BioNTech cuts drug development costs due to drop in COVID vaccine sales.

BioNTech cuts drug development costs due to drop in COVID vaccine sales.

BioNTech Lowers Drug Development Budget After Revenue Plunge

BioNTech

FRANKFURT, Aug 7 (ANBLE) – Germany’s BioNTech, the partner of Pfizer in developing COVID-19 vaccines, has decided to reduce its drug development budget for this year. This move comes after the company experienced a significant drop in quarterly revenues due to the decline in pandemic-related demand.

In the second quarter, BioNTech’s revenue plummeted to 167.7 million euros ($184 million) from 3.2 billion euros in the same period last year. This substantial decline was mainly caused by write-offs on Pfizer’s assets, which affected the profit share payments that BioNTech receives from its U.S. partner. As a result, the company reported a net loss of 190 million euros for the quarter, compared to a profit of 1.67 billion euros during the height of the COVID-19 pandemic in the previous year.

But despite these challenges, BioNTech remains committed to its long-term goals. The company’s finance chief, Jens Holstein, stated, “With some uncertainty on the revenue line, we are also carefully watching our spending by revisiting our cost base.” He emphasized that BioNTech’s ambition to become a multi-product oncology and infectious disease company remains unchanged.

To address the financial constraints caused by the revenue decline, BioNTech has decided to cut its projected research and development (R&D) budget for this year. The revised budget is now expected to be between 2 and 2.2 billion euros, down from the previous forecast of between 2.4 and 2.6 billion euros. Notably, the company’s R&D expenditures were 1.54 billion euros last year.

Despite the challenges, BioNTech continues to focus on broadening its work in cancer treatments and vaccines. The company has been hiring scientists, initiating costly late-stage trials, and forming partnerships to expand its research efforts. This includes developing vaccines against infections such as tuberculosis and shingles.

BioNTech also remains optimistic about its future revenue prospects. The company reaffirmed its outlook for COVID-19 vaccine revenues, expecting them to reach approximately 5 billion euros in 2023. Although this is a significant decrease from the 17.2 billion euros generated last year, BioNTech anticipates a renewed sales boost from a fall inoculation campaign.

In line with its commitment to fighting the COVID-19 pandemic, BioNTech plans to start delivering updated shots targeting the XBB.1.5 Omicron subvariant in partnership with Pfizer from September, pending regulatory approval.

In conclusion, the recent decline in quarterly revenues has prompted BioNTech to make strategic adjustments to its financial plans. The company aims to navigate the challenges by trimming its R&D budget while remaining focused on its long-term goals. By continuing to expand its work in cancer treatments and vaccines, BioNTech is positioning itself as a leading player in the pharmaceutical industry. With the ongoing fight against COVID-19 and future opportunities in the pipeline, the company remains optimistic about its prospects for the years to come.

($1 = 0.9115 euros)

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