BioNTech SE (BNTX) JP Morgan Annual Healthcare Conference – (Transcript)

BioNTech SE (NASDAQ:BNTX) JP Morgan Annual Healthcare Conference January 10, 2023 12:45 PM ET

Company Participants

Ugur Sahin – Chief Executive Officer & Co-Founder

Ryan Richardson – Chief Strategy Officer

Conference Call Participants

Jessica Fye – JPMorgan

Jessica Fye

Great. Good morning, everyone. My name is Jess Fye. I’m the large cap biotech analyst at JPMorgan, and we’re delighted to be continuing the conference today with BioNTech. [Operator Instructions]

So with that, let me turn it over to BioNTech CEO, Ugur Sahin for the presentation.

Ugur Sahin

Yeah. Thank you for joining us today, and thank you for the JPM team for inviting us here. It’s a pleasure to present here. So first of all, the usual forward-looking statements and some safety information about our vaccine.

I would like to start, again, as always, with our vision. Our vision is to harness the power of the immune system to fight human diseases. And in the last three years, we were encountered with a terrible pandemic and we were able to respond despite to this pandemic with a life-saving vaccine. We were in this privileged situation based on 20 years of research based on preparedness and it shows what technology, science and working together does.

And by being able to respond to this pandemic, our company was transformed. We are now in a situation, in a historic situation where we can shape the future of medicine with new technologies, with new approaches. And we see that as a new chapter in our journey to act in a responsible way to address really to use this chance, the ability that we have built to contribute in a most effective manner to save individual lives, but also medical needs worldwide.

2022 was a great year. I would like to thank our team for a number of accomplishments. And I would like to highlight just a few of them on the helicopter perspective. With regard to the commercial success, we were able to bring the first variant vaccines. We delivered more than 2 billion doses, and we were able to keep our market leadership with a broad label (ph) and with delivery of vaccines worldwide in more than 60 regions on the planet.

With regard to the execution on the scientific program, we have proven proof-of-concept for our first cell therapy product, for our next-generation immunomodulators, and we were able to start seven first in-human clinical trials (ph) for immune-oncology and free in infectious disease. And we continue to build our company, we built our capabilities. We’re able to deliver the first COVID-19 variant vaccine within two months after announcement. We started new collaborations. We broadened our pipeline. We broadened our team and we ended the year financially strong.

So what are the key strategic priorities for 2023? Number one, to build and strengthen our COVID-19 franchise by variant adaptive vaccines, by adding new technologies and by combination vaccines. In the immuno-oncology, we want to advance to our first registrational studies, starting clinical trials in various programs. And in infectious disease, we want to use the learnings of our COVID-19 vaccines to enter new clinical trials and continue with the already started.

So how are we going to accomplish this? I would like to talk a little bit about our capabilities and our network. So in the meantime, BioNTech has more than 4,500 employees from more than 80 different nations. We have sites and collaborations now on five continents. And we announced last Friday a collaboration with U.K. I will go later into that showing that we are building now a global company with multiple sites, multiple continents with teams on all relevant places to execute our vision.

We want to harness the power of the immune system. For us, this means, in principle, excellence in five pillars, deep understanding of the immune system, target discovery, multi-platform innovation engines, digital capabilities and manufacturing and automation. Today, I would like to touch a little bit deeper into our multi-platform engine and our digital capabilities.

Personalized medicine is about delivering treatments for any kind of targets and any kind of conditions. We have a technology agnostic approach. We are extremely strong in the messenger mRNA technologies, but this is not the only thing that we do. We have cell and gene therapies. We are developing monoclonal antibodies, bispecific antibodies, and we have small molecules in clinical testing.

And we are not only focusing on the modular aspects of these technologies, but we are focusing on the interface between the technologies. Great progress often happens if you bring in two technologies together, for example, cell therapy and mRNA technology. We have now approaches allowing us to empower cell therapies by vaccines, and we will go into approaches that we use the combination, use mRNA applications for engineering T-cell therapies.

The idea of having this modular platform is the ability to have complementarity, but also to enable synergistic treatment and thereby enable individualization. Why we are doing that? Why we are so bold? At the end of the day, cancer is a devastating disease. And the greatest challenge in cancer is that every patient has a different type of tumor. That means we are getting more and more information about the genomics profiles of tumors, but the applications that we have are still based on the concept of personalization using single targets.

Individualized medicine means that we can get the sequence of tumor signals of patients, engineer therapies according to the genetic profile of the patient, use of the shaft trucks (ph) and tailored on-demand therapies to adjust the entire individual variability. This type of new medicine has two aspects. We need to bring in new technologies, for example, AI technologies to ensure that these approaches can be done in an extremely fast fashion. And we have to implement a patient centric way in dealing with clinical trials as well as in a patient centric way in drug development.

To address that at scale, we announced on Friday a collaboration with the U.K. Government. It is a collaboration with — in a broad fashion with the U.K. health system, with clinical centers with genomic sequencing, sequencing partners. The goal of this collaboration is to deliver 10,000 personalized therapies by end of 2030, allowing us to do clinical trials with our portfolio of immunotherapies, mRNA vaccines, cell therapies, target therapies, small molecule modulators in multiple clinical indications, in multiple settings, early-stage and late-stage therapies.

By this collaboration, our aim is to use the power of our pipeline and combine it with the logistics that allow us to do faster clinical trials. One key aspect for personalization is the ability to dissect data, clinical data, to dissect genomes, to understand how to identify mutations, how to deliver new products. And for this, we are using, since the beginning of BioNTech and even earlier, digital tools, machine learning algorithms, and we are now reaching a stage where the progress in the world of AI must be connected to the competencies that we have on drug development.

And for that, we had started three years ago a collaboration with InstaDeep for connecting really cutting-edge AI technologies and solutions to the cutting-edge platform solutions that we have. From this collaboration, we came up with a number of solutions. So InstaDeep, today we announced and our plan to acquire InstaDeep.

A few words to InstaDeep. InstaDeep is a leader in artificial intelligence, located in London with multiple sites in Cambridge, Paris, in Africa and in the East. InstaDeep has implemented deep AI technologies, collaborations with AI leaders and has a team of more than 240 engineers. And the plan is to acquire the company until end of Q1, so that this team and the capabilities are becoming part of our competencies.

In the last three years, we developed a number of projects successfully, which already showed how important the integration of AI technologies in our existing business is, for example, the early warning system to identify COVID-19 variance in an extremely quick fashion, allowing us to reduce the turnaround time for vaccines or design of mRNA backbones to further improve the potency of our vaccines. Our goal is with the acquisition to integrate AI seamlessly in all aspects of our work from the target discovery, lead discovery as well as manufacturing and delivery of our products.

So coming now to the results and goals that we have in 2,000 — expect in 2023 for COVID-19. We have — in 2022, we have accomplished to deliver two variant vaccines. We delivered more than 500 million doses shipped at worldwide. We have now the broadest label. And we not only manufactured and delivered the vaccines, but we did comprehensive research to understand how these variants evolve, what are the logic behind the mutations and how the immune system responds. And these learnings are extremely important for future design of the vaccines. We have created a database, safety database of more than 1.5 billion individuals, and we have built the capability to deliver vaccines in an extremely short time.

How does this connect to 2023? So we know that the pandemic is not over. Yeah. We know that the virus is continuing to evolve. In 2022, more than 250,000 people died in the U.S., and we have similar numbers in Europe and this virus will stay with us for the next years. We are better prepared to address severe disease. But even severe disease, if the last immunization or the last infection is — has a longer distance is getting a higher likelihood. So that means there is a need for variant adapted vaccines. And for that, it is important to quickly identify when a variant adapted vaccine is needed, and then we can continue to deliver the existing vaccines.

What is also important is understanding that these mutations circumvented the recognition of the virus by antibodies. On the right side, you see in red the reduction of epitopes recognized by the existing immune responses, and we have left at the moment, less than 8% of epitopes on the surface of the spike protein, which is recognized by the antibodies created by the existing vaccines. This is the bad message, and this will continue to become lower in the next weeks and months.

The good message is, is that there is a second protection layer. This is the T cell protection layer, and it is extremely difficult for the virus to overcome this layer. Still 80% of epitopes of the spike protein are conserved. But we believe that we can make the T cell response even more potent. We have now a T cell vaccine in clinical testing. And this T cell vaccine is designed in a way that all conserved epitopes from multiple of the Coronavirus proteins are addressed. We have about 99% conservation of this T cell stream epitopes in all strains.

And we believe with this combination of a spike protein vaccine with a T cell vaccine, we can even further improve the quality of the response that we are getting from vaccination. And we will, of course, continue also this combination vaccine, not only the combo of flu with COVID-19, but also other combinations.

In the infectious disease setting, we have started several clinical trials in 2022, including our malaria type trial and HSV-2 trial. We will continue with these trials. For malaria, we plan to evaluate multiple targets with additional studies in 2023. We will start our first tuberculosis vaccine and shingles vaccine trial in the next few months, and we plan to add additional pathogens in our infectious disease pipeline in the next six to nine months.

Coming to oncology, our key aim in oncology is to accelerate the high priority programs towards registrational trials. We have at the moment 19 clinical programs in 22 ongoing clinical trials, and I will touch on a few of these programs, which are suitable for Phase II studies or for registrational studies to be decided in the next few months. We have, on the one side, our mRNA cancer vaccines. We have two platforms. We have the FixVac platform where we take non-mutated shared tumor antigens combine that in a disease-specific fashion. And we have the iNeST platform, which allows us to design mutation based vaccines configured in an individualized fashion.

For both of the vaccine platforms, we have shown clinical activity data. For the iNeST platform, we have shown data, particularly in the adjuvant settings, strong immune responses, prevention of metastatic relapses in the adjuvant setting. We have data in melanoma, triple negative breast cancer, pancreatic cancer. For FixVac, we have shown objective responses in patients who had relapsed or progressed under PD-1 treatment, where for both approaches running Phase II clinical trials and one of the Phase II clinical trials that is of special interest is depicted on the next slide.

It’s iNeST trial that we have started in end of 2021. It’s in the perioperative alterative session. Patients with colorectal cancer have labs relapse rate of about 30% after surgery. And if they have relapse, the prognosis of the disease is really bad. So we have — we are identifying these patients who are going to relapse using a ctDNA assay and these patients are then randomized into standard of care with chemotherapy or standard of care plus personalized vaccination. This trial is screening more than 3,000 patients with colorectal cancer, and we will recruit more than 200 patients for vaccination. And we believe that this is one of the ideal setting for a personalized vaccine to reduce the relapses after surgery.

In other programs, I would like to touch on our collaboration with our partner, Genmab. Here, we are developing immune modulatory antibodies, bispecific antibodies and engineered multivalent antibodies. We have two programs, which are now reaching Phase II with one program combining checkpoint blockade with agonistic 4-1BB approach and one program 1042/BNT312 combining to immunostimulatory aspect agonistic activities. We believe by bringing agonistic activity into cancer immunotherapy, we can increase the response, particularly in patients with cold tumors.

We have seen exciting data, particularly for BNT312, which is an immunostimulatory antibody of CD40 and 4-1BB, for example, in head and neck cancer patients where we have in a small group of patients, 80% of patients showing objective — deep objective responses with head and neck cancer. There are several expansion costs now running, and we will report about the progress of the study and how to continue with potentially registrational studies in 2023.

In the cell therapy field, we started our first clinical trial with CAR-T cells. We are targeting a new molecule CLDN6 for solid tumors expressed in ovarian cancer, testicular cancer, many other tumors. This trial is still in dose escalation phase, but we are seeing encouraging objective responses particularly in testicular cancer, deepening over time with the first complete response now being stable for more than 12 months. The plan here is to proceed to Phase II clinical trial in testicular cancer and evaluate further trial opportunities in ovarian cancer and other type of cancers. This is, by the way, a combination of a CAR-T cell treatment with an mRNA vaccine.

So with these approaches, we have a number of milestones expecting us in 2023. This is a selection of milestones encompassing a new clinical trial starts, data read outs from existing clinical trials as well as start of several Phase II clinical trials. The list is incomplete because we have a number of collaborations, and we still need to align in the next weeks with our partners what kind of clinical studies we are going to announce in 2023.

So our vision remains the same. We want to advance the development with realization of our vision. Our goal is by 2030 to become a multiproduct, global biotechnology leader who is addressing medical need for individualized cancer patients as well as in multiple other indications with disruptive technologies. We have a good position for that with both pipeline of products and technologies now progressing towards registrational studies.

I would like to thank our team, our partners and our investors, and thank you for your attention, and we can now have a discussion.

Question-and-Answer Session

Q – Jessica Fye

Great. So just as a reminder, if you would like to ask a question, you raise your hand or you can send it to me on the portal. Nobody has done that yet. So I will start. Maybe first, recognizing you’re not providing sort of near term guidance today. How do you think about the long-term COVID-19 revenue opportunity as the world moves toward dealing with it as an endemic disease? And when might we be able to anticipate more of a steady state for COVID revenue?

Ryan Richardson

Yeah. Thanks, Jess. Thank you, Jess. I’ll start that, and I think Ugur, I’m sure can chime in. So I think our starting point here has been that there really is no perfect analog for the long-term COVID-19 vaccine market. We think this is a new pathogen. There’s still a lot that we don’t know. And while we expect that there — the market could share some similarities with the seasonal flu market, it’s not identical. So the seasonal flu market is about a 400 million to 600 million dose per year global market from a volume perspective.

I think when we look long-term, we think that COVID-19 will stay with us, and those volumes might be the best analog, but probably aren’t perfect. But I think there’s a couple of features that are different between COVID and flu. And just to name a few of those, I think flu is highly competitive market. You do have a leading brands. But here, we have a more concentrated market. Ugur talked about our market share being about 60% and having grown over the last year so that’s a difference. We have a generic component to the flu market here. We don’t expect that. So when we look long-term, we see a double-digit billion market opportunity. I don’t know, Ugur, if you want to add to that?

Ugur Sahin

Yes. I think what is really important is, we can’t make predictions about volumes, but we have to really open our eyes and understand what is going on. People are seeing — it is very clear that virus is continuing to mutate. And it is really mutating in a clever fashion. And the burden — genomic burden of this virus worldwide is so high that it will not disappear. So of course, we all want that this goes away, but it will stay with us, okay. And we have to get used to a new normal.

And what is the new normal? This virus is not only coming in a season, it is coming really in an unpredictable fashion. And we have two types of mutations. We have the mutation where we have a variant like Omicron, where there are [indiscernible] coming up. And then we have this unexpected completely new variants, which comes with multiple new mutations and whether where we have to say, okay, this is a really new variant and this will continue to happen.

What is also not comparable to flu is it is not just an infection, which is then over after acute phase. Many people suffer from chronic symptoms. And there are more and more data that infected people were positive for eight, nine, 10 months. So this is a different beast, and we have to be aware of that. We have to communicate that and we have to find ways to deal with that. I believe one trend will be still not only focused on severe infection, but think about how can we develop vaccines and approaches that prevent infections or symptomatic disease.

Jessica Fye

And going back to Ryan, your comment, it was a double-digit billion market opportunity. So total market with UN competitors?

Ryan Richardson

Well, I think, again, we don’t have clear visibility. But when we look at the structural, some of the structural features that we would expect. We’re already starting to see in terms of the evolution of the virus, likely requiring sort of seasonal or regular updates, and from a variant perspective, potential for combination vaccines, et cetera, yes. So talking about total market, best guess, we don’t know, but I think best guess, we do think that this is likely to be a more attractive market than seasonal flu. So I think that’s — I think that’s the key point over the coming years and longer term.

Jessica Fye

I’ve got a couple of questions in the audience. Can you bring a mic down the middle aisle, please.

Unidentified Participant

Thank you very much. BioNTech has announced unprecedented investments in industrial structures in Africa, soon the most populous continent and systematically underserved by those companies who normally present here. Would you elaborate a little bit on BioNTech’s plans?

Ugur Sahin

Should I take that, or do you? Yeah. So one of our goals is really addressing medical need worldwide. And with the mRNA technology, of course, we have now the opportunity to address infectious diseases, which were neglected or which were quasi neglected for where there is a huge medical need. So we just got an approval of malaria vaccine is the first malaria vaccine, but we still believe that malaria is an infectious disease with extremely high medical need, when mRNA vaccine, a highly effective mRNA vaccine can help eradication.

The same is to for tuberculosis, and the same, even much more difficult to address is true for HIV. So we want to bring our technology, use our technologies for this high medical need neglected diseases. And we have started now our malaria trial. We are going to start a tuberculosis trial. And our goal is really the data look good to continue to develop these vaccines and get them to the market. This is the first aspect, addressing medical need.

The second aspect is providing access to technology and manufacturing. So one of the learnings of the pandemic was that, at least in the first nine months when vaccine rollout were there, and poor countries didn’t get vaccine doses. And this will not change even in the next pandemic because it is very clear if we have a pandemic situation, where vaccines are produced, they will be the first served, okay. So the question, how can we change that?

And the only way to change that is to implement manufacturing technology, for example, in Africa. And this is not an easy task because it takes many years and huge investment to get these manufacturing facilities. And therefore, we came up with a new concept, which we call BioNTainer concept. This BioNTainer concept is more or less a plug-in manufacturing technology, which allows with a containerized system to produce up to 60 million in the second phase up to 100 million doses of vaccines in container-based, automated, digitally controlled factories.

And our first factory will be implemented or we had the groundbreaking this year, and it will be implemented the first manufacturing facility will be there in 2023, and we plan to produce the first mRNA vaccines on the African continent in 2023. So this is in Kigali, Rwanda. We have identified other sites, for example, in Senegal. We are thinking about South Africa. So by this modular system, we can make technology accessible. And by this, we could get true independence by access to technology, and we will combine that also with a collaborative approach, getting access to talents, training the people there, so that they can really manage these new technologies by their own. So that’s our plan.

Unidentified Participant

You have a great COVID-19 vaccine, but this vaccine is not available in China. Do you think price negotiation is part of reason in that case, can you help?

Ryan Richardson

Yeah. So I think your question just to make sure I understood was that are the price — is pricing negotiations, the roadblock to approval in China, right?

Unidentified Participant

Yes.

Ryan Richardson

Yeah. So I think the short answer is not really. No. I think it’s a broader roadblock. You’re right that we don’t yet have approval in Mainland China. We have been distributing our vaccine actually for well over a year in Hong Kong, Macau. We’ve distributed to Taiwan. We actually had quite good uptake in Hong Kong Macau and very recently, Chinese nationals were able, if they travel to Macau, to get access to our vaccine. I think we’ve not been able to — so far to get approval in Mainland China.

Over the last couple of weeks after a meeting with Chancellor Scholz in Germany and his counterpart in China, we did have a sort of mini breakthrough whereby our vaccine was made available for German nationals in China. But I think, at this point, so far, China has not authorized any foreign vaccine for the broader population. And I think we don’t yet have visibility on when or if that policy will change.

Jessica Fye

A question there?

Unidentified Participant

Yeah. Thanks. You mentioned that you didn’t expect the COVID vaccines to go generic anytime soon, but we’ve heard Peter Marks mention that he does expect them to kind of follow in the footsteps of the flu in that sense. So I guess can you offer a little more color around that and talk a little bit?

Ryan Richardson

Yeah. So I think the flu market, we’ve seen room for both branded products — successful branded, blockbuster products, but also the long tail of much lower priced generic products, and then there’s a whole bunch of products in between. I think here, my point was that we have a much more sort of consolidated market with a couple of big players globally in the key markets. Obviously, we’re in a good position in that regard.

And so I think over the next couple of years, I do think that there’s going to be a stronger branded character to the market relative to flu, if we just want to compare. And I think that’s unavoidable. That’s not to say that there couldn’t be, on the margin, new entrants. But we’ve built up such brand equity and our safety database that, for example, sort of such a broad base of the population that have been vaccinated now, in many cases, several times with the vaccine, I think many people had a good experience with that.

And I think that, that counts for something as we think about the likely shape of the market over the coming years. And I think innovation will continue to add to that, too. I think — Ugur talked about some of the next-gen vaccines, the T-cell strain vaccine, potentially the next variant adaptive vaccines. So we’re going to continue to invest in the franchise. We look at this as a sort of multiproduct franchise. And I think that core part of the market will likely continue to be, let’s say, branded because it will be based on continuing innovation.

Jessica Fye

There have also been some headlines, I think, about potential list prices for co-vaccines in the U.S. as we move to a commercial market and recognizing that you have a partner here, how should we think about whatever the net price for commodity (ph) ends up being in the commercial setting in the U.S?

Ryan Richardson

Well, so I think it’s — our starting point here was a very low price. On any sort of health economic basis, the price — we started off at $19.50 in the U.S. The prices come up to a little over $30 in the booster phase of the pandemic. But if you compare that to other innovative vaccines in a sort of normal market setting, that’s just orders of magnitude lower. So that’s the starting point, and of course, that reflects the situation that we were in with massive volumes and a global public health need that we felt was important to address.

I think as we transition now towards the next phase of the market, we do expect prices to come up in the commercial setting. We and Pfizer have guided to a price per dose gross of $110 to $130. We’re not in a position yet to talk about net prices and gross to net ratios. But I think even that price, we think, is certainly more than justified on a health economic basis when you look at the lives saved through vaccination, the hospitalizations avoided and the overall benefit from a public health perspective.

Jessica Fye

Maybe with just a little more time here. Switching to your oncology pipeline. Moderna recently top lined some positive data for their PCV program. Is there any read-through that you see from an approach like PCB to your own oncology programs like iNeST?

Ugur Sahin

Yes, I believe what we all expected, and this is not surprising is that cancer vaccines, personal cancer vaccines will be particularly effective in the adjuvant setting. The reason for that is a biological reason. There is much less tumor cells. There’s more time to build an immune response.

And in all kinds of experiments, we have seen that vaccines are ideally suited to prevent outgrowth of metastatic lesions, and that is what is observed in Moderna’s trial. We have published similar data from single-arm studies in melanoma, in pancreatic cancer. We are seeing similar observations in triple negative breast cancer. And this, of course, calls for randomized registrational studies in the adjuvant setting.

Jessica Fye

Great. And we are out of time, so we will end it there. Thank you.