Frankfurt After a noticeable drop in sales in the second quarter, the Mainz-based biotech company Biontech expects demand for Covid vaccines to increase again in the fourth quarter of the year. Like its partner Pfizer and competitor Moderna, Biontech is sticking to its forecast for the year as a whole.
Sales of 13 to 17 billion euros are still expected, according to the interim report for the second quarter presented on Monday.
The forecast is based on previous orders and the prospect of new Covid vaccines adapted to the omicron variant of the virus. “We expect an increase in demand in our key markets in the fourth quarter due to our progress with the variant-adapted Covid-19 vaccine candidates, subject to regulatory approval,” said CFO Jens Holstein.
For the second quarter, however, the company reported a relatively sharp drop in sales to 3.2 billion euros compared to 5.3 billion euros in the previous year. The net profit fell by 40 percent to 1.7 billion euros, the operating result has almost halved to 2.2 billion euros. As in the case of partner Pfizer, the write-down of inventories in the amount of around 400 million euros also contributed to this.
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Investors reacted disappointed to these numbers on Monday. The Biontech share, which had increased by around a third since mid-June, lost more than nine percent both in Frankfurt and in early New York trading by the afternoon.
Analysts had mainly expected higher revenues and earnings in the Covid business for the second quarter. In addition, many investors are likely to have hoped for an increase in the outlook for the year as a whole, not least against the background of the strong appreciation of the dollar.
Corona: Two vaccines from Biontech and Pfizer
Biontech and the US partner Pfizer want to start with two combined vaccines in the fall: On the one hand, a drug that is aimed at the wild type and the omicron variant BA.1 and that is now in the test procedure at the European Medicines Agency Ema, but not has been submitted to the US Food and Drug Administration.
The other is a vaccine containing mRNA sequences of the wild type and the omicron subvariant BA.4/5. Biontech and Pfizer want to submit this vaccine to the FDA and also to the EMA. Clinical trials for this vaccine are expected to start this month. Biontech and Pfizer want to have larger quantities of both vaccines available in October.
This two-pronged strategy is primarily the result of the somewhat different signals from the approval authorities. The FDA has clearly come out in favor of a so-called bivalent vaccine with elements of subvariant BA.4/5, while the EMA has not yet expressed any preference in this regard and is open to both versions.
Biontech makes more profit than Bayer and Boehringer
According to their own statements, Biontech and Pfizer have so far signed orders for the delivery of around 2.5 billion doses for 2022, of which around 1.2 billion doses were invoiced in the first half of the year. The market share in the global Covid vaccine business has improved from 52 to 63 percent.
“Our goal is to further expand the market position and we believe that Sars-CoV-2 will accompany us for the foreseeable future,” said Biontech boss Ugur Sahin in a conference call with analysts. In anticipation of modified vaccines, many countries, including the EU, have postponed the procurement of vaccines until autumn, which is currently clearly reflected in Biontech’s sales figures.
>> Also read: Masks, quarantine, compulsory testing: What currently applies and where in Europe?
For the entire first half of the year, on the other hand, the company can continue to show strong growth thanks to the high deliveries in the first quarter. During this period, sales increased by 30 percent to almost 9.6 billion euros.
Operating profit improved in the first half by 19 percent to almost seven billion euros, net profit by more than a third to around 5.4 billion euros. For the time being, Biontech remains the German pharmaceutical company with the highest sales and earnings, ahead of Bayer and Boehringer.
The Corona business: Biontech only posts direct vaccine sales in two countries
The company’s financial strength has also continued to improve thanks to high vaccine yields. At the end of June, Biontech had a cash position of EUR 9.3 billion and trade accounts receivable of EUR 10.4 billion. The latter result primarily from Biontech’s claims against its partner Pfizer, with which Biontech shares the gross profit from the Covid vaccine business.
The lion’s share of Biontech’s sales also consists of the profit shares from the partnership. Biontech only posts direct vaccine sales in Germany and Turkey, while Pfizer supplies the rest of the world except China.
The high financial reserves continue to give the biotech company great scope for expanding product development in both the Covid area and in oncology. As far as cancer drugs are concerned, Biontech is now testing 18 substances in 23 clinical studies. Phase 1 studies have been started for two new product candidates in recent months.
>>Read more about this: Innovation boom in oncology: the new miracle cure for cancer
Among other things, the company says it is making preparations for approval-relevant studies with a vaccine against pancreatic cancer and a new, innovative cell therapy against various other types of tumors. Encouraging data from early clinical studies have been published for these projects in recent weeks. A few days ago, Biontech expanded its cooperation with the Belgian biotech company Genmab.
In the Covid area, meanwhile, Biontech and Pfizer have recently started the first clinical trials with a next-generation vaccine candidate. The aim here is to develop vaccines that offer longer and broader protection against various Sars-CoV variants. The two companies intend to test other product candidates of this type in the first clinical studies in the second half of the year.
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