Further income and thus tax payments from the Covid vaccine business in the billions are already planned for the current year.
(Photo: Bloomberg)
With its success in vaccine development, Mainz-based Biontech SE has become one of the leading players in the fight against the corona pandemic. This is now reflected not only in the vaccination rates, but also in the no less impressive financial data of the biotech climber.
The young company has risen practically overnight to become the top-selling and most profitable German drug manufacturer and last year earned more than Bayer, Merck and Boehringer together with a net profit of a good ten billion euros.
Biontech shows in a particularly impressive way how the principle of biotech works and what potential it has: The business as a whole is indeed very risky, lengthy and there are many failures. But even individual hits can shift the overall balance extremely positive.
In the case of Biontech, in principle the entire German biotech industry is raised to a new level. The market capitalization of the industry has almost tripled in the two years since the start of the Covid pandemic to currently around 62 billion euros and has been significantly higher in the meantime. Biontech alone accounts for almost two thirds of this. In this respect, one could almost speak of the biontech industry.
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The net profit that the Mainz-based company has now made in the first year after approval of their vaccine would be enough to pay back almost all of the venture capital that German biotech companies have collected over the past three decades.
>> Also read: Despite double-digit billion sales: Uncertainty among corona vaccine manufacturers is growing
Thanks to Biontech, the biotech industry has also suddenly turned into a lucrative investment for the state. For 2021, the Mainz-based company will transfer around 4.7 billion euros in income taxes to the federal, state and local governments – more than industrial giants like VW, Mercedes or Siemens and more than enough to cover both the previous Covid vaccine purchases and the state biotech funding of the to refinance in recent years. Based solely on the 300 million euros in funding with which the federal government supported Biontech in the development of the Covid vaccine, the return is more than 1,300 percent.
The founding couple of the biotechnology company Biontech were awarded the Paul Ehrlich and Ludwig Darmstaedter Prize 2022.
(Photo: dpa)
And it won’t stop there. Further income and thus tax payments from the Covid vaccine business in the billions are already planned for the current year. As is now becoming apparent, Covid vaccines are likely to represent a much smaller but still solid source of income in the medium term.
Even more important is the longer-term momentum that the success of the mRNA and immunology specialist can develop. A whole network of partners and suppliers for vaccine production is now grouped around the Mainz-based company. At the same time, the success radiates to young start-ups, for which the financing conditions are tending to improve.
Thanks to the Covid income, Biontech itself will be financed for years to come in order to advance its product development in other areas, especially in cancer therapy, and, if necessary, to strengthen it through new alliances and acquisitions. This does not guarantee that company founder Ugur Sahin’s vision of making Biontech a global powerhouse in immunotherapy will be fulfilled. But at least the odds have improved significantly.
All of this shows what potential the biotech sector offers both for investors and from an industrial policy point of view. The task now is to take this momentum with us and strengthen it as much as possible. Biontech shouldn’t remain the only model of success that inspires an entire industry.
More on this: Ten billion euros: Biontech wants to use record profits for further expansion and pay a special dividend.