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 MAY 2020

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): ☐

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DOCUMENTS INCLUDED AS PART OF THIS FORM 6-K

 

On May 12, 2020, BioNTech SE (the “Company”) issued a press release providing a development update and reporting its financial results for the three months ended March 31, 2020. Attached hereto as Exhibit 99.1 are the press release, the interim condensed consolidated financial statements as well as the operating and financial review and prospects of the Company, for the three months ended March 31, 2020.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 12, 2020

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EXHIBIT INDEX

 

 

 

Exhibit 99.1

 

 

BioNTech Announces First Quarter 2020 Financial Results and Corporate Progress

 

 

Conference call and webcast scheduled for May 12, 2020 at 08:00 a.m. ET (2:00 p.m. CET)

 

MAINZ, Germany, May 12, 2020 (GLOBE NEWSWIRE) -- BioNTech SE (Nasdaq: BNTX, “BioNTech” or “the Company”), a clinical-stage biotechnology company focused on patient-specific immunotherapies for the treatment of cancer and infectious diseases, today provided an update on its corporate progress and reported financial results for the quarter ended March 31, 2020.

 

“BioNTech has demonstrated significant progress to date in 2020. We advanced our oncology pipeline, announced the closing of our acquisition of Neon Therapeutics in the U.S., and signed several new value-adding partnerships,” said Ugur Sahin, BioNTech’s CEO. “Most notably, we have rapidly initiated a global clinical development program in Europe and the U.S. for multiple COVID-19 vaccine candidates.”

 

First Quarter 2020 and Subsequent Updates

BioNTech continues to monitor the effect of the current COVID-19 pandemic situation on its overall operations. As previously announced, the company has put significant measures in place to protect supply chain, operations, employees and the execution of clinical trials. The Company has not seen any impact on our mRNA manufacturing, nor on our CAR-T manufacturing operations. BioNTech has implemented a plan to manage the evolving disruptions on our clinical programs, and as previously detailed, is prioritizing execution of ongoing clinical trials, whereas certain first-in-human (FIH) clinical trial timelines have been affected. BioNTech intends to initiate Phase 2 trials as planned, manage ongoing Phase 1 trials to support completion and optimize ability to initiate and conduct FIH studies. BioNTech will continue to evaluate potential effects and provide updates as appropriate.

 

Infectious disease

BioNTech has made significant progress in its efforts to develop a potential vaccine to induce immunity and prevent COVID-19 infection in response to the global health threat posed by the disease. During the first quarter, the company assembled a global consortium of partners including Pfizer (worldwide collaboration outside of China) and Fosun Pharma (China). BioNTech’s goal is to make a vaccine available to the public worldwide as quickly as possible.

 

 

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COVID-19 Vaccine Program

BNT162 - BioNTech’s vaccine program against COVID-19, BNT162, leverages the Company’s proprietary mRNA platform. Currently there are four vaccine candidates, two of the four vaccine candidates include a nucleoside modified mRNA (modRNA), one includes a uridine containing mRNA (uRNA), and the fourth vaccine candidate utilizes self-amplifying mRNA (saRNA). Each mRNA format is combined with a lipid nanoparticle (LNP) formulation. The larger spike sequence is included in two of the vaccine candidates, and the smaller optimized receptor binding domain (RBD) from the spike protein is included in the other two candidates.

 

 

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Oncology

BioNTech has also continued to advance its broad oncology pipeline. There are currently ten oncology products in 11 ongoing trials with multiple data readouts expected in 2020. BioNTech intends to initiate four Phase 2 trials (BNT111, BNT113, BNT122) and two additional FIH trials (BNT211, BNT411) in 2020.

 

FixVac

Individualized neoantigen specific immunotherapy (iNeST)

mRNA intratumoral immunotherapy

CAR-T cell immunotherapy

Next-generation checkpoint immunomodulators

 

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Toll-Like Receptor Binding

 

Corporate Development

Recently, BioNTech completed the acquisition of Neon Therapeutics, Inc. in an all-stock transaction. BioNTech is now in the integration phase and expects the new subsidiary, based in Cambridge, Massachusetts, to serve as BioNTech’s U.S. headquarters.

 

First Quarter 2020 Financial Results

Cash Position: Cash and cash equivalents as of March 31, 2020, were €451.6 million. 

Revenue: Total revenue, consisting primarily of revenue from collaborative agreements, was €27.7 million for the three months ended March 31, 2020, compared to €26.2 million for the three months ended March 31, 2019. The increase was mainly due to revenues resulting from other sales transactions, i.e. development and manufacturing services sold to third-party customers, retroviral vectors for clinical supply, and sales of peptides.

Research and Development Expenses: Research and development expenses were €65.1 million for the three months ended March 31, 2020, compared to €57.2 million for the three months ended March 31, 2019. The increase was primarily due to an increase in headcount leading to higher wages, benefits and social security expenses as well as an increase in expenses for purchased research services.

General and Administrative Expenses: General and administrative expenses were €15.8 million for the three months ended March 31, 2020, compared to €9.3 million for the three months ended March 31, 2019. This increase was mainly driven by higher legal expenses, an increase in headcount leading to higher wages, benefits and social security expenses as well as higher expenses due to newly concluded insurance premiums.

Net Loss: Net loss was €53.4 million for the three months ended March 31, 2020, compared to a net loss of €40.8 million for the three months ended March 31, 2019.

Shares Outstanding: Shares outstanding as of March 31, 2020 were 226,779,744.

Financial Guidance:

Interim quarterly financial statements can be found in the 6-K filing as published on the SEC website under www.sec.gov.

 

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Conference Call and Webcast Information

BioNTech SE will host a conference call and webcast today at 08:00 a.m. ET (2:00 p.m. CET) to report its financial results for the quarter ended March 31, 2020 and provide a corporate update.

 

To participate in the conference call, please dial the following numbers 10-15 minutes prior to the start of the call and provide the Conference ID: 9282359.

 

United States international:  +1 646 741 3167

United States domestic (toll-free):  +1 877 870 9135

Germany: +49 692 2222 625

 

Participants may also access the slides and the webcast of the c1nference call via the “Events & Presentations” page of the Investor Relations section of the Company’s website at https://biontech.de/. A replay of the webcast will be available shortly after the conclusion of the call and archived on the Company’s website for 30 days following the call.

 

 

 

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BioNTech SE

(“BioNTech” or “the Company”)

 

Financial and Operational Results for the First Quarter Ended March 31, 2020

 

 

Key Pipeline Updates

 

Below is a summary of our clinical product candidates, organized by platform and indications.

 

Oncology

 

FixVac. Our FixVac product candidates contain selected combinations of pharmacologically optimized uridine mRNA encoding known cancer-specific shared antigens. They feature our proprietary immunogenic mRNA backbone and proprietary RNA-lipoplex, or RNA-LPX, delivery formulation, designed to enhance stability and translation, target dendritic cells and trigger both innate and adaptive immune responses. FixVac is currently being evaluating in five clinical trials, including:

 

Individualized neoantigen specific immunotherapy (iNeST). Our iNeST immunotherapies contain unmodified, pharmacologically optimized mRNA encoding up to 20 patient-specific neoantigens and also feature our proprietary RNA-LPX formulation.

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mRNA intratumoral immunotherapy. In collaboration with Sanofi, we are conducting a Phase 1 trial of SAR441000 (BNT131), our first mRNA-based intratumoral immunotherapy, as a monotherapy and in combination with cemiplimab in patients with solid tumors. SAR441000 (BNT131) consists of a modified mRNA that encodes the IL-12sc, IL-15sushi, GM-CSF and IFN-a cytokines. SAR441000 (BNT131) is designed to be administered directly into the tumor in order to alter the tumor microenvironment and enhance the immune system’s ability to recognize and fight cancer within the tumor (proximal) as well as in other untreated locations (distal).  We expect to report a data update in the second half of 2020.

 

CLDN6 CAR-T cell immunotherapy. We are developing a proprietary chimeric antigen receptor T cell, or CAR-T, product candidate, BNT211, targeting Claudin-6, or CLDN6, a novel solid tumor-specific antigen. We developed BNT211 utilizing our target discovery engine, and we plan to administer it along with a CARVac “primer” to boost the immune response and promote CAR-T cell persistence. We expect to initiate a Phase 1/2 clinical trial for BNT211 in patients with advanced CLDN6 + solid tumors in the second half of 2020.

 

Next-generation checkpoint immunomodulators. We are developing, in collaboration with Genmab, novel next-generation bispecific antibodies that are designed for conditional activation of immunostimulatory checkpoint molecules. Our first bispecific candidates are GEN1046 (BNT311), which targets PD-L1 in conjunction with 4-1BB, and GEN1042 (BNT312), which targets CD40 in conjunction with 4-1BB. While 4-1BB is a known immune checkpoint target that is expressed on T cells and natural killer, or NK, cells, prior attempts to target 4-1BB with monoclonal antibodies have been severely limited by liver toxicities. Our 4-1BB targeting product candidates are designed to avoid toxicities by conditionally activating a 4-1BB receptor only together with the binding of either PD-L1 or CD40. We have initiated Phase 1/2a trials of GEN1046 (BNT311) and GEN1042 (BNT312) in solid tumors.  The expansion cohort has been initiated in the Phase 1/2 trial in multiple solid tumors for BNT311 (PD-L1x4-1BB). BioNTech expects to provide a data update, to include dose-escalation and potentially some limited expansion data from the trial in 2H 2020.

 

Targeted Cancer Antibodies. BNT321 is a fully human IgG1 monoclonal antibody targeting sialyl Lewis A (sLea), a novel epitope expressed specifically in pancreatic and other solid tumors. MVT-5873 (BNT321) is currently in Phase 1 clinical development in pancreatic cancer, which we resumed in December 2019 upon the enrollment of the first patient.

 

Small molecule immunomodulators. BNT411 is our novel small molecule TLR7 agonist product candidate. BNT411 is engineered for high potency and high selectivity for the TLR7 receptor to activate both the adaptive and innate immune system. BNT411 will be given as a monotherapy or in combination with chemotherapy and/or checkpoint inhibitors in multiple solid tumors, including colorectal cancer, bladder cancer and small cell lung cancer. We expect to initiate a Phase 1 clinical trial for BNT411 in solid tumors in the second half of 2020.

 

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In addition, we have several other cancer immunotherapy programs in development, including:

 

Infectious Disease Immunotherapies

 

We have collaborated with third parties to exploit the immunotherapeutic properties of our mRNA drug class for the treatment and prevention of infectious diseases.

 

COVID-19 Vaccine Program

In response to the Coronavirus global pandemic, the company assembled a global consortium of partners including Pfizer (worldwide collaboration outside of China) and Fosun Pharma (China). BioNTech's vaccine program against COVID-19, BNT162, leverages the Company's proprietary mRNA platform. Currently there are four vaccine candidates, two of the four vaccine candidates include a nucleoside modified mRNA (modRNA), one includes a uridine containing mRNA (uRNA), and the fourth vaccine candidate utilizes self-amplifying mRNA (saRNA). Each mRNA format is combined with a lipid nanoparticle (LNP) formulation. The larger spike sequence is included in two of the vaccine candidates, and the smaller optimized receptor binding domain (RBD) from the spike protein is included in the other two candidates.

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Flu vaccine: In August 2018, we entered into a collaboration with Pfizer to develop mRNA-based immunotherapies for the prevention of influenza, product candidate BNT161.  We expect to begin clinical testing in the first half of 2021

 

Infectious diseases: In October 2018, we entered into a research collaboration with Penn, under which we have the exclusive option to develop and commercialize mRNA immunotherapies for the treatment of up to 10 infectious disease indications. In August 2019, we entered into a letter agreement and investment agreement with the Bill & Melinda Gates Foundation to advance the development of immunotherapies for the prevention and/or treatment of HIV and tuberculosis and up to three additional infectious diseases.

 

Rare Disease Protein Replacement Therapies

 

We are collaborating with Genevant in order to capitalize on opportunities for our mRNA technology in rare disease indications potentially featuring expedited paths to market. We are combining our mRNA technology with Genevant’s lipid nanoparticle, or LNP, delivery technology to create up to five mRNA protein replacement therapies for the treatment of rare diseases with high unmet medical needs. We expect our first compound to enter the clinic in the first half of 2021.

 

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About BioNTech

Biopharmaceutical New Technologies (BioNTech) is a next generation immunotherapy company pioneering novel therapies for cancer and other serious diseases. The Company exploits a wide array of computational discovery and therapeutic drug platforms for the rapid development of novel biopharmaceuticals. Its broad portfolio of oncology product candidates includes individualized and off-the-shelf mRNA-based therapies, innovative chimeric antigen receptor T cells, bi-specific checkpoint immuno-modulators, targeted cancer antibodies and small molecules. Based on its deep expertise in mRNA vaccine development and in-house manufacturing capabilities, BioNTech and its collaborators are developing multiple mRNA vaccine candidates for a range of infectious diseases alongside its diverse oncology pipeline. BioNTech has established a broad set of relationships with multiple global pharmaceutical collaborators, including Eli Lilly and Company, Genmab, Sanofi, Bayer Animal Health, Genentech, a member of the Roche Group, Genevant, Fosun Pharma, and Pfizer.

 

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended including, but not limited to, statements concerning: the planned next steps in BioNTech’s pipeline programs and specifically including, but not limited to, statements regarding plans to initiate clinical trials of BioNTech’s BNT111, BNT113, iNeST (BNT122), BNT211, BNT141, BNT142, BNT151, BNT152/BNT153, BNT211 and BNT411; expectations for data announcements with respect to BioNTech’s BNT111, BNT114, iNeST (BNT122), BNT131, BNT162 and BNT311 clinical trials; and our ability to scale-up manufacturing capacity for BNT162 and supply millions of vaccine doses by the end of 2020. In some cases, forward-looking statements can be identified by terminology such as “will,” “may,” “should,” “expects,” “intends,” “plans,” “aims,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. The forward-looking statements in this press release are neither promises nor guarantees, and you should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, many of which are beyond BioNTech’s control and which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. You should review the risks and uncertainties described under the heading “Risk Factors” in BioNTech’s Annual report on Form 20-F filed with the U.S. Securities and Exchange Commission (SEC) on March 31, 2020 and in subsequent filings made by BioNTech with the SEC, which are available on the SEC’s website at https://www.sec.gov/. Except as required by law, BioNTech disclaims any intention or responsibility for updating or revising any forward-looking statements contained in this press release in the event of new information, future developments or otherwise. These forward-looking statements are based on BioNTech’s current expectations and speak only as of the date hereof.

 

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For more information, please contact:

 

Investor Relations

Sylke Maas, Ph.D.

VP Investor Relations & Business Strategy
Tel: +49 (0)6131 9084 1074
E-mail: Investors@biontech.de 

 

Media Relations

Jasmina Alatovic

Senior Manager Global External Communications
Tel: +49 (0)6131 9084 1513 or +49 (0)151 1978 1385
E-mail: Media@biontech.de

 

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BioNTech SE

Quarterly Report for the Three Months ended March 31, 2020

 

 

 

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BioNTech SE

Index to the Quarterly Report for the Three Months ended March 31, 2020

Interim Condensed Consolidated Financial Statements

 

Operating and Financial Review and Prospects

 

 

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Interim Condensed Consolidated Financial Statements

Interim Condensed Consolidated Statements of Financial Position

 

 

 

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

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Interim Condensed Consolidated Statements of Operations

 

 

The accompanying notes form an integral part of these interim consolidated financial statements.

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Interim Condensed Consolidated Statements of Comprehensive Loss

 

 

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

 

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Interim Condensed Consolidated Statements of Changes in Stockholders’ Equity

 

 

 

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

 

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Interim Condensed Consolidated Statements of Cash Flows

 

 

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

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Selected Explanatory Notes to the Interim Condensed Consolidated Financial Statements

BioNTech SE is a limited company incorporated and domiciled in Germany. American Depository Shares (ADS) representing BioNTech’s shares are publicly traded on Nasdaq Global Select Market since October 10, 2019. The registered office is located in Mainz, An der Goldgrube 12, 55131 Germany. The accompanying International Financial Reporting Standards, or IFRS, unaudited interim condensed consolidated financial statements present the financial position and the results of operation of BioNTech SE and its subsidiaries, hereinafter also referred to as “BioNTech” or the “Group” and have been prepared on a going concern basis in accordance with the IFRS as issued by the International Accounting Standards Board, or IASB.

The Group is principally engaged in developing innovative immunotherapies for the individualized treatment of cancer and other infectious diseases.

During the three months ended March 31, 2020, a change to the Group structure occurred: A new entity was founded in the United States: BioNTech US, Inc., Cambridge/Massachusetts (previously Endor Lights Inc., New York), United States, a wholly owned subsidiary of BioNTech SE. All entities are included in the Group’s unaudited interim condensed consolidated financial statements.

The unaudited interim condensed consolidated financial statements of the Group as of and for the three months ended March 31, 2020 were authorized for issuance in accordance with a resolution of the directors on May 11, 2020.

Basis of Preparation

These unaudited interim condensed consolidated financial statements as of and for the three months ended March 31, 2020 have been prepared in accordance with 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 the Group’s consolidated financial statements as of and for the year ended December 31, 2019.

BioNTech prepares and presents its unaudited interim condensed consolidated financial statements in Euros. Unless otherwise stated, the numbers are rounded to thousands of Euros. Accordingly, numerical figures shown as totals in some tables may not be exact arithmetic aggregations of the figures that preceded them.

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 the Group’s consolidated financial statements for the year ended December 31, 2019. The standards applied for the first time as of January 1, 2020, as disclosed in the notes to the consolidated financial statements as of December 31, 2019, had no impact on the unaudited interim condensed consolidated financial statements of the Group as of March 31, 2020.

Impact of COVID-19

In early March 2020 BioNTech announced details of its efforts to develop a potential vaccine to induce immunity for and prevent COVID-19 infection. BioNTech’s product candidate, BNT162, is a potential

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first-in-class mRNA vaccine in the worldwide effort against COVID-19. As part of the program, BioNTech announced two strategic collaborations with large pharmaceutical companies to globally develop BioNTech’s vaccine candidates and supply an approved vaccine globally. BioNTech and Pfizer Inc. (“Pfizer”; NYSE: PFE) aim to accelerate the development of BNT162, building on the existing research and development partnership between Pfizer and BioNTech, signed in 2018, under which the companies have been working together to develop mRNA-based vaccines for the prevention of influenza. The companies expect to utilize multiple research and development sites from both companies to jointly conduct clinical trials for the COVID-19 vaccine candidates initially in the United States and Europe across multiple sites. BioNTech also announced a strategic alliance with Shanghai Fosun Pharmaceutical (Group) Co., Ltd (“Fosun Pharma”; Stock Symbol: 600196.SH, 02196.HK) to develop its COVID-19 vaccine candidates in China. Under the terms of the agreement, the two companies will work together on the development of BNT162 in China, conducting clinical trials in China and leveraging Fosun Pharma’s extensive clinical development, regulatory, and commercial capabilities in the country. If approved, Fosun Pharma will commercialize the vaccine in China. Under the terms of the agreement, Fosun Pharma has agreed to make an equity investment of $50 million (€46 million) for 1,580,777 ordinary shares in BioNTech, subject to execution of share subscription documentation and approval from regulatory authorities in China. The capital increase became effective after March 31, 2020.

In addition to its development efforts, as the global COVID-19 pandemic continues to evolve, BioNTech has continuously monitored the situation in regards to its operations and has put significant measures in place to protect supply chain, operations, employees and the execution of clinical trials. BioNTech has not seen any impact on its mRNA manufacturing, nor on its CAR-T manufacturing operations. BioNTech has implemented a plan to manage the evolving disruptions on the clinical pro-grams, and is prioritizing execution of ongoing clinical trials, whereas certain first-in-human (FIH) clinical trial timelines have been affected. BioNTech intends to initiate Phase 2 trials as planned, manage ongoing Phase 1 trials to support timely completion and optimize ability to initiate and conduct FIH studies. The extent to which the COVID-19 pandemic impacts BioNTech’s operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. All factors were evaluated and considered carefully when preparing these unaudited interim condensed consolidated financial statements. BioNTech will continue to evaluate potential effects and will provide updates as appropriate.

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For the three months ended March 31, 2020 and 2019, respectively, the following tables present revenue and operating results for the Group’s operating segments consistent with the presentation in the notes to the consolidated financial statements as of December 31, 2019:

 

 

The segments are managed based on external sales and operating profit/loss, which represents the operating profit/loss incurred within each segment. Segment figures are reported consolidated, which reflects the way management steers the business.

BioNTech’s internal reporting is generally in accordance with IFRS and in line with the Group’s accounting policies, except for minor deviations in classification between cost of sales and research and development cost. Whenever revenues are attributable to different segments, these revenues are split based on the cost incurred. Internal overhead costs are allocated to segments based on revenues when

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they are directly attributable to a service rendered. Sales and marketing expenses, general and administrative expenses and the other result that are not directly attributable to one of the segments are allocated to Business Service.

In order to reconcile the segment figures to the Group unaudited interim condensed consolidated financial statements, some of the research and development expenses are reclassified to cost of sales.

Revenue at BioNTech is differentiated between revenues resulting from collaboration and license agreements and revenues from other sales. The Company collaborates with pharmaceutical and healthcare companies and several global academic collaborators. During the three months ended March 31, 2020, the revenue generated from the Genentech and Pfizer collaboration agreements each represented more than 10% of BioNTech’s overall revenue resulting from collaboration and license agreements. The revenues were partly recorded in the Clinical as well as Manufacturing segment. During the three months ended March 31, 2019, the revenue generated from the Genentech, Pfizer and Sanofi collaboration agreements each represented more than 10% of BioNTech’s overall revenue resulting from collaboration and license agreements. The revenues were partly recorded in the Clinical as well as Manufacturing segment. The total amounts of revenues generated with these customers in the periods presented are disclosed in Note 4.

Revenues from other sales result from the sale of medical products (e.g., peptides and retroviral vectors) for clinical supply. Research and development activities are managed on a worldwide basis but the operative manufacturing facilities and sales offices are located and managed in Germany. External sales originate in Germany.

Disaggregated revenue information

Set out below is the disaggregation of the Group’s revenue from contracts with customers:

 

 

During the three months ended March 31, 2020, revenues from our new collaboration agreement with Fosun Pharma were recognized for the first time. BioNTech and Fosun Pharma work together on the development of BNT162, a potential first-in-class mRNA vaccine in the worldwide effort against COVID-19, in China.

The transactions resulting from product sales that are included within the revenue from other sales transactions are displayed below:

 

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Lipocalyx GmbH

In December 2019, BioNTech Delivery Technologies GmbH (previously BioNTech Protein Therapeutics GmbH; “BioNTech Delivery Technologies”), a wholly owned subsidiary of BioNTech SE, entered into an agreement to acquire all assets, employees and proprietary know-how of Lipocalyx GmbH (“Lipocalyx”) in exchange for a total consideration of cash at an amount of k€6,516 and additional contingent consideration provisionally estimated at an amount of k€572. The employees of Lipocalyx were transferred automatically to BioNTech Delivery Technologies with effect as of the closing date. The acquisition closed on January 6, 2020.

The group has acquired Lipocalyx to combine the acquired technologies and the related know-how with already existing product candidates of the group to improve their functionality and performance.

The final fair values of the identifiable net assets of Lipocalyx as at the date of acquisition were:

 

 

 

The interim condensed consolidated statement of operations includes the result of Lipocalyx since the acquisition date. From the date of acquisition, Lipocalyx contributed k€191 to loss before tax in the Technology Platform business segment of the Group. From the date of acquisition, Lipocalyx generated k€136 in revenues. Given the timing of closing, the contribution to loss before tax and revenues, if the transaction would have occurred at the beginning of the reporting period, would not differ materially. Goodwill recognized is primarily attributed to the expected synergies and other benefits from combining the assets and activities of Lipocalyx with those of the Group. The goodwill recognized for tax purposes is deductible over a period of 15 years. The goodwill resulting from the Lipocalyx acquisition during the three months ended March 31, 2020 was allocated to the Technology Platform segment.

Transaction costs of k€17 relating to the acquisition have been expensed and are included in the general and administrative expenses within the interim condensed consolidated statement of operations and are included in cash flows used in operating activities in the interim condensed consolidated statement of cash flows.

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The purchase agreement with Lipocalyx includes the following contingent cash considerations to the previous owners:

At the acquisition date, the fair value of the contingent consideration was estimated to be k€572. The contingent consideration is presented in ‘non-current financial liabilities’ in the statement of financial position.

The Group calculates the interim income tax expense using the tax rate that would be applicable to the expected total annual earnings. Deferred tax assets on tax losses have not been capitalized 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 can be utilized. The accumulated tax losses relate to Germany and the United States. There is no expiration date for any of the accumulated tax losses under German or US tax law.

During the three months ended March 31, 2020, the Group acquired intangible assets with a cost of k€2,122 (three months ended March 31, 2019: k€8,193), excluding intangible assets acquired through business combinations (see Note 5). The acquisitions during the three months ended March 31, 2020 were mainly related to advance payments (k€1,394) as well as concessions, licenses and similar rights (k€728). During the three months ended March 31, 2019 the acquisitions were mainly related to advance payments (k€5,930) as well as concessions, licenses and similar rights (k€2,263).

During the three months ended March 31, 2020, the Group acquired property, plant and equipment with a cost of k€6,295 (three months ended March 31, 2019: k€6,300). The acquisitions during the three months ended March 31, 2020 were related to construction in progress and advanced payments (k€4,275), equipment, tools and installations (k€1,932) as well as land and buildings (k€88). During the three months ended March 31, 2019, the acquisitions were related to equipment, tools and installations (k€3,049), construction in progress and advance payments (k€2,850) as well as land and buildings (k€401).

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Set out below, is an overview of financial assets, other than cash and cash equivalents, held by the Group as of March 31, 2020 and December 31, 2019:

 

Set out below, is an overview of financial liabilities held by the Group as of March 31, 2020 and December 31, 2019:

 

 

Risk management activities

No changes have occurred regarding the Group’s risk management activities as disclosed in the notes to the consolidated financial statements as of December 31, 2019.

Fair values

Fair values of cash and cash equivalents, trade receivables, trade payables, and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The liabilities include two fixed-interest rate loans. The fair value of the two fixed-interest rate loans is calculated based on significant observable inputs (Level 2). As of March 31, 2020 and December 31, 2019, the carrying value approximates their fair values as there have been no significant changes in relevant interest rates since inception of the respective loans.

On September 18, 2019, BioNTech effected a 1:18 share split by issuing 206,595,492 shares by way of a capital increase from its own funds; thus, no outside proceeds were received. This capital increase came into effect upon registration with the commercial register (Handelsregister). The accompanying unaudited interim condensed consolidated financial statements and notes to the unaudited interim condensed consolidated financial statements give retroactive effect to the share split for all periods presented.

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During the three months ended March 31, 2020, there were no transactions which had an effect on share capital. Each share has a nominal value of EUR 1.00.

During the three months ended March 31, 2019, BioNTech issued 5,088,204 shares and increased its share capital by k€5,088. The cash investment of k€80,006 was received in 2018 (k€79,997). As a result of the share split and the financing transaction, the capital reserve decreased during the three months ended March 31, 2019, by k€5,079.

Management Board Grant (Cash-Settled)

From the beginning of 2020, the first year following the completion of BioNTech’s initial public offering (IPO), the current service agreements with BioNTech’s Management Board provide for a short-term incentive compensation of up to a maximum of 50% of the annual base salary for the years 2020, 2021 and 2022. The amount of such short-term incentive compensation will depend on the achievement of certain company goals in the particular fiscal year, which goals will be set uniformly for all members of the Management Board. 50% of the incentive compensation will be paid promptly upon achievement of the applicable company goals (first installment), with the remaining amount payable one year later, subject to adjustment relative to BioNTech’s share price performance during that year (second installment).

For each of the three yearly awards, the second installment of the short-term incentive compensation that is dependent on BioNTech’s share price, represents a cash-settled share-based payment arrangement. The fair values of the liabilities are recognized over the award’s vesting period beginning as of the service commencement date (January 1, 2020) until each separate determination date and are remeasured until settlement date.

During the three months ended March 31, 2020 the Group recognized share-based payment expenses of k€83 as research & development expenses and of k€124 as general & administrative expenses in the interim condensed consolidated statement of operations (three months ended March 31, 2019: Nil).

Management Board Grant (Equity-Settled)

From the beginning of the year 2020, the first year following the completion of BioNTech’s initial public offering (IPO), until the end of the term of the Management Board Member’s employment agreement, the service agreements of BioNTech’s Management Board provide for a long-term incentive compensation in terms of a yearly grant of options to purchase BioNTech shares. The right to receive options in 2020, 2021 and 2022 represents an equity-settled share-based payment arrangement.

The options allocated each year will be subject to the terms, conditions, definitions and provisions of the Employee Stock Ownership Plan (ESOP) and the applicable option agreement thereunder. The number of options to be allocated each year to Prof. Ugur Sahin, Sean Marett, Dr. Sierk Poetting, Dr. Özlem Türeci and Ryan Richardson is to be calculated based on a value of €750,000, €300,000, €300,000, €300,000 and €260,000, respectively, in each case divided by the amount by which a certain target share price exceeds the exercise price. For Ryan Richardson the amount to calculate the number of options increases to €280,000 for the year 2022.

The allocation of the number of options to be received in 2020 was done on February 13, 2020 (allocation date). The allocations of the number of options to be received in 2021 and 2022 are estimated to take place on the 1st and 2nd anniversary of the Allocation date (estimated allocation dates).

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The share options allocated and expected to be allocated to BioNTech’s Management Board as of the dates indicated are presented in the tables below.

 

 

* Valuation parameter derived from the Monte-Carlo simulation model

 

* Valuation parameter derived from the Monte-Carlo simulation model

For the awards with estimated allocation dates, the numbers of awards expected to be allocated have been calculated using the valuation parameter derived from the Monte-Carlo simulation model. Unless the actual allocation has occurred, these numbers will be considered with a true-up to the number ultimately satisfied. The options will vest annually in equal installments over four years commencing on the first anniversary of the allocation date and will be exercisable four years after the allocation date.

The options will be subject to the terms, conditions, definitions and provisions of the Employee Stock Ownership Plan (ESOP) and the applicable option agreement thereunder. The vested options can only be exercised if and to the extent that each of the following performance criteria has been achieved: (i) at the time of exercise, the current price is equal to or greater than the threshold amount (that is, the exercise price, provided that such amount increases by seven percentage points on each anniversary of the allocation date); (ii) at the time of exercise, the current price is at least equal to the target price (that is, (a) for the twelve-month period starting on the fourth anniversary of the allocation date, $8.5 billion divided by the total number of the shares outstanding immediately following the initial public offering (other than shares owned by BioNTech), and (b) for each twelve-month period starting on the fifth or subsequent anniversary of the allocation date, 107% of the target share price applicable for the prior twelve-month period); and (iii) the closing price for the fifth trading day prior to the start of the relevant exercise window is higher than the exercise price by at least the same percentage by which the Nasdaq Biotechnology Index or a comparable successor index as of such time is higher than such index was as of the last trading day before the allocation date. The options can be exercised at the latest ten years after the allocation date. If they have not been exercised by that date, they will lapse without compensation.

A Monte-Carlo simulation model has been used to measure the fair values at the (estimated) allocation dates of the Management Board Grant. This model incorporates the impact of the performance criteria

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regarding share price and index development described above. The parameters used for measuring the fair values as of the respective (estimated) allocation dates were as follows:

 

* Valuation parameter derived from the Monte-Carlo simulation model

The exercise of the option rights in accordance with the terms of the ESOP gives the Management Board members the right to obtain shares against payment of the exercise price. The options’ per share exercise price is the Euro translation of the arithmetic mean of the closing prices of the ten last trading days prior to the allocation date. For the award allocated as of February 13, 2020 the exercise price has been determined at $30.78 (€28.32). The exercise prices for the awards with estimated allocation dates as of February 13, 2021 and February 13, 2022 have been derived from the Monte-Carlo simulation model. Expected volatility was based on an evaluation of the historical volatilities of comparable companies over the historical period commensurate with the expected option term. The expected term was based on general optionholder behavior for employee options.

The share options allocated and expected to be allocated under the Management Board Grant were as follows:

 

* Valuation parameter derived from the Monte-Carlo simulation model

As of March 31, 2020, the share options allocated and expected to be allocated had a weighted-average expected life of 5.37 years.

The expenses recognized for employee services received during the three months ended March 31, 2020 are shown in the following table:

 

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Chief Executive Officer Grant (Equity-Settled)

In September 2019, BioNTech agreed to grant Prof. Ugur Sahin, M.D. an option to purchase 4,374,963 ordinary shares, subject to Prof. Sahin’s continuous employment with BioNTech. As disclosed in the notes to the consolidated financial statements as of December 31, 2019, the option will be subject to the terms, conditions, definitions and provisions of the Employee Stock Ownership Plan (ESOP) and the applicable option agreement thereunder.

During the three months ended March 31, 2020, no further options were granted or forfeited.

During the three months ended March 31, 2020 the Group has recognized k€3,208 of share-based payment expenses as research & development expenses in the interim condensed consolidated statement of operations (three months ended March 31, 2019: Nil).

Employee Stock Ownership Plan (Equity-Settled)

On November 15, 2018, the Group established a share option program that grants selected employees options to receive shares in the company. The program is designed as an Employee Stock Ownership Plan (ESOP) as disclosed in the notes to the consolidated financial statements as of December 31, 2019. The amounts disclosed in this note have been retrospectively adjusted to reflect the share split as described in note 10.

Set out below is an overview of changes in ESOP during the three months ended March 31, 2020.

 

 

During the three months ended March 31, 2020, no further options were granted but 4,536 options were forfeited.

During the three months ended March 31, 2020 the Group has recognized k€4,269 of share-based payment expenses in the interim condensed consolidated statement of operations (three months ended March 31, 2019: k€13,496).

 

Key Management Personnel Transactions

A number of key management personnel or their related parties hold positions in other companies that results in them having control or significant influence over these companies. A number of these companies have consummated transactions with the Group during the period.

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BioNTech has a longstanding relationship with Translational Oncology at the University Medical Center of the Johannes Gutenberg University Mainz (Translationale Onkologie an der Universitätsmedizin der Johannes Gutenberg Universität Mainz gemeinnützige GmbH), or TRON. TRON is a non-profit limited liability company engaged in biopharmaceutical research. Prof. Ugur Sahin, M.D., BioNTech’s co-founder and Chief Executive Officer, is a significant shareholder of TRON.

The aggregate value of transactions related to key management personnel were as follows for the periods indicated:

 

 

The outstanding balances of transactions related to key management personnel were as follows as at the periods indicated:

 

Other Related Party Transactions

ATHOS KG, Holzkirchen, Germany owns 100% of shares in AT Impf GmbH, Munich, Germany and is the beneficial owner of BioNTech SE. AT Impf GmbH, Munich, Germany is the parent company of the Group. The total amount of transactions with ATHOS KG or entities controlled by them was as follows for the periods indicated: