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BioNTech has written down about €900mn on its Covid-19 vaccines because of lower than expected demand for the shots it developed with partner Pfizer.
The German biotech group said on Monday that it had been informed by Pfizer that the majority of the write-offs related to raw materials purchased during the pandemic, mainly the lipids that deliver the active ingredients into the body.
It added that some of the write-offs related to jabs made for “at risk” patients, adapted to variants other than the XBB 1.5 strain, which is more contagious than earlier Omicron strains and is the group’s most recent vaccine target.
Shares in BioNTech, which have fallen more than 70 per cent since their peak in August 2021, dropped 6.5 per cent to $96.78 in pre-market trading in New York.
Covid vaccine makers including BioNTech, Pfizer and Moderna have suffered as investors become concerned about unpredictable demand for the shots. They have also yet to be convinced about how the companies plan to spend their pandemic windfalls.
Analysts at Leerink Partners said there was a risk of even lower revenue from the vaccine than their own forecasts in the fourth quarter because at present they assume there will be a “massive uptick in demand” this season.
“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,” they wrote in a note.
BioNTech’s announcement came after Pfizer cut its guidance for the Covid vaccine, known as Comirnaty, and Paxlovid, its Covid antiviral jabs, because of low demand.
Shares in Pfizer fell 2.5 per cent on Friday after it said it now expected its full-year revenues to be between $58bn and $61bn, lower than its previous range of $67bn to $70bn. The stock fell another 3 per cent to $31.13 in US pre-market trading on Monday.
The US drugmaker reduced guidance for Paxlovid revenues by about $7bn this year after the US government returned about $4.2bn worth of treatment. It said the amended agreement would give it a pathway towards selling the drug in the commercial market.
Pfizer cut its full-year guidance for revenues from the Covid vaccine by about $2bn and announced inventory write-offs and other charges of $900mn. Pfizer and BioNTech each receive half of the gross profits of the vaccine. The US group plans to cut about $1bn in costs this year.
Albert Bourla, Pfizer’s chief executive, said the company’s product portfolio, apart from Covid medicines, remained strong, with the company expecting revenues from the rest of the business to grow between 8 and 10 per cent year on year.
“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 utilisation in future years,” he said.
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