BioNTech Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 8, 2023

There are 15 speakers on the call.

Operator

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

Speaker 1

Good morning and afternoon. My name is Victoria Meissner and I'm the new Head of Investor Relations at BioNTech. I'm a medical doctor by training have recently joined BioNTech from Healthcare Investment Banking at Jefferies. I look forward to working with you on the corporate side. Thank you for joining us today for BioNTech's Q1 2023 earnings call.

Speaker 1

As a brief reminder, the slides that accompany this call and the Q1 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 our forward looking statements disclaimer. Additional information about these statements and other risks are described in our filings made with the U. S. Securities and Exchange Commission.

Speaker 1

Forward looking statements on the call are subject to substantial risks and uncertainties, speak only as of called original date, and we undertake no obligation to update or revise any of the statements. On slides 34, you can see detailed safety information regarding our COVID-nineteen vaccine. On Slide 5, 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 Zahin Ozlem Tureci, our Chief Medical Officer and Co Founder Jens Holstein, our Chief Financial Officer and Ryan Richardson, our Chief Strategy Officer.

Speaker 1

I would like to turn the call over to Ugur Sahin.

Speaker 2

Thank you, Victoria. Good morning and good afternoon and warm welcome to all the call participants. We appreciate your continued support. Today, I will summarize our Q1 2023 highlights and priorities before I pass the call over to my team to provide further details. Let me reiterate our strategy goals for 2023 and highlight our Q1 and recent achievements.

Speaker 2

1st, to expand and sustain our leadership in COVID-nineteen with Pfizer by advancing our next generation vaccine candidates, developing combination vaccines and advancing key Cominati features. This quarter, we maintained our strong COVID-nineteen vaccine market position, supported by key label expansions in regions around the world. This month, we published preclinical data in the journal Cell on our next generation He's a spring vaccine component in combination with Cominati. Our second goal is to accelerate our oncology pipeline and initiate multiple potentially registrational trials. Our new collaborations with Duality Bio and OncoCy 4 complement our pipeline with multiple mid to late and Stage clinical programs that will help us to achieve this goal in the near term.

Speaker 2

Our 3rd and Final strategic goal is to initiate and accelerate clinical programs with high unmet medical need in infectious diseases. In the Q1, we initiated new clinical vaccine programs, namely for shingles and tuberculosis. The Q1 was a strong start to 2023. We plan to continue execution against these strategic goals to continue our development into a fully integrated global multiproduct biotechnology company and the rest of medical needs worldwide. Cancer remains one of this key unmet medical needs.

Speaker 2

Our long term oncology strategy is to expand the treatment options available for cancer patients and become a multiproduct company in the next year. In order to best serve the needs of tumor patients, we aim to address the full continuum of cancer treatment, Bring novel therapies to market for patients with adjuvant and late stage cancer and combining our platforms and programs to translate our science into survival. Key elements in our oncology pipeline mRNA cancer vaccines, cell therapies, next generation checkpoint, immune modulators and antibody drug conjugates. We believe that these drug classes have the potential to drive improved outcomes for solid Tumor patients across multiple lines of treatment and tumor types. Our most advanced oncology assets are currently in development for a range of So tumors at all stage of treatment.

Speaker 2

We believe that this asset has 1st in class or best in class potential and may enable us to drive meaningful change in the treatment of many cancers. How are we planning to achieve this? Our technology agnostic innovation engine leverages modular technology platforms, Both developed internally and accessed via collaboration partnerships to produce novel product candidates. In the Q1, we announced 2 new collaborations to give us access to assets and platforms that we believe may be important in how solid tumors are treated in the future. One of those, which I'm particularly excited about at the new collaboration with Strelke Biologics, a company focused on the discovery and development of next generation antibody drug conjugates.

Speaker 2

In the last few years, advancements in ADC technology has resulted in its prudent use for the treatment of solid tumors. We believe that ADCs have the potential to replace highly toxic chemotherapy regimens as a cytotoxic backbone to CancerTrids. ADC consists of 3 main components antibody, linker and payload. Each of these components has an impact on ADC's pharmacological and clinical properties. ADC is a precision medicine allowing for targeted Drug Delivery, particularly to tumor cells with high specificity and potent induced cell death with the benefit of reduced of target events.

Speaker 2

When the monoclonal antibody binds to the target antigen specifically expressed on the tumor cell, The ADC is internalized, allowing for the release of the cytotoxin, which leads to cell death. Slide 11. Under the terms of the exclusive worldwide licensing collaboration agreement with Duality Bio, Excluding Mainland China, Hong Kong region and Macau region, we will gain access to 2 programs, DB1303 targeting HER 2 and DB1311, driven by Zoology's Ditech platform and novel cleavable linker and payload technologies, this 3rd generation ADCs have demonstrated pharmacokinetic properties that may contribute to an increased therapeutic window compared to other ADC platforms. ADCs offer a both combination potentials, especially with various IO agents. A Phase III clinical trial for DB13 is ongoing, which we plan to expand into further tumor indications and we aim to rapidly advance clinical development of this program.

Speaker 2

Slide 12. I want to end where I started, our vision. With our new collaboration, we now have 27 programs. We plan to start multiple potentially registrational trials in the coming years. Within the next years, we aim to become a multiproduct global biotechnology leader aiming to contribute and address the world's most pressing health challenges with pioneering disruptive technologies delivered at scale.

Speaker 2

With that, I would like to thank you all for your confidence in our success and your continued support. I will now turn the call over to Esme.

Speaker 3

Thank you, Ugur. I'm delighted to speak with everyone today and provide our pipeline update. Starting on Slide 14, Not only since BioNTech's founding, we have firmly believed in the potential for mRNA cancer vaccines to have a place in the future of cancer treatment. We have built our personalized and off the shelf platforms and initiated a broad clinical program to evaluate the full utility of our approaches. Today, we have a broad cancer vaccines development program with 4 ongoing randomized Phase 2 clinical trials in both the adjuvant and metastatic disease settings.

Speaker 3

The INES program includes 4 clinical studies, for Phase 2 clinical trial with autogen sevomerang BNT122 monotherapy in adjuvant CRC started in 2020 and is recruiting patients with ctDNA positive, resected, stage 2 high risk and stage 3 colorectal cancer. Data from an investigator initiated Phase 1 clinical trials evaluating BNT122 autogen savomeran and one time dosing of atezolizumab in atrivent pancreatic ductal adenocarcinoma were presented at ASCO last year, The Phase 2 clinical trial in this patient population is planned to start in 2023. The randomized Phase 2 clinical trial evaluating our agent in combination with pembrolizumab in first line melanoma patients has finished enrollment. Analysis of PFS as primary endpoint will be triggered event based. Data from Phase 1 clinical trial with BNT122 autogen cerumaran, A single agent and in combination with atiselizumab in patients with locally advanced disease and metastatic disease across multiple tumor types was presented previously.

Speaker 3

We are preparing a manuscript summarizing the Phase 1 Data for Publication. In our 6 stack program that is comprised of 4 different indication specific product candidates, We have ongoing clinical studies. We have a 1st in human Phase III clinical trial evaluating BNT-one hundred and twelve Monotherapy and in combination with cemiplimab in 2 cohorts of patients, namely with metastatic castration resistant prostate cancer and with high That a castration resistant prostate cancer and with high risk localized prostate cancer who are eligible for treatment with androgen Depreviation Therapy is ongoing. A randomized Phase 2 clinical trial evaluating BNT-one hundred and thirteen in combination with pembrolizumab versus pembrolizumab monotherapy as a first line treatment in patients with PD L1 positive unresectable recurrent or metastatic HPV16 in positive head neck squamous cell carcinoma is ongoing. The randomized Phase 2 clinical trial evaluate in BNT-one hundred and eleven in combination with samiplimab versus both agents as monotherapy in patients with refractory relapsed unresectable stage 3 of 4 melanoma is ongoing, conducted in collaboration with Regeneron.

Speaker 3

Data from a first in human open label Phase 1 clinical trial evaluating BNT-one hundred and eleven in patients with advanced melanoma have been published and presented. The Phase 1 DASKET clinical trial evaluating BNT-one hundred and sixteen alone and in combination with cemiplimab in patients with non small cell lung cancer in various settings is ongoing. For example, patients who have progressed on prior PD-one inhibitor treatment or are not eligible for and in combination with docetaxel in patients who have received priapritinib based chemotherapy. A second trial is planned to start this year to evaluate a combination of for BNT-one hundred and sixteen and cemiplimab and cemiplimab alone as first line treatment of patients with non small cell lung cancer. Based on the data collected from these trials, we plan to continue the clinical trial advancement and expansion of both our mRNA cancer vaccine program.

Speaker 3

I'd like to put our first Quarter pipeline advancements and additions into the broader context of our clinical stage pipeline, which is depicted on Slide 15. In the Q1, we added to our pipeline the new assets Ugur already mentioned. The HER2 targeting ADC DB1303 developed by our colleagues at Duality Bio, which has recently started the Phase 2 portion of the ongoing Phase III clinical trial. Also in the Q1, we added ONC392 to our pipeline, the pH sensitive anti CTLA-four antibody developed by our partner, ONCO C4. ONC392 is being in 2 ongoing clinical trials.

Speaker 3

The first in multiple solid tumors as monotherapy and in combination with pembrolizumab and the 2nd trial in platinum resistant ovarian cancer patients in combination with pembrolizumab. We are excited about accelerating and broadening the clinical development for both of these programs based on the data we've seen in the preclinical and clinic. On Slide 16, I want to briefly highlight the mechanism of and Clinical Data of ONC392. CTLA-four recitals continuously between the cell surface and the endosome as it does not undergo lysosomal degradation. Interruption of this process is associated with the development of autoimmunity.

Speaker 3

Autoimmunity and immune related adverse events are a major limitation of approved anti CTLA-four antibodies such as ipilimumab that disrupt CTLA-four recycling by promoting lysosomal degradation of this important immune checkpoint molecule. Octane42 does not interfere with the recycling. It dissociates from the CTLA-four molecule in the endosome and allows normal recycling of both the antibody and the CTLA-four molecule and thus is designed for stronger cancer therapeutic effect and less immune related adverse effects. ONC392 is being tested in the trial that investigated dose escalation, a single agent and in combination with pembrolizumab. Multiple indications such as IONez and resistant non small cell lung cancer and melanoma are being treated with RP2D.

Speaker 3

Preliminary data shows that ONC392 is well tolerated with no DLTs and the RP2D was determined to be 10 mgkg without MTDs being reached. Severe immune related grade 3 at worst event rate in the combo dose escalation was 23%, which is considered lower than what was reported for comparable IOI0 combination. The RP2D dose for combination In summary, on 392 dose, as monotherapy or in combination was well tolerated and the safety profile appears to allow higher dosing for a longer duration of treatment as compared to ipilimumab. Early efficacy data as monotherapy in platinum resistant ovarian cancer patients and in combination with Pembrolizumab in multiple solid tumors were promising. Presentation of the first data from the NSCL The expansion cohort of the Phase III PRESERV001 study is planned at ASCO next month.

Speaker 3

Building on these data, we are planning to start a Phase 3 clinical trial in non small cell lung cancer patients without driver mutations who have progressed following anti PD-one. After progressing on an anti PD-one treatment, non small cell lung cancer patients at 8 to 11 months median overall survival and 3 to 4.5 months progression free survival with a response rate of around 10% when treated with the second line standard of care, dotcetaxial. With ONC392, we hope to offer a promising new second line treatment option for these patients. The randomized open label controlled multicenter Phase 3, Preserve 3 study It's planned to treat I O resistance non small cell lung cancer patients. In the dose confirmation part, we and ONC-four plan to assess the efficacy and Safety of ONC392 given at 2 dose levels in comparison to docetaxel.

Speaker 3

In the Sequent part of the trial, we intend to assess the safety and efficacy of ON-three ninety two at the selected dose regimen versus docetaxel. Patients with stage 4 non small cell lung cancer who progressed on prior IO treatment with or without chemotherapy and ECOG status of 0 or 1 can be enrolled. Prior IO, IO therapy is allowed. A total of about 600 patients are planned to be enrolled and randomized 1 to 1 to receive either ONC392 or Doctor. Tafsir in this 2 stage study.

Speaker 3

The primary endpoint is overall survival with objective response rate, PFS and safety as secondary endpoints. The study is planned to start enrolling patients within the next few weeks. The trial in progress poster will be presented at the 2023 ESCO Annual Meeting. Moving to our collaboration with our partners, Duality Bio on Slide 18. As part of the collaboration, we will gain access to Duality Bio's lead candidate, DB1303, A HER2 targeting ADC comprised of a trastuzumab biosimilar covalently linked to a proprietary DNA topoisomerase 1 inhibitor, P1003 via the cleavable linker L1 hundred and one.

Speaker 3

Approved ADCs have shown anti tumor activity and clinical benefits in multiple types of cancer. While current generations of anti HER2 2 ADCs have an improved overall therapeutic index, more efficacious and safer anti Her to ADCs, for example, regarding potential lung toxicity, such as severe life threatening or fatal interstitial lung disease, including Pneumonitis may add further clinical benefit. The first data for DB1303 were presented at the EORTC and CI AACR Conference last October and describe the significantly improved therapeutic window of DV1303 preclinically as compared to the S82201A or TDM-one and A. In red monkey and human plasma, DD1303 demonstrated high drug to antibody ratio and outstanding plasma stability in HER2 positive and HER2 negative mixed cell cultures, DB1303 inhibited the proliferation of both cell types, demonstrating its bystander effect. Pharmacokinetic and pharmacodynamic analysis of DB1303 and xenograft mouse models showed targeted delivery of the toxin into tumor tissue.

Speaker 3

Further in vivo studies in monkeys showed a superior stability of DB1303 and rapid systemic clearance of the toxin. These pharmacokinetic Properties result in maintenance of efficacy and reduction of systemic toxicity in animal models, which are shown on the next slide. Slide 19, CB-thirteen oh three exhibited potent antitumor activity in both HER2 positive and HER2 low tumor models, potentially expanding the benefit population of HER2 targeted therapy. Preclinical studies in monkeys demonstrated an improved safety profile compared to DS-eight thousand two hundred and one with the highest non severely toxic dose of 18 mg per kg. Further DB1303 showed lower risk of causing lung inflammation with no ILD like lung toxicity.

Speaker 3

The pharmacokinetic properties of DB1303 may contribute to a superior and Safety Profile Observed in Monkeys. Slide 20. The program has received Fast Track designation from the FDA and is currently being evaluated in a Phase onetwo clinical trial for HER2 positive advanced solid tumors. The study is enrolling pretreated patients with advanced on metastatic HER2 positive or HER2 expressing solid tumors. Data from the study will be presented at ASCO this year.

Speaker 3

After determination of the recommended Phase 2 dose, Further dose expansion cohorts are planned, including tasuzumab treated HER2 gastric gastroesophageal adenocarcinoma and CRC, HER2 overexpressing and HER2 low endometrial carcinoma, hormone receptor positive HER2 low breast cancer as well as HER2 positive breast Cancer and Non Small Cell Lung Cancer with activating HER2 mutation. Slide 21 highlights our infectious disease pipeline. In December of last year, we initiated the first clinical trial investigating an mRNA based vaccine for malaria prevention. Consistent with our 2023 and Pagic priorities. We started 2 first in human clinical trials testing new mRNA vaccine candidates in the Q1 of 2023.

Speaker 3

1 is a vaccine against tuberculosis and the other with our partner Pfizer, These programs build on our validated platform of mRNA LMPs that has a backbone optimized design and are new nucleoside modified to address diseases with a significant global need. The World Health Organization estimates that about 25% of the world's population is latently infected with mycobacterium tuberculosis, a bacterium responsible for the tuberculosis disease. 10,600,000 people developed active tuberculosis in 2021 and a total of 1,600,000 people died of tuberculosis Worldwide. There are limited prophylactic treatment options for tuberculosis and cases of mysidrug resistant Mycobacterium tuberculosis strains are increasing worldwide. The only licensed tuberculosis vaccine It's the mycobacterium bolivus derived and attenuated BCG, which was first introduced in the 20s and is still routinely administered to newborns in most tuberculosis endemic countries.

Speaker 3

By BCG provides some protection from severe forms of tuberculosis in childhood, the high number of Pulmonary tuberculosis cases that emerge every year illustrate the limited durability and protective and the efficacy of BCG against tuberculosis disease and transmission in adolescents and adults. Vaccine technology advances are seen as important to ending the tuberculosis epidemic by 2,030, which is the United Nations Sustainable Development Goal. Given the major global unmet medical need for tuberculosis vaccine, We and the Bill Melinda Gates Foundation are working on multiantigen RNA lipid nanoparticles vaccine candidates against tuberculosis. The target population of the BNP-one hundred and sixty four program will include IGRAN negative and positive BCG naive and vaccinated healthy adults. The clinical program in Germany and South Africa, thereby including a non endemic and an endemic country, will investigate the safety, reactogenicity and tolerability of the BNT-one hundred and sixty four Vaccine Candidates.

Speaker 3

The Phase 1 program is intended to help select the optimal mRNA vaccine candidate and the dose level for advancement to Phase 2. The vaccine may prevent infection and subsequent transmission and when applied to a large enough Proportion of the target population that constitutes the infectious reservoir could enable interruption of transmission and thus bring us closer to the elimination of tuberculosis. We believe that even a vaccine that is only 50% efficacious would be a critical intervention and a success in contributing to the WHO tuberculosis elimination target by 2,030. Slide 23. Dynamic evolution of COVID-nineteen strains requires care vaccine adaptation and Innovative Next Generation Vaccines.

Speaker 3

We are pursuing several next gen vaccine concepts. One of these is a T cell vaccine component, AKA BNT162b4. As shown on the left hand side, along the evolution of SARS CoV-two and particularly pronounced in the Omicron subclinages, there has been progressive loss of conserved Spiked protein neutralizing antibody side. In contrast, HLA Class 1 and 2 presented T cell epitopes of a spike protein remained mostly unaltered across the virus evolution. This is not surprising.

Speaker 3

Indeed, a fundamental difference of T cell For this B cell mediated immunity is that owing to their very nature, T cell epitopes are less likely To be impacted by mutations and the T cell mediated layer of immunity is more robust against immunization. T cell response is likely to remain much less impacted than neutralizing antibodies by new variants of concern and may contribute to prevention or limitation of severe COVID-nineteen manifestation. Based On this rationale, we are developing BNT162b4, an mRNA that encodes variant conserved immunogenic segments of non spike proteins of SARS CoV-two, namely of nucleocapsid membrane and OF-1aB proteins with binding to diverse HLA leaders. For design of this drink, we have built on our platforms and skills developed in the context of Designing Domestic Mutation Based Cancer Vaccines. Our BNT162b4tcellstring component is designed to enhance T cell immunity and is intended to be combined with variant adapted Comirnaty.

Speaker 3

We believe we can improve immunity that is variant independent. Our preclinical data was recently published In a mouse animal module, we demonstrated that mice immunize with BNT162b2, which is Comminati, with our BNT162b4, which is the T cell string, non strong polyfunctional and polyepitopic CD4 and CD8 T cell responses to the NM and of 1AB proteins of SARS CoV-two, thus broadening the T cell response beyond the spike protein. Data from Syrian hamsters that were immunized with BNT162b4 alone or in combination with BNT162b4 B2B4 alone are in combination with BNT162b2 and then challenged with wild type SARS CoV-two of a delta variant demonstrates that BNT162b4 alone and in combination protects animals from severe disease and enhances and ViroCRM. The clinical study investigating this next generation COVID-nineteen vaccine component candidate in combination with Comirnaty is ongoing. I look forward to providing additional program updates in the coming months.

Speaker 3

I will now pass the presentation to our CFO, Jens Holstein, who will present our financial results.

Speaker 4

Thank you, Aslem, and a warm welcome to everyone who dialed in today's call. I'll start my section with the key highlights for the Q1 of 2023, which you can find on Slide 26. The Q1 of 2023 started strong and fully to our expectations. The quarter was driven by seasonal and some carryover effects from the previous year. As an example, we generated revenues from sales in countries with late approvals of our VA4five adapted by relevant COVID-nineteen vaccine.

Speaker 4

For the rest of the year, we are expecting an increase in vaccine sales towards the Northern Hemisphere winter season in the countries which are our key markets. As a consequence, we expect the Q2 to be the weakest quarter in 2023. Overall, we reiterate our COVID-nineteen vaccine revenue guidance of around €5,000,000,000 for the full 2023 financial year. I would now like to dive into some key financial figures that underline our successful Q1. Our total revenues reported for the Q1 of 2023 reached €1,300,000,000 mainly related to our share of gross profit from COVID-nineteen vaccine sales in the collaboration partners' territories.

Speaker 4

These revenues represent a net figure, meaning that we generate 100% gross margin on dose. As a reminder, under our COVID-nineteen vaccine collaboration, territories have been allocated between us, Pfizer and Fosun Pharma, based on marketing and distribution rights. Please keep in mind that Pfizer's fiscal quarter for subsidiaries outside the United States This is from our financial reporting cycle. Hence, Pfizer's international operations from December 2022 will be reflected in their Q1 2023 earnings, whereas we have included the respective estimate already in our Q4 2022 financial figures. This creates a deviation between the numbers of our partner Pfizer publishers versus our numbers on a quarterly and a full year basis.

Speaker 4

With €1,300,000,000 in revenues, we ended the Q1 with an operating result of €654,400,000 and generated earnings per share on a fully diluted basis of €2.05 With respect to the company's financial position, we ended the Q1 of 2023 with €12,800,000,000 comprising EUR 12,100,000,000 cash and cash equivalents as well as EUR 700,000,000 security investments with a longer time horizon, which we made as part of our investment strategy. When looking at our cash burn during the Q1 of 2023, The cash movement was negatively impacted, for example, due to a one time payment settling our wage tax liability incurred in the context of our 2022 share based payment settlement, significant tax prepayments relating to the full financial year of 2023 as well as Amounts spent as part of our share repurchase program. Subsequent to the end of the quarter, in April 2023, We have received approximately EUR 4,000,000,000 in cash from our collaboration partner Pfizer, settling our gross profit share for the Q4 of 2022. Our M and A activities and recent collaboration license agreements announced in the Q1 did not lead to cash outflows during the quarter. In connection with the planned acquisition of InstaDeep and the upfront payments of the collaboration and license agreements with Onco C4 and Duality Biologics, we expect approximately EUR 800,000,000 to be invested in cash and by exchanging shares in the course of 2023.

Speaker 4

Please note, the final InstaDi purchase price will be determined on closing and the mentioned amount for M and A does not comprise future earn out and milestone payments. I'll be moving to our financial results for the Q1 of 2023, as shown on Slide 27. Having explained our revenues on the previous slide, let me move to cost of sales that amounted to EUR 0,100,000,000 in the Q1 of 2023 compared to EUR 1,300,000,000 for the comparative prior year period. The drop was mainly due to the decrease in COVID-nineteen vaccine sales. Research and development expenses reached €334,000,000 for the Q1 of 2023 compared to €285,800,000 for the comparative prior year period.

Speaker 4

The increase was mainly due to higher expenses incurred from progressing the clinical studies for pipeline candidates. The increase was further driven by an increase in wages, benefits and Social Security expenses resulting from an increase in headcount. General and administrative expenses amounted to €119,400,000 for the Q1 of 2023 compared to €90,800,000 for the comparative prior year period. The increase in G and A was mainly due to increased and IT Services as well as an increase in wages, benefits and social security expenses resulting mainly from an increase in headcount. Income taxes were accrued with an amount of €205,500,000 for the Q1 of 2023 compared to EUR 1,300,000,000 for the comparative prior year period.

Speaker 4

The derived effective income tax rate for the Q1 of 2023 was approximately 29%, which is expected to decrease over the 2023 financial year to be in line with our guidance. For the Q1 of 2023, net profit reached EUR 502,200,000 compared to EUR 3,700,000,000 for the comparative prior year period. Our diluted earnings per share for the Q1 of 2023 amounted to €2.05 compared to €14.24 for the comparative prior year period. Now turning to Slide 28. I would like to emphasize that we are reiterating the company's outlook for the 2023 financial year.

Speaker 4

Please note the following number reflects current base case projections and are calculated based on the constant currency rate. As stated before, we reiterate our estimated COVID-nineteen vaccine revenues of around EUR 5,000,000,000 for the full 2023 financial year. Our capital allocation strategy includes a strong investment in M and A transactions to the extent disclosed. They have been, as far as known, reflected in the R and D expenses and will be updated as needed. Overall, we maintain our guidance for planned expenses and and Maintenance CapEx for operating activities as well as the estimated annual effective income tax rate, which we have summarized for you on the slide.

Speaker 4

And with that, I would like to turn the call over to our Chief Strategy Officer, Ryan Richardson, for an update on our strategic outlook for 2023 in concluding remarks. Thank you.

Speaker 5

Thank you, Jens. To wrap up our prepared remarks, I'll provide a brief summary of the commercial outlook for our COVID-nineteen Franchise before concluding with a few important dates to mark on your calendars. In 2023, we aim to develop, manufacture and We expect a recommendation from governmental authorities regarding vaccine strand composition mid year with a potential approval for an adapted vaccine by the end of the summer. Broad vaccination is planned to start early fall. In addition, we aim to introduce a single dose ready to use vial and will continue to improve key Comirnaty features such as shelf stability.

Speaker 5

In addition, we plan to advance our next generation COVID-nineteen vaccine candidates throughout the year. We expect that COVID demand in 2023 will continue to come from a broad range of regions globally. Since the beginning of the Q1, we have shipped We have also seen a greater contribution from the pediatric segment so far this year. For the full year 2023, We expect global demand to be driven by existing signed government contracts, which we anticipate will be augmented by the opening of a commercial market in the U. S.

Speaker 5

In the second half. In the midterm, we see multiple potential growth drivers for our COVID-nineteen vaccine franchise. These include the potential for volume growth as the seasonal market is established, particularly in high risk population segments. In addition, we believe continued innovation from variant adapted vaccines, Next generation vaccines and possible respiratory combination vaccines have the potential to support future franchise growth. The transition to private markets in certain regions is likely to take several years.

Speaker 5

We believe the shift to commercial pricing will provide further midterm growth potential. We and our partner Pfizer believe in the value that our COVID-nineteen vaccines provide both to individuals and health systems. And we will continue to invest to maintain our leadership position in the market. The next slide summarizes our pipeline news flow for 2023. Some of these points have been covered, so I won't go through them in detail again here.

Speaker 5

What is clear is that our pipeline of 27 clinical stage programs is expected to produce several readouts throughout the year across a range of technologies. We expect data updates for our CAR T cell program targeting CLAWDIN-six, our anti CTLA-four program and our new HER2 antibody drug conjugate at ASCO, in addition to multiple further updates for other programs later in the year. Before concluding and opening up the floor for questions, I would like to reiterate that we will hold our AGM on May 25th and our next innovation series event on November 7th. Who will provide further details in the coming weeks on both events. With that, I'd like to thank our shareholders for their continued support.

Speaker 5

I'll conclude our remarks and open up the floor for questions.

Operator

Thank you. We will now begin the question and answer session. And your first question comes from the line of Tazeen Ahmad from Bank of America. Please go ahead.

Speaker 6

Hi, good morning. Thanks for taking my question. I have one on pipeline as it relates to the partnership with Pfizer. On the INES program for first line melanoma, Can you give us a sense of when exactly this year that data could be presented, if it's still this year? And what level of data we should expect at the top line?

Speaker 6

And then I have a follow-up. Thanks.

Speaker 7

Yes, sure. Thank you, Tazeen. I'll start and maybe Umer you want to add. So we've retained our guidance for an update in the first line melanoma setting for this year. And we've also we've stated previously and it's still the case that our expectation is that the update would speak to both ORR and also PFS.

Speaker 7

Wouter, anything you'd like to add?

Speaker 2

No, that's the line. Thank you.

Speaker 6

Okay. Thanks. And then as it relates to HER2 looking for ADC program, So this is a relatively competitive space. There's multiple candidates that are in development. Can you just talk to us about how you think your program could be differentiated and how you're thinking about the general competitive landscape and what indications could that serve?

Speaker 2

Thanks. Yes. Maybe I can take this question. So The generation of ADCs, particularly of her Q provided a massive improvement on existing ADC compounds. We believe that there is still room for improvement, And we also believe that there is room for multiple lines of development, including, for example, her 2 gynecological tumors like ovarian cancer, endometrial cancer, Her 2 positive non small cell lung cancer, but even in the breast cancer space, yes, it's a compound that comes with a differentiated Safety profile, yes, that could add additional safety features and Tolerability Features.

Speaker 2

I would like to mention that we will have a poster in at ASCO, which would provide data and data generated in a larger breast cancer cohort. And that and this data could be informative about how this product could be positioned.

Speaker 3

Okay. Thank you.

Operator

Thank you. We will now go to our next question. And the next question comes from the line of Dana Graybosch, SVB Securities. Please go ahead.

Speaker 6

Hi. I have I'll take 2 questions too. The first one, I wonder if you could talk about the payload in the immunity sorry, in the duality Bio Programs. And whether you think that this payload will be as synergistic with IO, as some of the other payloads that we've seen late stage clinical trials and how whether its synergy Is great or less great how that will impact your development in combination with your other programs? And then I have a follow-up.

Speaker 2

Yes. Dana, thank you for the excellent question. Actually, you bring up a key point why We are interested in these ADCs. The payload is Based on topoisomerase inhibitor, And the linker technology is differentiated, providing a more stable Linker with even more reduced release of the spontaneous release of the topfin. And yes, the key aspect of bringing in this new compound class is that we believe that this new compound Would be highly synergistic with our IO pipeline, including the next generation immune modulators and bispecific antibodies as well as our personalized vaccines and fixed back applications.

Operator

Great. Thank you.

Speaker 6

And then my second question is on the flu vaccine. And I wonder how much degree of freedom there was and is in designing an mRNA based flu vaccine. And essentially I'm trying to get at how similar or different should we expect the Pfizer BioNTech vaccine from the Moderna vaccine in its outcome.

Speaker 2

So there is always flexibility. If you use this mRNA technology, there's a lot of flexibility in having A vaccine with a differentiated profile. As you know, there are Challenges in the field of influenza vaccines, particularly is you addressed The question of influenza A versus B immune responses. Therefore, I believe that The design of these vaccines could provide additional features that can overcome limitations in the field.

Speaker 6

Great. Thank you.

Speaker 7

Yes.

Operator

Thank you. We will now go to your next question. And your next question comes from the line of Akash Tewari Jefferies. Please go ahead.

Speaker 8

Hi, good morning. This is Ivy on for Kash. Thanks for taking our questions. We have 2 actually. First is for COVID.

Speaker 8

So for your EU government orders, I guess how many doses have been delivered so far? Because the tracker we found used to suggest there's around like $900,000,000 that has been delivered, but now it's only showing around $700,000,000 Biontech Pfizer doses delivered with around like 200,000,000 unknown categories. So I guess any clarifications you can give me will be super helpful. Then I have a

Speaker 9

follow-up questions on your INS program.

Speaker 4

Yes. Thanks for the question. I mean, as you know, we are currently in discussions with the EU regarding the renegotiation of the contract. And given that we're in the middle of these We don't want to give any details on this. We don't want to put any burden on those discussions, so please bear with us.

Speaker 4

We expect that we have some more clarity On the discussions in the course of Q2, that's our expectation. And then we're happy to share the results on those negotiations with you, of course.

Speaker 8

Got it. So my second question is for BNP122 supporting melanoma data readout this year. I guess you just reiterate that this will be limited for PFS and ORR. Is there any specific reason on why there won't be any OS data? Does that imply a potential longer duration of results?

Speaker 8

Thank you.

Speaker 2

I can take this question. The maturation of the data is will most likely not allow to generate OS or as we count.

Speaker 6

Got it. Thank you.

Operator

Thank you. We will now go to your next question. And your next question comes from the line of Chris Shibutani, Goldman Sachs. Please go ahead.

Speaker 9

Thank you very much. Some clarifying questions in terms of how we should think about your results and financials through the year, if I could. The reiteration of the €5,000,000,000 of guidance, can you tell us what does that take into account embedded in your base case assumption here, particularly as I recognize that you have the DEC contract negotiations are going through. You did mention the Q2 has been to the lightest, but then the deliveries Again, in the assumption for the $5,000,000,000 through the balance of the year. Similarly to the financials on the R and D related expense, You have the outlining of the full year level in the Q1.

Speaker 9

It was quite a bit less than we had been expecting and I believe consensus as well. Help us with the sort of the cadence and the shape of spending through the year. And then I have one other follow-up.

Speaker 4

Yes, Chris, happy to take that question and Ryan will chime in. Yes, maybe starting with the top line guidance. We reiterated the guidance as I stated in my speech. Before, we had a good start in Q1, we believe. Q2, and that's not a surprise to you, will be weaker.

Speaker 4

I mean, it's not really the season for vaccinations as we see it for flu. We assume that The development in terms of how people will get vaccinated is comparable to some extent to what we see in flu. So specifically looking at the Northern Hemisphere. So our expectation for Q3 and Q4 is that these will be the 2 quarters of relevance for us for the full year. We have, of course, seen already before we went out with the guidance that the discussions with the EU There will be discussions where we might have to face and we stated that when we went out with the guidance that we might have to face some reduction in the total volume for 23 versus what has been negotiated before, that we might have some other implications in some other countries potentially as well, and we try to reflect I would like to reiterate that if you compare the Pfizer guidance of 13 point $5,000,000,000 If you take that, I think that also reflected those discussions and negotiations ongoing.

Speaker 4

And if you translate that Taking into account the currency implication, taking into account that Pfizer reflects their December revenue figure of 2022 in their Q1 figure. And December 2022 has been a very strong month. Whereas we have to reflect This month in our full year figures for 2022, so we have from January to December our revenue figures whereas Pfizer for the international part Yes, just looking at November to November. So these things caused some differences, quite significant differences in our Estimation, if you compare in December 2022 versus our expectation for December 2023. So there is

Speaker 2

a big

Speaker 4

And if you then take this into account, we feel that the €5,000,000,000 that we have reiterated today It's something that we can live with. It could be that and that has been our assumption that there might be a new variant We will adapt the existing vaccine that we produce. That's our assumption to reach the €5,000,000,000 And we are Our assumption in that respect remains valid at this point in time.

Speaker 7

I hope that helps. And maybe and Ryan, I would just add maybe you can come back as well to the R and D point.

Speaker 4

Yes, I'll come back to the R and D point.

Speaker 7

Just to add Two points to that. So first is actually the volumes, while we're not disclosing volumes in the Q1, we were shipping to quite a broad range of countries the Q1 over 70 countries we mentioned. There's still some carryover there to pandemic contracts. And so as I mentioned in the prepared remarks, we did see some significant volumes in particular to low and middle income countries in the Q1.

Speaker 4

Yes. And then maybe to add on the R and D costs, Chris. So the Q1 has been Relatively light, if you see €4,000,000 that we have booked for Q1. If you put that into relation of the €2,400,000,000 to €2,600,000,000 of our guidance. But this is, to a great extent, some sort of phasing implication, to a great extent also coming from our Various programs that we have together with our collaboration partner Pfizer.

Speaker 4

So I wouldn't read too much into this. I would we reiterated that guidance. Please also take into account that we have reflected Ondurin already in there and to a great extent duality Spending for our clinical studies here. So we feel comfortable with the 2.4 to 2.6 in the course of the next quarters.

Speaker 9

And then to follow on, Pfizer during their meeting in December outlined their vision for what the vaccines for COVID could look like Usage, particularly in the U. S. Out for the next 3 or 4 years. There was a factor in there in terms of potential for combination with flu. Can you talk to what the BioNTech house view is?

Speaker 9

Were you involved with these projections? If there's any fundamental differences in your points of view, Where might they

Speaker 7

lie? Yes, thanks for the question. So yes, we're very involved Pfizer on an operational level and also on a commercial planning level globally as a co commercialization partner. I think it's fair to say that Pfizer has taken the driver's seat in the U. S.

Speaker 7

Commercial sphere. We've been very involved in Europe and also in other geographies. I think how we look at it, this is that it's a little too early to be precise and prescribe a factor to The contribution from combinations at this point, I think we need to see more data. I think what we outlined today is that we do see combinations, Respiratory Combination specifically as a potential one of multiple potential growth drivers over the mid to longer term for the franchise. So that is something that we're looking very closely at with our partner, multiple angles there.

Speaker 7

And I think Pfizer brings a lot of the table there, but so do we in terms of

Operator

Thank you. We will now go to your next question. And your next question comes from the line of Wyron Werber from Cowen. Please go ahead. Hello, Byron?

Operator

As there is no response, I will go to the next question. One moment please. And your next question comes from the line of Terence Flynn, Morgan Stanley. Please go ahead.

Speaker 10

Hi, good morning. Thanks for taking the question. Just had a follow-up on the INEST vaccine program. I was wondering if you can Discuss high level about how you're thinking about likelihood of success in the adjuvant versus the metastatic setting. I think Merck and Moderna have Focus more on the adjuvant setting, but obviously, you're taking a more a broader approach.

Speaker 10

So just wondering if you could elaborate there. Thank you.

Speaker 2

Yes, I can take this question. The question is a very important one. With regard to the develop for the development, We had an early adjuvant study in melanoma, and we have initiated 2 additional adjuvant stage PRICE 1 in purple negative breast cancer, for which we do not yet have reports and the second one in pancreatic cancer, which we have reported at ASCO last year and where we are expecting a publication in the next few weeks. And in the adjuvant setting, the clear understanding is that we have, as compared to the metastatic setting, a higher immunogenicity rate, yes, in even though using the same vaccine platform. And in the melanoma and now previously reported pancreatic cancer A study they have shown that immune responses are correlated with prevention of relapses or with a reduced relapse rate in this patient population.

Speaker 2

We have also reported the metastatic study Phase I study, which yielded also immunogenicity, but to a much weaker extent than the actual setting. And based on this, on this week, we can clearly say that at least in the In the setting how the vaccines are used so far, we see an improved activity in the adjuvant stage. There are other reasons why atrial stage cancers could be more eligible. This is, first of all, The lack of heavily established tumor microenvironment, the lower tumor load And most importantly, in the adjuvant setting, there is a window of opportunity so the tumors do not progress in the 1st 6 to in the 1st 3 months, giving the opportunity to build an immune response, which can then deal with the tumor. So in the totality, we believe that the adjuvant stage is the type of diseases to go.

Speaker 2

We have, As you know, randomized clinical trial in colorectal cancer running since 2019. We Expect here readout data from this randomized colorectal cancer trial in 2024, yes? And we are planning Phase II study based randomized Phase II study in pancreatic cancer based on the data that we have observed.

Operator

Thank you. We will now go to our next question. And your next question comes from the line of Yaron Werra, Cowen. Please go ahead.

Speaker 11

Great. Thanks so much. Hopefully, you can hear me. I got a quick question on Pfizer's and your flu vaccine 161, so the 25,000 patient, I'm sorry, U. S.

Speaker 11

Healthy adult study is ongoing. Any sense as To when you think we might be able to see data this year, is it are you thinking sort of it's in the fall? And is that sufficient to Followed, do you need to run an additional study potentially in the rest of the world or even in the Southern Hemisphere? And then secondly, my understanding that's The quadrivalent modified RNA vaccine, any update on the self amplifying mRNA vaccine for flu as well? Thank you.

Speaker 7

Yes, Yaron, I'll start and Ugar you may want to add to this. But I think it's just to start off that Important to reiterate that we've licensed that program since 2018 to Pfizer. So they're really in the driver's seat in terms of development. We do have rights to royalties and milestones upon success. And so of course, we're tracking that with them and working with them on the broader program.

Speaker 7

But I think Pfizer has guided to an update this year. I don't think they've specified and that we don't want to contradict what

Speaker 2

they put out. So I'll leave it at that.

Speaker 7

And the same goes Yaron for the self amplifying Program both are fall under our collaboration agreement with Pfizer.

Speaker 11

So Ryan, maybe just a follow-up when for the flu COVID Can you give us any sense at all as to whether your royalty is going to be sort of a blended between your low teens, let's say, and your fifty-fifty for COVID. Thank you.

Speaker 7

Yes, it's a great question. And I think blended is the right way to think about it. We haven't disclosed with Pfizer The specific economics, but I think it's fair to assume that would be a blend. As you know, we have a 50% gross profit share on the COVID-nineteen vaccine. And we do have a royalty on flu.

Speaker 7

And so there's still ongoing discussions about that, but I think we'll leave that for now until We can present some data and discuss next steps for the program.

Operator

Thank you. We will now go to your next question. And your next question comes from the line of Jessica Fye from JPMorgan. Please go ahead.

Speaker 12

Hey, guys. Good morning. This is Na Sun on for Jessica Fye. I think I want to ask about the 6 Back program and the progress there and when we might get to see initial data on that program. And then whether like in light of the comment on metastatic versus adjuvant setting, how you're thinking about the development for FICC VAC?

Speaker 12

Thanks.

Speaker 2

Maybe I'll take the second question. And Ryan, if you could take the first question, would be great. So for FICC spec, we have generated data in the metastatic setting in patients This melanoma, particularly with a high proportion of patients who did progress under existing PD-one therapy and have seen in objective responses and high rate of immunogenicity Objective responses in combination with anti PD-one in the range of 35% to 40% with vaccine alone in the range of 20%. The key advantage of UxFAC as compared to the personalized The antigen vaccine is the availability of the vaccine directly after Patient inclusion, so that means we do not have this 4 to 6 weeks of waiting time until patients can be dosed. Therefore, in principle, 6VAC could be an option for patients with advanced metastatic disease.

Speaker 2

But again, here, it's a question of the combination compounds. And this is something that is now in the focus of our upcoming studies evaluating the use of this vaccine in combination with Our checkpoint immune modulators, for example, the bispecific BNT312 and BNT311 molecules, But as well as our ribocytokine molecules that modified IL-two as well as the to

Speaker 7

IS-seven. Yes. And in terms of the timelines, we haven't guided any fixed date updates this year. So I would say that 2024 is the most likely. And as you know, we have multiple trials ongoing, multiple trials, so recruiting in NSCLC in refractory melanoma, head and neck, squamous cell carcinoma to name a few.

Speaker 7

So Likely 2024.

Operator

Thank you. We will now go to your next question. And your next question comes from the line of Bill Medan from Canaccord. Please go ahead.

Speaker 13

Good morning and thanks for the question. So I have 2 on the broader strategy. So First of all, some of the more recent BD partnerships are focused more on late stage clinical programs And less on massive paradigm shifting earlier stage programs. So is there an internal push to reach Profitability on some certain timeline on the non COVID portfolio. And then second related question is, are there any other technology platforms that you want to get into that you don't have that technology yet?

Speaker 13

Thank you.

Speaker 7

Yes, thank you. So maybe I'll take the first one and then Umer, if you want to speak to the technology platforms piece.

Speaker 2

Yes, sure.

Speaker 7

In terms of the rationale for the recent deals, I think what we have been It's clear about our intention to go commercial in the oncology portfolio by 2026 onwards. And so we have multiple internal programs that is successful in late stage trials could give us opportunities around that time period to bring products to market. And so what you've seen us do with these BD deals is basically add depth further depth to that Sort of wave 1 of oncology programs that have potential of successful to get to market around that same timeframe. In addition, we've gone for programs that can serve as backbones. So we've really tried to maximize synergy rather than solving for profitability near term, mid to long term synergy with our own pipeline.

Speaker 7

And so you see that with the anti CTLA-four molecule, you see that also with the HER2 ADC and with ADC modalities in general. Again, programs and technologies that we think could combine very well with our existing pipeline.

Speaker 2

Yes. Thank you, Ryan. With regard For technologies, no, we are not looking to any disruptive technology. We have a number of disruptive technologies in house. But what we are clearly doing is we are evaluating technology modules, And that could close gaps in our technology platforms or further augment the activity of our technology platforms.

Operator

Thank you. We will now go to your next question. And your next question comes from the line of Qixiang Xu from Berenberg. Please go ahead.

Speaker 14

I have 2. First, I want to ask about the 6 VAC BNT116.

Speaker 7

I

Speaker 14

think you mentioned you're going to start a Phase 2 programs in first line lung cancer. I wonder if you can comment on any signals

Speaker 2

Short answer. No, we do not have any updates so far from the running clinical trial That is expected end of this year.

Speaker 14

Got it. And then a quick follow-up on the your ADC CEO. Can you talk about the rest, I guess the comparison in top one inhibitor as payload versus microtubule as payload inhibitors payload in terms of the combination with IO differences and similarities there.

Speaker 2

Yes. I think the most important aspect is for getting ADC Technologies is That we believe that in the next 6, 7, 8 years, This ADC Technologies will more or less completely Replaced chemotherapy. So that means any type of combination therapy, which Requires a chemotherapy backbone, yes, might end up in an ADC approach. With regard to the currently evaluated compounds and topo2 inhibitors come with a profile allowing sustainable and also Long Term Application. And we have also seen now in several studies that they are ideally suited As backbone for combinations with IO compounds, we do not Exclude that we could be you might be also interested in microtubule inhibitors, But several of these microtubule inhibitors have been in the past, at least in the chemo therapeutic setting, associated with polymarblepatitis.

Speaker 2

And we believe that this new compound class should give the opportunity to develop treatments, which do not come with

Operator

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

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Earnings Conference Call
BioNTech Q1 2023
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