there is an adjuvant cohort in the Phase 1 study. The results haven't been communicated. Is there anything that you have seen in that adjuvant melanoma cohort?

Ozlem Tureci, Chief Medical Officer

Thank you for that question. We are evaluating the adjuvant cohort as well and later this year, we'll be able to report on that cohort as well.

Operator, Operator

Thank you. Your next question comes from the line of Daina Graybosch from SVB. Please ask your question.

Daina Graybosch, Analyst

Thank you very much. I'll start with two questions about BNT162 and then follow up with one regarding iNeST. First, there has been considerable discussion about the differences in CD8 immunogenicity responses among various companies and their vaccines. Could you comment on whether there is anything in the BNT162 mRNA construct or lipid nanoparticle that might explain your relatively higher CD8 response compared to others? Secondly, we've seen some data on CD8 and CD4 T cell responses in COVID-19 patients. Many publications indicate significant responses related to nucleocapsid, particularly in patients with specific HLA types. What are your thoughts on your vaccines and others that do not include nucleocapsid antigens, and whether this might be necessary for ensuring full protection in older adults?

Ugur Sahin, CEO

Thank you, Daina, for your questions. To start, yes, our goal in messenger RNA vaccine development is to enhance not just antibody responses but specifically CD4 and CD8 responses. Over the past decade, we have published several independent optimizations aimed at improving the translation of our messenger RNA in human dendritic cells. These optimizations include UTR regions, cap analogs, and vaccine delivery methods. The CD8 response necessitates direct expression of the antigen in dendritic cells. When the protein is expressed outside of dendritic cells, the typical pathway for antigen presentation relies on the uptake of the antigen by dendritic cells’ exogenous presentation machinery, leading to CD4 cell responses. This explains why spike protein vaccines and those that do not enter dendritic cells generate CD4 cell responses, while achieving robust CD8 responses hinges on strong expression within human dendritic cells, which we have validated for our platform and the COVID-19 vaccine in retail. This is what sets us apart in generating a more substantial CD8 T cell response. What was your second question?

Daina Graybosch, Analyst

The nucleocapsid, and whether there's some efficiency by not including that?

Ugur Sahin, CEO

Yeah. I think if you ask the question, what is the immunodominant antigen in an infection, this is not the same question with what antigen is particularly suitable to have a protective T cell response. Yes, nucleoprotein is an immunodominant antigen, yes, but we know that the virus entry is mediated, of course, by the full virus, and the spike protein is one of the key proteins in this virus. And therefore, having a protein, and particularly with the supposed spike protein, which is more than 1,200 amino acids and a large protein with 1,200 amino acids gives you multiple bases of presentation of Class 2 and Class 1 epitopes on multiple MHC haplotypes. So we believe that this spike protein is the near-perfect antigen. We wanted clearly to avoid adding additional antigens into our vaccine because every additional antigen comes with an independent price and independent costs for potential diversification of the autoantibody repertoire. And therefore, having a simple vaccine, which is able to induce CD4 and CD8 T cells in a broad population of people is sufficient, and we believe with the large spike protein, we have an ideal candidate.

Daina Graybosch, Analyst

That's very helpful. And then on iNeST, looking back at the data that was presented at AACR, one or two questions. I wonder if we should read anything into the biomarkers that there were few TCM cells versus TEM cells and also whether the number of sort of immunogenic neoantigens at around 2.6 is high enough. And sort of with both of those biomarkers, if you're worried about them and if you're doing anything to optimize them as you go forward.

Ugur Sahin, CEO

Yes. So the most important learnings from this bucket card is the feasibility of approach for really multiple different indications, the safety of the approach in different indications, in combination also with atezo and the broad immunogenicity. The shortcomings of the part, of course, this is a bucket uncontrolled trial in patients with heavily pretreated, and most of these patients had a progression-free survival time of less than three months. So this is not an ideal population for vaccine. And therefore, it's difficult to draw any conclusion with regard to potential clinical activity from this cohort. And this was the reason why we have already started in 2019 our randomized trial in melanoma, yes, in certain melanoma, which gives us with a PFS in the range of above nine months, gives us sufficient time to have a fully induced T cells response, succeeded in the T cell response. And here, the key question is if iNeST, in combination with checkpoint blockade in our first line a highly mutated tumor type, could induce an added benefit. So this trial would help us to get other indications with a similar type of profile. And the second learning, not only from this iNeST type but also from the melanoma trial that we had published in 2017 and followed up with updated data in 2020 is that tumors with a lower tumor load might be the ideal setting for iNeST. And that's the reason why we are going to start two clinical trials in ctDNA positive tumors. One is the non-small cell lung cancer program and the second one is the colorectal cancer trial. And this is also based on a learning from the basket trial because in the colorectal cancer patient population that we have vaccinated, even though these were advanced patients, we observed really strong T cell response. So the number of mutations seems not limiting for application of iNeST in this population. And that was encouraging enough to define it to two additional indications. So the next 12 months will be extremely informative for the iNeST project with data coming from the melanoma trial and with the randomized trials in lung cancer and colorectal cancer being active.

Operator, Operator

Your next question comes from the line of Navin Jacob from UBS. Please ask your question.

Navin Jacob, Analyst

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

Ugur Sahin, CEO

Yes.

Navin Jacob, Analyst

Perfect. Thanks. I'd like to start with BNT162. Firstly, congratulations on all the progress. I was hoping to get some clarity on the trial design, specifically regarding the statistical powering assumptions. What is the trial powered for, and what effect size are you looking at? Also, could you provide information on the number of events for the first and second interim looks? I have some follow-up questions as well.

Ugur Sahin, CEO

These are important questions, but at this time, we cannot disclose that information. However, you can assume that we have different interim readouts, which come with varying powers and assumptions regarding efficacy. This is the general structure of the trial, but I can't provide the actual number.

Navin Jacob, Analyst

Are there different regulatory requirements associated with an interim analysis considering 150 events compared to 100 events? Additionally, from a safety perspective, is there a minimum follow-up period of at least six months? If you were to submit a filing in October based on an interim analysis, would you have sufficient follow-up data regarding safety to support an emergency use authorization?

Ugur Sahin, CEO

Yeah. So the safety effect is addressed by two parameters. The one is the number of vaccinated subjects. Though, usually, 3,000 subjects are sufficient to support a pandemic vaccine approval. The second is the follow-up time. And we are all aware that we have, on the one side, the need to get a vaccine approved as fast as possible and make it available. For example, we are an emergency use authorization pathway. And on the other side, to continue to collect the safety data. And that is exactly what is happening. So the subjects in this trial will be followed up for safety parameters and we will get three months, say, to six months safety and we'll continue also to monitor immune responses and the stability of immune response in the subject to understand also the durability of immune response.

Navin Jacob, Analyst

And what exactly does emergency use authorization mean in the context of a vaccine? Does that mean it can be used, if you have the doses, could that be used in a broad population? Or will it be only used in high-risk populations such as patients in the frontline, healthcare workers, so on, and so forth? And then two quick other questions. So you mentioned long-term immunity. Wondering what gives you confidence or what are you seeing that should allow us to have some confidence in long-term immunity or memory function. And then on the Fosun partnership, it looks like you're moving forward with 16b1, if I'm correct, with Fosun and not 16b2. Maybe that is just earlier in where you're developing it in China. So maybe that's one. But if you could just clarify that, that'd be appreciated.

Ugur Sahin, CEO

To start with the first question, we need to identify who stands to gain from the emergency use authorization. This is primarily a governmental matter, as the U.S. government and the FDA must determine the populations that would benefit from such a vaccine. The same applies in Europe, with each government making its own decisions regarding vaccine availability and target populations. Regarding the question about durability, we are currently gathering data on the longevity of both antibody and T cell responses. Thus far, we have published findings covering a period of up to 43 days, but we will continue data collection over three months, six months, nine months, and twelve months. Naturally, we anticipate that antibody levels will decline over time, as is typical with vaccination. We need to understand the rate of this decline and the baseline level at which it stabilizes, as well as the nature of the antibody-based protection that remains at that baseline. These insights will emerge over the next six months as we gather more data. I am optimistic that our vaccine, which elicits a combined immune response from CD4 and CD8 T cells as well as antibodies, will require smaller amounts of each component due to the synergy of the immune system. However, it's essential for the scientific community and industry to observe the stability of these immune responses over the next two years and to establish what is necessary for protection against infection. If a decline in immune response becomes an issue, I believe that with our messenger RNA vaccine, we are well-placed to implement booster immunizations effectively, which is one of the significant advantages of messenger RNA vaccines. They are not constrained by any specific vector backbone immune response, allowing for robust antibody and T cell response boosting.

Navin Jacob, Analyst

Thank you so much. And just maybe two very quick questions on FixVac. The T cell data in the nature publication certainly look interesting, but it is plasma data. Wondering what it looks like in the two microenvironment, which, as you know, literature suggests there's better correlation with antitumor activity with T cells in the tumor. And then wondering also when we're going to see the next data set with a later cutoff point from this Phase 1.

Ugur Sahin, CEO

Yes. We have conducted studies analyzing tumor tissue and the presence of vaccine-induced T cell receptors, including in the iNeST trial and with FixVac. We confirm that T cells found in the peripheral blood do infiltrate the tumor and are detectable there. This was not required for the special publication, which focused on the relationship between the strength and duration of immune responses and their function. The next publication from the study is expected in the second half of 2021, relating to the patient population evaluated for relapse-free survival. This population included patients who had surgery but no tumors at the time they received therapy. We will have data regarding relapse-free survival. The upcoming publication will describe the Phase 2 data. We plan to start a randomized Phase 2 study for melanoma FixVac by the end of this year, which will be relatively small, and we expect to collect data over the next 18 to 24 months. I hope this will provide the crucial data needed for registration of FixVac in second-line or higher melanoma.

Navin Jacob, Analyst

Got it. I'm sorry. The question on Fosun, are you moving forward with 162b1 with them or 162b2?

Ugur Sahin, CEO

Özlem, could you please...

Ozlem Tureci, Chief Medical Officer

Yes, sure. We are moving further with b2 globally, also in China and with Fosun. The reason why the b1 part of our testing in China has started basically at the same time when we made the b2 decision is that we think that it has value to also compare in the Chinese population, meaning in other populations, these two candidates of mod-RNA platform, and we are now preparing the b2 entry in China. So the regulatory processes are the difference there. It's the more sequential approach, not the umbrella trial approach, which works in that regulatory region. We think that generating class-intrinsic data for mod-RNA as such and also benchmarking these two, b1 and b2 mod-RNAs, against each other in the Chinese population is of value for the entire program.

Navin Jacob, Analyst

That's very clear. Thank you very much for this call. Very helpful details and congrats on the progress.

Ozlem Tureci, Chief Medical Officer

Thank you.

Operator, Operator

Thank you. I would now like to hand the conference back to Sylke Maas for closing remarks.

Sylke Maas, Vice President, Investor Relations and Business Strategy

Thank you for joining today's call. We look forward to speaking to you in the future particularly. Bye-bye.

Operator, Operator

That does conclude our conference for today, thank you for participating. You may all disconnect.