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spk13: Welcome to the BioNTech first quarter 2023 update call. I would like to hand the call over to Dr. Victoria Meissner, Vice President of Strategy and Investor Relations. Please go ahead.
spk09: 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 and 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 first quarter 2023 earnings call. As a brief reminder, the slides that accompany this call and the first quarter 2023 press release that was issued this morning can be found in an investor section of our own website. As outlined on slide two, you can see our forward-looking statements disclaimer. Additional information about these statements and other risks are described in our filings made with U.S. Securities and Exchange Commission. 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 three and four, you can see detailed safety information regarding our COVID-19 vaccine. On slide five, you can find the agenda for today's call. Today, I am joined by the following members of BioNTech's management team. Our CEO and co-founder, Ugr Zahin. Özlem Türeci, our chief medical officer and co-founder. Jens Holstein, our chief financial officer. And Ryan Richardson, our chief strategy officer. I would like to turn the call over to Ugr Zahin.
spk04: 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 first quarter 2023 highlights and priorities before I pass the call over to my team to provide further details. Let me reiterate our strategic goals for 2023 and highlight our first quarter and recent achievements. to expand and sustain our leadership in COVID-19 with Pfizer by advancing our next generation vaccine candidates, developing combination vaccines, and advancing key Cominati features. This quarter, we maintained our strong COVID-19 vaccine market position, supported by key label expansions in regions around the world. We published preclinical data in the journal Cell on our next generation T-Side 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 Oncoseed4 complement our pipeline. with multiple mid- to late-stage clinical programs that will help us to achieve this goal in the near term. Our third and final strategic goal is to initiate and accelerate clinical programs with high unmet medical need in infectious diseases. In the first quarter, we initiated new clinical vaccine programs, namely for shingles and tuberculosis. The first quarter was a strong start to 2023. We plan to continue execution against these strategic goals to continue our development into a fully integrated global multi-product biotechnology company addressing medical needs worldwide. Cancer remains one of the key unmet medical needs. Our long-term oncology strategy is to expand the treatment options available for cancer patients and become a multi-product 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 are mRNA cancer vaccines, steric 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 solid tumors at all stages of treatment. We believe that these assets have first-in-class or best-in-class potential and they 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 first quarter, we announced two 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, is the new collaboration with Duality Biologics The company focused on the discovery and development of next-generation antibody drug conjugates. In the last few years, advancements in ADC technology have resulted in its potent 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 cancer treatment. ADCs consist of three main components, antibody, linker, and payload. Each of these components has an impact on ADCs pharmacological and clinical properties. ADCs are precision medicine allowing for targeted drug delivery, particularly to tumor cells with high specificity and potently induced cell death with the benefit of reduced off-target events. 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 cytotoxins, 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 two programs. DB1303 targeting HER2, and DB1311. Driven by Duality's DITAC platform and novel cleavable link and payload technologies, this third-generation ADCs have demonstrated pharmacokinetic properties that may contribute to an increased therapeutic window compared to other ADC platforms. ADCs offer a broad combination potential, especially with various A Phase 1-2 clinical trial for DB1303 is ongoing, which we plan to expand into further tumor indications, and we aim to rapidly advance clinical development of this program. 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 multi-product global biotechnology leader aiming to contribute and address the world's most pressing health challenges with pioneering disruptive technologies delivered at scale. 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 Esnet.
spk12: Thank you, Ugo. 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 vaccine development program with four ongoing randomized phase two clinical trials in both the adjuvant and metastatic disease settings. The INUS program includes four clinical studies, a phase two clinical trial with autogen serum around 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 trial evaluating BNT122 autogen sevumaran and one-time dosing of atesolizumab in adjuvant pancreatic ductal adenocarcinoma were presented at ESCO last year. A phase 2 clinical trial in this patient population is planned to start in 2023. A 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 a Phase I clinical trial with BNT122 autogen cerumoron as single agent and in combination with atezolizumab in patients with locally advanced disease and metastatic disease across multiple tumor types was presented previously. We are preparing a manuscript summarizing the Phase I data for publication. In our six-step program, that is comprised of four different indication-specific product candidates, we have ongoing clinical studies. We have a first-in-human phase 1-2 clinical trial evaluating BNT1-12 monotherapy, and in combination with Simiclimab in two cohorts of patients, namely with metastatic castration-resistant prostate cancer and with high-risk localized prostate cancer, who are eligible for treatment with androgen-deprivation therapy is ongoing. A randomized test to clinical trials evaluating BNT113 in combination with pembrolizumab versus pembrolizumab monotherapy as a first-line treatment in patients with PD-L1-positive, unresectable, recurrent or metastatic HPV16-positive head neck squamous cell carcinoma is ongoing. A randomized phase II clinical trial evaluating BNT1-11 in combination with Simiplimab, where both agents as monotherapy in patients with refractory relapsed unresectable state III or IV melanoma is ongoing, conducted in collaboration with Regeneron. Data from a first in human open-label phase I clinical trial evaluating BNT1-11 in patients with advanced melanoma have been published and presented. The phase one DER-SCID clinical trial evaluating BNT116 alone and in combination with SemipreMAP in patients with non-small cell lung cancer in various settings is ongoing. For example, patients who have progressed on prior PD-1 inhibitor treatment or are not eligible for chemotherapy, and in combination with docetaxel in patients who have received prior platinum-based chemotherapy. A second trial is planned to start this year to evaluate a combination of BNT116 and semipremab and semipremab 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. 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 first quarter, we added to our pipeline the new assets Ugo already mentioned. the HER2-targeting ADC-DB1303 developed by our colleagues at Duality Bio, which has recently started the Phase II portion of the ongoing Phase I-II clinical trials. Also in the first quarter, we added Ong392 to our pipeline, a pH-sensitive anti-CTLA-4 antibody developed by our partner OncoC4. ONC392 is being tested in two ongoing clinical trials, the first in multiple solid tumors as monotherapy and in combination with pembrolizumab, and the second 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 preclinic and clinical. On slide 16, I want to briefly highlight the mechanism of action and clinical data of Ong392. CTLA-4 recycles continuously between the cell surface and the endosomes as it does not undergo lysosomal degradation. Interruption of this process is associated with the development of autoimmunity. Autoimmunity and immune-related adverse events are a major limitation of approved anti-CTLA-4 antibodies such as ipilimumab that disrupts CTLA-4 recycling by promoting lysosomal degradation of this important immune checkpoint molecule. Octane-32 does not interfere with the recycling. It dissociates from the CTLA-4 molecule in the endosome and allows normal recycling of both the antibody and the CTLA-4 molecule. and thus is designed for stronger cancer theropoietic effect and less immune-related adverse effects. ONC392 is being tested in a trial that investigated dose escalation as single agent and in combination with pembrolizumab. Multiple indications, such as ionoeth and resistant non-small cell lung cancer and melanoma, are being treated with the RP2D. Preliminary data shows that ONC392 is well tolerated with no DLTs, and the RP2D was determined to be 10 mcg per kick without MTDs being reached. Severe immune-related grade 3 adverse event rate in the combo dose escalation was 23%, which is considered lower than what was reported for comparable IO-IO combination. The RP2D dose for combination is 6 mg per kick. In summary, ONC392 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 NSCLC expansion cohort of the phase 1 to preserve 001 study is planned at ESCO next month. 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-1. After progressing on an anti-PD-1 treatment, non-small cell lung cancer patients have 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 doxotexil. With Ong392, we hope to offer a promising new second-line treatment option for these patients. The randomized open-label controlled multicenter phase III-preserved OO3 study is planned to treat IO-resistant non-small cell lung cancer patients. In the dose confirmation part, we and ONC394 plan to assess the efficacy and safety of ONC392 given at two dose levels in comparison to docetaxel. In the subsequent part of the trial, we intend to assess the safety and efficacy of ONC392 at the selected dose regimen versus dot-detoxyl. 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 one-to-one to receive either Ong392 or DoxaTaxil in this two-stage study. The primary endpoint is overall survival with objective response rate, TFS, 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 partner, 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 L101. approved ADCs have shown anti-tumor activity and clinical benefits in multiple types of cancer. While current generations of anti-HER2 ADCs have an improved overall therapeutic index, more efficacious and safer anti-HER2 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 CIAACR conference last October and described the significantly improved therapeutic window of DB1303 preclinically as compared to DS8201A or TDM1 analogs to trastuzumab-deruxtecan and trastuzumab-emtazine, respectively. In red monkey and human plasma, DB1303 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 in xenograft mouse models showed targeted delivery of the toxin into tumor tissue. 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, DB1303 exhibited potent anti-tumor 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 DS8201 with the highest non-severely toxic dose of 18 mg per kick. showed lower risk of causing lung inflammation with no ILD-like lung toxicity. The pharmacokinetic properties of DB1303 may contribute to a superior 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 I-II clinical trial for HER2-positive advanced solid tumors. The study is enrolling pre-treated patients with advanced or metastatic HER2-positive or HER2-expressing solid tumors. Data from this study will be presented at ESCO this year. After determination of the recommended phase two dose, further dose expansion cohorts are planned, including trastuzumab-treated HER2 gastric, or gastroesophageal adenocarcinoma, esophageal carcinoma, 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 strategic priorities, we started two first in human clinical trials testing new mRNA vaccine candidates in the first quarter of 2023. One is a vaccine against tuberculosis and the other with our partner Pfizer, the vaccine for shingles. These programs build on our validated platform of mRNA LMPs that have a backbone optimized design and are 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, the bacterium responsible for the tuberculosis disease. 10.6 million people developed active tuberculosis in 2021, and a total of 1.6 million people died of tuberculosis worldwide. There are limited prophylactic treatment options for tuberculosis and cases of multidrug-resistant mycobacterium tuberculosis strains are increasing worldwide. The only licensed tuberculosis vaccine is the mycobacterium bovis derived and attenuated BCG, which was first introduced in the 1920s and is still routinely administered to newborns in most tuberculosis endemic countries. While 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 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 2030, which is a United Nations sustainable development goal. Given the major global unmet medical need for tuberculosis vaccines, we and the Bill and Melinda Gates Foundation are working on multi-antigen RNA lipid nanoparticle vaccine candidates against tuberculosis. The target population of the BNT164 program will include IGRA 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 BNT164 vaccine candidates. The phase one program is intended to help select the optimal mRNA vaccine candidate and the dose level for advancement to phase two. 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 2030. Slide 23. Dynamic evolution of COVID-19 strains requires vaccine adaptations and innovative next-generation vaccines. We are pursuing several next-gen vaccine concepts. One of these is a T-cell string vaccine component, aka BNT162B4. As shown on the left-hand side, along the evolution of SARS-CoV-2, and particularly pronounced in the Omicron sublineages, there has been progressive loss of conserved spike protein neutralizing antibody sites. In contrast, HLA class 1 and 2 presented T-cell epitopes of the spike protein remained mostly unaltered across the virus evolution. This is not surprising. Indeed, a fundamental difference of T-cell versus 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-19 manifestations. Based on this rationale, we are developing BNT162B4, an mRNA that encodes variant-conserved immunogenic segments of non-spike proteins of SARS-CoV-2, namely of nucleocapsid membrane and of 1AB proteins with binding to diverse HLA alleles. For design of this drink, we have built on our platforms and skills developed in the context of designing somatic mutation-based cancer vaccines. Our BNT162B4 T-cell string vaccine component is designed to enhance T-cell immunity and is intended to be combined with variant-adapted Comirnaty. We believe we can improve immunity that is variant-independent. Our preclinical data was recently published in Cell. In a mouse-animal model, we demonstrated that mice immunized with BNT162b2, which is Comianati, with or without BNT162b4, which is the T-cell string, mount strong polyfunctional and polyepitopic CD4 and CD8 T-cell responses to the N, M, and of 1AB proteins of SARS-CoV-2, thus broadening the T-cell response beyond the spike proteins. Data from Syrian hamsters that were immunized with BNT162B4 alone or in combination with BNT162B2 and then challenged with Y-type SARS-CoV-2 of a delta variant demonstrates that BNT162B4 alone and in combination protects animals from severe disease and enhances viral clearance. A clinical study investigating this next generation COVID-19 vaccine component candidate in combination with Comirnaty is ongoing. I look forward to providing additional program updates in the coming months. I will now pass the presentation to our CFO, Jens Holzstein, who will present our financial results.
spk03: Thank you, Özlem, and a warm welcome to everyone who dialed in today's call. I'll start my section with the key highlights for the first quarter of 2023, which you can find on slide 26. The first quarter 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 BA.4.5-adapted bi-valent COVID-19 vaccine. 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 second quarter to be the weakest quarter in 2023. overall we reiterate our covet 19 vaccine revenue guidance of around 5 billion euros for the full 2023 financial year I would now like to dive into some key financial figures that underline our successful first quarter. Our total revenues reported for the first quarter of 2023 reached 1.3 billion euros, mainly related to our share of gross profit from COVID-19 vaccine sales in the collaboration partners' territories. These revenues represent the net figure, meaning that we generate a 100% gross margin on those. as a reminder under our covet 19 vaccine collaborations territories have been allocated between us pfizer and frozen pharma based on marketing and distribution rights please keep in mind that pfizer fiscal quarter for subsidiaries outside the united states differs 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 our partner Pfizer publishes versus our numbers on a quarterly and a full year basis. With 1.3 billion in revenues, we ended the first quarter with an operating result of 654.4 million euros generated earnings per share on a fully diluted basis of 2 euros and 5 euro sets with respect to the company's financial position we ended the first quarter of 2023 with 12.8 billion euros comprising 12.1 billion euros cash and cash equivalent as well as 0.7 billion euros security investment with a longer time horizon which we made as part of our investment strategy When looking at our cash burn during the first quarter 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 4 billion euros in cash from our collaboration partner Pfizer, settling our gross profit share for the fourth quarter of 2022. Our M&A activities and recent collaboration license agreements announced in the first quarter 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 €0.8 billion to be invested in cash and by exchanging shares in the course of 2023. Please note, the final entity purchase price will be determined on closing, and the mentioned amount for M&A does not comprise future earn-out and milestone payments. I'll be moving to our financial results for the first quarter 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 0.1 billion euros in the first quarter of 2023 compared to 1.3 billion euros for the comparative prior year period. The drop was mainly due to the decrease in COVID-19 vaccine sales. Research and development expenses reached 334 million euros for the first quarter of 2023 compared to 285.8 million euros for the comparative prior year period. The increase was mainly due to higher expenses occurred 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 €119.4 million for the first quarter of 2023, compared to €90.8 million for the comparative prior year period. The increase in G&A was mainly due to increased expenses for IT consulting 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 205.5 million euros for the first quarter of 2023 compared to 1.3 billion euros for the comparative prior year period. The derived effective income tax rate for the first quarter of 2023 was approximately 29%, which is expected to decrease over the 2023 financial year to be in line with our guide. For the first quarter of 2023, net profit reached 502.2 million euros compared to 3.7 billion euros for the comparative prior year period. Our diluted earnings per share for the first quarter of 2023 amounted to 2 euros and 5 euro cents compared to 14 euros and 24 euro cents 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. 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-19 vaccine revenues of around 5 billion euros for the full 2023 financial year. Our capital allocation strategy includes a strong investment in M&A transactions to the extent disclosed. They have been, as far as known, reflected in the R&D expenses and will be updated as needed. Overall, we maintain our guidance for planned expenses and growth 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. 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.
spk07: Thank you. To wrap up our prepared remarks, I'll provide a brief summary of the commercial outlook for our COVID-19 vaccine franchise before concluding with a few important dates to mark on your calendars. In 2023, we aim to develop, manufacture, and deploy a seasonal adapted Comirnaty vaccine. 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. In addition, we plan to advance our next generation COVID-19 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 first quarter, we have shipped COVID-19 vaccine doses to more than 70 countries and regions. Since the start of the year, our deliveries to middle income and low income countries have increased. 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. in the second half. In the midterm, we see multiple potential growth drivers for our COVID-19 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. We believe the shift to commercial pricing will provide further midterm growth potential. We in our partner Pfizer believe in the value that our COVID-19 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. 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 CLAUDIN-6, our anti-CTLA-4 program, and our new HER2 antibody-viric conjugate at ASCO. In addition, the 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. We'll provide further details in the coming weeks on both events. With that, I'd like to thank our shareholders for their continued support, and I'll conclude our remarks and open up the floor for questions.
spk13: Thank you. We will now begin the question and answer session. If you wish to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. If you'd like to withdraw your question, please press star 1 and 1 again. We will now go to your first question. And your first question comes from the line of Tazeen Ahmad from Bank of America. Please go ahead.
spk16: Hi. Good morning. Thanks for taking my question. I have one on pipeline as it relates to the partnership with Pfizer. On the 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, and then I have a follow-up. Thanks.
spk07: Yeah, sure. Thank you, Tiziana. I'll start, and maybe, Ugar, 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 stated previously, and it's still the case, that our expectation is that the update would speak to both ORR and also PFS. Do you have anything you'd like to add?
spk04: No, that's fine. Thank you.
spk16: Okay, thanks. And then as it relates to HER2, your 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 be best served. Thanks.
spk04: Yeah, maybe I could take this question. So, the third generation of ADCs, particularly HER2, 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, HER2 gynecological tumors like ovarian cancer, endometrial cancer, HER2 positive non-small cell lung cancer, but even in the breast cancer space, there's a compound that comes with a differentiated safety profile. that could add additional safety features and tolerability features. I would like to mention that we will have a poster at ASCO which would provide data and data generated in a larger breast cancer cohort. and this data could be informative about how this product could be positioned.
spk13: Okay, thank you. Thank you. We will now go to our next question. And the next question comes from the line of Dana Graybosh, SVB Securities. Please go ahead.
spk14: Hi. I'll take two questions, too. The first one, I wonder if you could talk about the payload in the duality bio programs and whether you think that this payload will be as synergistic with IO as some of the other payloads if 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.
spk04: Yeah. Dana, thank you for the excellent question. Actually, you bring up a key point by we are interested in this ADC, so the payload is based on a topoisomerase inhibitor. The linker technology is differentiated, providing a more stable linker with even more reduced spontaneous release of the toxin. And yes, the key aspect of bringing in this new compound class is that we believe that these new compounds would be highly synergistic with our IO pipeline, including the next generation immune modulators and by specific antibodies, as well as our personalized vaccines and fixed-back applications.
spk14: Great. Thank you. 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?
spk04: 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 in the 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.
spk14: Great. Thank you.
spk13: Thank you. We will now get to our next question. And your next question comes from the line of Akash Tiwari from Jefferies. Please go ahead.
spk02: Hi, morning. This is Ivy Ong for Akash. Thanks for taking our questions. We have two, actually. First is for COVID. 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 900 million that have been delivered. But now it's only showing around 700 million BioNTech Pfizer doses delivered with around like 200 million unknown categories. So I guess any clarifications you can give me will be super helpful. Then I have a full of questions on your INS program.
spk03: Yeah, 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 discussions, 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. 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.
spk02: Got it. So my second question is for BNP122. So for the melanoma data readout this year, I guess you just reiterate that this will be limited to PFS and ORR. Is there any specific reason on why there won't be any OS data? Does that imply a potential longer duration for some? Thank you.
spk04: I can take this question. The maturation of the data is most likely not allowed to generate OS readout.
spk02: Got it. Thank you.
spk13: Thank you. We will now go to our next question. And your next question comes from the line of Chris Shibutani, Goldman Sachs. Please go ahead.
spk05: 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 billion euros 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 EC contract negotiations are going through? You did mention the second quarter is going to delight us, but then the deliveries, again, in the assumption for the $5 billion through the balance of the year. Similarly to the financials on the R&D-related expense, you have the outlining of the full-year level. In the first quarter, 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 in the shape of spending through the year. And then I have one other follow up.
spk03: Yeah, Chris, happy to take that question. And I, you know, Ryan will chime in. You know, maybe starting with the top line guidance, you know, we reiterated the guidance as I stated in my speech before, you know, we had a good start in Q1, we believe. Q2, and that's not a surprise to you, will be weaker. I mean, it's not really the season for vaccinations as we see it for flu. You know, we assume that the development in terms of, you know, how people will get vaccinated is comparable to some extent to what we see in flu. So, specifically looking at the northern hemisphere. So, you know, our expectation for Q3 and Q4 is that these will be the two 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 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, you know, some other implications in some other countries potentially as well, and we tried to reflect this accordingly. I would like to reiterate that if you compare, you know, the Pfizer guidance of $13.5 billion, you know, if you take that, I think that also reflected those discussions and negotiations ongoing. And if you translate that, you know, 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. You know, we have to, you know, 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, is just looking at November to November. So, you know, these things cause some differences, quite significant differences in our estimation if you compare the December 2022 versus our expectation for December 2023. So, you know, there is a big impact coming from this. And if you then take this into account, you know, we feel that the $5 billion that we have reiterated today is, you know, something that we can live with. You know, it could be that, and that has been our assumption, that there might be a new variant that we will adapt the existing vaccine that we produce. That's our assumption to reach the 5 billion. And we're, you know, our assumption in that respect remains valid at this point in time. I hope that helps.
spk07: And maybe, and Ryan, I would just add, and maybe you can come back as well to the R&D point. Yeah, I'd come back to the R&D point. Just to add two points to that. So first is, you know, actually the volumes, while we're not disclosing volumes in the first quarter, We were shipping to quite a broad range of countries in the first quarter, 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 first quarter.
spk03: Yeah, and then maybe to add on the R&D costs, Chris, so the first quarter has been relatively light. billion euros that we have booked for Q1. If you put that into relation of the 2.4 to 2.6 billion of our guidance. But this is, you know, 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. So, you know, I wouldn't read too much into this. You know, I would We reiterated that guidance. Please also take into account that we have reflected on the run already in there and to a great extent duality spending for our clinical studies here. So, you know, we feel comfortable with the 2.4 to 2.6 in the course of the next quarters.
spk05: 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 three or four 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? Were you involved with these projections? If there's any fundamental differences in your points of view, where might they lie?
spk07: Yeah, thanks for the question. So yes, we're very involved with 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. commercial sphere. We've been very involved in Europe and also in other geographies. I think how we look at 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 combinations 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. And I think Pfizer brings a lot to the table there, but so do we in terms of thinking about how combinations could be best deployed to meet patient need.
spk05: Great. Thanks. We'll look at the data as it progresses. Thank you.
spk13: Thank you. We will now go to our next question. And your next question comes from the line of Wyron Verba from Cowan. Please go ahead. Excuse me, Wyron, is your line muted? Hello, Wyron. 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.
spk10: Hi, good morning. Thanks for taking the question. Just had a follow-up on the iNest vaccine program. Was wondering if you can just 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 focused more on the adjuvant setting, but obviously you're taking a broader approach. So just wondering if you could elaborate there. Thank you.
spk04: Yeah, I can take this question, and the question is a very important one. With regard to the development, we had an early adjuvant study in melanoma, and we have initiated two additional adjuvant stage trials, one in triple 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 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, even though using the same vaccine platform. And in the melanoma and now previously reported reported pancreatic cancer study, they have shown that immune responses are correlated with prevention of relapses or with a reduced relapse rate in this patient population. We have also reported the metastatic study, Phase 1 study, which yielded also immunogenicity but to a much weaker extent than the adjuvant setting, and based on this, we can clearly say that At least in the setting how the vaccines are used so far, we see an improved activity in the adjuvant stage. There are other reasons why adjuvant 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 first three 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. We have, as you know, randomized clinical trials in colorectal cancers running since We expect to read out data from this randomized colorectal cancer trial in 2024. And we are planning a randomized phase two study in pancreatic cancer based on the data that we have observed.
spk13: Thank you. We will now go to our next question. And your next question comes from the line of Yaron Vera Cowan. Please go ahead.
spk11: Great. Thanks so much. Hopefully you can hear me. I got a quick question on Pfizer's and your flu vaccine, 161. The 25,000 patient, I'm sorry, U.S. Healthy Adult Study is ongoing. Any sense as to when you think we might be able to see data This year, are you thinking sort of in the fall, and is that sufficient to follow? 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 quadralent modified RNA vaccine. Any update on the self-amplifying mRNA vaccine for flu as well? Thank you.
spk07: Yeah, Jeroen, I'll start, and Ugar, you may want to add to this, but I think it's just to start off that it's 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, but I think Pfizer has guided to an update this year. I don't think they've specified, and we don't want to contradict what they put out, so I'll leave it at that. And the same goes, Yaron, for the self-amplifying program. Both fall under our collaboration agreement with Pfizer.
spk11: So, Ryan, maybe just a follow-up. When for the flu-COVID combo, can you give us any sense at all as to whether your world is going to be sort of a blended between your low teens, let's say, for flu and your 50-50 for COVID? Thank you.
spk07: Yeah, 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 it would be a blend. As you know, we have a 50% gross profit share on the COVID-19 vaccine, and we do have a royalty on flu, 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.
spk13: Thank you. We will now go to your next question. And your next question comes from the line of Jessica Fay from JP Morgan. Please go ahead.
spk15: Hey, guys. Good morning. This is Na Sun for Jessica Fay. I think I want to ask about the fixed 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 fixed back? Thanks.
spk04: Maybe I take the second question, and Ryan, if you could take the first question, it would be great. So for FIXVAC, we have generated data in the metastatic setting in patients with melanoma, particularly with a high proportion of patients who did FIXVAC. progress under existing PD-1 therapy and have seen objective responses and a high rate of immunogenicity to objective responses in combination with anti-PD-1 in the range of 35 to 40 percent with vaccine alone in the range of 20 percent. The key advantage as compared to the personalized neoantigen vaccine is the availability of the vaccine directly after patient inclusion. So that means we do not have this four to six weeks of waiting time until patients can be dosed. Therefore, in principle, 6VAC could be an option for patients with advanced metastatic disease. 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, the modified IL-2, as well as the IL-2, IL-7 approach.
spk07: Yeah, 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 SCLC and refractory melanoma, head and neck twin-cell carcinoma, and MFU. So likely 2024.
spk13: Thank you. We will now go to your next question. And your next question comes from the line of Bill Madant from Canaccord. Please go ahead.
spk06: Good morning, and thanks for the question. So, I have two on the broader strategy. So, first of all, some of the more recent BD, the partnerships, are focused more on late-stage clinical programs and less on, you know, massive paradigm-shifting earlier-stage programs. 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? Thank you.
spk07: Yeah, thank you. So maybe I'll take the first one and then, Ugar, if you want to speak to the technology platforms piece.
spk04: Yeah, sure.
spk07: In terms of the... In terms of the rationale for the recent deals, I think what we have been is clear about our intention to go commercial in the oncology portfolio by 2026 onwards. And so we have multiple internal programs that, if successful in late-stage trials, could give us opportunities around that time period. to bring products to market. And so what CNS do with these BD deals is basically add depth, further depth to that sort of wave one of oncology programs that have potential and 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. And so you see that with The anti-CTLA-4 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.
spk04: Yeah. Thank you, Ryan. With regard to 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.
spk13: Thank you. We will now go to your next question. And your next question comes from the line of Chi Xiang Xu from Barenburg. Please go ahead.
spk08: Thanks very much for taking my questions. I have two. First, I want to ask about the six VAC, BNT116. I think you mentioned you're going to start a Phase II program in first-line lung cancer. I wonder if you can comment on any signals from Phase I that gives you the confidence to start a Phase II.
spk04: Short answer, no, we do not have any updates so far from the running clinical trial that is expected end of the season.
spk08: Got it. And then a quick follow-up on your ADC deal. Can you talk about the, I guess, the comparison in top one inhibitor of payload versus microtubule inhibitors? as payload, inhibitors payload in terms of the combination with IO differences and similarities there?
spk04: Yeah, one, I think the most important aspect is for getting ADC technologies is that we believe that in the next six, seven, eight years, this ADC technology will more or less completely replace chemotherapy. So that means any type of combination therapy which requires chemotherapy backbone might end up in an ADC approach. With regard to the currently evaluated compounds, the TOPO2 inhibitors come with a profile allowing sustainable and also long-term application. 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 might be also interested in microtubule inhibitors, but several of these microtubule inhibitors have been in the past, at least in the chemotherapeutic setting, associated with polymorphopathies and the belief that this new compound class should give the opportunity to develop treatments which do not come with dose-limiting toxicity with regard to repeated application.
spk13: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
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