CFO Jens Holstein said some of the cost cuts pertain to the company’s COVID-19 collaboration with Pfizer.
BioNTech has cut full-year R&D expense guidance by 400 million euros ($440 million) as part of a “company-wide cost optimization” effort, though management relayed few details on the extent of the plans.
The German biotech’s trimming means the full-year R&D expense guidance has come down from the previously announced range of 2.4-2.6 billion euros ($2.6-2.8 billion) to 2-2.2 billion euros ($2.2-2.4 billion), according to Monday's second-quarter earnings presentation. CFO Jens Holstein coyly described the changes as a way to “increase cost consciousness.”
“It is our aim to move our clinical programs forward as quickly and cost-efficiently as possible towards becoming a multi-product company,” Holstein said on the earnings call. A spokesperson for BioNTech said that the measures were "process- and procedures-related" and layoffs have not followed. The number of employees has continued to increase, the spokesperson added.
Holstein said later in the call that some of the cost cuts pertain to the company’s COVID-19 collaboration with Pfizer but that they mainly centered on internal efforts, “in the areas of oncology, for example, or in building up production capacities.”
“Those have been specific areas where we just look at controlling our costs going forward to have more flexibility,” he said. Chief Strategy Officer Ryan Richardson added that Pfizer’s cost-cutting efforts, particularly those around the two companies' COVID-19 vaccine Comirnaty, would have little impact on BioNTech’s operating expenses.
A peek at the biotech's pipeline gives a clue as to where research expenses are no longer flowing. The company has culled BNT141, one of two RiboMab programs—a term for bispecific monoclonal antibody-encoding mRNA. The asset was in the middle of a phase 1 study in patients with CLDN18.2-positive solid tumors, with the company having updated the clinical trial record in May to indicate that enrollment had been completed.
BioNTech also culled one of its FixVac programs in the middle of the second quarter, wiping away BNT115, which was tested in ovarian cancer patients. The clinical trial record was updated at the end of June, saying “the target number of evaluable patients defined in the study protocol could not be reached and recruitment for the trial was stopped at that point of time.” In addition, Sanofi and BioNTech announced in late July that the two companies had discontinued a jointly developed intratumoral therapy using mRNA-encoded cytokines.
Along with the shrunken R&D expenses, BioNTech has shifted selling, general and administrative expense guidance down 50 million euros ($55 million) for the year and capital expenditure for operating activities is also now expected to come in at 150 million euros ($165 million) less than previous estimates.
Despite the cost-cutting efforts, M&A activity is not being put on the back burner, Richardson said, describing an appetite for similar in-licensing opportunities and small deals that have largely defined BioNTech’s strategy to date. The Chief Strategy Officer said deals that are “under a billion” are the company’s sweet spot.
“We will look at and consider larger deals but I think it has to be a very, very good strategic fit for us to make a larger move,” he said. “We do see opportunities in that sub-1 billion range to further bolster the pipeline.”