BioNTech plans to return nearly €2 billion to shareholders through share buybacks and a special dividend following the commercial success of its Covid-19 vaccine, the company said on Wednesday.
The German biotech, which launched the first Covid-19 vaccine in partnership with Pfizer, said it would also boost research and development spending by 50 per cent to between €1.4 billion and €1.5 billion, as it seeks to develop a new range of drugs based on mRNA technology.
“To continue our industry leadership, we intend to build on our 2021 success and rapidly advance multiple programmes, including our mRNA-based immunotherapies, cell therapies, and bi-specific antibodies,” said Ugur Sahin, BioNTech’s co-founder and chief executive.
The biotech has multiple ongoing drug development programmes, including 16 cancer drug candidates, in clinical trials.
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New drugs
BioNTech’s fortunes have soared following its December 2020 launch of the first vaccine using messenger ribonucleic acid, or mRNA technology. The Nasdaq-listed biotech now faces the challenge of bringing new drugs to market to diversify its revenue stream, with Covid vaccine sales expected to moderate as the pandemic eases.
Analysts said the biotech and its Covid vaccine rival Moderna face a delicate balancing act between investing the proceeds from vaccine sales in R&D and business development to expand their operations while also rewarding investors who backed both companies’ rapid rise from start-ups to global businesses.
BioNTech on Wednesday said it planned to repurchase $1.5 billion of its shares over the next two years. It also proposed paying a special cash dividend of €2 a share, worth about €486 million. Meanwhile, Moderna last month announced a $3 billion buyback but did not propose a special dividend.
Brad Loncar, a biotech investor, said BioNTech and Moderna faced challenges because they attracted a “fast-money” shareholder base during the pandemic that expects them to produce many new products in the short term.
“Drug development doesn’t work that way and these are going to be much longer-term stories than many realise,” he said. “By adding a modest income component to their stocks, I think they can attract more long term-oriented investors who have the patience to see the non-Covid pipeline play out over the years it will take in reality.”
Omicron variant
BioNTech said it would expand an ongoing clinical trial for a Covid-19 vaccine tailored to boost protection against the Omicron variant and would publish data in April. It is also working on next-generation Covid vaccines, which are intended to offer broader protection against new variants. But human trials have not yet begun, said the company.
The announcement accompanied fourth-quarter results, which topped analysts’ earnings forecasts. BioNTech earned €12.18 a share in the fourth quarter, compared with analysts’ estimates of €8.19 a share.
For the full year the company reported €18.9 billion in revenues, compared with €482.3 million a year earlier – a result that reflects the phenomenal success of the Covid-19 vaccine in 2021. Full-year net profit was €10.2 billion, compared with €15.2 million in 2020.
The company said it had signed orders for delivery of 2.4 billion Covid vaccines in 2022, which it expects to generate between €13 billion and €17 billion in revenues.
Shares in BioNTech were up almost 5 per cent in morning trade.
– Copyright The Financial Times Limited 2022
