Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a‑16 OR 15d‑16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF AUGUST 2022

COMMISSION FILE NUMBER 001-39081
BioNTech SE
(Translation of registrant’s name into English)
An der Goldgrube 12
D-55131 Mainz
Germany
+49 6131-9084-0
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20‑F or Form 40‑F: Form 20‑F Form 40‑F
Indicate by check mark if the registrant is submitting the Form 6‑K in paper as permitted by Regulation S‑T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6‑K in paper as permitted by Regulation S‑T Rule 101(b)(7):




DOCUMENTS INCLUDED AS PART OF THIS FORM 6-K

On August 8, 2022, BioNTech SE (the “Company”) provided a development update and reported its financial results for the three and six months ended June 30, 2022. The interim condensed consolidated financial statements as well as the operating and financial review and prospects of the Company, for the three months and six months ended June 30, 2022, are attached hereto as Exhibit 99.1 and shall be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and incorporated by reference herein.




SIGNATURE
Pursuant to the requirements of s the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BioNTech SE
By:/s/ Jens Holstein
Name: Jens Holstein
Title: Chief Financial Officer
Date: August 8, 2022




EXHIBIT INDEX
ExhibitDescription of Exhibit
99.1




Document
Exhibit 99.1


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BioNTech SE
Quarterly Report BioNTech SE for the Three And Six Months Ended June 30, 2022


Exhibit 99.1
Unaudited Interim Condensed Consolidated Financial Statements
12 Events after the Reporting Period
Operating and Financial Review and Prospects
Risk Factors



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Unaudited Interim Condensed Consolidated Financial Statements
Interim Condensed Consolidated Statements of Profit or Loss
Three months ended
June 30,
Six months ended
June 30,
2022202120222021
(in millions, except per share data)Note(unaudited)(unaudited)(unaudited)(unaudited)
Revenues
Commercial revenues3€3,166.3€5,280.5€9,528.5€7,308.0
Research & development revenues330.228.042.648.9
Total revenues€3,196.5€5,308.5€9,571.1€7,356.9
Cost of sales4.1(764.6)(883.8)(2,058.7)(1,116.9)
Research and development expenses4.2(399.6)(201.1)(685.4)(417.3)
Sales and marketing expenses(17.8)(13.3)(32.1)(22.0)
General and administrative expenses 4.3(130.0)(47.8)(220.8)(86.7)
Other operating expenses 4.4(240.7)(0.3)(309.5)(0.9)
Other operating income 4.5565.836.2697.7147.5
Operating income€2,209.6€4,198.4€6,962.3€5,860.6
Finance income4.6115.50.3387.624.8
Finance expenses4.7(5.8)(175.9)(12.5)(220.3)
Profit before tax€2,319.3€4,022.8€7,337.4€5,665.1
Income taxes5(647.3)(1,235.6)(1,966.6)(1,749.8)
Profit for the period€1,672.0€2,787.2€5,370.8€3,915.3
Earnings per share
Basic profit for the period per share€6.86€11.42€22.00€16.07
Diluted profit for the period per share€6.45€10.77€20.69€15.14
The accompanying notes form an integral part of these interim consolidated financial statements.
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Interim Condensed Consolidated Statements of Comprehensive Income
Three months ended
June 30,
Six months ended
June 30,
2022202120222021
(in millions)Note(unaudited)(unaudited)(unaudited)(unaudited)
Profit for the period€1,672.0€2,787.2€5,370.8€3,915.3
Other comprehensive income
Other comprehensive income that may be reclassified to profit or loss in subsequent periods, net of tax
Exchange differences on translation of foreign operations9.8(1.1)13.53.4
Net other comprehensive income / (loss) that may be reclassified to profit or loss in subsequent periods €9.8€(1.1)€13.5€3.4
Other comprehensive loss that will not be reclassified to profit or loss in subsequent periods, net of tax
Remeasurement loss on defined benefit plans(0.1)
Net other comprehensive loss that will not be reclassified to profit or loss in subsequent periods€—€—€(0.1)€—
Other comprehensive income / (loss) for the period, net of tax €9.8€(1.1)€13.4€3.4
Comprehensive income for the period, net of tax€1,681.8€2,786.1€5,384.2€3,918.7
The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.
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Interim Condensed Consolidated Statements of Financial Position

June 30, December 31,
(in millions)20222021
Assets Note(unaudited)
Non-current assets
Intangible assets €221.4€202.4
Property, plant and equipment 420.4322.5
Right-of-use assets243.7197.9
Other financial assets651.521.3
Other assets0.90.8
Deferred expenses9.413.6
Total non-current assets €947.3€758.5
Current assets
Inventories 7367.7502.5
Trade and other receivables 610,382.912,381.7
Other financial assets 60.1381.6
Other assets46.664.9
Income tax assets 0.40.4
Deferred expenses75.648.5
Cash and cash equivalents9,334.81,692.7
Total current assets €20,208.1€15,072.3
Total assets€21,155.4€15,830.8
Equity and liabilities
Equity
Share capital8248.6246.3
Capital reserve81,689.81,674.4
Treasury shares8(5.9)(3.8)
Retained earnings14,769.49,882.9
Other reserves 9128.893.9
Total equity €16,830.7€11,893.7
Non-current liabilities
Loans and borrowings6206.6171.6
Other financial liabilities 66.16.1
Income tax liabilities56.84.4
Provisions107.3184.9
Contract liabilities55.99.0
Other liabilities 17.912.8
Deferred tax liabilities100.466.7
Total non-current liabilities €401.0€455.5
Current liabilities
Loans and borrowings632.3129.9
Trade payables6291.1160.0
Other financial liabilities 6807.31,190.4
Government grants3.03.0
Refund liabilities90.0
Income tax liabilities51,417.91,568.9
Provisions10596.2110.2
Contract liabilities3656.3186.1
Other liabilities119.643.1
Total current liabilities€3,923.7€3,481.6
Total liabilities €4,324.7€3,937.1
Total equity and liabilities €21,155.4€15,830.8
The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.
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Interim Condensed Consolidated Statements of Changes in Stockholders’ Equity
(in millions, unaudited)NoteShare capitalCapital reserveTreasury sharesRetained earningsOther reserves Total equity
As of January 1, 2021€246.3€1,514.5€(4.8)€(409.6)€25.4€1,371.8
Profit for the period3,915.33,915.3
Other comprehensive income3.43.4
Total comprehensive income€—€—€—€3,915.3€3.4€3,918.7
Issuance of share capital and treasury shares162.61.0163.6
Transaction costs(2.7)(2.7)
Share-based payments 931.431.4
As of June 30, 2021€246.3€1,674.4€(3.8)€3,505.7€60.2€5,482.8
As of January 1, 2022€246.3€1,674.4€(3.8)€9,882.9€93.9€11,893.7
Profit for the period5,370.85,370.8
Other comprehensive income13.413.4
Total comprehensive income€—€—€—€5,370.8€13.4€5,384.2
Issuance of share capital80.567.167.6
Redemption of convertible note61.8233.2235.0
Share repurchase program8(284.8)(2.1)(286.9)
Transaction costs(0.1)(0.1)
Dividends8(484.3)(484.3)
Share-based payments921.521.5
As of June 30, 2022€248.6€1,689.8€(5.9)€14,769.4€128.8€16,830.7
The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.
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Interim Condensed Consolidated Statements of Cash Flows

Three months ended
June 30,
Six months ended
June 30,
2022202120222021
(in millions)(unaudited)(unaudited)(unaudited)(unaudited)
Operating activities
Profit for the period€1,672.0€2,787.2€5,370.8€3,915.3
Income taxes647.31,235.61,966.61,749.8
Profit before tax€2,319.3€4,022.8€7,337.4€5,665.1
Adjustments to reconcile profit before tax to net cash flows:
Depreciation and amortization of property, plant, equipment, intangible assets and right-of-use assets33.216.460.829.4
Share-based payment expense12.622.022.039.3
Net foreign exchange differences(344.6)(70.1)(338.5)(101.3)
Gain on disposal of property, plant and equipment0.20.20.20.4
Finance income(1.5)(0.3)(218.8)(0.6)
Finance expense5.8175.612.5220.3
Movements in government grants(20.9)(88.8)
Net loss on derivative instruments at fair value through profit or loss86.584.6
Working capital adjustments:
Decrease / (increase) in trade and other receivables, contract assets and other assets3,174.8(4,651.0)2,771.3(6,751.5)
Decrease / (increase) in inventories91.6(158.5)134.8(241.3)
(Decrease) / increase in trade payables, other financial liabilities, other liabilities, contract liabilities, refund liabilities and provisions(663.1)565.5194.4821.0
Interest received1.50.32.20.6
Interest paid(5.8)(2.1)(12.2)(3.9)
Income tax paid(791.4)(0.2)(2,081.4)(0.3)
Net cash flows from / (used in) operating activities€3,919.1€(100.3)€7,969.3€(411.6)
Investing activities
Purchase of property, plant and equipment(70.6)(25.9)(114.7)(47.6)
Proceeds from sale of property, plant and equipment0.31.2
Purchase of intangible assets and right-of-use assets(4.8)(4.2)(21.5)(11.7)
Purchase of financial instruments(3.0)(30.0)
Proceeds from maturity of other financial assets375.2
Net cash flows from / (used in) investing activities€(78.4)€(29.8)€209.0€(58.1)
Financing activities
Proceeds from issuance of share capital and treasury shares, net of costs160.9110.5160.9
Proceeds from loans and borrowings0.20.2
Repayment of loans and borrowings(0.7)(18.8)(1.4)
Payments related to lease liabilities(10.5)(7.3)(21.9)(11.1)
Share repurchase program(286.9)(286.9)
Dividends(484.3)(484.3)
Net cash flows from / (used in) financing activities€(781.5)€152.9€(701.2)€148.4
Net increase / (decrease) in cash and cash equivalents3,059.222.87,477.1(321.3)
Change in cash and cash equivalents resulting from exchange rate differences111.5(0.2)165.025.2
Cash and cash equivalents at the beginning of the period6,164.1891.51,692.71,210.2
Cash and cash equivalents at June 30€9,334.8€914.1€9,334.8€914.1
The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.
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Selected Explanatory Notes to the Unaudited Interim Condensed Consolidated Financial Statements
1Corporate Information
BioNTech SE is a limited company incorporated and domiciled in Germany. The registered office is located in Mainz, Germany (An der Goldgrube 12, 55131 Mainz). The accompanying unaudited interim condensed consolidated financial statements present the financial position and the results of operation of BioNTech SE and its subsidiaries and have been prepared on a going concern basis in accordance with the International Financial Reporting Standards, or IFRS as issued by the International Accounting Standards Board, or IASB. References to the “Company”, “BioNTech”, “Group”, “we”, “us” and “our” refer to BioNTech SE and its consolidated subsidiaries.
We are a fully integrated global biotechnology company specializing in the development of novel medicines at the intersection of immunology and synthetic biology. Since our founding in 2008, we have focused on harnessing the power of the immune system to address human diseases with unmet medical need and major health burden. Our fully-integrated model combines decades of research in immunology, translational drug discovery and development, a technology agnostic innovation engine, GMP manufacturing, and commercial capabilities to rapidly develop and commercialize potential vaccines and therapies to address a range of serious indications on a global scale. We have built a broad toolkit across multiple technology platforms, including a diverse range of potentially first-in-class therapeutic approaches. This includes mRNA vaccines, cell and gene therapies, targeted antibodies, small molecule immunomodulators, Ribologicals, and next generation immunomodulators.
In February 2022, BioNTech Innovation GmbH, Mainz, Germany, was established and is a wholly owned consolidated subsidiary of BioNTech SE.
In June 2022, at the Annual General Meeting, or AGM, our shareholders voted to reappoint Helmut Jeggle as a member of the Supervisory Board and appointed two additional Supervisory Board members, Prof. Dr. Anja Morawietz and Prof. Dr. Rudolf Staudigl. In a meeting following the AGM, the Supervisory Board re-elected Helmut Jeggle as its Chairman. All three members will serve in their roles until the 2026 AGM.
Our unaudited interim condensed consolidated financial statements as of and for the three and six months ended June 30, 2022 were authorized for issuance in accordance with a resolution of the audit committee on August 8, 2022.
2Basis of Preparation, Significant Accounting Policies and further Accounting Topics
Basis of Preparation and Principles of Consolidation
The accompanying unaudited interim condensed consolidated financial statements as of and for the three and six months ended June 30, 2022 have been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting.
The unaudited interim condensed consolidated financial statements do not include all the information and disclosures required in the consolidated financial statements, and should be read in conjunction with our audited consolidated financial statements and accompanying notes included in our Annual Report on Form 20-F as of and for the year ended December 31, 2021.
We prepare and present our unaudited interim condensed consolidated financial statements in Euros and round numbers to millions of Euros. Accordingly, numerical figures shown as totals in some tables may not be exact arithmetic aggregations of the figures that preceded them and figures presented in the explanatory notes may not add up to the rounded arithmetic aggregations.
The unaudited interim condensed consolidated financial statements as of and for the three and six months ended June 30, 2022 include BioNTech SE and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
Significant Accounting Judgments, Estimates and Assumptions
The preparation of the unaudited interim condensed consolidated financial statements requires our management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures. This includes but is not limited to the judgment described as “Pfizer Agreement Characteristics” in the notes to our audited consolidated financial statements as of and for the year ended December 31, 2021. In order to determine our share of the collaboration partner’s gross profits, we used certain information from the collaboration partner, including revenues from the sale of products, some of which is based on preliminary data shared
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between the partners. These estimated figures may change in future periods as we receive final data from our collaboration partner. Those changes in our share of the collaboration partner’s gross profit are recognized prospectively as a change in estimates. Our management continually evaluates judgments and estimates, including such related to the fair value measurement of derivatives, revenues and expenses. Management bases its judgments and estimates on parameters available when the unaudited interim condensed consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond our control. Such changes are reflected in the assumptions when they occur.
Significant Accounting Policies
The accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial statements are consistent with those followed in the preparation of our audited consolidated financial statements as of and for the year ended December 31, 2021, except for income taxes which are accounted for using the expected annual tax rate in our unaudited interim condensed consolidated financial statements (see Note 5). Certain policies have been described further below due to the activities related to and the transactions occurred during the three and six months ended June 30, 2022.
Foreign Exchange Forward Contracts
Effects from foreign exchange forward contracts are either shown as other operating income or expenses on a cumulative basis and might switch between those two positions during the year-to-date reporting periods.
Standards Applied for the First Time
The IFRS standards applied for the first time as of January 1, 2022, as disclosed in the notes to the audited consolidated financial statements as of and for the year ended December 31, 2021, had no impact on our unaudited interim condensed consolidated financial statements as of and for the three and six months ended June 30, 2022.
Operational Impacts of COVID-19
As we advance our clinical programs, we are in close contact with our principal investigators and clinical sites, and are assessing the impact on the clinical trials, expected timelines and costs on an ongoing basis. For certain programs, including BNT111, BNT113, BNT122, BNT141 and BNT142 (RiboMabs), BNT151 and BNT152/153 (RiboCytokines) and BNT161 (Influenza), delays in the commencement of trials were experienced, due to slowed patient enrollment and other delays as a result of the COVID-19 pandemic. After several months of delay to focus efforts on our COVID-19 vaccine in 2020, in 2021 we started four Phase 2 clinical trials: two for our FixVac product candidates BNT111 and BNT113, one each for our iNeST program BNT122 as well as for our bispecific antibody program BNT311. In addition, we have started multiple Phase 1 clinical trials in 2021 and 2022 that include product candidates for BNT211 (CARVac), BNT221 (NEO-PTC-01, a neoantigen-based T-cell therapy), BNT151 and BNT152+153 (RiboCytokines), BNT116 (FixVac), BNT141 (RiboMab) and BNT142 (RiboMab). The delays, even though they were temporary, may negatively impact our operations and overall business by delaying further progress of these clinical trials and preclinical studies. Our operations, including research and manufacturing, could also be negatively impacted due to the potential impact of staff absences as a result of self-isolation procedures or extended illness. Such factors were evaluated and considered when preparing these unaudited interim condensed consolidated financial statements as of and for the three and six months ended June 30, 2022. We will continue to evaluate observed and potential effects of the COVID-19 pandemic.
Operational Impacts of Gas Supply Situation
We monitor the natural gas supply situation as part of our regular business continuity management and are evaluating possible additional energy supply measures. Our commercial production of our COVID-19 vaccine is currently run on natural gas, but we expect that it could be powered by alternative fuel sources without interruption, if needed. According to our most recent information and analyses, commercial mRNA manufacturing in our facilities is not expected to be impacted by a natural gas shortage, such as the current one. Nonetheless, we cannot predict with certainty the impact that a continuing or more severe natural gas shortage would have on our operations. Our R&D and clinical development activities are currently dependent on gas. We are also continuously monitoring the impact on our R&D and clinical development activities as well and putting measures in place to mitigate the risks. Additionally, we continue to evaluate the impacts that the energy shortage may have on our partners, including Pfizer, suppliers, and service providers; however, at this time, we cannot predict the actual impact the shortage may have on these partners or the resulting impacts to us. Were any of these parties to experience significant impacts from this or any other energy shortage, we may be unable to manufacture our COVID-19 vaccine, and our business could be materially harmed. We recognize the critical importance of the continued manufacturing of our COVID-19 vaccine and manufacturing and testing of our product candidates and are proactively engaging in internal and external discussions with our
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counterparties and governmental authorities to address any potential risks at an early stage to mitigate any impacts due to an energy shortage.
3Revenues from Contracts with Customers
Disaggregated information on revenues
Set out below is the disaggregation of our revenues from contracts with customers:
Three months ended
June 30,
Six months ended
June 30,
(in millions)2022202120222021
Commercial revenues€3,166.3€5,280.5€9,528.5€7,308.0
COVID-19 vaccine revenues3,152.75,266.09,505.87,281.6
Sales to collaboration partners(1)
608.3138.11,211.5202.0
Direct product sales to customers557.01,035.61,720.11,235.4
Share of collaboration partners' gross profit and sales milestones1,987.44,092.36,574.25,844.2
Other sales13.614.522.726.4
Research & development revenues from collaborations€30.2€28.0€42.6€48.9
Total€3,196.5€5,308.5€9,571.1€7,356.9
(1)    Represents sales to our collaboration partners of products manufactured by us.
Commercial Revenues
During the three and six months ended June 30, 2022 and 2021, commercial revenues were recognized from the supply and sales of our COVID-19 vaccine worldwide. We are the marketing authorization holder in the United States, the European Union, the United Kingdom, Canada and other countries, and holder of emergency use authorizations or equivalents in the United States (jointly with Pfizer Inc., or Pfizer) and other countries; submissions to pursue regulatory approvals in those countries where emergency use authorizations or equivalent were initially granted are ongoing. Pfizer has marketing and distribution rights worldwide with the exception of China, Germany and Turkey. Fosun Pharma has marketing and distribution rights in China, Hong Kong special administrative region, or SAR, Macau SAR and the region of Taiwan. The allocation of marketing and distribution rights defines territories in which the collaboration partners act as a principal.
Whenever responsibilities in the manufacturing and supply process of the COVID-19 vaccine shift and our COVID-19 vaccine is transferred, the vaccine is sold from one partner to the other. During the three and six months ended June 30, 2022, we recognized €608.3 million and €1,211.5 million of revenues, respectively, from selling drug product batches manufactured by us to our partners. During the comparative periods, three and six months ended June 30, 2021, the revenues derived from sales to collaboration partners amounted to €138.1 million and €202.0 million were recognized, respectively.
By supplying our territories during the three and six months ended June 30, 2022, we recognized €557.0 million and €1,720.1 million of revenues, respectively, from direct COVID-19 vaccine sales in Germany and Turkey. During the comparative periods, three and six months ended June 30, 2021, recognized revenues derived from those sales amounted to €1,035.6 million and €1,235.4 million, respectively. The share of gross profit that we owe our collaboration partner Pfizer based on our sales is recognized as cost of sales. During the three months ended June 30, 2022 an upfront payment of €564.4 million became due and was recognized as current contract liability in our unaudited interim condensed consolidated statements of financial position.
Based on COVID-19 vaccine sales in the collaboration partners’ territories, we are eligible to receive a share of their gross profit which represents a net figure and is recognized as collaboration revenues during the commercial phase together with sales milestones that are recorded once the underlying thresholds are met. During the three months ended June 30, 2022, €1,987.4 million gross profit share was recognized as revenues. During the comparative period, three months ended June 30, 2021, €3,923.7 million gross profit share and €168.6 million of sales milestones were recognized as revenues. During the six months ended June 30, 2022, €6,574.2 million of gross profit share were recognized. During the comparative period, six months ended June 30, 2021, €5,428.4 million of gross profit share and €415.8 million of sales milestones were recognized as revenues. In order to determine our share of our collaboration partners’ gross profits, we used certain information from the collaboration partners, some of which is based on preliminary data shared
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between the partners and might vary once final data is available. The true-up recognized prospectively during the three and six months ended June 30, 2022 and 2021, with respect to the previous period, was not material.
Research & Development Revenues from Collaborations
During the three and six months ended June 30, 2022 and 2021, research and development revenues were mainly derived from our collaborations with Sanofi S.A. and Genentech Inc., or Genentech. In addition, during the six months ended June 30, 2022, we entered into a new research, development and commercialization collaboration with Pfizer to develop a potential first mRNA-based vaccine for the prevention of shingles (herpes zoster virus, or HZV). Under the terms of the agreement, an amount of €67.5 million was classified as upfront payment and recognized as contract liability in our unaudited interim condensed consolidated statements of financial position. The amount is recognized as revenues upon advancement of research and development activities.
Revenues from contracts with customers were recognized as follows:
Three months ended
June 30,
Six months ended
June 30,
(in millions)2022202120222021
Timing of revenue recognition
Goods and services transferred at a point in time€1,177.6€1,186.3€2,951.0€1,459.7
Goods and services transferred over time31.529.945.953.0
Revenue recognition applying the sales-based or usage-based royalty recognition constraint model(1)
1,987.44,092.36,574.25,844.2
Total€3,196.5€5,308.5€9,571.1€7,356.9
(1)    Represents sales based on the share of the collaboration partners' gross profit and sales milestones.
4Income and Expenses
4.1Cost of Sales
The cost of sales recognized during the three and six months ended June 30, 2022 and 2021 are shown in the following table:
Three months ended
June 30,
Six months ended
June 30,
(in millions)2022202120222021
Cost of sales related to COVID-19 vaccine revenues€753.3€872.1€2,041.6€1,095.3
Cost related to other sales11.311.717.121.6
Total€764.6€883.8€2,058.7€1,116.9
4.2Research and Development Expenses
The research and development expenses recognized during the three and six months ended June 30, 2022 and 2021 are shown in the following table:
Three months ended
June 30,
Six months ended
June 30,
(in millions)2022202120222021
Purchased services€230.0€99.9€361.4€241.8
Wages, benefits and social security expense85.568.2156.3115.7
Laboratory supplies48.116.5105.727.9
Depreciation and amortization11.67.122.414.6
Other24.49.439.617.3
Total€399.6€201.1€685.4€417.3
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4.3General and Administrative Expenses
The general and administrative expenses recognized during the three and six months ended June 30, 2022 and 2021 are shown in the following table:
Three months ended
June 30,
Six months ended
June 30,
(in millions)2022202120222021
Wages, benefits and social security expense€43.0€17.1€70.5€31.4
Purchased services34.611.564.923.5
IT and office equipment22.55.433.88.0
Insurance premiums8.54.414.58.7
Other21.49.437.115.1
Total€130.0€47.8€220.8€86.7
4.4Other Operating Expenses
The other operating expenses recognized during the three and six months ended June 30, 2022 and 2021 are shown in the following table:
Three months ended
June 30,
Six months ended
June 30,
(in millions)2022202120222021
Loss on derivative instruments at fair value through profit or loss€229.7€—€299.0
Other11.00.310.50.9
Total€240.7€0.3€309.5€0.9
The loss on derivative instruments at fair value through profit or loss related to foreign exchange forward contracts that did not qualify for hedge accounting (see Note 6).
4.5Other Operating Income
The other operating income recognized during the three and six months ended June 30, 2022 and 2021 is shown in the following table:
Three months ended
June 30,
Six months ended
June 30,
(in millions)2022202120222021
Foreign exchange differences, net€517.0€34.4€641.0€75.1
Government grants0.168.0
Other48.81.756.74.4
Total€565.8€36.2€697.7€147.5
The foreign exchange differences included in operating income primarily arose from valuing our U.S. dollar denominated trade receivables which mainly resulted from our COVID-19 collaboration with Pfizer, compensated by the foreign exchange rate effects of our U.S. dollar denominated trade payables as well as our U.S. dollar denominated other financial liabilities which mainly resulted from obligations incurred from our license agreements.
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4.6Finance Income
The finance income recognized during the three and six months ended June 30, 2022 and 2021 is shown in the following table:
Three months ended
June 30,
Six months ended
June 30,
(in millions)2022202120222021
Foreign exchange differences, net€114.0€—€168.8€24.2
Interest income1.50.32.00.6
Fair value adjustments of financial instruments measured at fair value216.8
Total€115.5€0.3€387.6€24.8
The foreign exchange differences included in finance income primarily arose from valuing our U.S. dollar denominated cash and cash equivalents.
The fair value adjustments were derived from remeasuring the derivative embedded in our convertible note (see Note 6) and are reflecting the change in the derivative's fair value related to the equity investment of Pfizer mainly derived from our share price development between contract signing and closing (see Note 8).
4.7Finance Expenses
The finance expenses recognized during the three and six months ended June 30, 2022 and 2021 are shown in the following table:
Three months ended
June 30,
Six months ended
June 30,
(in millions)2022202120222021
Interest expenses related to financial assets€5.1€—€8.3€—
Interest expenses related to lease liabilities0.70.51.61.2
Amortization of financial instruments4.72.67.2
Fair value adjustments of financial instruments measured at fair value170.4211.9
Foreign exchange differences, net0.3
Total€5.8€175.9€12.5€220.3
The fair value adjustments were derived from remeasuring the derivative embedded in our convertible note (see Note 6).
5Income Tax
For the six months ended June 30, 2022 and 2021, income taxes were calculated based on the best estimate of the weighted average annual income tax rates expected for the full financial years (estimated annual effective income tax rates) on ordinary income before tax plus the tax effect of any discrete items. For the six months ended June 30, 2022 and 2021, our effective income tax rates were approximately 26.8% and 30.9%, respectively. The effective income tax rate decreased in part due to average trade tax rates in Mainz, Marburg and Idar-Oberstein decreasing from 2022 onward. During the three and six months ended June 30, 2022, current income taxes were recognized with respect to the German tax group. Deferred tax effects were recognized with respect to identified discrete items. In addition, the non-tax effective fair value measurement of the convertible note was considered as permanent difference for the six months ended June 30, 2022. As of June 30, 2022, we continue to maintain a valuation allowance against deferred tax assets of our U.S. tax group as there is not sufficient probability in terms of IAS 12 that there will be future taxable profits available against which the unused tax losses and temporary differences can be utilized.
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The income taxes recognized during the three and six months ended June 30, 2022 and 2021 are shown in the following table:
Three months ended
June 30,
Six months ended
June 30,
(in millions)2022202120222021
Current income taxes€597.8€1,257.0€1,932.9€1,752.1
Deferred taxes49.5(21.4)33.7(2.3)
Income taxes€647.3€1,235.6€1,966.6€1,749.8
6Financial Assets and Financial Liabilities
Financial Assets
Set out below is an overview of financial assets, other than cash and cash equivalents, held as of June 30, 2022 and December 31, 2021.
(in millions)June 30,
2022
December 31,
2021
Derivatives not designated as hedging instruments
Foreign exchange forward contracts€—€5.7
Equity instruments designated at fair value through OCI
Non-listed equity investments46.519.5
Financial assets at amortized cost
Trade and other receivables 10,382.912,381.7
Cash deposit with an original term of six months375.2
Other financial assets5.12.5
Total€10,434.5€12,784.6
Total current10,383.012,763.3
Total non-current51.521.3
Equity Instruments Designated at Fair Value through Other Comprehensive Income
Equity investments generally are made in conjunction with our existing commercial partnerships. In accordance with IFRS 9 we elected to present gains and losses on our equity investments in other comprehensive income to avoid fluctuation to be disclosed in our unaudited interim condensed consolidated statements of profit or loss. During the six months ended June 30, 2022, no material gains and losses on our equity investments have occurred.
Financial Assets at Amortized Cost
Trade and other receivables slightly decreased and predominantly comprise trade receivables from our COVID-19 collaboration with Pfizer as well as our direct product sales to customers in our territory. The contractual settlement of the gross profit share has a temporal offset of more than one calendar quarter. As Pfizer’s fiscal quarter for subsidiaries outside the United States differs from ours, it creates an additional time lag between the recognition of revenues and the payment receipt. Consequently, as of June 30, 2022, our trade receivables included trade receivables which related to the gross profit share for the first and second quarter of 2022. The payment settling our gross profit share for the first quarter of 2022 (as defined by the contract) was received from our collaboration partner in July 2022, subsequent to the end of the reporting period. Of our trade receivables outstanding as of June 30, 2022, we collected €5,581.1 million in cash as of July 15, 2022.
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Financial Liabilities
Set forth below is an overview of financial liabilities, other financial liabilities and trade payables held as of June 30, 2022 and December 31, 2021.
Loans and borrowings
(in millions)June 30,
2022
December 31,
2021
Lease liabilities€237.4€181.6
Convertible note – host contract(1)
99.7
Loans and borrowings1.520.2
Total€238.9€301.5
Total current32.3129.9
Total non-current206.6171.6
(1)    The convertible note was fully redeemed by exercising our early redemption option as of March 1, 2022, the redemption date.
Other financial liabilities
(in millions)June 30,
2022
December 31,
2021
Derivatives not designated as hedging instruments
Convertible note – embedded derivative(1)
€—€308.7
Foreign exchange forward contracts141.963.0
Financial liabilities at fair value through profit or loss
Contingent consideration6.16.1
Total financial liabilities at fair value€148.0€377.8
Trade payables and other financial liabilities at amortized cost, other than loans and borrowings
Trade payables291.1160.0
Other financial liabilities665.4818.7
Total trade payables and other financial liabilities at amortized cost, other than loans and borrowings€956.5€978.7
Total other financial liabilities€1,104.5€1,356.5
Total current1,098.41,350.4
Total non-current6.16.1
(1)    The convertible note was fully redeemed by exercising our early redemption option as of March 1, 2022, the redemption date.
Total financial liabilities
(in millions)June 30,
2022
December 31,
2021
Loans and borrowings€238.9€301.5
Other financial liabilities1,104.51,356.5
Total€1,343.4€1,658.0
Total current1,130.71,480.3
Total non-current212.7177.7
Loans and Borrowings and Derivatives Not Designated as Hedging Instrument
Convertible Note
In February 2022, we gave notice to a fund associated with Temasek Capital Management Pte. Ltd., or Temasek, of the exercise of our early redemption option and the full redemption of our convertible note as of March 1, 2022, the redemption date. As of the redemption date, the conversion features provided for in the contract initially identified as a
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combined embedded derivative were finally measured at fair value through profit and loss and recognized as finance income in our unaudited interim condensed consolidated statements of profit or loss (see Note 4.6). During April 2022, the early redemption was fulfilled by issuing the number of our ordinary shares calculated pursuant to the early redemption provisions of the convertible note (see Note 8), plus paying a fractional share and accrued but unpaid interest up to (but excluding) the redemption date.
Foreign Exchange Forward Contracts
Derivatives not designated as hedging instruments reflect the fair value of those foreign exchange forward contracts that were outstanding as of June 30, 2022 and were entered into to manage some of our transaction exposures. The foreign exchange forward contracts are intended to reduce the level of foreign currency risk related to trade receivables denominated in U.S. dollar. The fair value adjustments derived from remeasuring the foreign exchange forward contracts during the three and six months ended June 30, 2022 were recognized as other operating expenses in our unaudited interim condensed consolidated statements of profit or loss (see Note 4.4).
Other Financial Liabilities at Amortized Cost
Other financial liabilities increased mainly due to obligations incurred from our license agreements.
Risk Management Activities
No changes have occurred regarding our risk management activities as disclosed in the notes to our audited consolidated financial statements included in our Annual Report on Form 20-F as of and for the year ended December 31, 2021.
Fair Values
Fair values of cash and cash equivalents, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair values of financial instruments measured at fair value are reassessed on a quarterly basis. The money market funds, or MMFs, which are recognized as cash and cash equivalents in the amount of €2,943.4 million as of June 30, 2022, are valued using quoted prices on the valuation date in active markets (Level 1). The change in the derivative's fair value related to the equity investment of Pfizer (see Note 8) was derived from our share price development between contract signing and closing (Level 1). As described above, as of the redemption date, the fair value of the derivative embedded in our convertible note was finally assessed by applying the Cox-Rubinstein binomial tree model which is based on significant observable inputs (Level 2) and described in further detail in Note 12 to our audited consolidated financial statements included in our Annual Report on Form 20-F as of and for the year ended December 31, 2021. The foreign exchange forward contracts are valued using valuation techniques, which employ the use of foreign exchange spot and forward rates (Level 2). The fair values of non-listed equity investments are measured based on observable inputs e.g. based on multiple analyses (Level 2). The initial fair value of the contingent consideration determined at acquisition was based on cash flow projections (unobservable Level 3 input factors) and remains valid since no changes of the underlying performance criteria have occurred.
7Inventories
Set out below is an overview of inventories held as of June 30, 2022 and December 31, 2021.
(in millions)June 30,
2022
December 31,
2021
Raw materials and supplies€264.0€248.3
Unfinished goods95.484.5
Finished goods8.3169.7
Total€367.7€502.5
During three and six months ended June 30, 2022, inventory write-offs and reserves related to our COVID-19 vaccine amounting to €247.1 million and €403.1 million, respectively, were recognized in cost of sales as a result of the planned introduction of a new COVID-19 vaccine formulation and the potential switch from the BNT162b2 vaccine to an Omicron-adapted bivalent vaccine. During the comparative periods, three and six months ended June 30, 2021 no inventory write-offs were recorded.
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8Issued Capital and Reserves
In January 2022, we announced a new research, development and commercialization collaboration with Pfizer to develop a potential first mRNA-based vaccine for the prevention of shingles (herpes zoster virus, or HZV). In connection with this collaboration, Pfizer has agreed to make an equity investment and acquired 497,727 ordinary shares paying a total amount of €110.6 million. The issuance of 497,727 ordinary shares with the nominal amount of €0.5 million was registered with the commercial register (Handelsregister) on March 24, 2022. The equity investment which was issued in a foreign currency represents a derivative from the date of signing until the date of closing of the transaction. From the fair value measurement of this derivative €43.0 million were recognized in finance income in our unaudited interim condensed consolidated statements of profit or loss during the six months ended June 30, 2022. At closing date, in February 2022, this derivative and the agreed investment amount were recognized in our capital reserve and, taking an increase in share capital of €0.5 million into account, led to a net increase of the capital reserve of €67.1 million in our unaudited interim condensed consolidated statements of financial position.
In March 2022, we redeemed our convertible note by exercising our early redemption option and reclassified the convertible note host contract as well as the embedded derivative which previously were recognized as separate financial liabilities into our capital reserve (see Note 6). In April 2022, the early redemption was fulfilled by issuing 1,744,392 ordinary shares. The nominal amount of €1.7 million was recorded in share capital and, finally, as a result of the transaction, the capital reserve increased by €233.2 million in our unaudited interim condensed consolidated statements of financial position. The declaratory registration with the commercial register (Handelsregister) was made on May 20, 2022.
In March 2022, our Management Board and Supervisory Board authorized a share repurchase program of American Depositary Shares, or ADSs, pursuant to which we may repurchase ADSs in the amount of up to $1.5 billion over the next two years. On May 2, 2022, the first tranche of our share repurchase program of ADSs, with a value of up to $1.0 billion, commenced. During the three months ended June 30, 2022, 2,078,207 ADSs were repurchased at an average price of $145.65, for total consideration of $302.7 million (€286.9 million). As a result of these repurchases, treasury shares changed by €2.1 million and the capital reserve decreased by €284.8 million.
In June 2022, at the Annual General Meeting, our shareholders approved the proposed special cash dividend of €2.00 per ordinary share (including those held in the form of ADSs), which led to an aggregate payment of €484.3 million.
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9Share-Based Payments
Expenses Arising from Share-Based Payment Arrangements
During the three and six months ended June 30, 2022 and 2021, the following share-based payment arrangements led to the expenses recognized for services received during the respective periods as shown in the following table:
Three months ended
June 30,
Six months ended
June 30,
(in millions)2022202120222021
Expense arising from equity-settled share-based payment arrangements€12.8€17.3€25.0€32.5
Employee Stock Ownership Plan4.57.19.211.6
Chief Executive Officer Grant0.91.61.83.3
Management Board Grant1.70.42.70.9
BioNTech 2020 Employee Equity Plan for Employees Based Outside North America5.78.211.316.7
(Income) / expense arising from cash-settled share-based payment arrangements2.09.811.9
Employee Stock Ownership Plan0.50.3
Management Board Grant(0.4)1.2(1.2)1.3
BioNTech Restricted Stock Unit Plan for North America Employees1.98.60.910.6
Total€14.8€27.1€25.0€44.4
Cost of sales0.71.91.53.6
Research and development expenses9.718.817.030.9
Sales and marketing expenses0.30.30.40.3
General and administrative expenses 4.16.16.19.6
Total€14.8€27.1€25.0€44.4
Changes in Share-Based Payment Arrangements
New share-based payment arrangements and material changes to arrangements that occurred during the three and six months ended June 30, 2022 are shown below. A detailed description of our share-based payment arrangements is included in Note 17 to our audited consolidated financial statements included in our Annual Report on Form 20-F as of and for the year ended December 31, 2021.
BioNTech 2020 Employee Equity Plan for Employees Based Outside North America (Equity-Settled)
In December 2020, we approved the BioNTech 2020 Employee Equity Plan for employees based outside North America, or the European Plan. Under the European Plan, Restricted Cash Units, or RSUs, are offered to our employees. Following the initial issuance of RSUs for the calendar year 2020 in what we refer to as the LTI 2020 program, and, for employees who did not participate in the Employee Stock Ownership Plan, or ESOP, the LTI-plus program, as of the grant date in January 2022, the European Plan was implemented again for the calendar year 2021 by entering into award agreements with our employees, which we refer to as the LTI 2021 program. RSUs issued under the LTI 2021 program vest annually in equal installments after four years commencing in December 2021. As we have the
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ability to determine the method of settlement, the program was classified as equity-settled. The cost of the awards will be recognized over the service period, applying the graded vesting method.
Set out below is an overview of the RSUs granted and subsequent changes to RSUs outstanding during the six months ended June 30, 2022.
Restricted stock unitsWeighted average fair value (€)
Outstanding under LTI 2020 and LTI-plus program as of January 1, 2022614,42778.61
Granted under LTI 2021 program109,202203.22
Forfeited(9,455)203.22
As of June 30, 2022714,17497.34
The fair value of the awards is based upon the price of our ADSs representing ordinary shares at grant date. A retention assumption is applied when estimating the number of equity instruments for which service conditions are expected to be satisfied and will be revised in case material differences arise. Ultimately, a true-up to the number satisfied until settlement date will be recorded.
Management Board Grant (partly Equity-Settled, partly Cash-Settled)
With effect as of March 1, 2022, the service agreement with Prof. Özlem Türeci, M.D. (Chief Medical Officer (CMO)) was renewed until May 31, 2025. With effect as of April 1, 2022, the service agreement with Sean Marett (Chief Business Officer (CBO) and Chief Commercial Officer (CCO)) was renewed until December 31, 2024. The short-term and long-term incentive compensation provided for by the extended term of the service agreements is in line with the provisions of the original terms and those of our other Management Board members as described in further detail in Note 17 to our audited consolidated financial statements included in our Annual Report on Form 20-F as of and for the year ended December 31, 2021 and has been reflected when accounting for the share-based payment arrangements during the three and six months ended June 30, 2022.
In May 2022, the allocation date, phantom options equivalent to the number of options the Management Board members would have been entitled to receive for the 2022 year were allocated under the Management Board Grant which led to a modification from equity-settled to cash-settled share-based payment arrangement and a reclassification of €3.5 million between equity and non-current other liabilities. The awards are expected to be granted to the Management Board via individual grant agreements which will outline specific terms relating to the exercise of the Phantom Options. Those agreements will include the provisions that are in line with general provisions of our Management Board Grant as outlined in our Annual Report on Form 20-F as of and for the year ended December 31, 2021. The rights to receive options in future years remain determined as equity-settled, share-based payment arrangements.
The phantom options allocated to BioNTech’s Management Board as of May 2022 allocation date are presented in the tables below.
Phantom options outstandingAllocation date May 2022
Prof. Ugur Sahin, M.D.19,997
Sean Marett14,664
Dr. Sierk Poetting14,664
Prof. Özlem Türeci, M.D.14,664
Ryan Richardson7,465
Jens Holstein14,664
Measurement of Fair Values
Under this cash-settled, share-based payment arrangement, the fair values of the liabilities will be remeasured until the settlement date continuously using a Monte-Carlo simulation model which incorporates the impact of the performance criteria regarding share price and index development as described in Note 17 to our audited consolidated financial statements included in our Annual Report on Form 20-F as of and for the year ended December 31, 2021. Continuously, the fair values are recognized over the award’s vesting period beginning as of the service commencement
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dates (dates when the respective service agreements became effective) until four years commencing on the first anniversary of the allocation date have lapsed.
10Provisions and Contingencies
Provisions
As of June 30, 2022, certain claims were pending or threatened against us, mainly related to purported obligations arising out of certain contractual disputes unrelated to the below mentioned patent proceedings. Our best estimate of potential outflow of economic resources from such proceedings amounts to €304.5 million as of June 30, 2022 (€178.1 million as of December 31, 2021), which was reclassified into current provisions during the three months ended June 30, 2022 in our consolidated statements of financial position due to the current estimated timing of the proceeding and was recognized in cost of sales in our unaudited interim condensed consolidated statements of profit or loss. This assessment is based on assumptions deemed reasonable by management including those about future events and uncertainties. Although we believe our position is strong, the outcome of these matters is ultimately uncertain, such that unanticipated events and circumstances might occur that might cause us to change those assumptions and give rise to a material adverse effect on our financial position in the future.
As of June 30, 2022, our current provisions include €207.8 million (nil as of December 31, 2021) of obligations for production capacities derived from contracts with Contract Manufacturing Organizations, or CMOs, that became redundant as a direct result of the planned introduction of a new COVID-19 vaccine formulation, the potential switch from the BNT162b2 vaccine to an Omicron-adapted bivalent vaccine and due to increased internal manufacturing capacities during the three and six months ended June 30, 2022. The related expenses were recognized in cost of sales in our unaudited interim condensed consolidated statements of profit or loss.
As of June 30, 2022, our current provisions include €41.2 million (€58.5 million as of December 31, 2021) of international trade obligations, including customs value calculation, customs tariff number classification and other related securities requirements. The majority of related expenses related to our commercial sales and were recognized as cost of sales in our unaudited interim condensed financial statements as of and for the three and six months ended June 30, 2022.
Contingencies
In addition to the above, from time to time, in the normal course and conduct of our business, we may be involved in discussions with third parties about considering, for example, the use and/or remuneration for use of such third party’s intellectual property. As of June 30, 2022, none of such intellectual property-related considerations that we have been notified of and for which potential claims could be brought against us or our subsidiaries in the future, fulfill the criteria for recording a provision. We will continue to evaluate whether, if circumstances were to change in the future, the recording of a provision may be needed and whether potential indemnification entitlements exist against any such claim. It is currently impractical for us to estimate the respective contingent liabilities.
Alnylam Proceedings
In March 2022, Alnylam Pharmaceuticals, Inc., or Alnylam, filed a lawsuit against Pfizer and Pharmacia & Upjohn    Co. LLC in the U.S. District Court for the District of Delaware alleging that an existing patent owned by Alnylam, U.S. Patent No. 11,246,933, or the ‘933 Patent, is infringed by the cationic lipid used in COMIRNATY, and seeking monetary relief.
We filed a counterclaim to become party to the Alnylam proceeding, and in June 2022, Alnylam added to its claims allegations that we induced infringement of the ‘933 Patent. Additionally, in July 2022, Alnylam filed a lawsuit against us, our wholly owned subsidiary, BioNTech Manufacturing GmbH, Pfizer, and Pharmacia & Upjohn Co. LLC in the U.S. District Court for the District of Delaware alleging that we also induced infringement of a newly issued patent, U.S. Patent No. 11,382,979, or the ‘979 Patent, which is a continuation of the ‘933 Patent.
We believe we have strong defenses against the allegations claimed relative to each of the patents and intend to vigorously defend ourselves in the proceedings mentioned above. However, we are in the early stages of conducting an analysis of Alnylam’s claims, which is ongoing and complex, and we believe the outcome of the suit remains substantially uncertain. Thus, we believe the probability of a loss, if any, being sustained by us and the estimate of the amount of any possible loss to us remains difficult to ascertain.
CureVac Proceedings
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In July 2022, CureVac AG, or CureVac, filed a lawsuit against us and our wholly owned subsidiaries, BioNTech Manufacturing GmbH and BioNTech Manufacturing Marburg GmbH, in the Düsseldorf Regional Court, alleging COMIRNATY’s infringement of one European patent, EP1857122B1, and three Utility Models DE202015009961U1, DE202015009974U1, and DE202021003575U1. Later in July 2022, we and Pfizer filed a complaint for a declaratory judgment in the U.S. District Court for the District of Massachusetts, seeking a judgment of non-infringement by COMIRNATY of U.S. Patent Nos. 11,135,312, 11,149,278, and 11,241,493.
We believe we have strong defenses against the allegations claimed relative to claims of the European patent and German Utility Models and intend to vigorously defend ourselves in the proceedings mentioned above. However, we are in the early stages of conducting an analysis of CureVac’s claims, which is ongoing and complex, and we believe the outcome of the suit is substantially uncertain. Thus, we believe the probability of a loss, if any, being sustained by us and the estimate of the amount of any possible loss to us remains difficult to ascertain.
11Related Party Disclosures
ATHOS KG, Holzkirchen, Germany is the sole shareholder of AT Impf GmbH, Munich, Germany and beneficial owner of our ordinary shares. Entities controlled by ATHOS KG mainly provide rental and property management activities and sell property, plant and equipment to us. The total amount of transactions with ATHOS KG or entities controlled by them had no significant impact on our unaudited interim condensed consolidated financial statements as of and for the three and six months ended June 30, 2022 compared to the details disclosed in Note 21 to our audited consolidated financial statements included in our Annual Report on Form 20-F as of and for the year ended December 31, 2021.
12Events after the Reporting Period
In July 2022, BioNTech BioNTainer Holding GmbH (previously BioNTech Barracuda Holding GmbH), Mainz, Germany, was founded and is a wholly owned subsidiary of BioNTech SE.
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Operating and Financial Review and Prospects
In this report, unless stated or the context otherwise requires, references to the “Company”, “BioNTech”, “Group”, “we”, “us” and “our” refer to BioNTech SE and its consolidated subsidiaries. The following “Operating and Financial Review and Prospects” should be read together with the unaudited interim condensed consolidated financial statements and related notes as presented above. The following discussion is based on our financial information prepared in accordance with the International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, which may differ in material respects from generally accepted accounting principles in other jurisdictions, including U.S. GAAP. The following discussion includes forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those described in the “Risk Factors” section further below. Please also see “Forward-Looking Statements” included elsewhere in this quarterly report for the three and six months ended June 30, 2022.
Operating Results
Overview
BioNTech was founded in 2008 with the goal to develop treatments for patients that address diseases with high unmet medical need. As a next generation immunotherapy company, it is our vision to harness the power of the immune system to develop novel therapies against cancer and infectious diseases. To realize this vision, we combine decades of groundbreaking research in immunology, a wide array of computational discovery and therapeutic drug platforms for the rapid development of novel biopharmaceuticals.
We have built a broad toolkit across multiple technology platforms, including a diverse range of potentially first-in-class therapeutic approaches. This includes mRNA vaccines, cell and gene therapies, targeted antibodies, small molecule immunomodulators, Ribologicals, and next generation immunomodulators. Our approach has created a robust and diversified product pipeline across infectious disease and oncology, comprised of our first commercial product, BNT162b2 (COMIRNATY), the first ever approved mRNA therapy, over 17 clinical stage product candidates and more than 30 research programs.
We believe our successful development of a first-in-class COVID-19 mRNA vaccine in less than one year validates our execution capabilities and the power of our technologies to change lives. We leverage powerful new therapeutic mechanisms and exploit a diverse array of biological targets to harness the power of each patient’s immune system to address the unique molecular signature of each patient’s underlying disease.
Core to our business practices is ensuring that people all around the globe benefit from our efforts. As part of this effort, we intend to maintain our focus on high medical needs and democratizing access to novel medicines. We believe we are well positioned to develop and commercialize the next generation of immunotherapies with the potential to transform treatment paradigms for many severe diseases and substantially improve clinical outcomes for patients. We support the United Nations Sustainable Development Goals, or SDGs. Our research and product development efforts make a relevant contribution to supporting the third United Nations Sustainable Development Goal (SDG 3): ensuring healthy lives and promoting well-being for all people of all ages. This aligns with our commitment to global social responsibility.
On the research and development front, we are focused on developing next-generation COVID-19 vaccines to maintain leadership and strengthen pandemic preparedness as well as broaden the label of and access to the vaccine.
Additionally, we are accelerating clinical development, bolstering mid- and late-stage oncology presence and broadening our pipeline through the start of new programs in oncology and infectious diseases. In addition, we are also diversifying our therapeutic area footprint which will enable us to fully leverage the potential of all technology platforms across autoimmune diseases, inflammatory diseases, cardiovascular disease, neurodegenerative diseases, and regenerative medicines. Moreover, we plan to invest to build out our global development organization bringing in talent with clinical and regulatory experts needed to rapidly advance our diversified clinical pipeline.
Mergers and acquisitions activity and business development efforts are focused on strengthening technology platforms and digital capabilities through selected strategic partnerships and acquisitions. We also plan to enhance capabilities through complementary acquisitions, technologies, infrastructure and manufacturing.
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Corporate Development
A key component of our corporate strategy is strengthening our technology platforms, digital capabilities and infrastructure through select strategic partnerships and acquisitions. In April 2022, we were granted a pandemic preparedness contract by the Federal Republic of Germany and we entered into an exclusive research collaboration with Matinas Biopharma.
In June 2022, we began construction of our first African-based mRNA vaccine manufacturing facility in Kigali, Rwanda, with a target for the first set of manufacturing BioNTainers to be delivered to the site by the end of 2022. The facility will initially include two BioNTainers equipped to manufacture a range of mRNA-based vaccines targeted to the needs of the African Union member states, including potentially our COVID-19 vaccine, and investigational malaria and tuberculosis vaccine candidates, if approved or authorized by regulatory authorities. We believe the estimated initial annual capacity of, for example, our COVID-19 vaccine may be as high as approximately 50 million doses and we expect that manufacturing in the BioNTainers could commence as soon as approximately 12 to 18 months after their installation.
We also provide an update on key Supervisory Board developments and the status of the return of capital to shareholders.
In June 2022, at the Annual General Meeting, or AGM, our shareholders voted to reappoint Helmut Jeggle as a member of the Supervisory Board and appointed two additional Supervisory Board members, Prof. Dr. Anja Morawietz and Prof. Dr. Rudolf Staudigl. In a meeting following the AGM, the Supervisory Board re-elected Helmut Jeggle as its Chairman. All three members will serve in their roles until the 2026 AGM.
In June 2022, at the Annual General Meeting, our shareholders approved the proposed special cash dividend of €2.00 per ordinary share (including those held in the form of ADSs), which led to an aggregate payment of €484.3 million.
During the three months ended June 30, 2022, 2,078,207 American Depositary Shares (ADSs) were repurchased under our share repurchase program of ADSs at an average price of $145.65, for total consideration of $302.7 million (€286.9 million).
In light of the potential energy supply issues in Europe, we are evaluating our ongoing mitigation efforts to ensure business continuity
We monitor the natural gas supply situation as part of our regular business continuity management and are evaluating possible additional energy supply measures. Our commercial production of our COVID-19 vaccine is currently run on natural gas, but we expect that it could be powered by alternative fuel sources without interruption, if needed. According to our most recent information and analyses, commercial mRNA manufacturing in our facilities is not expected to be impacted by a natural gas shortage, such as the current one. Nonetheless, we cannot predict with certainty the impact that a continuing or more severe natural gas shortage would have on our operations. Our R&D and clinical development activities are currently dependent on gas. We are also continuously monitoring the impact on our R&D and clinical development activities as well and putting measures in place to mitigate the risks. Additionally, we continue to evaluate the impacts that the energy shortage may have on our partners, including Pfizer, suppliers, and service providers; however, at this time, we cannot predict the actual impact the shortage may have on these partners or the resulting impacts to us. Were any of these parties to experience significant impacts from this or any other energy shortage, we may be unable to manufacture our COVID-19 vaccine, and our business could be materially harmed. We recognize the critical importance of the continued manufacturing of our COVID-19 vaccine and manufacturing and testing of our product candidates and are proactively engaging in internal and external discussions with our counterparties and governmental authorities to address any potential risks at an early stage to mitigate any impacts due to an energy shortage.
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Key Pipeline Updates
Below is a summary of our authorized product and clinical product candidates, organized by platform and indication.
Pipeline overview
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Infectious Disease
We are expanding our infectious disease pipeline of mRNA vaccines to address global health challenges. In addition to our COVID-19, influenza and shingles vaccine programs, which are partnered with Pfizer, we have active research and preclinical development programs targeting more than 10 additional distinct infectious diseases, spanning both prophylactic vaccine and therapeutic approaches. As demonstrated with our COVID-19 vaccine, our infectious disease product strategy is rooted in our belief that it is our responsibility to make global and social impact with our medicines. Our goal is to advance and expand our infectious disease pipeline to combat major health burdens while democratizing access to mRNA medicines.
COVID-19 Vaccine Program – BNT162
BNT162b2, the first ever approved mRNA-based product, has paved the way for a new class of medicines. We and Pfizer continue to build on our global COVID-19 vaccine leadership with further label expansions as well as development of a diverse pipeline of follow-on and next generation vaccine candidates. Subject to regulatory approval, Omicron-adapted vaccine launches and clinical trial starts including trials for next generation vaccines are expected to begin in the second half of 2022.
Commercial updates
As of the beginning of July 2022, we and Pfizer have delivered in total more than 3.6 billion doses to 180 countries or territories. We and Pfizer have signed orders for approximately 2.5 billion doses for 2022, and, in the first half of the year, invoiced approximately 1.2 billion doses. The cumulative share of doses1 increased in the period
1 Market share data includes only those markets in which Pfizer operates and that report market share data
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between January 1, 2022 to July 20, 2022 from approximately 52% to 63% in all markets2,3. In developed markets4, the share of doses for the same time period increased from approximately 59% to 68%.
As part of our and Pfizer's 2-billion-doses-pledge to support equitable access to medicines, we and Pfizer have delivered more than 1.5 billion doses of our COVID-19 vaccine in total to low- and middle-income countries.
In May 2022, we and Pfizer announced an agreement with the European Commission, or EC, to amend their originally agreed contractual delivery schedules for the COVID-19 vaccine. The amendment rephases planned deliveries to help support the EC and Member States' ongoing immunization programs and is aligned to the companies’ commitment to working collaboratively to identify pragmatic solutions to address the evolving pandemic needs. Doses scheduled for delivery in June through August 2022 will now be delivered in September through to the fourth quarter of 2022. This change of delivery schedule did not impact our and Pfizer’s full-year 2022 revenue guidance or the full-year commitment of doses to be delivered to EC Member States in 2022.
In June 2022, we and Pfizer entered into a new vaccine supply agreement with the U.S. government. Under the terms of the agreement, the U.S. government will receive 105 million doses, including 30 µg, 10 µg and 3 µg doses, potentially including the Omicron-adapted adult vaccine, subject to granting of U.S. FDA Emergency Use Authorization, or EUA. The U.S. government also has the option to purchase up to an additional 195 million doses, bringing the potential total to 300 million vaccine doses. Delivery of the vaccine doses is scheduled to begin in late summer 2022 and will continue into the fourth quarter of this year. The U.S. government will pay the two companies $3.2 billion after receiving the first 105 million doses of vaccine.
Manufacturing updates
Our and Pfizer’s global COVID-19 vaccine supply chain and manufacturing network includes 20 manufacturing facilities spanning four continents.
We and Pfizer have started to manufacture bivalent Omicron BA.1- and BA.4/5-adapted vaccines. Pending regulatory approval, we expect to be able to deliver the updated vaccines as soon as October 2022 and plan to supply both vaccines in time for fall booster campaigns.
Clinical development and regulatory updates
Our and Pfizer’s COVID-19 vaccine has received multiple regulatory approvals including expansions of authorizations for booster and pediatric vaccinations.
In May 2022, the U.S. FDA expanded the EUA to include a booster dose in children five through 11 years of age. The EUA was granted based on data from the Phase 2/3 clinical trial demonstrating high immune response following a booster dose after completion of the primary series of BNT162b2 in this age group. Data demonstrated that a booster dose given approximately six months after the second dose of the 10 µg primary series increased neutralizing antibodies by six-fold against the SARS-CoV-2 wild-type strain compared to levels observed after two doses. The vaccine was well tolerated with no new safety signals observed.
The data were also submitted to the EMA for a variation of the Conditional Marketing Authorization, or CMA, in the European Union to include a booster dose in this age group and are being filed with other regulatory authorities worldwide.
In June 2022, the U.S. FDA amended the EUA to include children six months of age through four years of age. The EUA was granted based on safety, immunogenicity and vaccine efficacy topline data from a Phase 2/3 study evaluating a third 3 µg dose in 1,678 children in this age group. Following a third dose in this age group, the vaccine elicited a strong immune response with a favorable safety profile similar to placebo. The vaccine met all immunobridging criteria required for an EUA, based on an immunogenicity analysis conducted on a subset of study participants one month following the third dose in this age group compared to the second dose in the 16- to 25-year-old population. Further data on this age group will be shared in the coming weeks.
The data were also submitted to the EMA for a line extension of the CMA in the European Union in this age group and are expected to be filed with other regulatory authorities in the coming weeks.
In July 2022, the U.S. FDA also approved the supplemental Biologics License Application, or sBLA, to include individuals 12 through 15 years of age in the approved indication, expanding licensure of the vaccine to this age group, which was previously included under U.S. EUA.
2 Incl. all markets in Developed Markets(3) plus Emerging Markets (Argentina, Chile, Ecuador, Hong Kong, Nepal, Peru, South Africa, Uruguay)
3 Includes the U.S., EU/EEA, other Int'l Developed markets (Japan, South Korea, Switzerland, Ukraine)
4 Starting date of January 1, 2022 for this data set is from Q1 2022 earnings presentation
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BNT162b2 has demonstrated a high level of protection against several variants of concern, including Alpha, Beta, and Delta and continues to offer protection against severe disease, hospitalization and death for circulating Omicron-variants. We and Pfizer continue to monitor protection offered by BNT162b2 against emerging SARS-CoV-2 variants.
We and Pfizer are currently evaluating variant-adapted COVID-19 vaccines, including monovalent and bivalent vaccines directed against Omicron subvariants and other strains of SARS-CoV-2. Data from these studies were presented to regulatory agencies in June and July 2022, which supported the regulators’ discussions for the development of Omicron-adapted vaccines and definition of the most appropriate regulatory pathways. We and Pfizer will continue to submit available data to regulatory authorities worldwide. In June 2022, the U.S. FDA advised vaccine manufacturers to develop modified vaccines that add an Omicron BA.4/5 spike protein encoding component to the current vaccine composition to create a bivalent booster vaccine.
In June 2022, we and Pfizer announced positive safety, tolerability and immunogenicity data for two Omicron BA.1-adapted vaccine candidates, including data on a monovalent and a bivalent vaccine candidate combining the existing vaccine and a vaccine candidate targeting the Omicron variant BA.1 spike protein.
Results from this Phase 2/3 trial in 1,234 subjects aged 56 years or older show that booster doses of 30 µg and 60 µg of both Omicron BA.1-adapted monovalent and bivalent vaccine candidates elicit significantly higher neutralizing antibody responses against Omicron BA.1 compared to BNT162b2, consistent with the regulatory requirements for superiority. The monovalent Omicron-adapted vaccine 30 µg and 60 µg achieved the regulatory requirement of super superiority.
One month after administration, a booster dose of the Omicron BA.1-adapted monovalent candidates increased neutralizing geometric mean titers, or GMTs, against Omicron BA.1 13.5- and 19.6-fold above pre-booster dose levels. Booster vaccination with the bivalent Omicron BA.1-adapted vaccine candidates resulted in a 9.1- and 10.9-fold increase in neutralizing GMTs against Omicron BA.1, respectively. Both vaccine candidates demonstrated a favorable safety and tolerability profile similar to BNT162b2.
In preclinical studies in mice, both monovalent and bivalent Omicron BA.4/5-adapted vaccine candidates were observed to substantially increase Omicron neutralization responses against all Omicron sublineages including BA.1, BA.4/5 and the wild-type strain.
Given the FDA guidance, we and Pfizer plan to distribute a bivalent vaccine encoding for the spike protein of the original strain as well as of the BA.4/BA.5 Omicron sublineage to be used as a booster, subject to regulatory authorizations. In addition, we and Pfizer plan to initiate a clinical trial in August 2022 to generate immunogenicity and safety data for an Omicron BA.4/5-adapted bivalent vaccine.
In July 2022, we and Pfizer completed the submission to the EMA for an Omicron-adapted bivalent COVID-19 vaccine, based on the BA.1 sublineage, for individuals 12 years of age and older. This application follows guidance from the EMA to move forward with introducing an Omicron-adapted bivalent vaccine candidate to address the continued evolution of the SARS-CoV-2 virus. We and Pfizer are preparing to initiate the submission of pre-clinical and Chemistry, Manufacturing, Controls, or CMC, data for a bivalent vaccine candidate encoding Omicron BA.4/5 spike protein to EMA beginning in August 2022.
In a recent preprint publication (bioRxiv. Omicron BA.2 breakthrough infection enhances cross-neutralization of BA.2.12.1 and BA.4/BA.5; August 2022) we reported data demonstrating that sera from triple mRNA-vaccinated individuals who experienced Omicron sublineage BA.2 breakthrough infection demonstrated broad neutralizing activity against variants of concern, including Omicron BA.2 derived variants BA.2.12.1, BA.4/BA.5. In addition, the data showed that neutralization of BA.2 and BA.4/BA.5 sublineages by BA.2 convalescent sera is driven to a large extent by antibodies targeting the N-terminal domain, or NTD, of the spike glycoprotein. In comparison, neutralization by Omicron BA.1 convalescent sera depends on antibodies targeting the receptor binding domain. These findings suggest that Omicron BA.2 triggers significant NTD specific recall responses in vaccinated individuals, which enhances the neutralization of BA.4/BA.5 sublineages. Given the current epidemiology with a predominance of BA.2 derived sublineages like BA.4/BA.5 and rapidly ongoing evolution, these findings will increase current understanding on Omicron immune escape mechanisms and the effects of immunization on variant cross-neutralization, and thus will help guide further vaccine development.
We and Pfizer are investigating and identifying novel next-generation vaccine approaches to maintain a broad and longer lasting immune response and high levels of protection against SARS-CoV-2 as it evolves. The long-term strategy takes a multipronged approach devised to develop and test multiple engineered vaccine candidates to enable us and Pfizer to achieve the goal of delivering a pan-SARS-CoV-2-type vaccine that will ultimately help to better manage upcoming variants of concern. We and Pfizer expect that scientific data derived from those different approaches will support the vaccine candidate selected for evaluation in a pivotal trial.
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We and Pfizer plan to test several novel vaccine constructs that have been engineered to engage multiple arms of the immune system, including antibodies and T cells. These next-generation vaccine approaches we and Pfizer plan to evaluate include an enhanced SARS-CoV-2 spike antigen and, a T cell enhancing vaccine candidate.
In July 2022, as a first step of our and Pfizer's long-term strategy of developing a next-generation COVID-19 vaccine, a randomized, active controlled, observer-blind Phase 2 study was initiated to evaluate the safety, tolerability, and immunogenicity of a 30 µg dose of an enhanced spike antigen vaccine candidate. This first of multiple vaccine candidates with an engineered design, BNT162b5, consists of RNAs encoding for a sequence-modified spike protein of the SARS-CoV-2 ancestral strain and the Omicron BA.2 variant. The enhanced prefusion spike protein in BNT162b5 has been modified with the aim to increase the magnitude and breadth of antibody neutralization response to better protect against COVID-19.
Additionally, in the second half of 2022, we and Pfizer anticipate progressing T cell enhancing and pan-SARS-CoV-2 vaccine candidates into the clinic.
Additional Infectious Disease Programs
Prevention and treatment of infectious diseases is a long-term growth pillar for us, and our objective is to be a leader in mRNA vaccines for infectious diseases. With investments in multiple programs to address diseases with major impact on global population health and on people in lower income countries, we are advancing our pipeline of mRNA vaccines and therapeutics to address multiple high-need indications.
Influenza Vaccine Program
We are collaborating with Pfizer to develop an influenza vaccine based on our suite of mRNA platforms.
BNT161 – A Phase 1/2 clinical trial to evaluate the safety, tolerability and immunogenicity of a single dose of BNT161, a quadrivalent nucleoside-modified RNA (modRNA) influenza vaccine candidate, is ongoing.
In July 2022, data were reported from the Phase 2 expansion study of BNT161 in subjects 65 years of age and older showing first evidence of substantial induction of strain specific CD4+ and CD8+ responses. At day seven after vaccination with BNT161, the geometric mean fold rise, or GMFR, for CD4+ T cells was more than two-fold for all four encoded strains. For strain specific CD8+ T cells the GMFR was more than two-fold for the Victoria B subtype and influenza B subtype (H3N2). The GMFR was higher compared to the control quadrivalent influenza vaccine for both CD4+ and CD8+ strain specific T-cell responses. Based on these encouraging T cell responses and observed seroconversion, a Phase 3 study of the quadrivalent modified mRNA influenza vaccine is planned to initiate in the second half of 2022.
We and Pfizer have started a clinical trial to develop a self-amplifying mRNA, or saRNA, influenza vaccine. This planned dose-finding study will evaluate safety, tolerability, and immunogenicity in healthy adults 18 to less than 50 years of age.
Shingles Vaccine Program
We are collaborating with Pfizer to develop the first mRNA-based shingles vaccine candidate. The goal is to develop an mRNA vaccine candidate with a favorable safety profile and high efficacy, utilizing a scalable manufacturing technology to support global access.
Clinical trials are expected to start in the second half of 2022.
HSV 2 Vaccine Program – BNT163
As part of the collaboration with the University of Pennsylvania, we are developing a Herpes Simplex Virus Type 2 (HSV 2) vaccine candidate.
BNT163 - A clinical trial is expected to start in the second half of 2022.
Tuberculosis Vaccine Program – BNT164
We have collaborated with the Bill & Melinda Gates Foundation since 2019 to develop vaccine candidates aimed at preventing tuberculosis infection and disease.
A clinical trial for one such candidate, BNT164, is now planned to start in the second half of 2022 or early 2023.
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Malaria Vaccine Program – BNT165
We are developing an mRNA vaccine candidate to potentially prevent malaria and disease-associated mortality. We will assess several vaccine candidates, featuring known targets such as circumsporozoite protein (CSP) as well as other antigens.
BNT165 - A clinical trial is now planned to start in the second half of 2022 or early 2023.
Research Collaboration with University of Pennsylvania
We have a research collaboration with the University of Pennsylvania under which we have the exclusive option to develop and commercialize prophylactic mRNA immunotherapies for the treatment of up to 10 infectious disease indications.
Oncology
Our immuno-oncology strategy is based on pioneering approaches that harness the immune response to treat cancer. We have multiple clinical stage assets across different therapeutic classes which may have the potential to tackle tumors using complementary strategies, either by targeting tumor cells directly or by modulating the immune response against the tumor. Our oncology pillars include mRNA therapeutic vaccines, cell therapies (CAR-, TCR-, and neoantigen-specific T-cell therapies), mRNA-encoded effector molecules (RiboMabs and RiboCytokines), next-generation immune checkpoint inhibitors and agonists, anti-tumor antibodies and immune-modulatory small molecules. Many product candidates have the potential to be combined with other pipeline assets or already approved therapies.
This diverse toolkit of different technologies and modes of action has the potential to address a broad range of solid tumors in different disease stages, using both off-the-shelf and individualized approaches. For our antigen-specific immune therapies, we have assembled libraries of more than 300 proprietary or known shared antigens and have developed predictive algorithms capable of efficiently identifying multiple neoantigens on an individualized basis for any patient.
Our clinical stage oncology pipeline includes a total of 18 product candidates in 23 ongoing clinical trials, including five in randomized Phase 2 clinical trials: two FixVac programs (BNT111 and BNT113), two indications for our iNeST product candidate autogene cevumeran (BNT122/RO7198457), and the bispecific antibody immune checkpoint modulator BNT311 (GEN1046). BNT116, a FixVac program for non-small cell lung cancer (NSCLC) and BNT142, a RiboMabs program targeting CD3 on T cells and Claudin-6 (CLDN6) in solid tumors, have recently entered first-in-human clinical testing.
We expect continued pipeline advancement and expansion, as well as further data readouts from the ongoing trials, for the remainder of 2022.
FixVac
Our off-the-shelf cancer immunotherapy approach, FixVac, leverages our proprietary uridine mRNA (uRNA) backbone for full actualization of the intrinsic adjuvanticity of RNA that encodes cancer-specific shared antigens for intravenous administration using the proprietary RNA-lipoplex, or RNA-LPX, formulation and aiming for induction of strong antigen-specific immune responses.
FixVac product candidates are designed to trigger both innate and adaptive immune responses and may be of clinical utility in combination with anti-PD1 in patients with lower mutational burden tumors, including those who have already experienced checkpoint inhibitor, or CPI, therapy.
BNT111 in advanced melanoma.
A global, three-arm Phase 2 trial evaluating BNT111 in combination with cemiplimab (Regeneron's Libtayo®), versus both agents as monotherapy, in patients with anti-PD1-refractory/relapsed, unresectable Stage III or IV melanoma, is ongoing. The primary endpoint is overall response rate of BNT111 in combination with cemiplimab. Secondary endpoints include overall response rate in the single agent arms, duration of response, and safety. The trial is being conducted in collaboration with Regeneron.
BNT111 is also in an ongoing Phase 1 trial for the treatment of advanced melanoma.
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BNT112 is in an ongoing Phase 1/2 trial for the treatment of prostate cancer.
BNT112 is being evaluated in a first-in-human, dose titration and expansion trial to evaluate safety, immunogenicity and preliminary efficacy of BNT112 monotherapy and in combination with cemiplimab in patients with prostate cancer.
The recruitment of new patients to this clinical trial, which we refer to as, PRO-MERIT, is temporarily halted until further notice due to unforeseen supply issues with the BNT112 investigational medicinal product. For patients who are currently on trial, the treatment continues per protocol.
BNT113 in HPV16+ head and neck cancer.
A randomized Phase 2 trial evaluating BNT113 in combination with pembrolizumab versus pembrolizumab monotherapy as a first-line treatment in patients with unresectable recurrent or metastatic HPV16+ head and neck squamous cell carcinoma, or HNSCC, expressing PD-L1 is ongoing. Primary endpoints include safety, overall survival and objective response rate. Secondary endpoints include progression free survival, durable complete responses, duration of response, patient reported outcomes and quality of life measures.
An investigator sponsored Phase 1/2 dose escalation trial of BNT113 in patients with HPV16+ head and neck and other cancers is ongoing.
BNT115 is in an ongoing investigator-initiated Phase 1 trial for the treatment of ovarian cancer.
BNT115 is being studied in a first-in-human, open label, Phase 1 dose escalation trial in ovarian cancer patients eligible for standard-of-care treatment with (neo-) adjuvant chemotherapy.
Although the original recruitment period was extended, the target number of evaluable patients defined in the study protocol was not reached and recruitment for the trial was stopped at this stage. The follow-up phase for enrolled patients is still being completed. The final evaluation of the clinical data from the trial will be made by the University Medical Center Groningen, Netherlands and recorded accordingly.
BNT116 in advanced non-small-cell lung cancer, or NSCLC.
BNT116 is being evaluated in a Phase 1 clinical trial. It is designed to elicit an immune response to six tumor-associated antigens that cover up to 100% of patients in all major histologic subtypes of NSCLC.
In July 2022, the first participant was dosed in a first-in-human clinical trial evaluating the safety, tolerability and preliminary efficacy of BNT116 alone and in combination in patients with advanced or metastasized NSCLC. The trial comprises several cohorts and is intended to establish a safe dose for BNT116 monotherapy as well as for BNT116 in combination with cemiplimab (Regeneron's Libtayo®) in 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.
Individualized Neoantigen Specific Immunotherapies, or iNeST
Our iNeST approach is also based on a pharmacologically optimized uRNA delivered in our proprietary RNA-LPX formulation.
Each patient is treated with a vaccine informed by the mutation profile of their personal cancer and manufactured on-demand. The RNA encodes a unique composition of the patient’s own tumor mutations and results in generation of neoantigen specific CD4+ and CD8+ T-cell responses. We believe this modality is well-suited for use in early-stage cancers and the adjuvant setting.
Autogene cevumeran (BNT122) – Our lead iNeST product candidate, autogene cevumeran, is being developed as part of a co-development and co-commercialization collaboration with Genentech.
An open-label Phase 2 trial evaluating the efficacy and safety of autogene cevumeran in combination with pembrolizumab versus pembrolizumab alone in patients with previously untreated advanced melanoma is ongoing. The primary endpoint is progression-free survival, or PFS, of patients treated with autogene cevumeran compared with patients receiving pembrolizumab alone, according to RECIST v1.1. Secondary endpoints include objective response rate, or ORR, overall survival, or OS, duration of response, or DOR, and safety. A data update is now expected in the first half of 2023.
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A randomized Phase 2 trial of autogene cevumeran in the adjuvant treatment of circulating tumor DNA, or ctDNA, positive, surgically resected Stage II (high risk)/Stage III colorectal cancer is ongoing. The trial is expected to enroll about 200 patients to evaluate the efficacy of autogene cevumeran compared to watchful waiting after surgery and chemotherapy, the current standard of care for these high-risk patients. The primary endpoint for the study is disease-free survival, or DFS. Secondary objectives include OS and safety.
The medical need for novel therapies to treat colorectal cancer, the second deadliest cancer worldwide, remains high. The current standard of care in this indication is watchful waiting to see if tumors recur after removal of the primary tumor and adjuvant chemotherapy. A proportion of these patients are expected to have a recurrence of their tumor within 2-3 years after their surgery. For this clinical trial, patients at high risk for recurrence will be selected with a highly sensitive blood test detecting ctDNA.
An open-label Phase 1a/1b trial evaluating the safety, tolerability, immune response and pharmacokinetics of autogene cevumeran (BNT122) as a single agent and in combination with atezolizumab in patients with locally advanced or metastatic solid tumors (basket trial) is ongoing.
In June 2022, initial data from an investigator-initiated Phase 1 clinical trial of autogene cevumeran evaluating safety and tolerability in combination with the anti-PD-L1 immune checkpoint inhibitor atezolizumab and chemotherapy in patients with surgically removed pancreatic ductal adenocarcinoma, or PDAC, was presented at the 2022 American Society of Clinical Oncology, or ASCO, Annual Meeting. 16 patients had their tumor surgically removed, were subsequently treated with a single dose of atezolizumab and received autogene cevumeran. Preliminary data from these 16 treated patients showed that autogene cevumeran was well tolerated. De novo neoantigen-specific T-cell responses of high-magnitude were induced in 50% (eight out of 16) of patients. After an early median follow-up of 18 months, patients with this type of immune response had a significantly longer recurrence-free survival, or RFS, than those without a high magnitude vaccine-induced immune response. Based on these data, we and Genentech are planning a randomized study to further evaluate the efficacy and safety of autogene cevumeran in combination with atezolizumab and chemotherapy in patients with resected PDAC.
mRNA Intratumoral Immunotherapy
We, in collaboration with Sanofi, are developing intratumoral immunotherapies utilizing our proprietary mRNA technology. The product candidate SAR441000 (BNT131) consists of modified mRNA encoding immunomodulatory cytokines for direct intratumoral injection.
SAR441000 (BNT131) – A Sanofi-sponsored Phase 1 clinical trial as monotherapy and in combination with an anti-PD-1 checkpoint inhibitor in patients with advanced solid tumors is ongoing.
RiboCytokines
BNT151 and BNT152+153 are nucleoside-modified mRNAs encoding human cytokines fused to human serum albumin. The modified mRNA is formulated with liver-targeting lipid nanoparticles, or LNP, for intravenous delivery BNT151 encodes an IL-2 variant, BNT152 encodes IL-7 and BNT153 encodes IL-2.
Our RiboCytokine product candidates are designed to address the limitations of recombinantly expressed cytokines, including limited serum half-life and production costs.
BNT151 – A first-in-human, open-label, multicenter Phase 1/2 trial in multiple solid tumor indications is ongoing. Part 1 of the trial is the monotherapy dose escalation and will enroll patients with tumors that are metastatic or unresectable with no available standard therapy likely to confer clinical benefit. In the combined treatment dose escalation, patients with different solid tumors will be enrolled and treated with BNT151 and other potential combination agents.
BNT152+153 – A first-in-human Phase 1 trial evaluating a combination of BNT152 (encoding IL-7) and BNT153 (encoding IL-2) in patients with various solid tumors is ongoing. In parallel, BNT152 and BNT153 monotherapy dose escalation in Part 1 will determine the Part 2 starting dose of each compound in combination. Part 2 will be the combination dose finding of BNT152 and BNT153.
RiboMabs
Our RiboMab product candidates, BNT141 and BNT142, are based on mRNA and designed to encode cancer cell targeting antibodies. These product candidates leverage our proprietary optimized mRNA technology combining nucleoside modifications to minimize immunogenicity with our modifications in the mRNA backbone with the aim of maximizing protein expression.
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RiboMabs may address the limitations of recombinant antibodies, including costly manufacturing processes and unfavorable pharmacokinetics.
BNT141 encodes an antibody targeting Claudin18.2, expressed in high unmet medical need tumors, including multiple epithelial solid tumors, such as gastric, biliary and pancreatic cancers. BNT142 encodes a bispecific T cell engaging antibody that targets CD3, a T cell receptor component, and CLDN6, an oncofetal cell surface antigen found in solid tumors such as testicular and ovarian cancers.
BNT141 – An open-label, multi-site, Phase 1/2 dose escalation, safety, and pharmacokinetic trial of BNT141 followed by expansion cohorts in patients with Claudin 18.2 (CLDN18.2)-positive tumors is ongoing. The trial is evaluating dose escalation as monotherapy in patients with unresectable or metastatic cancers, followed by dose escalation in combination with chemotherapy in patients with advanced unresectable or metastatic CLDN18.2-positive pancreatic adenocarcinoma or cholangiocarcinoma who are eligible for treatment with standard of care. After dose escalation, expansion cohorts will be evaluated.
BNT142 – In July 2022, the first participant was dosed in an open-label, multi-center, Phase 1/2 dose escalation, safety, and pharmacokinetic trial of BNT142 followed by expansion cohorts in patients with CLDN6-positive advanced solid tumors. The trial is evaluating BNT142 as monotherapy in patients that have exhausted therapy or are not eligible for standard of care therapy. After dose escalation, BNT142 will be evaluated in expansion cohorts in testicular cancer, ovarian cancer, and non-squamous NSCLC.
CAR-T Cell Immunotherapy
BNT211, our first chimeric antigen receptor, or CAR-T cell product candidate, targets CLDN6-positive solid tumors in combination with a CAR-T cell-amplifying RNA vaccine, or CARVac, encoding CLDN6. CARVac is also based on a pharmacologically optimized uRNA backbone delivered in our proprietary RNA-LPX formulation. CLDN6 CAR-T cells are equipped with a second-generation CAR of high sensitivity and specificity for the tumor-specific carcino-embryonic antigen CLDN6. CARVac drives in vivo expansion of transferred CAR-T cells, aiming to increase their persistence and efficacy. BNT211 is designed to overcome CAR-T cell therapy limitations in patients with solid tumors.
A first-in-human Phase 1/2 open-label dose escalation and dose expansion trial evaluating BNT211 in patients with CLDN6 positive solid tumors is ongoing. The trial evaluates CLDN6 CAR-T cells dosed as monotherapy and in combination with CLDN6 CARVac.
Data from the ongoing trial were presented at the American Association for Cancer Research, or AACR, Conference in April 2022 and at the annual meeting of the Association for Cancer Immunotherapy. or CIMT, in May 2022. The preliminary efficacy data showed encouraging signs of clinical activity with a disease control rate of 86% and an overall response rate of 43%. The results also demonstrated an encouraging safety profile as adverse events and dose limiting toxicities were manageable.
Another data update from the ongoing Phase 1/2 trial is expected in the second half of 2022.
In June 2022, the EMA granted Priority Medicines, or PRIME, designation to BNT211 for the third- or later-line treatment of testicular germ cell tumors. The PRIME status is granted to drug candidates that may offer a major therapeutic advantage over existing treatments and provides early and proactive EMA support to developers of medicines that target an unmet medical need. BNT211 will benefit from this interaction with the EMA through the next development phase.
Neoantigen-Targeting T Cell Therapy
BNT221 (NEO-PTC-01) is our individualized neoantigen-targeting T cell therapy for the treatment of cancer. BNT221 targets selected sets of individualized neoantigens.
A first-in-human Phase 1 dose escalation trial evaluating BNT221 in patients with checkpoint inhibitor unresponsive or refractory metastatic melanoma is ongoing. Part 1 of the trial consists of a monotherapy dose escalation of BNT221. In Part 2, BNT221 will be dosed in combination with anti-PD1 therapy after first-line treatment.
Next-Generation Immunomodulators
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We are developing, in collaboration with Genmab, bispecific antibodies that function as tumor-targeted and dual immunomodulators, applying Genmab’s proprietary DuoBody® technology in combination with our joint target identification and product concept expertise.
These next-generation immune checkpoint modulators are designed to prime and activate anti-tumor T-cell and Natural Killer cell function.
BNT311 and BNT312 are partnered with Genmab as part of a 50/50 collaboration in which development costs and future profit are shared.
BNT311 (GEN1046) is a potential first-in-class bispecific antibody combining PD-L1 checkpoint inhibition with 4-1BB checkpoint activation. BNT312 (GEN1042) is a potential first-in-class bispecific antibody designed to induce conditional immune activation by crosslinking CD40 and 4-1BB positive cells.
BNT311 (GEN1046) – A Phase 2, multicenter, randomized, open-label trial of BNT311 as monotherapy and in combination with pembrolizumab in subjects with relapsed/refractory metastatic NSCLC after treatment with standard of care therapy with an immune checkpoint inhibitor is ongoing. The primary endpoint of the study is ORR according to RECIST v1.1. Secondary endpoints include DOR, time to response, PFS, OS, and safety.
A Phase 1/2 trial with expansion cohorts in patients with solid tumors is ongoing. Multiple expansion cohorts are ongoing, including patients with NSCLC, triple negative breast cancer, or TNBC, urothelial cancer, squamous cell carcinoma of the head and neck, or SCCHN, and cervical cancer.
BNT312 (GEN1042) - A Phase 1/2 trial in patients with solid tumors is ongoing. Expansion cohorts in melanoma, NSCLC, pancreatic and head and neck carcinoma are recruiting.
In August 2022, we announced the expansion of our global strategic collaboration with Genmab for the joint development of BNT313 (GEN1053), a CD27 antibody, applying Genmab's proprietary HexaBody® technology. Under this 50/50 collaboration, the development costs and potential future profits for BNT313 will be shared equally.
BNT313 (GEN1053) - A Phase 1 trial to evaluate the safety, tolerability, and preliminary efficacy of BNT313 on malignant solid tumors as monotherapy is expected to be initiated in the second half of 2022. The trial will consist of two parts. The dose escalation part will explore the safety of escalating doses of BNT313 as monotherapy. The expansion part is planned to provide additional safety and initial antitumor activity information on the selected dose regimen for BNT313 monotherapy in selected tumor indications, as well as more detailed data related to the mode of action.
Targeted Cancer Antibodies
BNT321 (MVT-5873) is a fully human IgG1 monoclonal antibody targeting sialyl Lewis A (sLea), an epitope on CA19-9 that is expressed in pancreatic and other solid tumors that plays a role in tumor adhesion and metastasis formation, and is a marker of an aggressive cancer phenotype.
BNT321 is currently in Phase 1 clinical development in pancreatic cancer and other CA19-9 expressing solid tumors.
Small Molecule Immunomodulators
BNT411 is our novel small molecule TLR7 agonist product candidate. BNT411 is designed to activate both the adaptive and innate immune system through the TLR7 pathway.
A Phase 1/2 dose-escalation trial of BNT411 as a monotherapy in patients with solid tumors and in combination with atezolizumab, carboplatin and etoposide in patients with chemotherapy-naïve extensive-stage small cell lung cancer, or ES-SCLC, is ongoing.
Rare Disease Protein Replacement Therapies
We are collaborating with Genevant in order to combine our mRNA technology with Genevant’s LNP delivery technology, to create up to five mRNA protein replacement therapies for the treatment of rare diseases with high unmet medical needs. Currently, we have placed the programs on hold in order to focus on other disease areas.
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Financial Operations Overview
The following table shows our unaudited interim condensed consolidated statements of profit or loss for each period presented:
Three months ended
June 30,
Six months ended
June 30,
2022202120222021
(in millions, except per share data)(unaudited)(unaudited)(unaudited)(unaudited)
Revenues
Commercial revenues€3,166.3€5,280.5€9,528.5€7,308.0
Research & development revenues30.228.042.648.9
Total revenues€3,196.5€5,308.5€9,571.1€7,356.9
Cost of sales(764.6)(883.8)(2,058.7)(1,116.9)
Research and development expenses(399.6)(201.1)(685.4)(417.3)
Sales and marketing expenses(17.8)(13.3)(32.1)(22.0)
General and administrative expenses (130.0)(47.8)(220.8)(86.7)
Other operating expenses (240.7)(0.3)(309.5)(0.9)
Other operating income 565.836.2697.7147.5
Operating income€2,209.6€4,198.4€6,962.3€5,860.6
Finance income115.50.3387.624.8
Finance expenses(5.8)(175.9)(12.5)(220.3)
Profit before tax€2,319.3€4,022.8€7,337.4€5,665.1
Income taxes(647.3)(1,235.6)(1,966.6)(1,749.8)
Profit for the period€1,672.0€2,787.2€5,370.8€3,915.3
Earnings per share
Basic profit for the period per share€6.86€11.42€22.00€16.07
Diluted profit for the period per share€6.45€10.77€20.69€15.14
Important financial and operating terms and concepts are described in Item 5 of our Annual Report on Form 20-F as of and for the year ended December 31, 2021.
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Operational Impacts of COVID-19
As we advance our clinical programs, we are in close contact with our principal investigators and clinical sites, and are assessing the impact on the clinical trials, expected timelines and costs on an ongoing basis. For certain programs, including BNT111, BNT113, BNT122, BNT141 and BNT142 (RiboMabs), BNT151 and BNT152/153 (RiboCytokines) and BNT161 (Influenza), delays in the commencement of trials were experienced, due to slowed patient enrollment and other delays as a result of the COVID-19 pandemic. After several months of delay to focus efforts on our COVID-19 vaccine in 2020, in 2021 we started four Phase 2 clinical trials: two for our FixVac product candidates BNT111 and BNT113, one each for our iNeST program BNT122 as well as for our bispecific antibody program BNT311. In addition, we have started multiple Phase 1 clinical trials in 2021 and 2022 that include product candidates for BNT211 (CARVac), BNT221 (NEO-PTC-01, a neoantigen-based T-cell therapy), BNT151 and BNT152+153 (RiboCytokines), BNT116 (FixVac), BNT141 (RiboMab) and BNT142 (RiboMab). The delays, even though they were temporary, may negatively impact our operations and overall business by delaying further progress of these clinical trials and preclinical studies. Our operations, including research and manufacturing, could also be negatively impacted due to the potential impact of staff absences as a result of self-isolation procedures or extended illness. Such factors were evaluated and considered when preparing this Quarterly Report as of and for the three and six months ended June 30, 2022. We will continue to evaluate observed and potential effects of the COVID-19 pandemic.
COVID-19 Collaborations
In response to the COVID-19 pandemic, we initiated our COVID-19 vaccine development program, BNT162, in late January 2020, leveraging our proprietary mRNA platform, and assembled a global consortium of partners including Pfizer (marketing and distribution rights worldwide with the exception of China, Germany and Turkey) and Fosun Pharma (marketing and distribution rights in China, Hong Kong special administrative region, or SAR, Macau SAR and the region of Taiwan).
Details about our COVID-19 collaborations are described further in our Key Pipeline Updates above, Items 4 and 5 of our Annual Report on Form 20-F as of and for the year ended December 31, 2021, as well as the notes to our audited consolidated financial statements included in that Annual Report.
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Comparison of the three and six months ended June 30, 2022 and 2021
Revenues
The following is a summary of revenues recognized for the periods indicated:
Three months ended
June 30,
Change
(in millions)20222021%
Revenues
Commercial revenues€3,166.3€5,280.5€(2,114.2)(40)
COVID-19 vaccine revenues3,152.75,266.0(2,113.3)(40)
Sales to collaboration partners(1)
608.3138.1470.2340
Direct product sales to customers557.01,035.6(478.6)(46)
Share of collaboration partners' gross profit and sales milestones1,987.44,092.3(2,104.9)(51)
Other sales13.614.5(0.9)(6)
Research & development revenues from collaborations€30.2€28.0€2.28
Total revenues€3,196.5€5,308.5€(2,112.0)(40)
(1)    Represents sales to our collaboration partners of products manufactured by us.
Six months ended
June 30,
Change
(in millions)20222021%
Revenues
Commercial revenues€9,528.5€7,308.0€2,220.530
COVID-19 vaccine revenues9,505.87,281.62,224.231
Sales to collaboration partners(1)
1,211.5202.01,009.5500
Direct product sales to customers1,720.11,235.4484.739
Share of collaboration partners' gross profit and sales milestones6,574.25,844.2730.012
Other sales22.726.4(3.7)(14)
Research & development revenues from collaborations€42.6€48.9€(6.3)(13)
Total revenues€9,571.1€7,356.9€2,214.230
(1)    Represents sales to our collaboration partners of products manufactured by us.
For the three months ended June 30, 2022 compared to the three months ended June 30, 2021, our total revenues from contracts with customers decreased by €2,112.0 million from €5,308.5 million to €3,196.5 million, but on a year-to-date basis still increased by €2,214.2 million from €7,356.9 million during the six months ended June 30, 2021 to €9,571.1 million during the six months ended June 30, 2022. We believe the development of the pandemic remains dynamic which influences the potential switch from the BNT162b2 vaccine to an Omicron-adapted bivalent vaccine, subject to regulatory approval, thereby causing a re-phasing of orders from those made earlier in the year to a later time in the year. These developments are leading to fluctuations in quarterly revenues which we expect to remain over the rest of the financial year with an uptake in demand in our key markets in the fourth quarter of 2022 related to the Omicron-adapted bivalent vaccine, subject to regulatory approval.
We are the marketing authorization holder in the United States, the European Union, the United Kingdom, Canada and other countries, and holder of emergency use authorizations or equivalents in the United States (jointly with Pfizer) and other countries; submissions to pursue regulatory approvals in those countries where emergency use authorizations or equivalent were initially granted are ongoing. Pfizer has marketing and distribution rights worldwide with the exception of China, Germany and Turkey. Fosun Pharma has marketing and distribution rights in China, Hong Kong special administrative region, or SAR, Macau SAR and the region of Taiwan. The allocation of marketing and distribution rights defines territories in which the collaboration partners act as a principal.
Whenever responsibilities in the manufacturing and supply process of the COVID-19 vaccine shift and our COVID-19 vaccine is transferred, the vaccine is sold from one partner to the other. During the three and six months ended June 30, 2022, we recognized €608.3 million and €1,211.5 million of revenues, respectively, from selling drug product batches manufactured by us to our partners. During the comparative periods, three and six months ended
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June 30, 2021, the revenues derived from sales to collaboration partners amounted to €138.1 million and €202.0 million were recognized, respectively.
By supplying our territories during the three and six months ended June 30, 2022, we recognized €557.0 million and €1,720.1 million of revenues, respectively, from direct COVID-19 vaccine sales in Germany and Turkey. During the comparative periods, three and six months ended June 30, 2021, recognized revenues derived from those sales amounted to €1,035.6 million and €1,235.4 million, respectively. The share of gross profit that we owe our collaboration partner Pfizer based on our sales is recognized as cost of sales.
Based on COVID-19 vaccine sales in the collaboration partners’ territories, we are eligible to receive a share of their gross profit which represents a net figure and is recognized as collaboration revenues during the commercial phase together with sales milestones that are recorded once the underlying thresholds are met. During the three months ended June 30, 2022, €1,987.4 million gross profit share was recognized as revenues. During the comparative period, three months ended June 30, 2021, €3,923.7 million gross profit share and €168.6 million of sales milestones were recognized as revenues. During the six months ended June 30, 2022, €6,574.2 million of gross profit share were recognized. During the comparative period, six months ended June 30, 2021, €5,428.4 million of gross profit share and €415.8 million of sales milestones were recognized as revenues. In order to determine our share of our collaboration partners’ gross profits, we used certain information from the collaboration partners, some of which is based on preliminary data shared between the partners and might vary once final data is available. The true-up recognized prospectively during the three and six months ended June 30, 2022 and 2021, with respect to the previous period, was not material.
Cost of Sales
The following table summarizes our cost of sales for the periods indicated:
Three months ended
June 30,
Change
(in millions)20222021%
Cost of sales
Cost of sales related to COVID-19 vaccine revenues€753.3€872.1€(118.8)(14)
Cost related to other sales11.311.7(0.4)(3)
Total cost of sales€764.6€883.8€(119.2)(13)
Six months ended
June 30,
Change
(in millions)20222021%
Cost of sales
Cost of sales related to COVID-19 vaccine revenues€2,041.6€1,095.3€946.386
Cost related to other sales17.121.6(4.5)(21)
Total cost of sales€2,058.7€1,116.9€941.884
From the three months ended June 30, 2022 compared to the three months ended June 30, 2021, our cost of sales decreased by €119.2 million from €883.8 million to €764.6 million but on a year-to-date basis still increased by €941.8 million from €1,116.9 million during the six months ended June 30, 2021 to €2,058.7 million during the six months ended June 30, 2022. The change in cost of sales resulted mainly from the recognition of costs related to our COVID-19 vaccine revenues which included the share of gross profit owed to our collaboration partner Pfizer. In addition, cost of sales was impacted by expenses arising from inventory write-offs and expenses for production capacities derived from contracts with Contract Manufacturing Organizations, or CMOs, that became redundant as a direct result of the planned introduction of a new COVID-19 vaccine formulation, the potential switch from the BNT162b2 vaccine to an Omicron-adapted bivalent vaccine and due to increased internal manufacturing capacities during the three and six months ended June 30, 2022.
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Research and Development Expenses
The following table summarizes our research and development expenses for the periods indicated:
Three months ended
June 30,
Change
(in millions)20222021%
Research and development expenses
Purchased services€230.0€99.9€130.1130
Wages, benefits and social security expense85.568.217.325
Laboratory supplies48.116.531.6192
Depreciation and amortization11.67.14.563
Other24.49.415.0160
Total research and development expenses€399.6€201.1€198.599
Six months ended
June 30,
Change
(in millions)20222021%
Research and development expenses
Purchased services€361.4€241.8€119.649
Wages, benefits and social security expense156.3115.740.635
Laboratory supplies105.727.977.8279
Depreciation and amortization22.414.67.853
Other39.617.322.3129
Total research and development expenses€685.4€417.3€268.164
From the three months ended June 30, 2022 compared to the three months ended June 30, 2021, our research and development expenses increased by €198.5 million or 99% from €201.1 million to €399.6 million as well as by €268.1 million from €417.3 million during the six months ended June 30, 2021 to €685.4 million during the six months ended June 30, 2022 mainly due to recognizing costs related to the manufacturing of pre-launch Omicron vaccine candidates as research and development expenses in the period incurred as well as an increase in wages, benefits and social security expenses resulting from an increase in headcount.
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General and Administrative Expenses
The following table summarizes our general and administrative expenses for the periods indicated:
Three months ended
June 30,
Change
(in millions)20222021%
General and administrative expenses
Wages, benefits and social security expense€43.0€17.1€25.9151
Purchased services34.611.523.1201
IT and office equipment22.55.417.1317
Insurance premiums8.54.44.193
Other21.49.412.0128
Total general and administrative expenses €130.0€47.8€82.2172
Six months ended
June 30,
Change
(in millions)20222021%
General and administrative expenses
Wages, benefits and social security expense€70.5€31.4€39.1125
Purchased services64.923.541.4176
IT and office equipment33.88.025.8323
Insurance premiums14.58.75.867
Other37.115.122.0146
Total general and administrative expenses €220.8€86.7€134.1155
From the three months ended June 30, 2022 compared to the three months ended June 30, 2021, our general and administrative expenses increased by €82.2 million or 172% from €47.8 million to €130.0 million as well as by €134.1 million from €86.7 million during the six months ended June 30, 2021 to €220.8 million during the six months ended June 30, 2022 mainly due to recognizing increased expenses for purchased external services as well as an increase in wages, benefits and social security expenses resulting from an increase in headcount.
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Other Operating Income / Expenses
The following table summarizes our other result, including other operating income and expenses, for the periods indicated:
Three months ended
June 30,
Change
(in millions)20222021%
Other result
Other operating income€565.8€36.2€529.6n.m.
Foreign exchange differences, net517.034.4482.6n.m.
Government grants0.1(0.1)(100)
Other48.81.747.1n.m.
Other operating expenses€(240.7)€(0.3)€(240.4)n.m.
Loss on derivative instruments at fair value through profit or loss(229.7)(229.7)
Other(11.0)(0.3)(10.7)n.m.
Total other result€325.1€35.9€289.2806
Six months ended
June 30,
Change
(in millions)20222021%
Other result
Other operating income€697.7€147.5€550.2373
Foreign exchange differences, net641.075.1565.9754
Government grants68.0(68.0)(100)
Other56.74.452.3n.m.
Other operating expenses€(309.5)€(0.9)€(308.6)n.m.
Loss on derivative instruments at fair value through profit or loss(299.0)(299.0)
Other(10.5)(0.9)(9.6)n.m.
Total other result€388.2€146.6€241.6165
From the three months ended June 30, 2022 compared to the three months ended June 30, 2021, our total other result increased by €289.2 million from €35.9 million to €325.1 million as well as by €241.6 million from €146.6 million during the six months ended June 30, 2021 to €388.2 million during the six months ended June 30, 2022 mainly due to recording higher other income from foreign exchange differences arising on operating items. The increase reflects the change in foreign exchange rate and primarily related to our U.S. dollar denominated trade receivables which mainly resulted from our COVID-19 collaboration with Pfizer, compensated by the foreign exchange rate effects of our U.S. dollar denominated trade payables as well as U.S. dollar denominated other financial liabilities which mainly resulted from obligations incurred from our license agreements. The increasing effect was offset by recording changes in fair values of foreign exchange forward contracts that we entered into to manage some of our transaction exposures but were not designated as hedging instruments under IFRS. In addition, other income related to government grants recognized in the prior year period did not re-occur during the three and six months ended June 30, 2022.
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Finance Income / Expenses
The following table summarizes our finance result for the periods indicated:
Three months ended
June 30,
Change
(in millions)20222021%
Finance result
Finance income€115.5€0.3€115.2n.m.
Foreign exchange differences, net114.0114.0
Interest income1.50.31.2400
Finance expenses€(5.8)€(175.9)€170.1(97)
Interest expenses related to financial assets(5.1)(5.1)
Interest expenses related to lease liabilities(0.7)(0.5)(0.2)40
Amortization of financial instruments(4.7)4.7(100)
Fair value adjustments of financial instruments measured at fair value(170.4)170.4(100)
Foreign exchange differences, net(0.3)0.3(100)
Total finance result€109.7€(175.6)€285.3(162)
Six months ended
June 30,
Change
(in millions)20222021%
Finance result
Finance income€387.6€24.8€362.8n.m.
Fair value adjustments of financial instruments measured at fair value216.8216.8
Foreign exchange differences, net168.824.2144.6598
Interest income2.00.61.4233
Finance expenses€(12.5)€(220.3)€207.8(94)
Interest expenses related to financial assets(8.3)(8.3)
Amortization of financial instruments(2.6)(7.2)4.6(64)
Interest expenses related to lease liabilities(1.6)(1.2)(0.4)33
Fair value adjustments of financial instruments measured at fair value(211.9)211.9(100)
Total finance result€375.1€(195.5)€570.6(292)
From the three months ended June 30, 2022 compared to the three months ended June 30, 2021, our total financial result increased by €285.3 million from a negative financial result of €175.6 million to a positive financial result of €109.7 million as well as by €570.6 million from a negative financial result of €195.5 million during the six months ended June 30, 2021 to a positive financial result of €375.1 million during the six months ended June 30, 2022, mainly due to increased income arising from the final fair value measurement adjustments of the derivative embedded within the convertible note upon early redeeming the convertible note as of March 1, 2022, the redemption date (see Note 6 of our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report). In addition, finance income was increased with respect to recognizing foreign exchange differences arising on financing items (i.e. U.S. dollar denominated cash and cash equivalents).
Income Taxes
For the six months ended June 30, 2022 and 2021, income taxes were calculated based on the best estimate of the weighted average annual income tax rates expected for the full financial years (estimated annual effective income tax rates) on ordinary income before tax plus the tax effect of any discrete items. For the six months ended June 30, 2022 and 2021, our effective income tax rates were approximately 26.8% and 30.9%, respectively. The effective income tax rate decreased in part due to average trade tax rates in Mainz, Marburg and Idar-Oberstein decreasing from 2022 onward. During the three and six months ended June 30, 2022, current income taxes were recognized with respect to the German tax group. Deferred tax effects were recognized with respect to identified discrete items. In addition, the non-tax effective fair value measurement of the convertible note was considered as permanent difference for the six months
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ended June 30, 2022. As of June 30, 2022, we continue to maintain a valuation allowance against deferred tax assets of our U.S. tax group as there is not sufficient probability in terms of IAS 12 that there will be future taxable profits available against which the unused tax losses and temporary differences can be utilized.
Related Party Transactions
Related party transactions that occurred during the three and six months ended June 30, 2022 and 2021 are explained in Note 11 to the unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report.
Critical Accounting Policies and Use of Estimates
Our unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2022 have been prepared in accordance with IFRS, as issued by the IASB.
The preparation of the unaudited interim condensed consolidated financial statements in accordance with IFRS requires the use of estimates and assumptions by the management that affect the value of assets and liabilities as reported on the balance sheet date, and revenues and expenses arising during the respective reporting period. As described in Item 5 of our Annual Report on Form 20-F as of and for the year ended December 31, 2021 as well as the Note 3 to our audited consolidated financial statements included in that Annual Report, the area where our management needed to apply judgment the most relates to the recognition of revenues. This includes but is not limited to determining commercial revenues under our collaboration agreement, which is recognized based on the collaboration partners’ gross profit from COVID-19 vaccine sales where we used certain information from the collaboration partner, including revenues from the sale of products, some of which is based on preliminary data shared between the partners. These estimated figures may change in future periods as we receive final data from our collaboration partner. Those changes in our share of the collaboration partner’s gross profit are recognized prospectively as change in estimates.
Further areas in which assumptions, estimates and the exercising of a degree of discretion are appropriate relate to establishing the fair value of intangibles and derivatives, the formation of provisions, as well as income taxes. We base our assumptions and estimates on parameters available when the unaudited interim condensed consolidated financial statements are prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond our control. Hence, our estimates may vary from the actual values.
Our critical accounting policies and the use of estimates are discussed further in Item 5 of our Annual Report on Form 20-F as of and for the year ended December 31, 2021 as well as Note 2.3 and Note 3 to our audited consolidated financial statements included in that Annual Report and include those related to revenue recognition, research and development expenses, share-based compensation, fair value measurement of share-based awards as well as taxes. Actual results in the areas related to critical accounting estimates could differ from management’s estimates.
Legal Proceedings
As of June 30, 2022, certain claims were pending or threatened against us, mainly related to purported obligations arising out of certain contractual disputes unrelated to the below mentioned patent proceedings. Our best estimate of potential outflow of economic resources from such proceedings amounts to €304.5 million as of June 30, 2022 (€178.1 million as of December 31, 2021), which was reclassified into current provisions during the three months ended June 30, 2022 in our consolidated statements of financial position due to the current estimated timing of the proceeding and was recognized in cost of sales in our unaudited interim condensed consolidated statements of profit or loss. This assessment is based on assumptions deemed reasonable by management including those about future events and uncertainties. Although we believe our position is strong, the outcome of these matters is ultimately uncertain, such that unanticipated events and circumstances might occur that might cause us to change those assumptions and give rise to a material adverse effect on our financial position in the future.
In addition to the above, from time to time, in the normal course and conduct of our business, we may be involved in discussions with third parties about considering, for example, the use and/or remuneration for use of such third party’s intellectual property. As of June 30, 2022, none of such intellectual property-related considerations that we have been notified of and for which potential claims could be brought against us or our subsidiaries in the future, fulfill the criteria for recording a provision. We will continue to evaluate whether, if circumstances were to change in the future, the recording of a provision may be needed and whether potential indemnification entitlements exist against any such claim. It is currently impractical for us to estimate the respective contingent liabilities.
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For a description of the risks relating to these and other legal proceedings we face and may in the future face, see “Risk Factors” elsewhere in this Quarterly Report.
Alnylam Proceedings
In March 2022, Alnylam Pharmaceuticals, Inc., or Alnylam, filed a lawsuit against Pfizer and Pharmacia & Upjohn    Co. LLC in the U.S. District Court for the District of Delaware alleging that an existing patent owned by Alnylam, U.S. Patent No. 11,246,933, or the ‘933 Patent, is infringed by the cationic lipid used in COMIRNATY, and seeking monetary relief.
We filed a counterclaim to become party to the Alnylam proceeding, and in June 2022, Alnylam added to its claims allegations that we induced infringement of the ‘933 Patent. Additionally, in July 2022, Alnylam filed a lawsuit against us, our wholly owned subsidiary, BioNTech Manufacturing GmbH, Pfizer, and Pharmacia & Upjohn Co. LLC in the U.S. District Court for the District of Delaware alleging that we also induced infringement of a newly issued patent, U.S. Patent No. 11,382,979, or the ‘979 Patent, which is a continuation of the ‘933 Patent.
We believe we have strong defenses against the allegations claimed relative to each of the patents and intend to vigorously defend ourselves in the proceedings mentioned above. However, we are in the early stages of conducting an analysis of Alnylam’s claims, which is ongoing and complex, and we believe the outcome of the suit remains substantially uncertain. Thus, we believe the probability of a loss, if any, being sustained by us and the estimate of the amount of any possible loss to us remains difficult to ascertain.
CureVac Proceedings
In July 2022, CureVac AG, or CureVac, filed a lawsuit against us and our wholly owned subsidiaries, BioNTech Manufacturing GmbH and BioNTech Manufacturing Marburg GmbH, in the Düsseldorf Regional Court, alleging COMIRNATY’s infringement of one European patent, EP1857122B1, and three Utility Models DE202015009961U1, DE202015009974U1, and DE202021003575U1. Later in July 2022, we and Pfizer filed a complaint for a declaratory judgment in the U.S. District Court for the District of Massachusetts, seeking a judgment of non-infringement by COMIRNATY of U.S. Patent Nos. 11,135,312, 11,149,278, and 11,241,493.
We believe we have strong defenses against the allegations claimed relative to claims of the European patent and German Utility Models and intend to vigorously defend ourselves in the proceedings mentioned above. However, we are in the early stages of conducting an analysis of CureVac’s claims, which is ongoing and complex, and we believe the outcome of the suit is substantially uncertain. Thus, we believe the probability of a loss, if any, being sustained by us and the estimate of the amount of any possible loss to us remains difficult to ascertain.
Liquidity and Capital Resources
Overview
Given our strong financial, scientific and operational accomplishments, we believe we have the resources to diligently allocate our current capital to drive a multi-platform strategy and deliver a fully integrated global biotechnology company. On the R&D front, we are focused on developing next generation COVID-19 vaccines to maintain leadership and pandemic preparedness as well as broaden the label of and access to the vaccine. We also plan to invest heavily to build out our global development organization, bringing in talent with clinical and regulatory expertise needed to rapidly advance our diversified clinical pipeline. In addition, we are also diversifying our therapeutic area footprint which will enable us to fully leverage the potential of all technology platforms across autoimmune diseases, inflammatory diseases, cardiovascular disease, neurodegenerative diseases, and regenerative medicines. In addition, we plan to enhance capabilities through complementary acquisitions, technologies, infrastructure and manufacturing. To support our future trajectory, growing the organization and expanding our team is of utmost importance. We are on the way to develop our global footprint in key regions including Europe, the United States, Asia and Africa. Additionally, investing in manufacturing capabilities for key technologies and deploying our pandemic response capabilities remain priorities for us. As of June 30, 2022, we had cash and cash equivalents of €9,334.8 million. When analyzing our liquidity, we anticipate certain significant balance sheet items that are expected to improve our cash and cash equivalents balance subsequent to the end of the reporting period. Our trade receivables remained outstanding as of June 30, 2022 mainly due to the contractual settlement of the gross profit share under our COVID-19 collaboration with Pfizer as described in Note 6 to the unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report. As of June 30, 2022, our trade receivables included trade receivables which related to the gross profit share for the first and second quarter of 2022. The payment settling our gross profit share for the first quarter of 2022 (as defined by the contract) was received from our collaboration partner in July 2022, subsequent to the end of the reporting period. Of our trade receivables outstanding as of June 30, 2022, we
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collected €5,581.1 million in cash. In total, our cash and cash equivalents as of July 15, 2022 amounted to €14,884.5 million.
Cash and cash equivalents are invested in accordance with our investment policy, primarily with a focus on liquidity and capital preservation, and consist primarily of cash in bank accounts and on hand and short-term deposits with an original maturity of three months or less, which are stated at fair value.
During the six months ended June 30, 2022, we repaid large parts of our outstanding loans (see Note 6 to the unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report).
On July 27, 2020, we offered 5,500,000 American Depositary Shares, or ADSs, each representing one of our ordinary shares, in a public, underwritten offering on the Nasdaq Global Select Market at a public offering price of $93.00 per ADS, or the Underwritten Offering. On August 27, 2020, following the Underwritten Offering, we issued 16,124 ADSs each representing one of our ordinary shares, in a rights offering at the same public offering price of $93.00 per ADS, or the Rights Offering. The Underwritten Offering and the Rights Offering are part of a single, global offering which we refer to as the Global Offering. The gross proceeds of the Global Offering were $513.0 million (€436.3 million).
A fund associated with Temasek Capital Management Pte. Ltd. and another accredited investor participated in a private investment which we refer to as the June 2020 Private Placement. The private placement included an investment in a four-year mandatory convertible note and an investment in ordinary shares. The €100.0 million four-year mandatory convertible note with a coupon of 4.5% per annum and a conversion premium of 20% above the reference price was early redeemed during the six months ended June 30, 2022. During April 2022, the early redemption was fulfilled by issuing 1,744,392 ordinary shares (see Notes 6 and 8 to the unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report).
In November 2020, we entered into a sales agreement, or the Sales Agreement, with Jefferies LLC and SVB Leerink LLC (now known as SVB Securities LLC), as sales agents, to establish an at-the-market offering program, pursuant to which we may sell, from time to time, ADSs representing ordinary shares for aggregate gross proceeds of up to $500.0 million. During the years ended December 31, 2020 and 2021, we sold 735,490 ADS and 995,890 ADS, respectively, each representing one of our ordinary shares and previously held in treasury, under the Sales Agreement. During the years ended December 31, 2020 and 2021, the aggregate gross proceeds were $92.9 million (€76.5 million) and $200.0 million (€163.6 million), respectively. As of June 30, 2022, the remaining capacity under the Sales Agreement is $207.1 million. Under the at-the-market offering program, ADSs are sold at-the-market, via the stock exchange, and therefore no shareholders’ subscription rights are affected.
In January 2022, we announced a new research, development and commercialization collaboration with Pfizer to develop a potential first mRNA-based vaccine for the prevention of shingles (herpes zoster virus, or HZV). In connection with this collaboration, Pfizer has agreed to make an equity investment and acquired 497,727 ordinary shares paying a total amount of €110.6 million. The issuance of 497,727 ordinary shares with the nominal amount of €0.5 million was registered with the commercial register (Handelsregister) on March 24, 2022 (see Note 8 to the unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report).
In March 2022, our Management Board and Supervisory Board authorized a share repurchase program of ADSs, pursuant to which we may repurchase ADSs in the amount of up to $1.5 billion over the next two years. On May 2, 2022, the first tranche of our share repurchase program of ADSs, with a value of up to $1.0 billion, commenced. During the three months ended June 30, 2022, 2,078,207 ADSs were repurchased at an average price of $145.65, for total consideration of $302.7 million (€286.9 million).
In June 2022, at the Annual General Meeting, our shareholders approved the proposed special cash dividend of €2.00 per ordinary share (including those held in the form of ADSs), which led to an aggregate payment of €484.3 million.
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Cash Flow
The following table summarizes the primary sources and uses of cash for each period presented:
Three months ended
June 30,
Six months ended
June 30,
(in millions)2022202120222021
Net cash flows from (used in):
Operating activities€3,919.1€(100.3)€7,969.3€(411.6)
Investing activities(78.4)(29.8)209.0(58.1)
Financing activities(781.5)152.9(701.2)148.4
Total cash inflow (outflow)€3,059.2€22.8€7,477.1€(321.3)
Operating Activities
We derive cash flows from operations primarily from the sale of products and services rendered. Our cash flows from operating activities are significantly influenced by our use of cash for operating expenses and working capital to support the business. During the three and six months ended June 30, 2022, our cash flows from operating activities include the settlement payments of our gross profit share from our collaboration partner Pfizer as scheduled by the contractual arrangement. As described in Note 6 to the unaudited interim condensed consolidated financial statement included elsewhere in this Quarterly Report, the contractual settlement of the gross profit share has a temporal offset of more than one calendar quarter. Therefore, subsequent to the end of the reporting period, in July 2022, we further improved our cash position as we received the settlement payment of our gross profit share for the first quarter of 2022 (as defined by the contract).
Net cash generated from operating activities for the three months ended June 30, 2022 was €3,919.1 million, comprising a profit before tax of €2,319.3 million, negative non-cash adjustments of €207.8 million, a net positive change in assets and liabilities of €2,603.3 million and income taxes paid of €791.4 million. Non-cash items primarily included net foreign exchange differences. The net positive change in assets and liabilities was primarily due to a decrease in trade and other receivables related to our COVID-19 collaboration with Pfizer.
Net cash used in operating activities for the three months ended June 30, 2021 was €100.3 million, comprising a profit before tax of €4,022.8 million, positive non-cash adjustments of €122.9 million, and a net negative change in assets and liabilities of €4,244.0 million. The net negative change in assets and liabilities was primarily due to an increase in trade and other receivables related to our COVID-19 collaboration with Pfizer.
Net cash generated from operating activities for the six months ended June 30, 2022 was €7,969.3 million, comprising a profit before tax of €7,337.4 million, negative non-cash adjustments of €377.2 million, a net positive change in assets and liabilities of €3,100.5 million and income taxes paid of €2,081.4 million. Non-cash items primarily included net foreign exchange differences and finance income related to our convertible bond fair value update. The net positive change in assets and liabilities was primarily due to a decrease in trade and other receivables related to our COVID-19 collaboration with Pfizer.
Net cash used in operating activities for the six months ended June 30, 2021 was 411.6 million, comprising a profit before tax of €5,665.1 million, positive non-cash adjustments of €98.7 million, and a net negative change in assets and liabilities of €6,171.8 million. Non-cash items primarily included finance expenses related to our convertible bond fair value update which were offset by net foreign exchange differences and movements in government grants. The net negative change in assets and liabilities was primarily due to an increase in trade and other receivables related to our COVID-19 collaboration with Pfizer.
Investing Activities
Net cash used in investing activities for the three months ended June 30, 2022 was €78.4 million, of which €70.6 million was attributable to the purchase of property, plant and equipment.
Net cash used in investing activities for the three months ended June 30, 2021 was €29.8 million, of which €25.9 million was attributable to the purchase of property, plant and equipment with respect to our production as well as research and development facilities.
Net cash generated from investing activities for the six months ended June 30, 2022 was €209.0 million, mainly derived from €375.2 million proceeds from cash deposit which returned to cash upon maturity of their original investments' term.
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Net cash used in investing activities for the six months ended June 30, 2021 was €58.1 million, of which €47.6 million was attributable to the purchase of property, plant and equipment.
Financing Activities
During the three months ended June 30, 2022, net cash used in financing activities was 781.5 million, primarily with respect to a share repurchase program and a special cash dividend as previously discussed in this Quarterly Report.
During the six months ended June 30, 2022, we had a cash outflow from financing activities of €701.2 million, primarily with respect to a share repurchase program and a special cash dividend.
During the three and six months ended June 30, 2021, we generated cash from financing activities of €152.9 million and €148.4 million, respectively, primarily from the sale of treasury shares under the at-the-market offering program net of transaction cost.
Operation and Funding Requirements
Prior to December 2020, we incurred significant losses and negative cash flows from operations due to our significant research and development expenses and our investment in our manufacturing capabilities. As of December 31, 2020, our accumulated losses amounted to €409.6 million. Those have been offset by the profit generated during the year ended December 31, 2021 and the six months ended June 30, 2022 and our retained earnings as of June 30, 2022 amounted to €14,769.4 million.
As part of our capital allocation strategy, we expect to continue to incur significant and increasing operating expenses for the foreseeable future. We anticipate that our expenses will increase substantially if and as we and our collaborators:
continue or expand our research or development of our programs in preclinical development;
continue or expand the scope of our clinical trials for our product candidates;
initiate additional preclinical, clinical, or other trials for our product candidates, including under our collaboration agreements;
continue to invest in our immunotherapy platforms to conduct research to identify novel technologies;
change or increase our manufacturing capacity or capability;
change or add additional suppliers;
add additional infrastructure to our quality control, quality assurance, legal, compliance and other groups to support our operations as a public company and our product development and commercialization efforts, including expansion of sites in Germany and new sites in the United States, and potentially others globally;
attract and retain skilled personnel;
seek marketing approvals and reimbursement for our product candidates;
develop our sales, marketing, and distribution infrastructure for our COVID-19 vaccine and any other products for which we may obtain marketing approval or emergency use authorization;
seek to identify and validate additional product candidates;
acquire or in-license other product candidates and technologies;
acquire other companies;
make milestone or other payments under any in-license agreements;
maintain, protect, defend, enforce and expand our intellectual property portfolio; and
experience any delays or encounter issues with any of the above
We are a party to license and research and development agreements with universities and other third parties, as well as patent assignment agreements, under which we have obtained rights to patents, patent applications and know-how. We enter into contracts in the normal course of business with CROs for clinical trials, clinical and commercial supply manufacturing, with vendors for preclinical research studies and for other services and products for operating purposes. We work together with CMOs, who manufacture our product candidates and products and enter into lease agreements to lease laboratory, GMP manufacturing, storage and office spaces. Purchase obligations under our agreements to the extent that they are quantifiable and not cancelable have been considered when defining our guidance
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for future cash commitments. Most of the committed cash outflow within the remaining months in 2022 is related to CMO purchase obligations amounting to €359.4 million and lease payments amounting to €18.9 million. Further, we have CMO purchase obligations with an amount of €272.6 million and lease payment obligations of €257.2 million for the years 2023 and beyond.
We are subject to all of the risks related to the development and commercialization of pharmaceutical products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.
Our future funding requirements, both near and long term, will depend on many factors, including, but not limited to:
the initiation, progress, timing, costs, and results of preclinical or nonclinical studies and clinical trials for our product candidates;
the amount and timing of revenues and associated costs from sales of our COVID-19 vaccine;
the results of research and our other platform activities;
the clinical development plans we establish for our product candidates;
the terms of any agreements with our current or future collaborators, and the achievement of any milestone payments under such agreements to be paid to us or our collaborators;
the number and characteristics of product candidates that we develop or may in-license;
the outcome, timing and cost of meeting regulatory requirements established by the FDA, the EMA and other comparable regulatory authorities;
the cost of filing, prosecuting, obtaining, maintaining, protecting, defending and enforcing our patent claims and other intellectual property rights, including actions for patent and other intellectual property infringement, misappropriation and other violations brought by third parties against us regarding our product candidates or actions by us challenging the patent or intellectual property rights of others;
the effect of competing technological and market developments, including other products that may compete with one or more of our product candidates;
the cost and timing of completion and further expansion of clinical and commercial scale manufacturing activities sufficient to support all of our current and future programs;
the cost of establishing sales, marketing, and distribution capabilities for any product candidates for which we may receive marketing approval and reimbursement in regions where we choose to commercialize our products on our own; and
the terms of any ADS repurchases we make.
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Risk Factors
Our business is subject to various risks, including those described below. You should consider carefully the risks and uncertainties described below and in our future filings. If any such risks are realized, our business, financial condition, results of operations and prospects could be materially and adversely affected. Additionally, risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, results of operations and/or prospects.
Risk Factor Summary
Our revenue depends heavily on sales of our COVID-19 vaccine, and our future revenues from our COVID-19 vaccine are uncertain.
Our reported commercial revenue is based on preliminary estimates of COVID-19 vaccine sales and costs from Pfizer that are likely to change in future periods, which may impact our reported financial results.
We may be unsuccessful in adapting our COVID-19 vaccine or developing future versions of our COVID-19 vaccine to protect against variants of the SARS-CoV-2 virus, and even if we are successful, a market for vaccines against these variants may not develop.
Significant adverse events may occur during our clinical trials or even after receiving regulatory approval, which could delay or terminate clinical trials, delay or prevent regulatory approval or market acceptance of any of our product candidates.
We face significant competition from other makers of COVID-19 vaccines and may be unable to maintain a competitive market share for our COVID-19 vaccine.
We have only recently built our marketing and sales organization. If we are unable to continue to increase our marketing and sales capabilities on our own or through third parties, we may not be able to market and sell our product candidates effectively in the United States and other jurisdictions, if approved, or generate product sales revenue.
Other companies or organizations may challenge our intellectual property rights or may assert intellectual property rights that prevent us from developing and commercializing our COVID-19 vaccine or our product candidates and other technologies.
Even if we obtain regulatory approval for our product candidates, the products may not gain the market acceptance among physicians, patients, hospitals, treatment centers and others in the medical community necessary for commercial success.
Our operating results may fluctuate significantly, which makes our future operating results difficult to predict. If our operating results fall below expectations, the price of the ADSs representing our shares could decline.
We may require substantial additional financing to achieve our goals, and a failure to obtain this capital on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations.
We have in the past identified a material weakness in our internal control over financial reporting and may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements in our financial statements. If we identify material weaknesses in the future and fail to remediate such material weaknesses, we may not be able to report our financial results accurately or to prevent fraud.
As a “foreign private issuer,” we are exempt from a number of rules under the U.S. securities laws, as well as Nasdaq rules, and we are permitted to file less information with the SEC than U.S. companies. This may limit the information available to holders of the ADSs and may make our ordinary shares and the ADSs less attractive to investors.
Clinical development involves a lengthy and expensive process with an uncertain outcome, and delays can occur for a variety of reasons outside of our control. Clinical trials of our product candidates may be delayed, and certain programs may never advance in the clinic or may be more costly to conduct than we anticipate, any of which can affect our ability to fund our company and would have a material adverse impact on our business.
mRNA drug development has substantial clinical development and regulatory risks due to limited regulatory experience with mRNA immunotherapies.
Our approved product and product candidates are based on novel technologies and they may be complex and difficult to manufacture. We may encounter difficulties in manufacturing, product release, shelf life, testing, storage, supply chain management or shipping. If we or any of the third-party manufacturers we work with encounter such difficulties, our ability to supply materials for clinical trials or any approved product could be delayed or stopped.
If our efforts to obtain, maintain, protect, defend and/or enforce the intellectual property related to our COVID-19 vaccine or our product candidates and technologies are not adequate, we may not be able to compete effectively in our market.
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We have experienced and may continue to experience significant volatility in the market price of the ADSs representing our ordinary shares.
Our principal shareholders and management own a significant percentage of our ordinary shares and will be able to exert significant control over matters subject to shareholder approval.
Risks Related to our COVID-19 vaccine and the Commercialization of our Pipeline
Our revenue depends heavily on sales of our COVID-19 vaccine, and our future revenues from our COVID-19 vaccine are uncertain.
Our COVID-19 vaccine was granted emergency use authorization in the United States and the United Kingdom, and conditional marketing approval in the European Union, in December 2020, followed by emergency or limited use authorization in a number of other countries and approval for use in certain other countries. Prior to this, we had not sold or marketed any products in our pipeline. As a result, a majority of our total revenues, and all of our product revenues, in 2021 were attributable and in 2022 will be attributable to sales of our COVID-19 vaccine. There is intense competition in the field of COVID-19 vaccines, including with other vaccines that have been authorized and those in late-stage clinical development. Our future revenues from sales of our COVID-19 vaccine depend on numerous factors, including:
competition from other COVID-19 vaccines, including those with different mechanisms of action and different manufacturing and distribution constraints, on the basis of, among other things, efficacy, cost, convenience of storage and distribution, breadth of approved use, side-effect profile and durability of immune response;
the extent of the spread of COVID-19 infection;
the extent to which a COVID-19 vaccine, including any booster shot, continues to be necessary beyond the current pandemic, including when it becomes an endemic virus;
the durability of immune response generated by our COVID-19 vaccine, which has not yet been demonstrated in clinical trials;
our ability to receive full regulatory approvals, where we currently have emergency use authorizations or equivalents;
our ability to expand our geographic customer base;
our pricing and coverage negotiations with governmental authorities, private health insurers and other third-party payors after our initial sales to national governments;
the extent to which SARS-CoV-2 mutates and the efficacy of our COVID-19 vaccine in preventing COVID-19 infection from mutated strains;
the ability of countries and jurisdictions to store and distribute doses of our COVID-19 vaccine to end users at cold temperatures;
the safety profile of our COVID-19 vaccine, including if previously unknown side effects or increased incidence or severity of known side effects as compared to those seen during clinical trials are identified with our COVID-19 vaccine with widespread global use after approval;
future intellectual property litigation involving COVID-19 vaccines, particularly if such litigation involves our COVID-19 vaccine; and
our manufacturing and distribution capabilities for our COVID-19 vaccine.
While our COVID-19 vaccine has established a competitive commercial profile, we cannot ensure it will maintain its competitive position as competing vaccines become approved, and we cannot accurately predict the revenues our COVID-19 vaccine will generate in future periods or for how long our COVID-19 vaccine will continue to generate material revenues. If our revenues, market share and/or other indicators of market acceptance of our COVID-19 vaccine do not meet the expectations of investors or securities analysts, the market price of the ADSs representing our ordinary shares may decline. In addition, if one or more of the factors above negatively affects our COVID-19 vaccine sales, our business and financial condition could be materially harmed.
Our reported commercial revenue is based on preliminary estimates of COVID-19 vaccine sales and costs from Pfizer that are likely to change in future periods, which may impact our reported financial results.
Our reported commercial revenue is based on preliminary estimates from Pfizer, and other assumptions and judgments that we have made, which may be subject to significant uncertainties. Our commercial revenue are preliminary estimates in part due to a difference in Pfizer’s fiscal quarter for subsidiaries outside the United States, which consequently creates an additional time lag between the recognition of revenues and the payment receipt. Although our revenue recognition policy is based on facts and circumstances known to us and various other assumptions that we believe to be reasonable under the circumstances, our actual results may deviate from such reported revenue.
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We depend on Pfizer to determine and provide estimates of the costs and profits to be shared with us in the countries where it is commercializing our COVID-19 vaccine under our collaboration agreement with Pfizer for our COVID-19 vaccine, which we refer to as the Pfizer Agreement. Because the information supplied by Pfizer is preliminary and is subject to change, the commercial revenue we report based on such information is also subject to finalization. This is particularly true for vaccine sales outside of the United States, where Pfizer has a different reporting cycle than ours. As a result, we may not have the complete sales and costs results outside of the United States for months not covered by the reporting period, but we are nonetheless required to report estimated figures.
For example, for the three and six months ended June 30, 2022, Pfizer provided us profit figures for our COVID-19 vaccine sales in the United States using standard U.S. transfer prices and manufacturing and shipping cost variances (as far as those have been identified) that could be subject to adjustment (e.g., due to changes in manufacturing costs or the price of our COVID-19 vaccine). Pfizer also provided estimated profits for COVID-19 vaccine sales outside of the United States that were preliminary in nature, as Pfizer’s subsidiaries outside of the United States do not have a quarter end of June 30, 2022. These estimated figures are likely to change as we receive final data from Pfizer for the three and six months ended June 30, 2022 in accordance with the reporting cycle of its ex-U.S. subsidiaries and as actual costs become known. Further, to the extent that Pfizer does not provide such preliminary information in the future, our provisional sales figures for territories outside of the United States will be subject to an even greater level of estimates and judgments. Any changes to the preliminary data we report herein may have an impact on our reported revenues and expenses, profitability or financial position.
Our COVID-19 vaccine is sensitive to temperature, shipping and storage conditions and could be subject to risk of loss or damage.
Our COVID-19 vaccine is, and other product candidates we develop could be, sensitive to temperature, storage and handling conditions. In particular, while we have improved the required shipping and storage conditions of our COVID-19 vaccine, it must be shipped and stored at cold temperatures. Loss in supply of our COVID-19 vaccine and our product candidates could occur if the product or product intermediates are not stored or handled properly. Shelf life for our product candidates may vary by product, and it is possible that supply of our COVID-19 vaccine or our product candidates could be lost due to expiration prior to use. This has in the past led, and could in the future, lead to additional manufacturing costs and delays in our ability to supply required quantities for clinical trials or for commercial purposes. Such distribution challenges may make our COVID-19 vaccine a less attractive product than other COVID-19 vaccines that do not require as cold storage, and our COVID-19 vaccine may become increasingly less competitive as additional other vaccines become authorized for emergency use. If we, our partners and customers are unable to adequately manage these issues, we may be exposed to product liability claims and the market opportunity for our COVID-19 vaccine may be reduced, each of which could adversely affect our business prospects and our financial condition could be materially harmed.
If we discover safety issues with our products, including our COVID-19 vaccine, that were not known at the time of approval, commercialization efforts for our products could be negatively affected, approved products could lose their approval or sales could be suspended, we could be subject to product liability claims, and our business and reputation could be materially harmed.
Our COVID-19 vaccine and any other product candidates for which we receive approval or emergency use authorization are subject to continuing regulatory oversight, including the review of additional safety information. Our COVID-19 vaccine is being more widely used by patients as an authorized product than it was used in clinical trials and therefore side effects and other problems may be observed after emergency use authorization that were not seen or anticipated, or were not as prevalent or severe, during clinical trials. We cannot provide assurance that newly discovered or developed safety issues will not arise. With the use of any vaccine by a wide patient population, serious adverse events may occur from time to time that did not arise in the clinical trials of the product or that initially appeared to be unrelated to the vaccine itself and only with the collection of subsequent information were found to be causally related to the product. Any such safety issues could cause us to suspend or cease marketing of our approved products, possibly subject us to substantial liabilities, and adversely affect our ability to generate revenue and our financial condition. The subsequent discovery of previously unknown problems with a product could negatively affect commercial sales of the product, result in restrictions on the product or lead to the withdrawal of the product from the market. The reporting of adverse safety events involving our products or public speculation about such events could cause the price of the ADSs representing our ordinary shares to decline or experience periods of volatility.
Unexpected safety issues, including any that we have not yet observed in our clinical trials for our COVID-19 vaccine or in real world data, could lead to significant reputational damage for us and our product development platforms going forward and other issues, including delays in our other programs, the need for re-design of our clinical trials and the need for significant additional financial resources.
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Failure to comply with continuing regulatory requirements by us or our collaboration partners could adversely impact regulatory approvals for our products, result in product recalls or suspensions, subject us to fines and/or other types of liabilities.
If we or our collaborators fail to comply with applicable continuing regulatory requirements, including good industry practices, such as good manufacturing practices (GMP), we or our collaborators may be subject to fines, suspension or withdrawal of regulatory approvals for specific drugs, product recalls and seizures, operating restrictions and/or criminal prosecutions. In addition, the manufacturers we engage to make our products and the manufacturing facilities in which our products are made are subject to periodic review and inspection by the U.S. Food and Drug Administration, or the FDA, and foreign regulatory authorities. If problems are identified during the review or inspection of these manufacturers or manufacturing facilities, it could result in our inability to use the facility to make our product or a determination that inventories are not safe for commercial sale. Any of these factors could adversely affect our business prospects and our financial position could be materially harmed.
We may be unsuccessful in adapting our COVID-19 vaccine or developing future versions of our COVID-19 vaccine to protect against variants of the SARS-CoV-2 virus, and even if we are successful, a market for vaccines against these variants may not develop.
Our COVID-19 vaccine was developed based upon the genetic sequence of the ancestral SARS-CoV-2 virus that was first detected. The SARS-CoV-2 virus continues to evolve, and new strains of the virus or those that are already in circulation may prove more transmissible or cause more severe forms of COVID-19 disease than the predominant strains observed to date. Our vaccine may not be as effective in protecting against existing and future variant strains of the SARS-CoV-2 virus as it is against the ancestral virus. While we continue to monitor emerging SARS-CoV-2 strains, undertake preclinical investigations into the immunogenicity of our COVID-19 vaccine against new variants as they emerge, and develop modified versions of our COVID-19 vaccine against new variants, these efforts may be unsuccessful, and failure to adapt our vaccine to variants of the SARS-CoV-2 virus could lead to significant reputational harm and adversely affect our financial results. It is also possible that we may expend significant resources adapting our COVID-19 vaccine to protect against variants of the SARS-CoV-2 virus, but that a market for adapted vaccines does not develop or demand does not align with our projections or cost expenditures. Moreover, even if we are successful in developing an adapted vaccine and there is a market for the new vaccine, new variants continue to emerge and any adapted vaccine may not be as effective in protecting against such future variant strain.
The successful commercialization of our product candidates will depend in part on the extent to which governmental authorities, private health insurers and other third-party payors provide coverage and adequate reimbursement levels and implement pricing policies favorable for our product candidates. Failure to obtain or maintain coverage and adequate reimbursement for our product candidates, if approved, and/or delayed payments from government authorities could limit our ability to market those products and decrease our ability to generate revenue.
The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford certain treatments, including our COVID-19 vaccine and other product candidates we may develop and sell. In addition, because our mRNA product candidates represent an entirely new therapeutic modality, we cannot accurately estimate how future products we may develop and sell would be priced, whether reimbursement could be obtained, or any potential revenue. Sales of our product candidates will depend substantially, both domestically and abroad, on the extent to which the costs of our product candidates will be paid by health maintenance, managed care, pharmacy benefit, and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our product candidates. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize an adequate return on our investment in any of our products. Additionally, even if pricing terms with governmental authorities are agreed upon, there may be delayed or denied payments.
There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products in particular in the United States, including genetic medicines. In the United States, the principal decisions about reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid Services, or CMS, an agency within the U.S. Department of Health and Human Services, or HHS, as CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare. Private payors tend to follow CMS to a substantial degree. It is difficult to predict what CMS will decide with respect to reimbursement for novel products such as ours. Reimbursement agencies in Europe may be more conservative than CMS. For example, a number of cancer drugs have been approved for reimbursement in the United States but have not been approved for reimbursement in certain European countries.
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Outside the United States, certain countries, including a number of member states of the European Union, set prices and reimbursement for pharmaceutical products, with limited participation from the marketing authorization holders. We cannot be sure that such prices and reimbursement will be acceptable to us or our collaborators. If the regulatory authorities in these jurisdictions set prices or reimbursement levels that are not commercially attractive for us or our collaborators, our revenues from sales by us or our collaborators, and the potential profitability of our drug products, in those countries would be negatively affected. An increasing number of countries are taking initiatives to attempt to reduce large budget deficits by focusing cost-cutting efforts on pharmaceuticals for their state-run health care systems. These international price control efforts have impacted all regions of the world but have been most drastic in the European Union. Additionally, some countries require approval of the sale price of a product before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. As a result, we might obtain marketing approval for a product in a particular country, but then may experience delays in the reimbursement approval of our product or be subject to price regulations that would delay our commercial launch of the product, possibly for lengthy time periods, which could negatively impact the revenues we are able to generate from the sale of the product in that particular country.
Moreover, increasing efforts by governmental and third-party payors, in the United States and abroad, to cap or reduce healthcare costs may cause such organizations to limit both coverage and level of reimbursement for new products approved and, as a result, they may not cover or provide adequate payment for our product candidates. For example, the U.S. government released a “blueprint,” which is a plan to reduce the cost of drugs. The blueprint contains certain measures that the HHS is already working to implement. At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access, and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
We expect to experience pricing pressures in connection with the sale of any of our product candidates, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products in the marketplace.
The imposition of export controls on our COVID-19 vaccine in the European Union or in other jurisdictions could severely and adversely impact our manufacturing activities, commercial activities and financial results.
Governments of the jurisdictions in which we or our partners produce our COVID-19 vaccine may prohibit us from delivering orders of our COVID-19 vaccine to customers in other jurisdictions.
The European Union and other regions have imposed, or threatened to impose, export controls that would limit or block the delivery of COVID-19 vaccines manufactured in or outside their territories in instances where manufacturers have been delayed or have not fully satisfied their delivery obligations to such governments. The European Union ended this export authorization scheme as of December 31, 2021, however if they reenact this scheme, we may be prohibited from exporting commercial supply of the vaccine from our manufacturing site in Germany to non-EU countries (and Pfizer may likewise be prohibited from exporting out of its manufacturing site in Belgium). Such restrictions may have a material impact on our manufacturing or distribution activities, and the commercialization of our COVID-19 vaccine.
Our ability to continue to generate income from sales of our COVID-19 vaccine is uncertain, due to government interest and public perception regarding a vaccine, as well as the evolving nature of the disease more generally.
The COVID-19 disease itself is unpredictable and each variant comes with varying levels of transmissibility and severity. Consequently, the burden of the disease may wane or dissipate such that our and other COVID-19 vaccines may be less essential from individual and public health perspectives.
In addition, there is a heightened risk that a COVID-19 vaccine may be subject to adverse emergency actions taken by governmental entities in certain countries, including intellectual property expropriation, compulsory licenses, strict price controls or other actions. In the U.S., the Defense Production Act of 1950, as amended (the “Defense Production Act”), gives the U.S. government rights and authorities that may directly or indirectly diminish our own rights or economic opportunities with respect to our COVID-19 vaccine. Our current and potential third-party service providers may be impacted by government entities potentially invoking the Defense Production Act or other potential restrictions to all or a portion of services they might otherwise offer. The Biden administration has previously invoked, and may continue using, the Defense Production Act to expand manufacturing capacity of vaccine and vaccine supplies
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as well as COVID-19 tests and testing supplies. Additionally, we may need to, or we may be required by governmental or non-governmental authorities to, set aside specific quantities of doses of our COVID-19 vaccine for designated purposes or geographic areas. We face challenges related to the allocation of supply of our COVID-19 vaccine, particularly with respect to geographic distribution.
Furthermore, public sentiment regarding commercialization of a COVID-19 vaccine, the safety and efficacy of our COVID-19 vaccine, other COVID-19 vaccines and treatments, the COVID-19 pandemic generally, as well as public perception of the severity of SARS-CoV-2 virus may limit or negate our ability to generate income from sales of our COVID-19 vaccine. We believe that social media is increasingly being used to communicate information and misinformation about the COVID-19 pandemic and our and other COVID-19 vaccines. If social media posts and other communications contain negative, inaccurate or misleading information about our COVID-19 vaccine, demand for our COVID-19 vaccine may be diminished and we may suffer reputational damage.
We face significant competition with other makers of COVID-19 vaccines and may be unable to maintain a competitive market share for our COVID-19 vaccine.
A large number of vaccine manufacturers, academic institutions and other organizations currently have programs to develop COVID-19 vaccine candidates and more than thirty other vaccines have been authorized for emergency use or approved in various countries, including vaccines developed by Moderna, Inc., Johnson & Johnson, University of Oxford/AstraZeneca plc, China National Pharmaceutical Group (Sinopharm)/Beijing Institute of Biological Products and Wuhan Institute of Biological Products, Novavax, Inc., Valneva SE/Dynavax Technologies Corporation, Sinovac Biotech Ltd., Bharat Biotech Ltd. and others. Our competitors pursuing vaccine candidates may have greater financial, product candidate development, manufacturing and marketing resources than we do. Larger pharmaceutical and biotechnology companies have extensive experience in clinical testing and obtaining regulatory approval for their products, and may have the resources to invest heavily to accelerate discovery and development of their vaccine candidates.
Our efforts to successfully commercialize our COVID-19 vaccine may fail if competitors develop and commercialize COVID-19 vaccines that are safer, more effective, produce longer immunity against COVID-19, require fewer administrations, have fewer or less severe side effects, have broader market acceptance, are more convenient to administer or distribute or are less expensive than any vaccine candidate that we have developed or we may develop.
We may not be able to demonstrate sufficient efficacy or safety of our COVID-19 vaccine to obtain permanent regulatory approval in jurisdictions where it has been authorized for emergency use or granted conditional marketing approval.
Our COVID-19 vaccine has been granted full U.S. FDA approval for individuals 16 years and older, emergency or limited use authorization in a number of countries and in the U.S. for individuals 5 to 15 years of age and approval for use in certain other countries. Our COVID-19 vaccine has not yet been approved by regulatory authorities in many of such countries. We and Pfizer intend to continue to observe our COVID-19 vaccine and vaccines we may develop for other variants of COVID-19 in global clinical trials. It is possible that subsequent data from these clinical trials may not be as favorable as data we submitted to regulatory authorities to support our applications for emergency use authorization, marketing or conditional marketing approval or that concerns with the safety of our COVID-19 vaccine will arise from the widespread use of our COVID-19 vaccine outside of clinical trials. Our COVID-19 vaccine may not receive approval outside of the emergency use setting in the countries where it is not currently approved, which could adversely affect our business prospects.
We are developing other product candidates in an environment of rapid technological and scientific change, and our failure to effectively compete would prevent us from achieving significant market penetration. Most of our competitors have significantly greater resources than we do and we may not be able to compete successfully.
The pharmaceutical market is intensely competitive and rapidly changing. Many large pharmaceutical and biotechnology companies, academic institutions, governmental agencies, and other public and private research organizations are pursuing the development of novel drugs for the same diseases that we are targeting or expect to target. Many of our competitors have:
greater financial, technical and human resources than we have at every stage of the discovery, development, manufacture and commercialization of products;
more extensive experience in preclinical testing, conducting clinical trials, obtaining regulatory approvals, and in manufacturing, marketing and selling drug products;
product candidates that are based on previously tested or accepted technologies;
products that have been approved or are in late stages of development; and
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collaborative arrangements in our target markets with leading companies and research institutions.
We will face intense competition from drugs that have already been approved and accepted by the medical community for the treatment of the conditions for which we may develop drugs in the future. We also expect to face competition from new drugs that enter the market. There are a number of drugs currently under development, which may become commercially available in the future, for the treatment of conditions for which we are trying, or may in the future try, to develop drugs. These drugs may be more effective, safer, less expensive, or marketed and sold more effectively, than any products we develop.
We anticipate competing with the largest pharmaceutical companies in the world, many of which are all currently conducting research in the fields of infectious diseases, immuno-oncology, rare genetic diseases and cancer immunotherapies. Some of these companies have greater financial and human resources than we currently have. In addition to these large pharmaceutical companies, we may directly compete with fully-integrated biopharmaceutical companies and other immunotherapy-focused oncology companies, as well as a number of companies focused on immunotherapies or shared tumor antigen and neoantigen therapeutics, some of which have entered into collaboration and funding agreements with larger pharmaceutical or biotechnology companies.
If we successfully develop other product candidates, and obtain approval for them, we will face competition based on many different factors, including:
the safety and effectiveness of our products relative to alternative therapies, if any;
the ease with which our products can be administered and the extent to which patients accept relatively new routes of administration;
the timing and scope of regulatory approvals for these products;
the availability and cost of manufacturing, marketing and sales capabilities;
the price of any approved immunotherapy;
reimbursement coverage; and
intellectual property position.
Our competitors may develop or commercialize products with significant advantages over any products we develop based on any of the factors listed above or on other factors. In addition, our competitors may develop collaborations with or receive funding from larger pharmaceutical or biotechnology companies, providing them with an advantage over us. Our competitors therefore may be more successful in commercializing their products than we are, which could adversely affect our competitive position and business. Competitive products may make any products we develop obsolete or noncompetitive before we can recover the expenses of developing and commercializing our products, if approved.
The market opportunities for certain of our product candidates may be small due to the rarity of the disease, or limited to those patients who are ineligible for or have failed prior treatments. As the target patient populations for some of our programs are small, we may never achieve or maintain profitability without obtaining regulatory approval for additional indication.
The FDA often approves new cancer therapies initially only for use by patients with relapsed or refractory advanced cancer. We expect to seek approval initially of certain of our product candidates in this context. Subsequently, for those products that prove to be sufficiently beneficial, we would expect to seek approval in earlier lines of treatment and potentially as a first-line therapy but there is no guarantee that our product candidates, even if approved, would be approved for earlier lines of therapy, and, prior to any such approvals, we may have to conduct additional clinical trials. We are also developing product candidates for the treatment of rare diseases.
Our projections of the number of people who have or will have the diseases we may be targeting may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these diseases. The number of trial participants may turn out to be lower than expected. Additionally, the potentially addressable patient population for our product candidates may be limited or may not be amenable to treatment with our product candidates. Even if we obtain significant market share for our products, if approved, because the potential target populations may be small, we may never achieve or maintain profitability without obtaining regulatory approval for additional indications.
We have only recently built our marketing and sales organization. If we are unable to continue to increase our marketing and sales capabilities on our own or through third parties, we may not be able to market and sell our product candidates effectively in the United States and other jurisdictions, if approved, or generate product sales revenue.
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We have only recently developed our sales, distribution or marketing capabilities in Germany and Turkey, and, other than for our COVID-19 vaccine, we have not historically designed our preclinical studies and clinical trials with specific commercialization or marketing considerations in mind. To successfully commercialize our COVID-19 vaccine and any other products that may result from our development programs, we will need to continue developing sales and marketing capabilities in the United States, Europe and other regions, either on our own or with others. We may enter into collaborations with other entities to utilize their mature marketing and distribution capabilities, but we may be unable to enter into marketing agreements on favorable terms, if at all. If our current and future collaborators do not commit sufficient resources to commercialize our COVID-19 vaccine and our future products, if any, and we are unable to develop the necessary marketing capabilities on our own, we may be unable to generate sufficient product sales revenue to sustain our business. We will be competing with many companies that currently have extensive and well-funded marketing and sales operations. Without a significant internal team or the support of a third party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies.
Our ability to maintain profitability depends in part on our and our collaborators’ ability to penetrate global markets, where we would be subject to additional regulatory burdens and other risks and uncertainties associated with international operations that could materially adversely affect our business.
Our ability to maintain profitability will depend in part on our ability and the ability of our collaborators to commercialize any products that we or our collaborators may develop in markets throughout the world. Commercialization of products in various markets could subject us to risks and uncertainties, including:
obtaining, on a country-by-country basis, the applicable marketing authorization from the competent regulatory authority;
the burden of complying with complex and changing regulatory, tax, accounting, labor and other legal requirements in each jurisdiction that we or our collaborators pursue;<