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BioNTech has incurred a €900mn write-down on its Covid-19 vaccines due to lower than anticipated demand for the shots developed in collaboration with Pfizer.
The German biotech company announced on Monday that Pfizer had informed them that the majority of the write-offs were related to raw materials purchased during the pandemic, particularly the lipids used to deliver the active ingredients into the body.
Additionally, some of the write-offs were associated with vaccines made for “at risk” patients, specifically those adapted to variants other than the XBB 1.5 strain, which is more contagious than earlier Omicron strains and is the company’s most recent vaccine target.
Shares in BioNTech, which have declined by over 70% since reaching their peak in August 2021, fell 6.5% to $96.78 in pre-market trading in New York.
Investors have become worried about the fluctuating demand for Covid vaccines, resulting in the decline of vaccine manufacturers’ stocks such as BioNTech, Pfizer, and Moderna. Furthermore, they are still skeptical about how these companies plan to allocate their profits from the pandemic.
According to analysts at Leerink Partners, there is a risk of even lower vaccine revenues in the fourth quarter than their own projections, as they currently assume there will be a significant increase in demand during this season.
They stated in a note that “however, we also anticipate an uptick in Sars-Cov-2 infections as we head into the winter, and the holiday season could spur this demand.”
BioNTech’s announcement came after Pfizer revised its guidance for the Covid vaccine, Comirnaty, and Paxlovid, its Covid antiviral shots, due to weak demand.
Shares in Pfizer declined by 2.5% on Friday after the company revised its full-year revenue outlook to be between $58bn and $61bn, down from the previous range of $67bn to $70bn.
On Monday, the stock fell an additional 3% to $31.13 in US pre-market trading.
The US pharmaceutical company reduced its guidance for Paxlovid revenue by roughly $7bn this year following the return of approximately $4.2bn worth of treatments by the US government. Pfizer stated that the revised agreement would allow them to sell the drug in the commercial market.
Pfizer also lowered its full-year revenue guidance for the Covid vaccine by around $2bn and reported inventory write-offs and other charges totaling $900mn. Both Pfizer and BioNTech receive half of the vaccine’s gross profits.
Pfizer plans to cut costs by approximately $1bn this year. Albert Bourla, Pfizer’s CEO, emphasized the strength of the company’s product portfolio outside of Covid medicines and anticipates 8-10% year-on-year revenue growth in the remaining businesses.
He stated, “We expect additional clarification on global vaccination and treatment rates by the end of the year, which we expect will be a good predictor of utilization in future years.”
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