Q1 2023 BioNTech SE Earnings Call
Welcome to the biotech first quarter 'twenty to 'twenty three update call I would like to hand, the call over to talk to Victoria mice, not vice President of strategy and Investor Relations. Please go ahead.
Good morning, and afternoon, My name is Victoria and I'm, the new head of Investor Relations at biotech.
I'm a medical Doctor by training and have recently joined Zion Tech from health care investment banking at Jefferies.
I look forward to working with you on the corporate side.
Thank you for joining us today for Biotechs first quarter 2023 earnings call.
As a brief reminder, the slides that accompany this call in the first quarter 2023 press release that was issued this morning can be found in investors section of our website.
As outlined on slide two you can see our forward looking statements disclaimer.
Additional information about these statements and other risks are described in our filings made with the U S Securities and Exchange Commission.
Forward looking statements on the call are subject to substantial risks and uncertainties speak only as of called original date, and we undertake no obligation to update or revise any of the statements.
On slides three and four you can see detailed safety information regarding our COVID-19 vaccine.
On slide five you can find the agenda for today's call.
Today I'm joined by the following members of Biotics management team.
Our CEO and co founder Lubrizol him.
Cause them to Ritchie, our Chief Medical Officer, and cofounder yachts Holstein, our Chief Financial Officer.
And Brian Richardson, our Chief strategy Officer.
I would like to turn the call over to resign.
Thank you Victoria, Good morning, and good afternoon, and warm welcome to all the Cogs Pakistan.
We appreciate your continued support today I have with some of our Cogs.
Uh Huh, Jackie 23 highlights.
Priorities before I pass the call over to my team to provide.
A lot of details.
Let me reiterate our strategy calls for 'twenty 'twenty for you and highlight our first quarter.
Houston.
So to expand and sustain our leadership in COVID-19 response by advancing our next generation vaccine candidate <unk>.
Wrapping combination vaccine.
And advancing key commonality future.
This quarter.
Our strong COVID-19 vaccine market positioning supported by key labor expansion in regions around Covid.
This month, we published preclinical data in the journal cell on our next generation to start scoring vaccine component in combination that's coming on.
Our second goal is to accelerate our oncology pipeline and initiate multiple potentially registrational.
Our new collaborations that reality and of course it for complement our pipeline.
It's multiple mid to late stage clinical programs.
To help us achieve this goal in the near term.
Our third and final strategy always to initiate an accelerated clinical programs.
Unmet medical need in infectious diseases.
In the first quarter and initiate new clinical vaccine programs.
Amy for shingle and tuberculosis.
The FERC Krakow was a strong start to 2023.
We plan to continue execution against the strategic course.
To continue our development.
Fully integrated global multi product biotechnology company.
Divesting medical needs.
And somebody made fun of this key unmet medical needs. Our long term oncology strategy is to expand the treatment options available for cancer patients and become a multi product company in the next year.
In order to best address the needs of tumor patients.
We aim to address the full continuum of cancer treatment.
Bringing novel therapies to market for patients with adjuvant and late stage cancer, and combining our platforms and programs to translate our son into survivor.
Key element.
In our oncology pipeline.
And on a cancer vaccine.
Please next generation checkpoint immune modulator.
Anti body.
When you get.
We believe that beef cut classes.
Has the potential to drive improved outcomes for solid tumor patients across multiple lines of treatment and tumor types.
Our most advanced oncology assets are currently in development for a range of solid tumors at our stage of treatment. We believe that this asset has a first in class.
Best in class potential.
EBITDA to Paas meaningful change in the treatment of many cancers.
How are we planning to achieve this.
Our technology agnostic and innovation engine, leveraging modular technology platform.
Both developed internally and access via collaboration partnerships to produce novel product candidates.
In the first quarter, we announced two new collaborations to get access to assets and platform that we believe may be important in our solid tumor to accretive in the future.
One of those which I'm, particularly excited about is the new collaboration we strive to keep biologics company focused on the discovery and development of next generation anti body drug conjugates.
In the last few years advancements in ADC technology.
Started in the sport and views for the treatment of solid tumors.
We believe that adcs have the potential to the place.
Toxic chemotherapy regimens as the cytotoxic backbone.
Cancer three.
Adt's consists of three main components anti body linker payload each of these components has an impact on adc's pharmacological and clinical properties.
It is a precision medicine, allowing targeted drug delivery, particularly into tumor cells with high specificity and potent induced cell death with the.
The benefit of reduced cost.
Target events.
And the monoclonal antibody binds to the target antigen specific do you expect from the two months that the Adcs internalize allows.
Allowing for the release of the Cytotoxin, which.
It leads to cell death.
Slide 11.
Under the terms of the exclusive backpack.
In collaboration.
With two oddity buyer, excluding mainland China, Hong Kong, and Macau region, we will gain access to programs.
Touching or free targeting Q MTB testing 11, driven by duality that tech platform and novel Cleavable Linker and payload technologies.
First generation Adcs.
Created pharmacokinetic properties that may contribute to an increased top park window compared to other ADC platform Adcs offer a broad combination potential, especially with various Io agents.
Our phase one two clinical trial for DB tracking or free is ongoing.
<unk>.
To expand into solid tumor indications and we aim to rapidly advance clinical development of this program.
So that class.
I wanted to end, where I started our vision.
Our new collaborations we now have 37 programs.
We plan to start multiple potentially registrational trial in the coming years.
Within the next yes, the aim to become a multi product global biotechnology leader aiming to contribute and address the most pressing health challenges with pioneering disruptive technologies delivered at scale.
With that I would like to thank you all for your confidence in our success and your continued support I will now turn the call over to Aetna.
Thank you Luca.
Did I get to speak with everyone today and provide a lot pipeline update starting on slide 14, not only from biotechs founding we have firmly believed in the potential for mrna cancer vaccine to other plays and the future of cancer treatment, we have split our personal lives.
For sure that forms and initiated a broad clinical program to evaluate before the utility of a lot of traction.
Okay, we have a broad cancer vaccine development program with four ongoing randomized phase two clinical trials in both the adjuvant and metastatic disease settings.
This program includes four clinical studies, a phase two clinical trial with oxygen.
<unk> began to your 122 more than of European and Extroverted CRC started in 2020 and recruiting patients with C. T. D N a positive irrespective state school high risk and stage III colorectal cancer.
Data from an investigator initiated phase one clinical trials evaluating BNP you want with 22 auto just to move on and one times, though one thing of artists or lease them up and excellent pancreatic ductal adenocarcinoma were presented at ESMO last year, a phase two clinical trials.
And the patient population is planned to start in 2023.
The randomized phase two clinical trial evaluating our agent in combination with temporary lease them up in first line melanoma patients has finished enrollment analysis of PFS primary end point will be trigger event based <unk>.
From a phase one clinical trial with B N T 122, quadrants of whom are on a single agent and in combination with a typical lease them up.
In patients with locally advanced and.
<unk> metastatic disease across multiple tumor types. What's presented previously we are preparing a manuscript summarizing the phase one data for publication.
Now, let's take back program that is comprised of four different indications specific product candidates, we have ongoing clinical studies.
We have a first in human phase one <unk> trial evaluating <unk>, two as monotherapy and in combination with symmetry mob in two cohorts of patients, namely with metastatic castration resistant prostate cancer and with high risk localized prostate cancer.
What is the trigger for treatment with androgen deprivation therapy is ongoing.
Our randomized phase two clinical trial evaluating BMT one for <unk> in combination with PEMCO leesville not for this temporary lease them up one of your opinion as a first line treatment in patients with PDL, one positive unresectable recurrent or metastatic HPV 16 clause.
Pet next squamous cell carcinoma.
It's ongoing.
Brenda My phase two clinical trial evaluating BMT 111 in combination with the meat dream up whereas this both agents as mono therapy in patients with refractory relapse Unresectable stage, three or four melanoma is ongoing conducted in collaboration with regeneron.
From a first in human open label Phase one clinical trial evaluating BMT 111 in patients with advanced melanoma have been published and presented.
The phase one basket clinical trials evaluating BMT 116 alone and in combination with T map in patients with non small cell lung cancer in various settings, it's ongoing.
Aimed at patients who have progressed on prior PD one inhibitor treatment.
The triplet for chemotherapy and in combination with the West coast with Tech data in patients who have received prior platinum based chemotherapy. The second trial planned to start this year to evaluate the combination of PMT 116, and submit them up and to me.
Up alone as first line treatment of patients with non small cell lung cancer.
Based on the data collected from these trials, we plan to continue with clinical trial, the advancement and expansion of both our mrna.
So vaccine program.
I'd like to put our first quarter pipeline advancement and additions into the broader context of our clinical stage pipeline, which is depicted on slide 15 in the first quarter, we added to our pipeline with new assets, who are already mentioned the her two targeting ADC.
Searching or free developed by our colleagues at Suavity Bio which has recently started the phase two portion of the ongoing phase one two clinical trial.
So in the first quarter, we added almost 392 two hour pipeline the ph sensitive anti <unk> four antibody developed by our partner on calls before.
292 is being tested in two ongoing clinical trials. The first in multiple solid tumors is born of European and in combination with them or lease them up and a second trial in platinum resistant ovarian cancer patients in combination with Penn or lease them up.
Excited about accelerating and broadening the clinical development for both of these programs based on the data we've seen in the preclinical and clinical.
On slide 16, I want to briefly highlight the mechanism of action and clinical data of <unk> 392, Cts for recycled continuously between the surface and the underground as it does not undergo.
The decrease station interruption of this process is associated with the development of auto immunity.
Ultra immunity and immune related adverse events, a major limitation of approved anti <unk> anti bodies, such as <unk> move up that disrupt cts for recycling by promoting lysosomal degradation of this important immune checkpoint market next year.
Q2 does not get in touch with our recycling it associates from the CTO at a far more acute in the Anderson and allows normal recycling of Sofia anti body and with Ctr April molecule and that's designed for strong catch up your party effect and.
Immune related adverse effects.
All 392 is being tested in the trial.
The gate two dose escalation single agent and in combination with temporary lease them up.
Second indications such as I O in the east and resistant non small cell lung cancer and melanoma are being treated with the RP to date preliminary data showed that all 392 is well tolerated with no dear to us and the optical D was determined to be.
10, Mick Kartik without Mtv's being reached severe immune related grade three adverse event rate in the combo dose escalation was 23%, which is considerably lower than what was reported for comparable I O I O combinations, but RP too.
Deep dose combination is six MC kartik.
In summary on 392 dose as monotherapy or in combination was well tolerated and the safety profile appears to allow higher dosing for a longer duration of treatment as compared to appealing them up.
If we could see data as monotherapy in platinum resistant ovarian cancer patients and in combination with penalties from up in multiple solid tumors were promising presentation of the first data from that and I see I see expansion cohort of the phase one to preserve all one study.
This plant at ESCO next month's Bill.
Building on these data we are planning to start a phase III clinical trial in non small cell lung cancer patients without driver mutation, who have progressed following anti PD one after progressing on anti PD, one treatment of non small cell lung cancer patients.
Eight to 11 months median overall survival and three to four five month progression free survival with a response rate of around 10% when treated with the second line standard of care. That's the texts ataxia with Anna Sui 92, we hope to also a promising new second line.
<unk> option for these patients.
The randomized open label controlled multi center phase III.
Oh, Oh free study tend to treat eye or resistant non small cell lung cancer patients in the dose confirmation plot, we honestly for plan to assess the efficacy and safety of <unk>.
<unk> thousand 90, <unk> Gibson at two dose levels in comparison to the photography and the subsequent part of the trial, we intend to assess the safety and efficacy of all 392.
Select a dose regimen, where does it stop the taxi patients with stage four non small cell lung cancer, who progressed on prior I O treatment.
With or without chemotherapy and equal status of zero or one can be enrolled.
Oh I O therapy is allowed.
A total of about 600 patients are planned to be enrolled and randomized one to one to receive either on 2019 to our docks at tech tuck in.
Two stage study the primary endpoint is overall survival objective response rate PFS and safety of secondary endpoints.
The study is planned to start enrolling patients within the next few weeks to try it and progressed cold so we'd be presented at the 2020 free ESCO and your team.
Moving to our collaboration with all our partners to have a cheap bio on slide 18, as part of our collaboration with a gain access to that duality Bios lead candidate D V hurricane or free of her two targeting ADC comprised of Trastuzumab Biosimilar covalently links to a proper.
Rioters DNA hopefully some rates.
<unk> inhibitor P 10, or free via looks even better than anyone.
101 post ADC have shown anti tumor activity and clinical benefits and most of it that's off of cancer by calling generations of anti her to Abc's haven't improved over our peer index modification and safer and tie her two ADC for it.
Sandra regarding potential lung toxicity, such a severe life threatening or fatal interstitial lung disease, including pneumonitis at her books indicate a benefit.
First data for D V. Turkey, No free were presented at the RTC.
Our T C. NCI ACR conference last October and describe for significantly improved therapeutic window of refreshing our fleet pre clinically as compared to <unk>.
82, or one <unk> or tdm, one analogues to Trastuzumab rux chicken and trust with some up and testing, respectively, and retinal monkey and human plasma T V's hurting or free demonstrated high drug to antibody ratio and outstanding customer stability and her too.
Positive to enter to a negative mixed cell culture did these hurting or free inhibited the proliferation of both types demonstrating its bystander effect pharmacokinetic and Pharmacodynamic analysis of DB for it you know free and Xenograft mouse models showed pockets of delivery of it.
Toxin into tumor tissue chugger in vivo studies in monkeys showed a superior stability of DB for original free and rapid systemic clearance of the toxin.
Pharmacokinetic properties with that and maintain them.
Christie and reduction of systemic toxicity.
My models, which are shown on the next slides.
Slide 19.
So as you know free exhibited potent anti tumor activity in both her two positive and character low tumor models potentially expanding the benefit population of her two targeted therapy preclinical studies in monkeys demonstrated an improved safety profile compared to <unk> 82 or one.
This is the highest non severely toxic dose.
18, Nick per kick.
So I thought it would be for Jim <unk>.
So lower risk of causing lung inflammation.
With no Iot like Dan toxicity.
The pharmacokinetic properties of DB, Turkey, no free.
Due to our superior safety profile observed in monkeys.
The program has received fast track designation from the FDA and is currently being evaluated in a phase one two clinical trial for.
Her two positive advanced solid tumor studies.
The study is enrolling pre treated patients with advanced or metastatic her two positive all her two expressing solid tumor data from this study will be presented at school. This year after determination of a recommended phase two dose for the dose expansion cohorts.
Including Tuscaloosa luxury could hurt to guest strict.
The gastro esophageal adenocarcinoma.
Carcinoma MCR see.
So two over expressing in her two low endometrial carcinoma Holman receptor positive her two little breast cancer as well as her two positive breast cancer and non small cell lung cancer with activating her two mutations.
Slide 21 highlights our infectious disease pipeline and.
In December of last year, we initiated the first clinical trial investigating an mrna based vaccine for malaria prevention.
Systems with <unk> 23 to <unk>.
<unk> priorities, we started to first in human clinical trials testing new mrna vaccine candidates in the first quarter of 2023, one is a vaccine against tuberculosis and the other with our partner Pfizer the vaccine pushing it.
This program builds on our validated platform of mrna L. M piece that has a backbone optimized design and our nucleoside modified to address diseases with a significant built in it.
The World Health organization estimates that about 25% of the worst population is blatantly infected with mycobacterium tuberculosis.
Terry I'm responsible for the tobacco at all this season.
$10 6 million people developed active tuberculosis, and 2021 and a total of one 6 million people died off to book roles with worldwide.
There are limited prophylactic treatment option, Tortuga kudos and cases of multi drug resistant mycobacterium tuberculosis strength increasing worldwide.
The only license to book roles with vaccine is the Mycobacterium bovis derived an attenuated BCG, which was first introduced in the 19 twenties and just to routinely administer two new born in a most tuberculosis endemic countries.
By BCG provides some protection from severe forms of tuberculosis and childhood the high number of Thailand tuberculosis cases that emerge every year illustrates the limited durability and protective efficacy of BCG against tuberculosis disease and transmission in adolescence.
That does.
Vaccine technology advances I've seen as important to ending the tuberculosis epidemic by 'twenty for it which is the United Nations sustainable development goals, given the major global unmet medical need for tuberculosis vaccine. We entered there Melinda Gates Foundation are working on now.
And to John RNA lipid nanoparticle vaccine candidates against credit losses.
The target population of BB&T 164 program will include like around negative and positive P. C. G. In the east and vaccinated Paas Ebitdas, the clinical program in Germany, and South Africa, thereby including a non endemic and endemic country where investigators.
Safety react Virginia City, and Tolerability also DNT 164 vaccine candidates.
Phase one program is intended to help select the optimal route.
Vaccine candidate and the dose level for advancement to phase III. The vaccine may prevent infection and subsequent transmission and when applied to a large enough proportion of the target population that constitute the infectious reservoir could enable interruption of transmission and stuff.
Bring us closer to the elimination of tuberculosis, we believe that's even a vaccine that is only 50% efficacious would be a critical intervention and the success in country beauty to the W. R H or tobacco.
The nation targets by 20 foot.
Slide 10, Geoffrey dynamic evolution of COVID-19 strengths requires vaccine adaptation and innovative next generation vaccines.
We are pursuing several nextgen vaccine concept one off he is a he said spring vaccine component a K a b N Q1, 62 will be for.
As shown on the left hand side, along with evolution of Sars Cov, two and particularly pronounced in the army cranks up the niches that have seen progressive loss of conserved faculty neutralizing anti bodies.
In contrast, HLA class one and two presented he said if he talks of the site coating remained mostly on all all taught the cross the virus evolution. This is not surprising indeed, a fundamental difference of T cell b cell mediated immunity is that owing to their very nature.
T cell epitopes.
It's likely to be impacted by mutations in the T cell mediated layoffs and unity is small robust against immunization.
She said response is likely to remain much less impacted by neutralizing anti bodies by new variants of concern and make contribute to prevention all limitation of severe COVID-19 manifestation.
Based on this rationale we are developing BMT 160, it will be for <unk>.
Mrna that encodes varian conserved immunogenic heckman of nonstop 14th of Sars Cov, two namely of nuclear captured membrane and off one AP proteins with binding to diverse H H.
For the design of the strength, we have built on our platforms and kids developed in the context of designing somatic mutation based cancer vaccine.
Our D N T 162 before he says strain vaccine component is designed to enhance T cell immunity and is intended to be combined with variance adapted community. We believe we can improve immunity.
It's variant independent.
Our preclinical data was recently published in says in a mouse model, we demonstrated that mice immunized with BMT 162, B tool, which is called me and Archie with all without the N Q1, 62, before which is the T cell spring months strong fully functional and fully at the topic.
C D four and CDA T cell responses to the N M.
And off one a pea proteins Zach koff tool that's broadening the T cell response beyond just like 14th data from serious harm stuffs that were immunised with BMT 162 before alone or in combination with the anti <unk> two and then challenged with wild type Sars.
Two other desktop Erin demonstrate that <unk> 62, before alone and in combination protect animals from severe disease and enhances the virus Zeeland.
Nickel study investigating the next generation COVID-19 vaccine component can be data in combination of whats called me and our team is uncle.
I look forward to providing additional program updates in the coming months I will now pass the presentation to our CFO <unk> <unk>.
Sean who will present, our financial results.
Thank you Adam.
Warm welcome to everyone, who dialed in todays call.
I'll start my section with key highlights for the first quarter of 2020 suite, which you can find on slide 26.
The first quarter of 2023 started strong and fully to our expectations.
The quarter was driven by seasonal and some carryover effects from the previous year. As an example, with generated revenues from sales in countries with late approvals of our VA four five adapted by William COVID-19 vaccine.
For the rest of the year, we are expecting an increase in vaccine sales towards the northern hemisphere winter season in the countries, which are our key markets.
As a consequence, we expect the second quarter to be the weakest quarter in 2023.
Overall, we reiterate our COVID-19 vaccine revenue guidance of around 5 billion euros for the full 2023 financial year.
I would now like to dive into some key financial figures that underline our successful first quarter.
I'll include the revenues reported for the first quarter of 2023 reached $1 3 billion euros.
And related to our share of gross profit from COVID-19 vaccine sales in the collaboration partners territories.
These revenues represent the next CCAR, meaning that we generate 100% gross margin on those.
As a reminder, under our COVID-19 vaccine collaborations territories have been allocated between Pfizer and Fosun pharma based on marketing and distribution to us.
Please keep in mind that final fiscal quarter for subsidiaries outside the United States differs from our financial reporting cycle.
Hence <unk> international operations.
December 2022 will be reflected in their Q1 2023 earnings, whereas we have included the respective estimate already in our Q4 'twenty financial figures.
This creates a deviation between the numbers of our partner Pfizer publishers versus our numbers on a quarterly and full year basis.
With $1 3 billion in revenues, we ended the first quarter with an operating result of $654 4 million euros and generated earnings per share on a fully diluted basis of two euros and five year or so.
Yeah.
With respect to the company's financial position. We ended the first quarter of 2023 was $12 8 billion euros, comprising $12 1 billion cash and cash equivalents as well as <unk> 7 billion euros security investments with a longer time horizon, which we've made as part of our investment strategy.
When looking at our cash burn during the first quarter of 2023, the cash movement was negatively impacted for example, due to a onetime payments settling our wage tax liability incurred in the context of our 2022 a share based payment settlement. So.
<unk> prepayments relating to the full financial year of 2023, as well as announced spend as part of our share repurchase program.
Subsequent to the end of the quarter in April 2023, we have received approximately 4 billion euros in cash from our collaboration partner Pfizer settling our gross profit share for the fourth quarter of 2022.
Our M&A activities and recent collaboration and license agreements announced in the first quarter did not lead to cash outflows during the quarter.
In connection with the planned acquisition of <unk>.
And the upfront payments of the collaboration and license agreements with <unk> for <unk> biologics.
Expect approximately $4 8 billion euros to be invested in cash and by exchanging shares in the course of 2023.
Please note the final purchase price will be determined on closing and dimension amounts for M&A does not comprise future earn out and milestone payments.
I'll be moving to our financial results for the first quarter of 2023 as shown on slide 27.
Have been explained our revenues on the previous slide let me move to cost of sales amounted to $4 1 billion euros in the first quarter of 2023 compared to $1 3 billion for the comparative prior year period.
The drop was mainly due to the decrease in COVID-19 vaccine sales.
Research and development expenses reached $334 million rose for the first quarter of 2023 compared to $285 8 million euros for the comparative prior year period.
The increase was mainly due to higher expenses sic code.
Aggressive the clinical studies for pipeline candidates.
<unk> was further driven by an increase in wages benefits and social security expenses, resulting from an increase in head count.
General and administrative expenses amounted to $119 4 million euros for the first quarter of 2023 compared to $19 8 million for the comparative prior year period.
The increase in G&A was mainly due to increased expenses for consulting services as well as an increase in wages benefits and social security expenses, resulting mainly from an increase in accounts.
Income taxes were approved with an amount of $205 5 million for the first quarter of 2023 compared to $1 3 billion euros for the compared to prior year period.
The derived effective income tax rate for the first quarter of 2023 was approximately 29%, which is expected to decrease over the 2023 financial year to be in line with OCA.
For the first quarter of 2023 net profit reached $582 2 million compared to $3 7 billion euros for the comparative prior year period.
Our diluted earnings per share for the first quarter of 2023 amounted to two <unk> compared to 14 <unk> in 'twenty four euro cents for the comparative prior year period.
Now turning to slide 28, I would like to emphasize that we are reiterating the companys outlook for the 2023 financial year. Please note. The following number reflects current base case projections.
Calculated based on the constant currency rates.
Stated before.
Reiterate our estimated COVID-19 vaccine revenues of around $5 billion for the full 2023 pharmacies.
Our capital allocation strategy includes a strong investment in M&A transactions to the extent disclosed they have been as far as known reflected in the R&D expenses and will be updated as needed.
Overall, we maintain our guidance for planned expenses and growth and maintenance capex for operating activities as well as the estimated annual effective income tax rate, which we have summarized for you on the slide.
And with that I would like to turn the call over to our Chief strategy Officer, Ryan Richardson for an update on our strategic outlook for 2023, concluding remarks. Thank you.
Thank you, yes to wrap up our prepared remarks I'll provide a brief summary of the commercial outlook for a COVID-19 vaccine franchise before concluding with a few important dates to mark on your calendars.
In 2023, we aim to develop manufacture and deploy the seasonal adapted commonality vaccine.
We expect a recommendation from governmental authorities regarding the vaccine strain composition midyear with the potential approval front adaptive vaccine by the end of the summer.
<unk> initiatives planned to start for this fall.
In addition, we aim to introduce a single dose ready to use vial and we will continue to improve key commonality features such as shelf stability.
In addition, we plan to advance our next generation COVID-19 vaccine candidates throughout the year.
We expect the Covid demand in 2023 will continue to come from a broad range of regions globally.
Since the beginning of the first quarter, we have shipped COVID-19 vaccine doses to more than 70 countries and regions.
Since the start of the year, our deliveries to middle income and low income countries have increased.
We have also seen a greater contribution from the pediatric segment. So far this year.
For the full year of 2023, we expect global demand to be driven by existing signed government contracts, which we anticipate will be augmented by the opening of a commercial market in the U S. In the second half.
In the midterm, we see multiple potential growth drivers for our COVID-19 vaccine franchise.
These include the potential for volume growth as the seasonal market as established particularly in high risk population segments in.
In addition, we believe continued innovation from Varian adopted vaccines next generation vaccines and possible respiratory combination vaccines have the potential to support future franchise growth.
The transition to private markets and certain regions is likely to take several years we.
We believe the shift to commercial pricing will provide further mid term growth potential.
We and our partner Pfizer believe in the value that our COVID-19 vaccines provide both to individuals and health systems.
We'll continue to invest to maintain our leadership position in the market.
The next slide summarizes our pipeline news flow for 2023.
Some of these points have been covered so I won't go through them in detail again here.
Well it is clear that our pipeline 27 clinical stage programs is expected to produce several readouts throughout the year across a range of technologies.
We expect data updates for our T cell program targeting <unk> six.
Our anti HLA for program and our new <unk>, two antibody drug conjugate Alaska.
In addition to multiple further updates for other programs later in the year.
Before concluding and opening up the floor for questions I would like to reiterate that we will hold our AGM on May 25, and our next innovation series event on November subs will provide further details in the coming weeks and both events.
With that I'd like to thank our shareholders for their continued support.
I'll conclude our remarks and open up the floor for questions.
Thank you.
We will now begin the question and answer session. If you wish to ask a question. Please press star one on one on your telephone and wait for your name to be announced if you'd like to withdraw your question. Please press star one again.
We will now go to your first question.
And your first question comes from the line of <unk> Ahmad from Bank of America. Please go ahead.
Hi, good morning, Thanks for taking my question.
I have one pipeline as it relates to the partnership with Pfizer.
On the <unk> program for first line melanoma.
Can you give us a sense of when exactly this year that data could be presented if it's still this year.
And what level of data, we should expect that the top line and then I have a follow up thanks.
Okay.
Yes, sure. Thank you Tien tsin, I'll start and maybe where you want to add.
We've retained our guidance for an update in the first line melanoma setting for this year.
And we've also we've stated previously and Thats still the case, but our expectation is that the update.
Speak to both or and also PFS.
Is there anything you'd like to add.
Yeah.
Thanks, David.
Thank you.
Okay. Thanks, and then as it relates to her to the ADC program.
This is a relatively competitive space. There is multiple candidates that are in development.
Can you just talk to US about how you think your program could be differentiated.
And how you're thinking about the general competitive landscape and what indications could sir thanks.
Yes, maybe I can take this question.
So.
The generation of Adcs, particularly.
Q provided.
Massive improvement.
On existing existing.
ADC compounds, we believe that this data would improve.
<unk>.
And we also believe that.
And there is room for us.
Multiple lines of development, including Santa too to Corelogic.
Chumash like ovarian cancer endometrial cancer.
What's your positive non small cell lung cancer, but even in India.
In the breast cancer space.
As a component that comes as the differentiated safety profile.
That could cut cut at it.
Safety feature and sort of a <unk>.
I'd like to mention.
We either haven't Postop.
Cool.
Rich.
Five provide data and data generated in our larger breast cancer cohort.
And this data.
Could be informative about how this product could be positioned.
Okay. Thank you.
Yes.
Thank you.
We will now go to our next question.
And the next question comes from the line of Dana Gray Bosch SVP Securities. Please go ahead.
Yeah.
Hi, I have I'll take two questions. The first one I wanted I Wonder if you could talk about the payload.
And doesn't mean 80, sorry in the duality of bio programs and whether you think that this payload will be synergistic with I O as some of the other payloads. If we've seen a late stage clinical trials and.
How whether it's synergy is great or less great how that will impact your development in combination with your other programs and then I have a follow up.
Yeah Dana. Thank you. Thank you for that.
Excellent question actually actually Youre, bringing up a key point by we.
We are interested in.
This adcs.
Hello.
Based on that.
Yes.
<unk> inhibitor and the linker technology is differentiated and providing.
A more stable more stable linker, there's even more reduced.
After swim tennis and release of the top 10.
And yes, the key aspect of bringing in this new compounds classes that we believe that this new compounds would be highly synergistic with our I O.
Pipeline, including the next generation immune modulators and Paas specific anti bodies.
Our personalized vaccines and to expect applications.
Great. Thank you and then my second question is on the flu vaccine and I Wonder how much degree of freedom. There was and is and designing an mrna based flu vaccine and essentially I'm trying to get at how similar or different should we expect the Pfizer beyond tech vaccine from them.
During a vaccine and its.
Outcome.
Okay.
Yes.
So it's all the flexibility to use this <unk> technology, there's a lot of flexibility in it.
Having.
A vaccine.
Differentiated profile as you would know.
There are challenges in the field of influenza vaccines, particularly particularly.
You addressed the question of influenza a.
B immune responses, therefore, I believe that.
The design of this vaccine.
<unk> provides additional teach us.
Ken overcoming limitations in the field.
Okay. Thank you.
Thank you.
We will now go to your next question.
And your next question comes from the line of our cash to Ari from Jefferies. Please go ahead.
Hi, Good morning. This is Ivy ultra harsh thanks for taking all the questions. We have to actually first is for Covid. So far your EU government order or I guess, how many doses have done the work so far because just like I always quality used to suggest there is a lot like 900 million that have been delivered and now it's only showing.
Around 700 million final take Pfizer don't catch starboard, whereas around like 200 million unknown category. So I guess any clarification you can give here will be super helpful.
A lot of questions.
This program.
Yes.
Yes, thanks for the question.
As you know we are currently in discussions with the EU regarding that arena Ashish on the contract and given that we're in the middle of these discussions.
We don't want to give any details on this we don't want to put any burden on those discussion. So please bear with US we expect that we have some more clarity on the discussions in the course of Q2 and that's our expectation and then we're happy to share the results on that.
Negotiations with caution.
Got it. So my second question is for <unk> 'twenty Q supporting melanoma data read all this year I guess you just reiterate that this will be limited to PFS or are there any specific reason why there won't be any watch data does that imply a potential longer Jewish health yourself. Thank you.
I can take this question domestic ovation of the data is most likely.
To generate Oss OSB cost.
Got it thank you.
Okay.
Thank you.
We will now go to our next question.
And your next question comes the line of Chris Shaw Tani Goldman Sachs. Please go ahead.
Thank you very much some clarifying questions in terms of how we should think about.
Your results and financials through the year, if I could the reiteration of the 5 billion euros of guidance can you tell us what does that take into account.
Embedded in your base case assumption here, particularly as I recognize that you have the EPC contract negotiations are going through.
You had mentioned in the second quarter is going to be the lightest, but then the deliveries again in the assumption for the $5 billion through the balance of the year. Similarly to the financials on the R&D related expense you have be outlining for the full year level in the first quarter. It was quite a bit less than we had been expecting I believe consensus as well help us with the ask.
Sort of the cadence and the shape of spending through the year and then I have one other follow up.
Yes, Chris happy to take that question.
And Ryan Wilson.
Yes, maybe starting with the top line guidance.
Right at the guidance that sustained in my speech before.
Before we had a good start in Q1, we believe Q2 and that's not a surprise to you will be weaker I mean, it's not really the season for us.
Explanations as we see it for slow we assume that the development in terms of how people.
People Lucky, we'll get them vaccinated as comparable to some extent to what we see in flu. So specifically looking at the northern hemisphere. So.
Our expectation for Q3 and Q4 is that these will be the two quarters of relevance for us for the full year.
We have of course.
<unk> seen already before we went out with the guidance that the discussions with the EU will be discussions where we might have to face as we stated that when we went out with the guidance that we might have to face some reduction in the total volume for 'twenty three versus what has been negotiated before.
That we might have some other implications in some other countries potentially as well and we tried to reflect that accordingly.
I would like to reiterate that if you compare that defines our guidance.
Point $5 billion.
You could take that I think that'll also reflected those.
Discussions and negotiations ongoing and if you translate that taking into account the.
Currency implications taking into account that Pfizer reflects their December revenue figure.
1022, India Q1 figure and December 2022 has been a very strong months.
We will as we have to reflect this months in our <unk>.
Full year figures for 2022, so we have from January to December our revenue figures with Pfizer for <unk>.
National Park.
Just looking at November till November so.
Cause some difference is quite significant differences in our estimation. If you compare then December 2022 versus our expectation for December 2023. So there was a big impact coming from this and if you then take this into account we feel that the $5 billion that we have reiterated today.
Is it something that we can live with.
It could be that and that has been our assumption that there might be a new variants that we will adapt the existing.
Vaccine that we produce.
Assumption to reach the $5 billion.
Yeah.
Assumption that respect remains pellet at this point in time.
I hope that helps.
And Ryan I would just I would just maybe you can come back as well to the R&D point I'll come back to the R&D.
Just to add two points to that so first is actually the volumes, but we're not disclosing volumes in the first quarter.
We're shipping to quite a broad arrange.
<unk> in the first quarter over 70 countries, we mentioned.
Still some carryover there to pandemic contracts and so as I mentioned in the prepared remarks, we did see.
Some significant volumes in particular to low and middle income countries in the first quarter.
Yes.
Ed on the R&D costs, Chris So the first quarter has been.
Relatively light if you will.
Yes.
The euro that we have.
Booked for Q1.
If you put that into relation of the $2 $42 6 billion of our guidance, but this is.
<unk> extended some some sort of phasing application to a great extent also coming from.
Various programs that we have together with our collaboration partner Pfizer So.
I wouldn't read too much into this.
I would.
We reiterated that guidance. Please also take into account that we have reflected underrun already in there until great extent duality.
Spending for our clinical studies CSO wafers.
We feel comfortable with the $2 40 to $2 six and of course of the next quarters.
And then to follow on Pfizer during their meeting in December outlined their vision for what the <unk>.
Vaccines for Covid could look like usage, particularly in the U S. For the next three or four years. There was a factor in there in terms of potential for combination with flu can you talk to what the buyout in Tech House view is were you involved with these projections if there's any fundamental differences in your point of view where am I.
Yeah.
Yeah.
Yes, thanks for the question.
Yes.
Very involved with Pfizer on an operational level and also on our commercial planning level globally as a co commercialization partner.
Fair to say that Pfizer has taken the driver's seat in the U S.
Commercial sphere, we've been very involved in Europe and also in other geographies.
I think how we look at it is that it's a little too early to be.
Precise and prescribe a factor.
To the contribution from combinations at this point I think we need to see more data I think what we outlined today is that we do see combinations.
Respiratory combination specifically as a potential one of multiple potential growth drivers over the mid to longer term to the franchise. So that is something that we're looking very closely with our partner.
Multiple angles there.
And I think Pfizer brings a lot to the table there, but so do we in terms of thinking about how combinations could be best deployed to meet.
Patient need.
Great. Thanks, we'll look at the data as it progresses. Thank you.
Thank you.
We will now go to our next question.
And your next question comes from the line of well I run of bad <unk> from Cowen. Please go ahead.
Excuse me one is your line muted.
Hello, everyone.
As there was no response I will go to the next question.
Well ma'am please.
And your next question comes from the line of Terence Flynn Morgan Stanley . Please go ahead.
Hi, Good morning, Thanks for taking the question just had a follow up on the <unk>.
<unk> vaccine program I was wondering if you can just discuss high level about how you're thinking about likelihood of success in the adjuvant versus the metastatic setting I think.
Merck and Madonna have focused more on the adjuvant setting, but obviously youre, taking a more a broader approach. So just wondering if you could elaborate there. Thank you.
Yeah I can take the question on the cost.
It's been very important.
And with regard to the developer put it for the development. We had some early adjuvant study in melanoma and we have initiated two additional add.
Such ties and triple negative breast cancer for which we do not yet tests.
And the second one.
In pancreatic cancer, which we have reported at ash last year and that we are expecting application.
The next next few.
<unk> and adjuvant setting the clear understanding that we have as compared to the metastatic setting a higher immunogenicity right.
In each.
Even though using the same same vaccine platform.
And in the end.
The melanoma and and now previously partnered with Patek contact at Kansas Studies have shown that immune responses are.
Currently coordinated this prevention upscale access.
This was a reduced scale.
In this patient population, we have also reported the metastatic studies.
One study.
<unk> unit also immunogenicity back to them.
Much VK extend.
And then <unk>.
Adjuvant setting and based on this.
On this.
This week, we can clearly say that at least in the in the in the setting and the setting how the vaccines are used so far have you see we see an improved activity in that state.
What reasons by adjuvant stage cancer could be more eligible this is assessed of or the lack of food.
Heavily aesthetic tumor micro environment, the lower two myeloid and most importantly in the adjuvant setting.
Is that we know of.
Q&A P. So the tumors do not forecast in the first.
Six two.
In the first three months, giving the opportunity to build an immune response.
<unk> done deals as the tumor so.
So technically we believe that the adjuvant stage stage is.
Type of diseases to go we have as.
As you know.
Randomized clinical trial in colorectal cancer.
Since.
2019 to expect.
Expect here read out data from this randomized colorectal.
In 2024.
We are planning.
Phase III study based randomized phase two study in pancreatic cancer based on the data that we have obsessed.
Thank you.
We will now go to our next question.
And your next question comes from the line of John Barber of Cowen. Please go ahead.
Great. Thanks, so much hopefully you can hear me.
I've got a quick question on.
Pfizer's in your flu vaccine.
161, the 25000 patient I'm, sorry U S. Healthy adult study is ongoing any sense as to when you think we might be able to see data. This year is it are you thinking sort of it in the fall and is that sufficient to file as we need to run an additional study potentially.
In the rest of the world or even in the southern Hemisphere, and then secondly, my understanding that's the quadrivalent modified RNA vaccine any any update on the self amplifying mrna vaccine for flu as well. Thank you.
Yes, you're right I'll start and debris you may want to add to this but I think just to start off it's important to reiterate that we've licensed that program since 2018 to Pfizer so they're really in the driver's seat in terms of development.
We do have.
Rights to royalties and milestones upon success and so of course, we are tracking that with them and working with them on the broader program, but.
I think Pfizer has guided to an update this year I don't think they've specified in that we don't want to we don't want to contradict what they put out so I'll leave it at that.
Yeah.
Yes.
And the same goes you Ron for the self amplifying.
Graham both our fall under our collaboration agreement with Pfizer.
So Ryan maybe just a follow up when when for the Fluke Covid combo is can you give us any sense at all as to whether your royalty is going to be sort of a blended between your low teens lets say for flu and your 50 50 for Covid. Thank you.
Yes, it's a great question I think blended is the right way to think about it we haven't disclosed with Pfizer.
The specific economics, but I think it's fair to assume that would be a blend as you know we have a 50% gross profit share on.
COVID-19 vaccine.
And we do have a royalty on flu and so.
There are still ongoing discussions about that but.
I think I think we'll leave that for now until.
We can present, some data and discuss next steps for the program.
Yes.
Thank you.
We will now go to your next question.
And your next question comes from the line of Jessica Fye from Jpmorgan. Please go ahead.
Hey, guys. Good morning. This is <unk> on for Jessica Fye.
I think I want to ask about the fixed back program and the progress there and when we might.
Get to see initial data on that program.
And then the weather like in light of the comment on Ah <unk>.
Metastatic versus adjuvant setting how youre thinking about the development for fixed back. Thanks.
Yeah.
Hi.
Maybe I take the second question if you could take the first question would be great.
So for <unk>, we have some we have.
Generated data in the metastatic setting in patients.
This.
<unk>.
In melanoma, particularly with a high proportion of patients towards that.
Cash.
Existing PD one therapy.
Sin.
Objective responses.
Higher rate of Immunogenicity, Jeff this responses in combination with anti PD, one in the range of 35% to 40%.
<unk> seen that loan in the in the range of 20% the key advantage of expect as compared to desktop.
The antigen vaccine.
Is the.
And then the ability of the vaccine.
After after patient patient inclusion so that means we need to in our path to support the six speaks.
Beijing time until patients can be dosed. Therefore in principle six back could be could be an option for patients.
Advanced metastatic disease, but again here, it's a question of the combination compounds.
And this is something that is now and the focus of our our upcoming studies.
The use of.
<unk> in combination with our <unk>.
Checkpoint immune modulators for example, the bi specific.
BMT suite, Bath, MP, MTP, 11 molecules, but as well as our.
Hi, Beau cytokine molecules modified IL two is about <unk>.
<unk>.
Yeah and in terms of the timelines, we haven't guided to any <unk> updates this year.
So I haven't seen the 'twenty 'twenty four is the most likely.
As you know we have multiple trials ongoing multiple trials so recruiting.
And as you'll see in refractory melanoma.
Squamous cell carcinoma, the next year.
Yeah.
Likely 2024.
Thank you.
We will now go to your next question.
And your next question comes from the line of Bill Mcgoey from Canaccord. Please go ahead.
Good morning, and thanks for the question. So I have two on the broader strategy. So.
First of all some of the more recent.
The partnerships are focused more on late stage clinical programs and less on.
Massive paradigm shifting earlier stage program. So is there an internal push to reach profitability on some certain.
Timeline on the non Covid portfolio and then second related question is are there any other technology platforms that you want to get into that you don't have that technology yet. Thank you.
Yes. Thank you so maybe I'll take the first one and then you want to speak to the technology platforms piece.
Yes sure in terms of the in terms of the rationale for the recent recent deals.
I think what we have been as clear about our intention to.
Dow commercial oncology portfolio by 2026 onwards, so we have multiple internal programs, but.
If successful in late stage trials could give us opportunities around that time period.
To bring products to market and so what you've seen us do with these BD deals.
Is basically add depth further depth to that sort of wave one of oncology programs that have potential and successful to get to market around that same timeframe. In addition, we've gone for programs.
<unk> service backbones. So we've really we've really tried to maximize synergy rather than solving for profitability near term.
Mid to long term synergy with our own pipeline.
So you see that with the anti <unk> four molecule you see that also with the her two ADC with EDC.
Modality in general.
Again.
Programs and technologies that we think could combine very well with our existing pipeline.
Okay.
Yes.
Thank you our clients with regard to protect noninterest no. We are not looking to any disruptive technology. They have a number.
Disruptive technologies in house, that's what we are clearly doing is if we are.
Evaluating evaluating technology modules.
It could close gaps in our or.
Technology technology platforms are further augment activity of our technology platforms.
Thank you.
We will now go to your next question.
And your next question comes from the line of Chi Tsang shoe from Diamondback. Please go ahead.
Thanks, very much for taking my questions I have two.
First I wanted to ask you about the fixed back won't BMT 116.
You mentioned, you're going to start a phase two programs and first first line lung cancer.
Wonder if you can comment on any signals from phase one that gives that gives you the confidence to start a phase III.
Yeah.
Short answer.
We do not have any updates so far from the from the running clinical tire that is expected to enter service.
Yes.
Got it and then a quick follow up on the.
Your ADC.
The deal can you talk about the the rush I guess the comparison in top a tough one.
<unk> versus <unk>.
As payload inhibitors payload in terms of the combination with IL.
Differences and similarities there.
Yeah, Ron Ron.
I think the most important aspect is tough.
In ADC technology is that we believe that.
In the next.
Six seven Ats.
ADC technology is.
More or less complete.
Complete the.
Replace chemotherapy, so that means any type of combination therapy, which require a class Cmos have IP backbone.
Mike might end up in <unk>.
ADC ADC approach because we got to do.
So the current evaluated compounds and top of <unk> inhibitors.
Vis a vis vis.
If there's a pulse.
Allowing.
Dana.
So long term long term application and we have also seen now in several studies that they are.
Ideally it should hit.
Backbone for combinations.
I O compounds, we do not.
Exclude that.
Ill be quick.
Might be also interested in microtubule inhibitor.
But several of the sniper <unk> inhibitors have been in the past at least in that shipments are quite exciting.
Associated with putting novel.
Pay case, and we believe that this new compound cash should give us the opportunity to develop.
Develop treatments, which do not come this.
Dose limiting toxicity.
We got to repeat that application.
Thank you.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
[music].
Okay.
[music].
Okay.
[music].