BioNTech SE

NASDAQ:BNTX

Earnings Call Transcript 2020-Q4

[Operator]

Good day and thank you for standing by. Welcome to BioNTech's Corporate Update and Financial Results Fourth Quarter and Full-Year 2020 Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised, today’s conference is being recorded. [Operator Instructions]

Now I’d like to hand the conference over to your first speaker today, Sylke Maas, Vice President, Investor Relations and Strategy. Please go ahead.

[Sylke Maas, Vice President, Investor Relations & Strategy]

Thank you. Good morning, and good afternoon. Thank you for joining us today to review BioNTech's fourth quarter and full year 2020 operational progress and financial results. Before we start, we encourage you to view the slides for this webcast, as well as the operational and financial results, press release issued this morning, both of which are accessible on our website in the Investors section.

As shown on slide 2, during today's presentation, we will be making several forward-looking statements. These forward-looking statements include, but are not limited to our current estimate COVID vaccine, revenues based on current contracted supply orders, expenses, expenditures and tax rate for 2021. Our target vaccine production capacity for 2021, our COVID-19 vaccine revenues, which are subject to numerous estimates, as more fully described in our Annual Report in Form 20-F, the ability of BioNTech to supply our COVID-19 vaccine, the planned next steps in BioNTech's pipeline programs, the timing for enrollment initiation, completion and reporting of data from our clinical trials, other risks described in our filings made with the US Securities and Exchange Commission, including our most recent Annual Report on Form 20-F.

Actual results could differ from those we currently anticipate. You are, therefore cautioned not to place undue reliance on any forward-looking statements, which speak only as of today, shared today during this conference call and webcast. Also please note that slide three provides details and important safety information regarding our recently launched COVID-19 vaccine.

On the call from BioNTech management today will be Ugur Sahin, our Chief Executive Officer and Co-Founder; Özlem Türeci, our Chief Medical Officer and Co-Founder; Sean Marett, our Chief Business and Commercial Officer; Sierk Poetting, our Chief Financial and Operating Officer; and Ryan Richardson, our Chief Strategy Officer.

I’ll now hand the call over to Ugur Sahin, BioNTech's, CEO.

[Ugur Sahin, Chief Executive Officer and Co-Founder]

Good morning and good afternoon, and thank you to everyone joining the call today. I'm delighted to be here to discuss the progress that we made in 2020, and I would like to introduce the important milestones we have planned in 2021 and beyond.

Slide 5. One year ago, the whole world was witnessing the rapid spread of the SARS-CoV-2 virus. At BioNTech, we made an early decision in January last year to tackle the virus head-on. We utilized a powerful mRNA vaccine platform and our deep immunoengineering competencies we have been developing for over a decade. The - this early decision and enormous amount of work and energy that followed it resulted in a highly-effective vaccine in less than a year.

Now one year later, we are already seeing the first signs of positive impact that vaccines are having in reducing infections, hospitalizations and mortality. Our work against COVID-19 is not finished. In today's presentation, I will summarize what we are currently doing and what will come next.

Turning to Slide 6. 2020 has literally transformed BioNTech. Our COVID-19 vaccine has now been authorized for use in more than 65 countries, with more than 200 million doses having been supplied as of March 23rd. During the fourth quarter of 2020, we recognized our first commercial product sales. This is a major milestone, given the considerable investment in research and development, which we have made over the past 10 years.

We are now a fully integrated biopharmaceutical company. We have built a sales force in Germany and we have built global commercial scale manufacturing capacity. We expect to be able to produce up to 1 billion doses of our vaccine in 2021 in BioNTech’s own manufacturing network. Our Marburg facility has made remarkable progress since we acquired it and will be ramping up production in the second quarter.

Despite COVID-19 being the spotlight last year, we made progress in advancing our oncology pipelines. We now have 13 oncology product candidates and 14 ongoing trials across four different drug classes. Many of these products demonstrated promising activity in Phase 1 clinical trials and we plan to initiate multiple Phase 2 trials this year.

We recently started first-in-human trials for our CARVac product, BNT211, and for our RiboCytokines product BNT151. Further, we are advancing our first wave of product opportunities towards the market. We expect up to three product candidates, including our mRNA cancer vaccines and our lead bispecific antibody, will be entering into randomized Phase 2 trials by the end of this year.

Ultimately, the core of our success is our employees. We have built a global footprint with establishment of our U.S. research and development hub and we have increased our workforce to over 1,900 employees worldwide. I want to again thank our employees for their tremendous efforts during a challenging and exciting year.

Moving to Slide 7. I want to highlight some key takeaways for us as we reflect on 2020. First, it became clear that our mRNA pharmaceuticals have a great potential to address major health challenges. While the first generation of our mRNA vaccine technology has already proven to be powerful, we are working on rapid iterations to further improve this new class of products.

Our mRNA approach is not based on a simple technology. Our way of developing novel technologies is not based on the idea of a single-trick pony. Rather our goal from the very beginning was to build a novel industrial approach for precision pharmaceuticals that can address medical needs in multiple disease areas.

We did more than a decade long research to develop a broad toolbox of mRNA technology platform. Each of these technology platforms is tailored and optimized for potency and immunological precision to enable the development of best-in-class product candidates for various disease areas.

Second, we believe that mRNA will revolutionize the field of immunology, and BioNTech is well-placed to continue to lead the revolution given our board technology-based vast IP portfolio and the deep know-how in the field. We intend to increase further our investment in the space given the tremendous opportunity we see.

In addition, we learned from our COVID-19 experience that product development can be faster. We intend to apply the capabilities and learning to develop during the Project Lightspeed to rapidly advance our pipeline products towards the market.

And finally, we learned that our collaboration model works. Our focus on innovation and our strategic partnership with powerful collaborators like Pfizer has helped us not only develop products in record time, but establish an early market-leading position. We intend to continue to leverage our strategic partnerships by building our own capabilities in long-term.

As depicted on Slide 8, we see a great opportunity ahead. We will accelerate the development of our innovative pipeline and expand the number of product candidates and indications we pursue.

Our goal is to launch several additional products in oncology and infectious disease here over the next five years. And long-term, our long-term goal remains to build a 21st century global immunotherapy powerhouse, developing products for multiple disease areas. Later in our prepared remarks, Ryan will provide some more detail into the steps we are taking to realize this vision.

Moving to Slide 9. mRNA vaccines are now established as a powerful new drug class. On the back of this validation, we intend to rapidly industrialize our mRNA technology. We believe mRNA vaccines are poised in the near-term to this place of complement traditional modalities in a range of infectious diseases and in the field of immuno-oncology. The proceeds from our COVID-19 vaccines will allow us to accelerate our pipeline development in this core area.

Longer-term, we see applications for the technology in the field of autoimmune diseases, allergy, inflammatory diseases, and even regenerative medicine. We have established early research program at BioNTech in this research area, and we plan to significantly ramp up the effort in the coming years.

Primarily it is important to point out that our ability to industrialize mRNA technology is linked to the deep expertise and know-how we have built over the course of more than a decade. It is also underpinned by our board IP portfolio covering our platform product candidate and often the target and formulation for use.

Now moving to Slide 11, the strong clinical result first for our vaccine in our global Phase 3 trial were a clear highlight in the fourth quarter. The study result demonstrated that our vaccine can prevent symptomatic COVID-19 with a well-tolerated safety profile. BNT162b2 demonstrated 95% efficacy in our trials with approximately 44,000 participants, including 94% efficacy in participants older than 65 years.

The safety profile was favorable with a low frequency of Phase 3 adverse events and mostly typical, vaccine related side effects. Key characteristics of our vaccines are both immunogenicity profile that is poly-epitopic and multi-effector. The vaccine induces high titers of neutralizing antibodies. Th1 type CD4 T-cell responses, and robust CD8 T-cell responses. We believe all of this factors contribute to the protection conferred by our vaccine.

Turning to Slide 12. We recently announced first real-world evidence data supporting the clinical profile of our vaccine. This exciting news comes from an observational analysis conducted by the Israeli Ministry of Health between January 17 and March 6 2021.

During this time, our COVID-19 vaccine was the only vaccine available in the country. Specifically, the data from Israeli shows that two weeks after the second dose vaccine effectiveness was at least 97% in preventing symptomatic disease, severe and critical disease, hospitalization and death.

The analysis also showed a vaccine effectiveness of 94% against asymptomatic SARS-CoV-2 infections. At the time of the Israeli study, the UK variant B.1.1.7 was the dominant player in the country, indicating the likely effectiveness of our vaccines against COVID-19 costs by this variant.

In this context, it is important to point out that in vitro data also supports our COVID 19 vaccines efficacy against several variants. We have published data in the New England Journal from in vitro studies of our vaccine neutralization activity against three different variants. In these studies, we have neutralized all the viruses tested and showed no significant reduction in activity against B.1.1.7 and P.1-spike virus. The neutralization of the South African variant B.1.351-spike virus was lower, but it was still robust. In addition to this in vitro testing, we are continuing to monitorily abort [ph] efficacy against several emerging variants.

As outlined to Slide 13, we anticipate that COVID-19 may become an endemic disease over the next few years. We already see evidence that immune responses in vaccinated individuals wanes over time. This is not surprising, indicating that re-boosting may be required.

In addition, there is a growing body of evidence shown that new variances, antibody escape mutations are driving new infections in many regions. As a result, we believe that there is likely a future need for additional vaccine boosters, and potentially also variant specific vaccines.

Due to their ability to be rapidly designed, customized and rapidly produced at scale, we believe that mRNA vaccines are well-suited to play an important role in addressing the next stage of the disease.

Expanding both access to BNT162b2 remains a key focus for us, as shown on Slide 14, we highlight here six key levers to expand BNT162b2 reach. The first is supply. We have increased our supply targets for 2021 to 2.5 billion doses. This will require further process improvements and further expansion of our supplier and CCM owned-network. But we believe we are on track to achieve this.

Continuing to bolster [ph] our vaccines label is also a key priority. We have extended our clinical program to additional vulnerable populations such as pregnant women, in particular resource participants for those in global Phase 2 trials in healthy pregnant women. The study will record 4000 capacity pregnant women 18 years of age or older during the 24th and 34 weeks of gestation.

Another important pillar is our pediatric test. We plan to submit the safety and efficacy data in 2000 children to up to 15 years of age from the suit trial to the regulatory authorities in the second quarter. Another study in healthy children six months to 11 years of age has started. We are also planning further studies in individuals with compromised immune system.

Another key level is geographic expansion. Our vaccine has now been approved for emergency or temporary use or granted conditional marketing authorization in more than 65 countries and we are moving in additional regions.

In Japan, a Phase 1 clinical trial started in October to evaluate our vaccines activity in adults of 20 to 85 years of age. In February, Japan Health Ministry approved BNT162b2 under the exceptional approval scheme.

Last November, a Phase 2 clinical trial of our vaccines started in China to evaluate BNT162b2 in healthy individuals up to 85 years of age. We now have initiated the regulatory submission process in Mainland, China. And I hope to be able to provide an update soon.

We are working to broaden access and even more than centralized approach to vaccine provision. While antivirus 2b2 is available in the US under emergency use authorization we are preparing BLA filing in the second quarter for full regulatory approval. Further regulatory submissions in other regions are also expected.

Stability and formulation testing and optimization work remains another key focus. Over the past few weeks. The US FDA and EMA approved a update that undiluted frozen [ph] virus of our vaccine may be transport and start at minus 25 degrees celsius to minus 15 degrees celsius for a period up to two weeks. We expect additional stability profile updates over the next few months.

We are also developing ready-to-use and lyophilized formulation with improved term of stability profiles. We are fast tracking development of the ready-to-use formulation and do not currently expect additional clinical studies to be required for this formulation.

For the lyophilized formulation, we announced today that we will start a prior to evaluate the safety tolerability and immunogenicity of this formulation. We expect data from this trial in Q3 or Q4 2021.

Antibody responses been over time, to address the veiling [ph] of immune responses we are awaiting the safety and immunogenicity of a third dose of our vaccine. The aim of this pilot to understand the effect for booster to prolong immunity against COVID-19 caused by the circulating and potential newly emerging first cost to variants.

As mentioned, today, there's no evidence that an adaptation of our current vaccine against key identified emergent variants is necessary. Despite this, we have developed a comprehensive strategy to address these variants should the need arise in the future.

In March 2021, the FDA approved an additional amendment to the study protocol of the global Phase 1/2/3 trial to included for a third dose of BNT162b2 or a third dose that is modified version of the vaccine carrying the spike protein sequence to so called South African variant in order to further describe duration of protection, and protection against potential emerging variants of concern.

An additional group of BNT162b2 naïve participants will be enrolled and receive two doses of the South African variant vaccine version to discuss protection against emerging variants of concern against this reference spread. The part of this variant is expected to start by the end of March.

I will now turn the call over to Sean to provide an update on our COVID-19 manufacturing and commercial supply status.

[Sean Marett, Chief Business and Commercial Officer]

Thank you, Ugur. Slide 15 shows flexible manufacturing process about COVID-19 vaccines. We can go from DNA production to sterile filtration and filling in its period nine to 13 days. Although 50,000 steps [ph] are required from manufacturing the mRNA to the bulk drug substance, the overall manufacturing from DNA template to program [ph] finish can be done in less than two weeks. Following production, quality control and release can take another four to five weeks, and then we are ready to deliver the vaccine.

One of the advantages of our mRNA technology is that it allows a rapid adoption of the vaccines to variants. Unlike traditional vaccine production, we can adapt our manufacturing to encode a new variant if needed, simply by providing a DNA template which encodes [indiscernible] of the new variant. This can be done within a couple of weeks and without the need for new scale up of the overall process and pending regulatory approval.

Another advantage I would like to point out, we can increase or decrease manufacturing quantities with a short lead time. Thus our manufacturing technology provides us with the flexibility to respond to market demand.

Moving on to Slide 16, we have firm orders 1.4 billion doses to date. Recently, we announced that the United States have exercised its option for an additional 100 million dosage, bringing the total to 300 million doses.

We also announced that the EU will be supplied with an additional 200 million doses with an option for an additional 100 million further doses. This brings the total number of doses to be delivered to the EU member states by the end of 2021 to 500 million, with the potential to increase further up to 600 million doses. Discussions for additional commitments worldwide are ongoing.

Beyond [indiscernible] prices initial goal was to manufacturer up to 1.3 billion doses in 2021. But we've been able to increase our target capacity to up to 2.5 billion doses for the year. The increase was driven by a number of factors including the increase from five to six doses per vial, additional supplies in CMOs, continuous excess in process optimization and initiation of production at our Marburg facility.

On March 26, we announced that the EMA approved the manufacturing of the COVID-19 vaccine drug product at the facility in Marburg. The approvals make BioNTech’s Marburg manufacturing site one of the largest mRNA vaccine manufacturing sites worldwide with an annual production capacity of up to 1 billion doses of our COVID-19 vaccine, once fully operational.

Due to optimized operational efficiencies which were initiated last year, we were able to increase the expected annual manufacturing capacity by 250 million doses. The first batches of vaccines manufactured at the Marburg site are expected to be delivered in the second half of April. The plan to produce up to 250 million doses of BNT162b2 in the first half of 2021.

Lastly, we have taken our first step in executing our commercial strategy for our COVID-19 vaccine in Germany and Turkey. While Pfizer is responsible for the rest of the world outside of China. This is the first time that BioNTech has commercialized the product from its pipeline.

I’ll now turn the call over to Ozlem to provide an update on our quality pipeline.

[Ozlem Tureci, Chief Medical Officer and Co-Founder]

Thank you, Sean. And hello, everyone. As usual, and in the interest of time, I'm going to provide updates on selected programs. For further details on the status of our other oncology programs, please refer to our annual report which is being filed with the US Securities Exchange Commission today.

As to be expected, we have continued to see some ongoing impact from the COVID-19 pandemic on our clinical operation. Specifically, there has been a slowdown in the enrollment in some of our ongoing studies. Despite these constraints, we expect to present several data sets and initiate multiple new trials this year.

Slide 18 outlines our immune oncology strategy. Our strategy is based on several first-in-class therapeutic approaches to target cancer to modulate the immune response. The programs address a broad range of cancers in different disease stages.

Of our six technology platforms have all reached clinical stage, by now with 13 clinical stage product candidates. We see multiple blockbuster opportunities and the potential for synergistic combination.

Our later stage programs are shown on Slide 19. Starting with the BNT111, our FixVac product candidate for the treatment of advanced melanoma, we expect to start a randomized Phase 2 trial in the US and EU in the first half of 2021. The trial will evaluate BNT111 in combination with Regeneron, Libtayo [indiscernible] BNT111 and Libtayo monotherapy in patients with advanced melanoma progressing during or after prior therapy with a PD-1 inhibitor.

In February, we received permission from FDA to move forward with the trial. The next FixVac product candidate is BNT113, our mRNA vaccine encoding E6 and E7 proteins of human papillomavirus 16. We expect to start a Phase 2 trial evaluating BNT113in combination with pembrolizumab versus pembrolizumab monotherapy as a first-line treatment in patients with unresectable recurrent or metastatic HPV16 positive head and neck squamous cell carcinoma, expressing PD-L1 in the first half of 2021 in the US and EU.

BNT113 has not been combined with anti-PD1 before and the Phase 2 trial will start with a run in portion designed to demonstrate the safety of the combination of BNT113 and pembrolizumab. These data are required to address the partial clinical hold on the subsequent randomized part of the Phase 2 trial.

Moving to our individualized neoantigen specific immunotherapy or iNeST platform which is partnered with Roche, Genentech. Our iNeST product candidate BNT122 has been given the international non-proprietary name autogene cevumeran. The Phase 2 trial in first-line melanoma and the Phase 1 basket trial in solid tumors remain ongoing. Data updates are not expected for these trials this year.

We along with Genentech has made a strategic decision to discontinue the previously planned Phase 2 trial in patients with high-risk resected early stage non-small cell lung cancer, given challenging approval [ph] timelines in the context of results caused to pandemic and the evolving landscape of treatment options. We and our partner Genentech are evaluating other options for treating early disease cancer patients with iNeST [ph].

One of these early disease development options in the adjuvant testing is colorectal cancer. We expect to dose the first patient in the first half of the year in a randomized Phase 2 trial evaluating BNT122 in circulating tumor DNA positive, surgically resected Stage 2 high risk or Stage 3 colorectal cancer. We strongly believe that iNeST could be best positioned in the earlier stage or adjuvant setting in minimal residual disease setting/.

Moving to our next-generation checkpoint immunomodulators program, which is partnered with Genmab. We expect to present a data update in the second half of 2021 for the first-in-human Phase 1/2 trial of BNT311, also called GEN1046. BNT311 conditionally targets PD-L1 and 4-1BB and has the potential to be first in class.

Given the unmet need for improved checkpoint immunotherapies, we remain very encouraged by the results presented at last year's SITC [ph] conference and seen to date and believes the product has significant potential across multiple oncology indications. We look forward to moving this program forward with Genmab.

For BNT312, which conditionally targets CD4 Gen 4-1BB, we plan to present data from the ongoing Phase 1/2 trial in the second half of 2021. In addition, an extract [ph] highlighting preclinical data for BNT312 has been accepted for presentation at the upcoming ASCR meeting. The abstract [ph] describes the mechanism of action of conditional CD4 and 4-1BB activity to induce dendritic cell maturation and enhancement of T-cell activation and effector function.

Slide 20 provides an overview of programs across four different technologies that has the potential to advance innovation beyond current boundaries [ph] We are pleased to announce that from our CAR-T technology, our first CARVac product candidate has entered clinical testing. We dosed the first patient in a first-in-human trials in February for BNT211. I will discuss this program in detail shortly.

In the first half of 2021, we also expect to dose our first patient with BNT221, the first product from our NeoStem T Cell therapy program, which features adoptive transfer of individualized neoantigen specific autologous T cells. This Phase 1 dose escalation trial will evaluate the safety immunogenicity and efficacy of BNT221 in patients with checkpoint inhibitor refractory or unresponsive metastatic melanoma.

I am also pleased to report that the first patient was dosed in the Phase 1 trial in solid tumors in February for BNT151, our first RiboCytokine to enter clinical testing. I will also discuss this program in greater detail shortly.

For BNT152 and BNT153 in combination, our second RiboCytokines program, a Phase 1 trial in multiple solid tumors is expected to start in the first half of 2021. The BNT152, plus BNT153 IND for the Phase 1 trial in the US was approved by the FDA end of February, as our RiboCytokine, also our RiboMab, BNT141 and BNT142 are intravenously administered immune therapies with RNA-encoded proteins expressed in the liver and deployed into the vascular compartment to reach [ph] therapeutically active cell and concentration. Phase 1 trial with our first RiboMab in multiple solid tumors are expected to start in the second half of 2021. The FDA recently allowed our BNT141 IND.

Starting with Slide 21, more details to BNT211, the first clinical stage product candidate from our engineered T cell program which is expected to overcome Car t cell therapy barriers that restrict the efficacy and the widespread [ph] use of Car t cell therapies, particularly in patients with solid tumors.

BNTP211 consists of two components. One is another chimeric antigen receptor functionalized with an antibody derived claudin 6 binding domain with exclusive specificity and high sensitivity for claudin 6. Claudin 6 is an ideal candidate for Car T cell therapy due to its absence in healthy adulttissue, while high medical need cancer frequently show expression of its tumor antigen.

The second generation CAR scaffold also includes a co-stimulatory domain 4-1BB, which we believe may be a prolonged survival and the repetitive killing ability of engineered CAR-T cell. In preclinical studies BNT211 demonstrated strong recognition [indiscernible] of claudin 6 positive target cells.

As shown on Slide 22, the second component of BNT211 is a CAR-T cell amplifying our new vaccine named CARVac. We use our proprietary RNA- lipoplex technology known from FixVac studies to encode full length claudin 6, namely the CAR-T target.

Following intravenous administration of RNA- lipoplex the mRNA is specifically delivered to antigen presenting cells residing in secondary lymphoid organs. This mediate expression of claudin 6 on the surface of those specialized cells. Thus claudin 6 is recognized by adoptive [indiscernible] for its CAR-T cells in the lymphoid compartment that provides some ideal context for strong stimulation of these engineered T cells.

Repetitive administration of CARVac allows for control in liver expansion to keep the frequency of Car T cells on therapeutic levels. That expansion also results in increased persistence and superior functionality of Car T cells, which acquire the memory phenotype in preclinical models.

We are optimistic that our CARVac approach allows to overcome key challenges related to Car T cell therapy, which includes severe toxicities, restricted trafficking to and activation within tumors, as well as suboptimal persistence in weevil [ph] This is an excellent example for the potential of our therapeutic modalities for synergistic combinations.

Slide 23 shows the trial design for BNT211. The Phase 1 trial will recruit patients with claudin 6 positive relapsed or refractory advanced solid tumors. But one of the trial is the dose escalation of claudin 6 Car T cells is monotherapy, while part of the trial is the combination of claudin 6 Car T cells with claudin 6 CARVac. Once a maximum tolerated dose or recommended Phase 2 dose are determined dose expansion cohorts, with solo [ph] in ovarian, testicular, endometrial, non-small cell lung, and gastric cancer.

Initial Phase 1 data from this trial is expected in the second half of this year. The clinical material of this trial is manufactured at our GMP certified IMFS [ph] facility in [indiscernible] Germany, which has extensive cell and gene therapy manufacturing capabilities.

Our RiboCytokines on Slide 24 are another example for another class of RNA based therapeutics from our immune oncology pipeline designed to address the limitations of current therapeutic approaches. Major challenges associated with the therapeutic use of cytokines relate to their short term half [ph] life and low bio availability. This impedes therapeutic efficacy and necessitates high and frequent dosing, which often results in dose limiting toxicities.

Encoding cytokines by mRNA and producing them in the patient addresses these shortcomings. The right side of the slide describes our first RiboCytokine candidate, BNT151, which has entered clinical testing. BNT151 is a nucleoside-modified mRNA that encodes and optimize interleukin-2 fusion protein. IL-2 is a key cytokine in T cell immunity, supporting differentiation, proliferation, survival, effector functions. The drug design is optimized to improve pharmacokinetic properties with an increased total ability and activity of IL-2. Importantly, BNT151 has been designed to stimulate anti-tumoral T cells without triggering [indiscernible] cells.

As shown on Slide 25, the ongoing Phase 1 trial in solid tumors with no available standard therapy features monotherapy in combination therapy dose escalation, BNT151 will be combined with anti PD-1 or other standard of care in cancer types such as squamous cell carcinoma of head and neck, hepatocarcinoma [ph] renal cancer TNBC [ph] and non small cell lung cancer. While the product I just featured, are RiboCytokine and RiboMabs are mRNA based approaches, they quite obviously differ one from another and from the version of our mRNA technology used for creating the first COVID-19 vaccine. Again, demonstrating the high diversification of our mRNA platform and the [ph] many years of know-how development that went into it.

I will now hand the call over to Sierk to provide an update on our financials.

[Sierk Poetting, Chief Financial and Operating Officer]

Thank you, Ozlem. I will summarize our financial results for the fourth quarter and full year 2020 as shown on Slide 27. I will start with the total revenues, which were estimated to be €345.4 million for the fourth quarter of 2020 compared to €28.0 million for the fourth quarter of 2019.

For the full year of 2020, total revenues were estimated to be €482.3 million, compared to €108.6 million for the full year of 2019. Total revenues increased due to the recognition of revenues under our new collaboration agreements signed with Pfizer and Fosun Pharma, as part of our vaccine program against COVID-19.

Newly generated COVID-19 vaccine commercial revenue significantly drove our total revenues. As a reminder, under the Pfizer collaboration territories have been allocated between the companies based on marketing and distribution rights.

A breakdown of our commercial revenues is shown on Slide 28. Our 2020 commercial revenues comprise an estimated amount of €188.5 million share of gross profit from COVID-19 vaccine sales in the Pfizer territory. Please note, this is a next [ph] figure. Additionally, as it will be detailed in our annual report filed with the SEC. This figure is only estimated based on preliminary data shared between Pfizer and us and may be subject to adjustments as they receive final data on input parameters like sales and transfer prices. Changes in our share of the collaboration partners gross profit will be recognized prospectively.

Our COVID-19 vaccine commercial revenues also include €61.4 million sales to our collaboration partner or product manufacturer by us and €20.6 million of direct COVID-19 vaccine sales to customers in our territory Germany.

Now returning to Slide 27, and moving to cost of sales, which were estimated to be €41.0 million for the fourth quarter of 20202, compared to €4.4 million for the fourth quarter of 2019.

For the year of 2020, cost of sales were estimated to be at €59.3 million, compared to €17.4 million for the prior year. The increase was driven by estimated €35.6 million cost of sales, which were recognized for the first time with respect to our COVID-19 vaccine sales and include Pfizer's share of gross profit earned by us. Note that cost of sales do not include costs related to the production of pre-launch products since those are expensed as R&D expenses in the period incurred.

R&D expenses were €257.0 million for the fourth quarter of 2020, compared to €65.4 million for the comparable period in 2019. For the full year of 2020, R&D expenses were €645.0 million, compared to €226.5 million for the full year of 2019.

The increase was primarily due to an increase in R&D expenses related to our BNT162 program. R&D expenses include our share of expenses under the terms of the Pfizer collaboration agreement. As a reminder, development costs are equally shared between the two companies.

Higher expenses for purchase laboratory supplies as well as an increase in headcount leading to higher wages, benefits and social security expenses contributed to the increase. And in addition from the date of acquisition our US-based subsidiary, BioNTech US Inc., also contributed to our R&D expenses.

G&A expenses were €36.1 million for the fourth quarter of 2020, compared to €11.1 million for the comparable period in 2019. For the full year of 2020, G&A expenses were €94.0 million, compared to €45.5 million for the prior year period. The increase was mainly due to higher expenses for professional services, an increase in headcount leading to higher wages, benefits and social security expenses and higher insurance premiums. In addition, from the date of acquisition our US-based subsidiary, BioNTech US Inc., also contributed to our G&A expenses.

Following the authorization of approval of our COVID-19 vaccine for emergency or temporary use or having been granted conditional marketing authorization, the recognition of deferred tax assets was reevaluated. As of December 31, 2020, net deferred tax assets with respect to the accumulated tax losses and temporary differences of the German tax group were recognized with €161.0 million income tax effect.

For the fourth quarter of 2020 we showed a net profit of €366.9 million. This compared to a €58.2 million net loss net loss for the fourth quarter of 2019. For the full year of 2020, we're also profitable showing a net profit of €15.2 million, compared to €179.2 million net loss from the prior year period.

We ended 2020 with cash and cash equivalent of €1.2 billion, as a result of successful financing transactions in 2020 which strengthened our position for the execution of our strategy which will be accelerated by 2021 growth.

Now moving to Slide 29, that outlines our 2021 financial outlook. Based on the current contracted supply orders of approximately 1.4 billion doses, we are providing estimated COVID-19 vaccine revenues to BioNTech of approximately €9.8 billion. This estimate reflects expected revenues from direct COVID-19 vaccines sales to customers in our territories, expected revenues from sales to our collaboration partners, expected sales milestone payments from our collaboration partners and expected revenues related to our share of gross profit from COVID-19 vaccine sales in the collaboration partners’ territories. We expect additional revenues related to further supply contracts for deliveries in 2021.

I would like to point out again that we have raised our manufacturing capacity targets from 2.0 to 2.5 billion doses for the full year 2020 to be able to address increased demand.

In terms of guidance for the full year 2021 we expect R&D expenses to incur in the range of €750 million to €850 million for the full year 2021, reflecting our aspirations to broaden and accelerate our pipeline development which we plan to ramp up, especially in the second half of 2021.

SG&A expenses are estimated to rise up to €200 million. Capital expenditures for the year 2021 are expected to be in the range of €175 million to €225 million. I would like to emphasize that all these figures reflect our current base case projections.

Finally, please note that in terms of full year 2021 tax impact we expect the German tax group corporate tax rate of approximately 31%. We have approximately €450 million accumulated tax loss carry-forwards with respect to the German tax group as of December 31, 2020.

And with that, I turn the call to Ryan for concluding remarks.

[Ryan Richardson, Chief Strategy Officer]

Thank you, Sierk. Turning to Slide 32 to our 2021 strategic priorities. Our immediate aim is to supply our COVID-19 vaccine to over 1 billion people this year and be in a position to supply it in large quantities in 2022. While we work to broaden access to our vaccine, our goal is to build and maintain a leadership position into 2022 and beyond.

With proceeds from the COVID-19 vaccine, we plan to accelerate pipeline development in our core therapeutic areas of immuno-oncology and infectious disease. We currently have nine active preclinical programs in the infectious disease field, and intend to advance additional mRNA vaccines against other infectious diseases. We will provide more details on some of these programs over the course of the year.

We remain as committed as ever to our goal of ushering in a new era of immunotherapy for cancer patients. In 2021 and beyond, we intend to accelerate and broaden our immuno-oncology pipeline, where we see a significant opportunity for BioNTech to lead in the emerging fields of individualized cancer medicine, and cell therapy, among others.

Finally, we plan to ramp up investments in our platforms and early product development and select emerging therapeutic areas, such as autoimmune disease, inflammatory disease and regenerative medicine. While these areas will not be a major component of our capital allocation near trend [ph] we believe they could become major opportunities for BioNTech in the future.

Slide 33 highlight some of the key pipeline milestones we expect in 2021. These include trial updates on at least five ongoing programs, including BNT311 and 312, two bispecific antibodies in Phase 1/2 trials, which we believe have potential as next generation checkpoint immuno-modulators.

We also expect to initiate three randomized Phase 2 trials for our FixVac and iNeST programs in 2021. Finally, we're on track to initiate up to six first-in-human Phase 1 trials across a range of novel IO platforms. With the start of Phase 1 trials for BNT211, and 151 in the first quarter, two of the six milestones listed here have already been reached. Importantly, all of the product candidates entering the clinic in 2021 are wholly owned by BioNTech.

We're also pleased to announce our first Capital Markets Day, which will be held in the second half of the year. We will confirm the date in the coming weeks.

Turning to Slide 35, we believe we are better positioned than ever to bring innovative immunotherapy to patients. By reinvesting the proceeds from our COVID-19 vaccine, we plan to accelerate our vision to build a 21st century immunotherapy powerhouse. We see a tremendous opportunity ahead to build long term value for patients, our shareholders and society.

To broaden our global reach, we will continue to expand in key strategic locations in the US and Europe and have near term plans to establish a presence in Asia. To support our expanding pipeline, we intend to further invest in our clinical, commercial and manufacturing infrastructure. And we'll also make further investments to build our digital infrastructure and capabilities.

Finally, we will double down on what got us here, true innovation. Alongside, planned increases in internal R&D investment, we will continue to actively source complimentary external innovation that fits with our long term strategy to harness the full power of the immune system to address serious disease.

And with that, I will conclude our presentation. And thank our shareholders and partners for their ongoing collaboration and support. And we'll now open up the floor for questions.

[Operator]

Thank you. [Operator Instructions] Your first question today is from the line of Tazeen Ahmad from Bank of America. Please go ahead.

[Tazeen Ahmad, Bank of America]

Hi, good morning. Thanks for taking my questions. As it relates maybe to the COVID vaccine, can you give us a little bit more color, Ugur, about your thoughts about the need for boosters, maybe a couple of parts for that? Do you have any sense of the frequency with which, if needed, people would need boosters?

Secondly, you've talked about doing work on the different variants. So on a go-forward basis, with the booster shots, being inclusive of all variants that would be present at the time? And the last part of the question is, do you see value still for switching from the two-dose vaccine to a one-dose in the future? Thank you.

[Ugur Sahin, Chief Executive Officer and Co-Founder]

Okay. Thanks for the questions. Actually, this topics are related. So, first of all, what is important is that that the booster dose and the variant interaction are somehow related because some variants, for example, the South African variant come with a reduced neutralization titers. And we, of course, know that antibody titers will drop over time and we see first drop now after six months.

So we definitively will need a first booster dose in - yeah, maybe after six months, after nine months. And then the question will be of course after the boosts, how long after the boost the immune response will continue to stay stable that it is six months, nine months or 12 months. So I - we strongly believe that booster doses will be required.

And the second reason to ensure that it is - we are now seeing with mRNA vaccines and with the data coming from Israel that the vaccine indeed enables prevention of infection, which is one of the key parameters reducing also the emergence of variants because every infected person is somehow creating the chance for new mutation. And if you want to get a full control of this pandemic, we need to ensure to have high antibody titers to ensure prevention of infection.

With regard to the third topic, so, we will see, of course, with the upcoming data that a booster doses are required every 12 months, every 18 months. So this is data coming in.

With regard to single versus a double dose vaccine, it’s very clear that also our vaccine is able to provide protection against disease with a single dose, but this is limited, yeah. And we see it - we clearly see that a second dose is required to have a full immunity.

We will have the situation end of this year, that in many regions, we will have already a pre-existing immunity in the vast majority of the population. And then we are not any more dealing with the question whether we need two short vaccine or single short vaccine, because everyone who is receiving and vaccine - additional vaccine will be regarded as a booster dose vaccine. And we already know from published data and from our own data, if someone had received prior dose or had COVID disease before, then a single dose is sufficient.

So we are now talking about - starting - we need to start to talk in 2020 and beyond about the vaccination. And there is no any more a difference between single dose and two-dose vaccines here.

[Operator]

Thank you. [Operator Instructions] The next question is from the line of Cory Kasimov from JPMorgan. Please go ahead.

[Cory Kasimov, JPMorgan]

Hey, good morning, guys. Thank you for taking my question. Ugur, I wanted to follow-up with you in the comments you just made with around boosters. Are you saying that the participants in your Phase 3 trial who were vaccinated back in late summer, early fall, are now in need of booster shots, that they're no longer adequately protected from COVID?

I guess just a follow-up on that. How clear is the regulatory process for boosters and variant vaccines for that matter in terms of the burden of proof on your end to enable authorization or licensure? Thank you.

[Ugur Sahin, Chief Executive Officer and Co-Founder]

Yeah. So to the first part of the question, no, I did not say that the participants are not any more protected. And just saying that, we are seeing - we are starting to see a drop off of the antibody response and there are now clear publications showing a correlation between the neutralizing antibody titers and protection over time.

So we will see a decline of antibody titers and we have to identify the right timing for a booster dose, yeah. And the right timing of a booster dose comes, of course, with the objectives one would like to accomplish. And if they accomplish, it’s [ph] really to ensure prevention of infections, the boosters dose has to come earlier.

And I believe that we need to go for - to accomplish in the population a strategy to avoid infections, not only to avoid diseases, and therefore a booster dose would be needed earlier than later. So that's the first part of the question. Can you repeat the second, your second question, please?

[Cory Kasimov, JPMorgan]

Yeah, just how clear the regulatory process is for boosters and variant vaccines in terms of the burden of proof to enable authorization?

[Ugur Sahin, Chief Executive Officer and Co-Founder]

Yeah. So we have already started a clinical trial with boosting participants, who had received two doses of our vaccine. And at the end of the day, it is more or less an automatic approach based on understanding of titers, protection and the level of improvement that can be accomplished by a booster dose.

[Cory Kasimov, JPMorgan]

Okay, great. Thank you very much. Appreciate it.

[Ugur Sahin, Chief Executive Officer and Co-Founder]

Yeah.

[Operator]

Thank you. The next question is from the line of Arlinda Lee from Canaccord Genuity. Please go ahead.

[Arlinda Lee, Canaccord Genuity]

Hi, guys. Thank you for taking my questions. I wanted to maybe clarify something, you alluded to single and double doses for the booster studies that are planned and underway. Can you please explain how the study is designed? What you hope to see? And when might we see data from that?

[Ugur Sahin, Chief Executive Officer and Co-Founder]

Ozlem, do you like to take the question or should I take the question?

[Ozlem Tureci, Chief Medical Officer and Co-Founder]

Yes. Can you please repeat, the audio is a bit shaking? It was about boost study, right?

[Arlinda Lee, Canaccord Genuity]

Right. You were talking about the single and double dose - doses for booster studies that would address the variants that are planned and underway. Can you please explain how that study is designed? What you hope to see and when we might see data flow?

[Ozlem Tureci, Chief Medical Officer and Co-Founder]

So the studies assess a couple of questions. One question is that we assess a search dose, meaning after prime boosts the second booster dose of our vaccine in its current form, and we'll assess how immunogenicity after this dose is boosted and whether it also protects from circulating variants, so, not only tests or neutralization of the vaccine strain, but also for other variants.

What these studies will also test is boosting of the BNT162b2 boost participants with use claim of interest of concern. And here we will use the South African strain as a representative of variant of concerns. And additional assessments are in participants who are naive for vaccines, and will need - test it with regards to immunogenicity and protection by stray - by a vaccine which we present a variant strain, meaning in this case with South African strain.

These studies have partly already started as amendments of our ongoing for example, Phase 3 trial where those subjects and participants who have been already vaccinated with communality [ph] are now for example getting the first boost with the same vaccine or with the new strain and partly we have submitted them, they have not started yet.

[Arlinda Lee, Canaccord Genuity]

Okay, thank you.

[Operator]

Thank you. The next question is from the line of Daniel Wendorff from Commerzbank. Please go ahead.

[Daniel Wendorff, Commerzbank]

Yes, good afternoon. And thanks for taking my questions. I have a question on the - on your development effort of different formulations. And can you maybe elaborate a bit on where we stand there? And is it technically possible also to bring a commonality vaccine to the market which is stable at normal, refrigerator temperatures for longer time. Is it something you work on? So anymore color here would be much appreciated? Thank you.

[Ugur Sahin, Chief Executive Officer and Co-Founder]

I can take the question, okay. Yes we are continuously working on - from a new formulation but also on extending the use of our current formulation. So we have recently announced that the existing formulation is - can be stored for a longer time at minus 20 degree. We will update this data also with regard to stability of our formulation at 2 to 8 degrees.

So we had announced that that this is an ongoing study with the existing formulation. To relax the conditions for the existing formulation we are developing ready-to-use formulation and lyophilized formulation, which will come into the market in the second half of 2021 and this new formulations will allow much longer stability at such temperature 2 to 8 degree.

[Daniel Wendorff, Commerzbank]

Thank you.

[Ugur Sahin, Chief Executive Officer and Co-Founder]

Well come.

[Operator]

Thank you. The next question is from a line of Daina Graybosch from SVB Leerink. Please go ahead.

[Daina Graybosch, SVB Leerink]

Hi. Thank you for the question. I'm going to ask another one on the boosting variant. Specifically you have suggested that you need to maintain a threshold titer of antibodies. And I wonder what evidence you have that informs what that target threshold is, what's the impact of B-cell affinity maturation on the required threshold? And where did T-cells fit in and could they come save us and not require multiple boosts?

[Ugur Sahin, Chief Executive Officer and Co-Founder]

Yeah. So great questions, Daina as always. So what is emerging, so its really a correlation between prevention of disease and prevention of infection by the different types of vaccines and neutralizing antibody titers. So it is - now more and more studies are publishing which provides a clear correlation between vaccine effectiveness, vaccine efficacy and neutralizing antibody titers.

And we do not yet have concrete numbers, but this will clearly come in the next 6 to 9 months. And prevention of infection is clearly dependent on neutralizing antibody titers. Severe disease, prevention of severe disease and even maybe also prevention of disease is also driven of course responses, but these are responses coming in only if the virus has reached already the target cells and start replicate – replication.

So we are confident that particularly CD8 T-cell responses will provide long-term protection against severe disease, including the variants, but they will not be able to prevent effectively infection in combination with neutralizing antibodies and of course they will be – there will most likely be a situation where lower titers, neutralizing titers can impact compensated by former T-cell responses and vice versa, but this is science [ph] to come or data which will be - which will emerge in the next 6 to 12 months.

[Operator]

Thank you. The next question is from the line of Navin Jacob from UBS. Please go ahead.

[Navin Jacob, UBS]

Hi. Yes, thanks. I know you said one, but hopefully these two questions are very quick. I just wanted to clarify the lyophilized version of 162 that you're working on, you mentioned that you're starting the study. I just wanted to understand, I'm sorry, I missed it, but what exactly is required to get that approved, is it just immunogenicity data or do you have to run a full outcomes based study or is it just PK data>

And then of the 450 million doses contracted in “other regions” how much of that is China? Any color there would be appreciated.

[Ugur Sahin, Chief Executive Officer and Co-Founder]

I can take first question maybe and the second question is Ryan or Sean, if that’s okay?

[Navin Jacob, UBS]

Yeah, I can ask that…

[Ugur Sahin, Chief Executive Officer and Co-Founder]

Yeah. So the first question is, so there are different guidelines or guidances at the moment, how to approve - approve a process to ensure that new variants vaccine can be introduced. When they doing that, and this is the way requested by the FDA is to show for a variant strain that a vaccine addressing a variant strain can be manufactured in the same day, released in the same day, then provide safety data for this new variant vaccine and provide immunogenicity data and show comparability of titers accomplished against this variant strain.

And then on the data package, on the full data package, and on the comparability data, this could be cite [ph] in a blueprint, a proof blueprint process, so that if a variant vaccine is needed, it could be introduced without the need for an additional clinical trial. So that's the general way to progress. But there are differences suggested by regulators in UK and then by EMA, but at the end of the day, for each of the parties, some sort of study data will be required.

[Ryan Richardson, Chief Strategy Officer]

Yeah. Navin on the China question, so the answer is very little, has been included in the 1.4 billion currently signed figure. We've included the doses that have been committed to Hong Kong and Macau, where we have an EU approval, which is just under 10 million doses.

We've also committed to Fosun, our partner from Mainland China to supply up to 100 million doses, or at least 100 million doses in 2021, if approval occurs, and we're in the approval process as we speak, but those doses have not been included in the 1.4 billion number.

[Operator]

Thank you. And the last question today is from the line of Akash Tewari from Wolfe Research. Please go ahead.

[Akash Tewari, Wolfe Research]

Thanks so much. So Pfizer has publicly made - I would argue some unusual comments on its desire to go after mRNA themselves. Moving forward, can you comment on your current COVID partnership, how long it lasts, if there are any outs, and when either company be able to develop a vaccine candidate for SARS-CoV-2 at solo at some point?

And then maybe on your PD-L1x4-1BB bispecific, Genmab mentioned one of the reasons they selected the 100 million [ph] dose, they wanted to have optimal trimer formation. And that kind of translates to about 60% to 70% occupancy for the PD-L1. How important is that formation of a trimer and why not target a higher PD-L1 occupancy from an efficacy perspective? Thank you.

[Ugur Sahin, Chief Executive Officer and Co-Founder]

Okay. Thanks Akash for the question. So the first question. The first question is, first of all, we have an excellent collaboration with Pfizer where the teams are really closely collaborating and we at the management level, for example, with Albert Bourla, we have a daily conversations about the ongoing collaboration, but also about future collaboration opportunities.

And with regard to the existing COVID-19 project, it is a partnership. We have a 50-50 partnership and there is no room for any of the partner to do something alone, everything has to be decided in a partnership manner and - but understanding of course, that COVID-19 will stay with us, most likely for at least a decade, this is a long term partnership.

With regard to other potential collaborations, Albert Bourla said that they like to work with us, but they don't need to do it. And this is actually a comment I made in the same way. It is an fantastic partnership. And we would like to continue to do additional projects with Pfizer, but we don't have to do it.

And I think it's an excellent situation where you just enter into a partnership, if you see the benefits, we see a lot of benefits in doing additional projects together. But we will come up with this update about this in the next weeks.

[Sean Marett, Chief Business and Commercial Officer]

Yeah, and Ugur, I just like to add to that, of course, you know, I just like to remind everyone that we've been developing I&P [ph] around in our – in a for over a decade. And, of course, that's important for any collaborator when they're thinking about entering into the space themselves. And of course, the other thing we do is, we continue to talk to other pharmaceutical companies to sort of ordinary [ph] course of business matter.

[Ugur Sahin, Chief Executive Officer and Co-Founder]

Thanks, Sean for this additional…

[Akash Tewari, Wolfe Research]

The trimer formation?

[Ugur Sahin, Chief Executive Officer and Co-Founder]

Yeah, the trimer formation is - indeed the trimer formation is important for the conditional activation of the 4-1BB and with 100 microgram we have the sweet spot of PD-L1 or PD-1 blockade, plus trimer formation in a sufficiently long time. So we exploit here the optimal activation or functions of both arms of the antibody. And this is also in line with objective responses that we have observed with this component which are - which seem to be associated with this dose window.

[Akash Tewari, Wolfe Research]

Thanks so much.

[Ugur Sahin, Chief Executive Officer and Co-Founder]

Yeah.

[Operator]

Thank you. I'll now hand back to the speakers.

[Sylke Maas, Vice President, Investor Relations & Strategy]

Yeah. Thank you again for joining the call today. We look forward to speaking to you in the future. Thank you and bye-bye.

[Ugur Sahin, Chief Executive Officer and Co-Founder]

Thanks, everyone.

[Sean Marett, Chief Business and Commercial Officer]

Thank you.

[Ozlem Tureci, Chief Medical Officer and Co-Founder]

Thank you.

[Operator]

Thank you. That concludes the conference for today. Thank you for participating and you may now disconnect.