BioNTech SE — FY2019 Form 20-F
Reporting period: Fiscal year ended December 31, 2019; this annual filing does not provide separate fourth-quarter results. Financial statements are prepared under IFRS. BioNTech was a clinical-stage biotechnology company with no pharmaceutical products approved for commercial sale. Its ADSs began trading on Nasdaq in October 2019.
Financial results and liquidity
| Metric | FY2019 | FY2018 |
|---|---|---|
| Revenue | €108.6 million | €127.6 million |
| Gross profit / gross margin | €91.2 million / 84.0% | €113.9 million / 89.3% |
| Research and development expense | €226.5 million | €143.0 million |
| Operating loss | €181.5 million | €53.9 million |
| Net loss | €179.2 million | €48.3 million |
| Basic and diluted loss per share | €0.85 | €0.25 |
| Cash and cash equivalents at year-end | €519.1 million | €411.5 million |
| Cash used in operating activities | €198.5 million | €58.9 million |
| Cash used in investing activities | €77.1 million | €66.5 million |
| Cash from financing activities | €383.3 million | €365.2 million |
| Total equity | €493.5 million | €267.0 million |
Revenue was primarily from collaborations and license agreements (€84.4 million) and external product sales and services (€24.2 million), not pharmaceutical product sales. Management attributed the revenue decline mainly to nonrecurring 2018 collaboration-related items, including €33.2 million from reimbursement of CellScript sublicense costs. Gross margin fell as revenue declined and cost of sales rose.
At year-end, total assets were €797.6 million; current liabilities were €138.1 million and non-current liabilities €166.0 million. The balance sheet reports €16.6 million of drawn bank loans and €57.6 million of lease liabilities. Operating cash outflow increased as research, development, staffing and working-capital needs grew. Financing cash inflow was mainly from equity issuance, including the IPO and other share financings.
Material changes and business developments
- Revenue fell 14.9% year over year, while R&D expense rose 58.3%; net loss widened by €130.9 million.
- R&D investment increased across clinical programs and platforms, with higher personnel, purchased services and laboratory supplies. The company reported more than 20 product candidates, 10 in 11 ongoing clinical trials, and more than 10 additional preclinical programs.
- Equity increased from €267.0 million to €493.5 million, supported by 2019 financing and the Nasdaq IPO. Cash rose despite higher operating and investing outflows.
- BioNTech reported accumulated losses of €424.8 million at year-end. Management estimated existing cash would fund operating expenses and capital expenditure into the third quarter of 2021, based on plans and assumptions then in effect.
Outlook, commentary, risks and unusual items
- Outlook: Management expected continued losses and higher expenses as clinical development, manufacturing capacity, staffing and infrastructure expanded. It targeted advancement of up to three candidates into clinical testing in 2020 and data updates for up to five programs by year-end. These were forward-looking plans, not guarantees; the filing does not provide clear numerical revenue or profit guidance.
- Pipeline and COVID-19: After year-end, BioNTech announced development of BNT162, a potential COVID-19 vaccine, and planned to begin clinical testing in late April 2020 subject to regulatory approval. Pfizer and Fosun Pharma collaborations were also announced after year-end. These were development plans, not approved products or realized 2019 revenue. The filing stated that pandemic effects on trials, supply chain, staffing, operations and financing were uncertain.
- Clinical and execution risks: Candidates remained investigational; clinical results may not predict later success, and regulatory pathways for novel mRNA and individualized therapies were uncertain. Manufacturing scale-up, product stability, patient-specific production, single-source suppliers and trial enrollment could delay development or increase costs.
- Funding and dilution: The company anticipated requiring substantial additional capital to secure approvals and commercialize candidates. Future financing might be unavailable or dilute shareholders, add debt restrictions, or require licensing or relinquishing rights.
- Withholding-tax matter: An internal review found that BioNTech and certain subsidiaries had not withheld, reported or remitted certain German taxes on intellectual-property royalty payments over an 11-year period before April 2019. The company notified tax authorities and paid the amounts in 2019; €2.6 million was recorded in general and administrative expense. Some amounts had been refunded, further refunds were expected, but recovery was not assured. The company reported that no administrative-offence or criminal proceeding had been opened or was expected.
- Merger: A proposed all-stock acquisition of Neon Therapeutics was announced in January 2020 and remained subject to conditions, including shareholder approval. Completion and anticipated benefits were uncertain; transaction and integration costs and dilution were possible.
- Controls and audit: The auditor gave an unqualified opinion on the IFRS financial statements. Management concluded disclosure controls were ineffective at December 31, 2019 because of a material weakness involving insufficient technical accounting and supervisory resources, oversight of external consultants and inconsistent accounting procedures. The filing did not include an auditor attestation on internal control.
- Other: BioNTech reported no material legal proceedings and no off-balance-sheet arrangements. Contractual obligations totaled €100.2 million, including €78.9 million of undiscounted lease liabilities and €21.3 million of interest-bearing loans and borrowings.
Important facts for investors to verify
- Whether cash use and development spending remain consistent with the stated runway, particularly given subsequent business and pandemic developments.
- Progress and final results from clinical trials, including safety, efficacy, enrollment and whether announced interim data are confirmed in complete datasets.
- Whether collaboration income, milestone receipts and partner commitments can offset rising R&D, manufacturing and infrastructure costs.
- Resolution and refund status of the historical withholding-tax payments, and any remaining exposure or accounting implications.
- Remediation of the disclosed material weakness, effectiveness of financial-reporting controls and any subsequent auditor findings.
- Debt, lease commitments, secured-credit-facility conditions, and the status and realized costs or benefits of the proposed Neon transaction.