BioNTech Se (BNTX) Q2 2023 Earnings Call Transcript

BioNTech Se (BNTX 0.58%)
Q2 2023 Earnings Call
Aug 07, 2023, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Welcome to BioNTech s second-quarter 2023 update call. I would like to hand the call over to Dr. Victoria Meissner, vice president of strategy and investor relations. Please go ahead.

Victoria Meissner -- Vice President, Strategy and Investor Relations

Thank you. Good morning and afternoon. Thank you for joining us today for BioNTech's second-quarter 2023 earnings call. As a brief reminder, the slides that accompany this call and the second-quarter 2023 press release that was issued this morning can be found in an investor section of our website.

As outlined on Slide 2, you can see all our forward-looking statements disclaimer. Additional information about these statements and other risks are described in our filings made with the U.S. Securities and Exchange Commission. Forward-looking statements on the call are subject to substantial risks and uncertainties, speak only as of the call's original date, and we undertake no obligation to update or revise any of these statements. On Slide 3, you can find the agenda for today's call.

Today, I'm joined by the following members of BioNTech's management team: our CEO and co-founder; Uğur Şahin; Ozlem Tureci, our chief medical officer and co-founder; Jens Holstein, our chief financial officer; and Ryan Richardson, our chief strategy officer. I would like to turn the call over to Uğur Şahin.

Uğur Şahin -- Co-Founder and Chief Executive Officer

Thank you, Victoria. A warm welcome to all the call participants. We appreciate your continued support. Today.

I will summarize our second-quarter 2023 highlights and priorities before I pass the call over to my team to provide some further details. Slide 5. Let me start reiterating our 2023 strategic priorities that we set at the beginning of the year and highlight our recent progress executing against them. We pursue our priority to expand and sustain our COVID-19 leadership further by advancing our next-generation and combination vaccine candidates and by advancing key Comirnaty features. During this quarter, we receive recommendations from regulatory authorities and the World Health Organization on the composition of the adapted COVID-19 vaccine for the 2023-2024 season. Based on these recommendations, we, together with our partner, Pfizer, have submitted regulatory packages from omicron XBB.1.5-adapted monovalent COVID-19 vaccine to the U.S.

FDA, EMA, and other regulatory agencies. We have also kicked off commercial launch activities for the omicron XBB.1.5-adapted monovalent COVID-19 vaccine. Our second 2023 strategic priority is to accelerate our oncology pipeline and initiate multiple trials with registration potential. Our new collaborations with DualityBio and OncoC4 complement our pipeline with multiple mid- to late-stage clinical programs that will help us to achieve this goal in the near term. In the second quarter, at ASCO Annual Meeting, we and our respective collaboration partners presented three new clinical data sets that Ozlem will cover later. Further, jointly with our partner, OncoC4, we began a pivotal phase 3 trial evaluating the next-generation anti-CTLA-4 antibody candidate, BNT316, gotistobart, as a second-line treatment for patients with non-small cell lung cancer. Our third strategic goal is to initiate and accelerate clinical programs with high medical need in infectious diseases.

We are expecting multiple data readouts for our mRNA-based vaccine candidates in the second half of this year. In summary, we continued our focused execution against strategic priorities in the second quarter and look forward to additional progress in all three of these areas in the remainder of this year. Slide 6, starting with COVID-19. While variants of concern have emerged in all seasons in the past few years, we expect that in the fall and winter, in line with other common respiratory diseases, such as influenza and RSV, also SARS-CoV-2, hospitalization will increase. Slide 7.

In 2023, four years after the start of the COVID-19 pandemic, there's a high level of prevalence in the global population as a result of vaccination and/or infection. Profiles of immune responses against SARS-CoV-2 are highly heterogeneous as individuals have been infected with different variants and/or vaccinated using a variety of vaccine platforms. The substantial genetic and antigenic evolution of SARS-CoV-2 and spike protein continues with divergence of the evolutionary trajectory from the original wild-type virus. Despite increasing gaps in the genomic surveillance globally, the available sequencing data indicates that the original virus and other early variants such as alpha, beta, gamma, delta are no longer detected in humans. As of July 2023, the XBB.1 descendant lineages predominate globally and they have further antigenic distance from previous variants. Clinical data have shown that currently approved COVID-19 vaccines provide a level of protection against these new variants.

However, with the antigenic drift of current variants of concern, signs of waning protection have been observed starting two to four months after boosters with last seasons before BA.5-adapted vaccine, including against severe COVID-19. Due to the greater antigenic distance of these variants of concern and greater immune escape, absolute vaccine effectiveness against hospitalization due to COVID-19 is reduced as time passes between vaccination and subsequent infection. In summary, this data support a rollout of a COVID-19 vaccine adapted to the most recent variants of concern this fall. We plan to launch an omicron XBB.1.5-adapted monovalent COVID-19 vaccine this fall, subject to approval by regulatory authorities. Our goal is to maintain protection against severe COVID-19 disease hospitalization and death by providing a vaccine that is better match to the currently circulating strains and that is designed to be more closely aligned to the newer evolving lineages.

Slide 8. Let me remind you of the core principles of our overarching strategy. We pursue a multi-technology-driven approach rooted in deep fundamental understanding of biology and immunobiology. We leverage the power of computational science and AI. Our acquisition of InstaDeep has expanded our capabilities in that regard.

Together, we aim to become the global leader in applying cutting-edge artificial intelligence and machine learning technology and research to discover, design, and develop next-generation immunotherapies at scale. They built novel platforms with their ability to produce multiple product candidates for our clinical pipeline, including approaches that enable and accelerate individualization of treatment. To leverage synergistic mode of action, we explore opportunities for combining modalities, both developed internally and accessed via collaboration partnerships. Last quarter, we announced that we initiated a collaboration with Duality Biologics to access two of their next-generation antibody-drug conjugates. This quarter, we and Duality shared clinical data from one of these programs and expanded our collaboration to a third encouraging program from Duality Biologics' pipeline. Slide 9.

ADCs consist of three main components: antibody, linker, payload. Each of these components has an impact on ADCs' pharmacological and clinical properties. It is a precision medicine, allowing for targeted drug delivery, particularly to tumor cells with high specificity and potently induced cell death with the benefit of reduced off-target events. When the monoclonal antibody binds to the target expressed in the tumor cell, the ADC is internalized, allowing for the release of the cytotoxins, which leads to cell death. We continue to broaden our access to ADCs because we believe this technology has the potential to replace highly toxic chemotherapy regimens to become a new combination backbone for cancer immunotherapy. Advancements in this technology have resulted in its extended use for the treatment of solid tumors.

ADCs can also synergize with various immunotherapy modalities including those in our current immunotherapy pipeline. Our growing ADC pipeline now includes ADCs directed against three distinct targets and is of interest for a broad range of cancer types. In the future, we plan to combine these ADCs with our proprietary pipeline programs to maximize the patient impact of this exciting modality. With that, I would like to thank you all for your confidence in our success and your continued support. I will now turn the call over to Ozlem.

Ozlem Tureci -- Co-Founder and Chief Medical Officer

Thank you. I'm delighted to speak with everyone today and to provide our pipeline update. Slide 11, starting with our COVID-19 vaccine. We expect that as SARS-CoV-2 continues to evolve and the risk of severe COVID-19 disease and deaths continues, there will be persisting demand for vaccine boosting and vaccinations, especially for at-risk and immunocompromised groups. The omicron XBB sublineages currently account for the majority of COVID-19 cases globally and are antigenically distant from prior circulating SARS-CoV-2 lineages, including omicron BA.4/BA.5 and the original SARS-CoV-2 strain.

Although omicron BA.4/BA.5-adapted bivalent vaccines provide some protection against a range of outcomes from XBB-related COVID-19, evidence suggests that vaccines better match to currently circulating sublineages can help further improve protection against symptomatic disease and severe COVID-19. XBB lineage viruses have reduced neutralization in comparison to earlier omicron lineages but have similar neutralization profiles to each other. The spike sequence of XBB.1.5 and XBB.1.16 differ in only two mutations highlighted here. In May, the EMA and other health authorities provided guidance highlighting that updated vaccines targeting omicron XBB.1 sublineages may help to maintain protection against COVID-19 during the upcoming fall and winter season when COVID-19 case rates and hospital isolations are expected to increase. Also, the FDA's Vaccines and Related Biological Products Advisory Committee, VRBPAC, issued guidance recommending manufacture of an omicron XBB.1.5-adapted monovalent COVID-19 vaccine for the 2023 and 2024 fall and winter seasons.

We and Pfizer submitted regulatory applications to the EMA and to the FDA for our omicron XBB.1.5-adapted monovalent COVID-19 vaccine for individuals six months of age and older. Following guidance from regulatory authorities on the requirements for strain changes, their applications include data suggesting that omicron XBB.1.5-adapted monovalent COVID-19 vaccine may generate improved responses against circulating XBB sublineages compared to the current omicron BA.4/BA.5-adapted bivalent COVID-19 vaccine. Moving to Slide 12. We and our partner Pfizer tested the potential effectiveness of an omicron XBB.1.5-adapted monovalent vaccine as a primary series and booster in mice. Here you see the neutralizing antibody response in mice immunized with the omicron BA.4/BA.5-adapted bivalent vaccine as booster after two doses of the original vaccine. One group of mice again received a BA.4/BA.5-adapted bivalent COVID-19 vaccine as a fourth dose, and the other group received the new XBB.1.5-adapted monovalent COVID-19 vaccine as a fourth dose. You can see a four to fivefold increase of neutralization of several XBB-related variants when dose four is the XBB.1.5-adapted monovalent vaccine as compared to last season's bivalent vaccine, indicating that a XBB.1.5 variant-adapted monovalent vaccine in the pre-vaccinated setting has the potential to induce broad cross-neutralizing antibody titers against multiple XBB sublineages. We made significant progress toward a monovalent COVID-19 vaccine against omicron XBB.1.5 with regulatory submissions to the U.S.

FDA, EMA, and other regulatory authorities. And we are well prepared to launch an adapted COVID-19 vaccine if approved in early fall this year. Moving to our oncology pipeline. Let me put our second-quarter pipeline and advancements into the broader context of our clinical-stage pipeline, which is depicted on Slide 13.

In the second quarter, the initiation of our pivotal phase 3 trial in non-small cell lung cancer marks the first landmark in our strategic collaboration with OncoC4. The randomized phase 3 trial is evaluating BNT316, a pH-sensitive anti-CTLA-4 antibody with distinctive mode of action, and is expected to enroll approximately 600 patients with metastatic immunotherapy-resistant non-small cell lung cancer. The trial initiation follows the FDA Fast Track designation granted in 2022 and is based on phase 1/2 safety and efficacy data for the monotherapy in metastatic immune checkpoint inhibitor-resistant non-small cell lung cancer. Further, we expanded our collaboration with Duality and added a third ADC to our oncology pipeline. DB-1305 is currently in a phase1/2 clinical trial for solid tumors.

Then I have news from BNT116, our lung cancer antigen-based FixVac candidate. The second trial of BNT116 has dosed its first patient end of July. Together with our partner, Regeneron, we will evaluate BNT116 in combination with cemiplimab versus monotherapy alone in treatment-naive patients with stage 3B, stage 3C, or stage 4 squamous or nonsquamous non-small cell lung cancer patients with at least 50% PD-L1 expression in a randomized multicenter, open-label, phase 2 study. The phase 1 clinical trial is ongoing with BNT116 to evaluate the safety, tolerability, and preliminary efficacy of BNT116 alone and in combination with cemiplimab in patients who have progressed on prior PD-1 inhibitor treatment or are not eligible for chemotherapy, and in combination with docetaxel in patients who have received prior PD-1 inhibitor therapy and platinum-based chemotherapy. We are planning to start several trials with our partners imminently. Firstly, building on compelling phase 1 data in patients with resectable PDAC in the adjuvant setting that we recently reported in Nature.

A phase 2 trial with autogene cevumeran, BNT122, our individualized cancer vaccine candidate is planned with our partner Genentech, evaluating the efficacy and safety of autogene cevumeran in combination with atezolizumab and modified FOLFIRINOX compared to modified FOLFIRINOX as standard of care alone. Second, another trial is planned to start with our second ADC developed by Duality Bio. BNT324 is a humanized antibody conjugated to a novel DNA topoisomerase-1 inhibitor via a cleavable linker. The phase 1 part of the study will evaluate the safety in all-comers and determine the recommended phase 2 dose. In the phase 2 dose expansion part, we aim to evaluate safety and efficacy in small cell and non-small cell lung cancer, esophageal cancer, prostate cancer, melanoma, and other solid tumors.

On the next couple of slides, I want to summarize the recently presented data from three of our programs at the ASCO Annual Meeting. On Slide 14, starting with BNT316/ONC-392. Antibody targeting of CTLA-4 works primarily by depleting regulatory T cells and thus their suppression of tumor-specific immunity. Physiologically, CTLA-4 recycles continuously between the cell surface and the endosomes. Interruption of this process by a binding antibody is associated with the development of autoimmunity.

Autoimmunity and immune-related adverse events are a major limitation of approved anti-CTLA-4 antibodies that disrupt CTLA-4 recycling by promoting lysosomal degradation of this important immune checkpoint molecule. BNT316, in contrast, dissociates from the CTLA-4 molecule and the endosome allows normal recycling of both the antibody and the CTLA-4 molecule and thus is designed for stronger cancer therapeutic effect and less immune-related adverse effects. Preliminary data showed that BNT316 is well tolerated with no dose-limiting toxicities. The single-agent recommended phase 2 dose was determined to be 10 mg/kg without MTD being reached. Severe immune-related Grade 3 adverse event rate in the combo dose escalation with pembrolizumab was 23%, which is considered lower than what was reported for comparable IO-IO combinations. The recommended phase 2 dose for combination is six 6 mg/kg.

Overall BNT316 dosed as monotherapy and in combination was well-tolerated, and the safety profile appears to allow higher dosing for a longer duration of treatment as compared, for example, to ipilimumab. Early efficacy data of monotherapy in platinum-resistant ovarian cancer patients and in combination with pembrolizumab in multiple solid tumors were promising. Slide 15. With our colleagues from OncoC4, we presented data from the phase 1/2 study investigating BNT316 in 35 non-small cell lung cancer patients with metastatic lesions that progressed on immune checkpoint inhibition in previous lines. The majority of patients had an ECOG status of 1. The objective response rate was about 30% and disease control rate was 70%.

Patients that responded to BNT316 had previously failed multiple lines of treatment including several immune checkpoint inhibitors. In this cohort, BNT316 has shown manageable safety and tolerability when dosed at 10 mg/kg twice and followed with 6 mg/kg every three weeks. Immune-related adverse event of Grade 3/4 were observed in 34% of patients and included immune-mediated colitis; ALT, AST increase; and immune hepatitis. Our findings support the further development of BNT316 in non-small cell lung cancer in the phase 3 study PRESERVE-003. Slide 16.

Our second presentation at ASCO was together with our colleagues from Duality Bio and about our first clinical data for BNT323, our next-generation HER2-targeting ADC. BNT323 is comprised of our two targeting antibody covalently linked to the proprietary DNA topoisomerase-1 inhibitor via a cleavage build linker. Approved ADCs have shown anti-tumor activity and clinical benefits in multiple types of cancer, and we believe that, mid-term, ADCs as a modality will become a broadly used backbone for combos in oncology. More efficacious and safer anti-HER2 ADCs for example regarding potential lung toxicity may add further clinical benefit. Preclinical data for BNT323 described a significantly improved therapeutic window as compared to DS8201a or T-DM1analogs to approved HER2 ADC trastuzumab deruxtecan and trastuzumab emtansine, respectively.

BNT323 has a high drug-to-antibody ratio and, when incubated with rat, monkey, and human plasma, demonstrated outstanding plasma stability. In HER2-positive and and HER2-negative mixed cell cultures, BNT323 inhibited the proliferation of both cell types, demonstrating its bystander effect. Pharmacokinetic and pharmacodynamic analysis of BNT323 in xenograft mouse models showed targeted delivery of the toxin into tumor tissue. In vivo studies in monkeys showed a superior stability of BNT323 and rapid systemic clearance of the toxin.

All together, these properties result in maintenance of efficacy and reduction of systemic toxicity in animal models. Slide 17. The program has received Fast Track designation from the FDA and is being evaluated in a phase 1/2 clinical trial. The study is enrolling pretreated patients with advanced or metastatic HER2-targetable solid tumors. HER2 status is identified via IHC or ISH 4 expression level via NGS for HER2 amplification or HER2 mutation. The majority of patients had HER2 expression by IHC of 2-plus or 3-plus.

We showed preliminary antitumor activity in heavily pretreated HER2-expressing patients with a median of seven prior systemic treatment plans, including other anti-HER2 ADCs, anti-HER2 antibody therapy, or anti-HER2 TKI therapy. In HER2-positive breast cancer patients, while objective response rate is 50%, the disease control rate is 96%. In HER2-low breast cancer patients, objective response rate is 38%, while the disease control rate is 84%. Anti-tumor activity of BNT323 was also observed in non-breast cancer tumor types such as colorectal cancer, ovarian cancer, and endometrial cancer. Responses were observed in patients treated with different dose levels and HER2 expression status.

BNT323 was well tolerated and all adverse events were manageable so far. Interstitial lung disease of Grade 1 occurred in two patients out of 85 patients. Expansion cohorts are ongoing in selected tumor patients treated at the recombinant phase 2 dose, and we expect further data this year. Slide 18.

Finally, we presented data on our cell therapy product, candidate BNT211. We developed a highly sensitive second-generation CAR-targeting protein, Claudin-6, with high specificity. The carcino embryonic antigen Claudin-6 is an ideal target for cell therapy as it is absent in healthy tissues but highly expressed in many high medical need cancers. T improve CAR-T cell engraftment and persistence, we co-developed a CAR-T cell amplifying RNA vaccine, or CARVac for short.

The goal is to keep CAR-T cells at therapeutically relevant levels. In animal studies, we have shown that the persistence and effector function of CAR-T cells can be further enhanced by repeated administration of CARVac, a nanoparticulate RNA vaccine that encodes Claudin-6. CARVac is based on our uridine, nucleoside mRNA lipoplex vaccine technology and mediates bodywide RNA delivery to lymphoid compartment resident antigen-presenting cells. In multiple preclinical models, the display of a translated natively folded CAR target protein on antigen-presenting cells mediated in vivo stimulation and controlled expansion of CAR-T cells, induced a memory T cell phenotype along with higher target sensitivity and enabled tumor control even if sub-therapeutic CAR-T cell doses were administered. We are testing the safety, tolerability, and activity of a combination of Claudin-6 CAR-T cells in a bifurcated dose escalation study with increasing dose levels of CAR-T cells and a fixed CARVac schedule in patients with various cancer types that occurred in six positive defined as more than 50% of tumor cells with 2 to 3-plus intensity. A dose escalation has been completed for CAR-T cells derived from a manual manufacturing process, and we have presented data with highly encouraging signs of clinical activity and manageable safety at various conferences in the past.

Side 19. A subsequent cohort of 19 patients have been treated with a CAR-T product manufactured with a scalable automated version of the product. No DLTs have been observed so far and Claudin-6 CAR-T cells as well as CARVac were well tolerated, reflecting the safety profile detected in the first dose escalation level. The objective response rate was 41% for all 17 evaluable patients and 75% for eight patients treated at dose level two, namely one times 10 to the eight CAR-T cells. Next to germ cell tumors, which dominated the first dose escalation, we observed ovarian cancer patients responding.

We are expecting an additional data readout later this year. Once we have determined the recommended phase two dose for BNT211, we plan to initiate a pivotal trial in germ cell tumors which has already received PRIME designation by the EMA. Advancing our pipeline remains a key strategic priority for the year. This and next year, we plan to transform our pipeline as we advance multiple programs toward the pivotal stage. I will now pass the presentation to our CFO, Jens Holstein.

Jens Holstein -- Chief Financial Officer

Thank you, Ozlem, and a warm welcome to everyone who dialed into today's call. Before we go into the financial details for the second quarter and the first half of 2023, I'll start with giving you an overview on some key financial figures which you can find on the next slide. Our total revenues reached 1.4 billion euros for the first half of 2023, in our -- in line with our expectations with Q2 being the expected weakest quarter in the year. Our COVID-19 vaccine revenues are, as stated and expected before, heavily influenced by seasonal effects, especially now as we have summer in our biggest markets in the Northern Hemisphere. As we have outlined in earlier earnings calls, the revenue development for COVID-19 vaccines is expected to mimic a flu-like setting. I will go into more details concerning our financial guidance in the course of the call, but I want to emphasize already now that, acknowledging the uncertainties related to the seasonal effect, we reiterate our 2023 COVID-19 vaccine revenue guidance of around 5 billion euros for the full 2023 financial year.

With 1.4 billion euros in revenues, we ended the first six months of 2023 with an operating result of 91.1 million euros and generated earnings per share on a fully diluted basis of 1.28 euros. With respect to the company's financial position, we ended the second quarter of 2023 with 16.8 billion euros comprising approximately 14.2 billion euros cash and cash equivalents, as well as approximately 2.7 billion euros, partly current and partly non-current security investments which are part of our investment strategy. Subsequent to the end of the quarter, in July 2023, received 1.1 billion euros in cash from our collaboration partner, Pfizer, settling our gross profit share for the first quarter of 2023 alongside with 0.4 billion euros received until early August in connection with the amended COVID-19 vaccine purchase agreement with the European Commission. In connection with our acquisition of InstaDeep, which closed on July 31st, approximately 450 million euros were invested in form of cash and shares, not including potential future milestones. Overall, with this strong cash position in the background, we are on track to launch our new variant-adapted COVID-19 vaccine and intend to start multiple clinical trials across our oncology and infectious disease pipeline such as the ones with OncoC4and Duality Biologics that you Ugur mentioned earlier. I'll be moving to our financial results for the second quarter of 2023 as shown on the next slide. Our total revenues reported reached 166.4 million euros for the second quarter compared to 3.2 billion euros for the comparative prior-year period and decreased with a corresponding lower COVID-19 vaccine market demand. Write-offs by our collaboration partner, Pfizer, significantly reduced our gross profit share in the second quarter and hence negatively influenced our revenues for the three months ended June 2023.

Let me move to cost of sales which amounted to 162.9 million euros in the second quarter of 2023, compared to 764.6 million euros for the comparative prior-year period. For the first six months of 2023, the cost of sales reached 258.9 million euros, compared to 2.1 billion euros for the comparative prior-year period. The change was in line with decreasing COVID-19 vaccine sales. Research and development expenses reached 373.4 million euros for the second quarter of 2023, compared to 399.6 million euros for the comparative prior-year period. For the first six months of 2023, research and development expenses amounted to 707.4 million euros, compared to 685.4 million euros for the comparative prior-year period. Our R&D expenses are mainly influenced by progressing clinical studies for pipeline candidates, the development of variant-adapted as well as next-generation COVID-19 vaccines, and the expansion of our R&D headcount. General and administrative expenses amounted to 122.7 million euros for the second quarter of 2023, compared to 130 million euros for the comparative prior-year period.

For the first six months of 2023, G&A expenses reached 242.1 million euros, compared to 220.8 million euros for the comparative prior-year period. While in Q2, some cost savings have been achieved, G&A expenses for the first six months were mainly influenced by increased expenses for IT services as well as expanding the G&A headcount. Due to a loss-making second quarter of 2023 and the tax effects of a reorganization of the intellectual property rights within the group, income taxes with an amount of 221.8 million euros were realized, compared to tax expenses of 647.3 million euros accrued for the comparative prior-year period. In total for the first six months of 2023, income taxes were realized with an amount of 16.3 million euros; tax income compared to 2 billion euros tax expenses accrued for the comparative prior-year period. The derived effective income tax rate for the first six months of 2023 were approximately minus 5.5%, which is expected to change over the 2023 financial year to be in line with the updated estimated annual cash effective income tax rate of somewhere around 21% for the BioNTech Group, an improvement that I will elaborate on in a minute. As mentioned at the beginning, due to mainly seasonal effects of our COVID business, we recognized a loss during the second quarter of 2023 amounting to 190.4 million euros, compared to 1.7 billion euros net profit for the comparative prior-year period.

For the first six months of 2023, Net profit reached 311.8 million euros, compared to 5.4 billion euros for the comparative prior-year period. Our loss per share for the second quarter of 2023 amounted to 0.79 euros, compared to a diluted earnings per share of 6.44 euros for the comparative prior-year period. For the first six months of 2023, our diluted earnings per share was 1.28 euros compared to 20.65 euros for the comparative prior-year period. Now turning to the next slide, I would like to emphasize that we are updating the company's financial outlook for the 2023 financial year with respect to our planned full-year R&D and SG&A expenses, as well as our planned expenses and growth and maintenance capex for operating activities excluding effects caused by or driven from in-licensing arrangements, collaborations, or M&A transactions. Please note that the following numbers reflect current base case projections and are calculated based on constant currency rate and do not include further transactions that could occur in the second half of 2023. As stated before, we reiterate our estimated COVID-19 vaccine revenues of around 5 billion euros for the full 2023 financial year. Our guidance is based on the expectation that the demand in our vaccine will pick up in the year's third and fourth quarter, along with our rollout of the adapted COVID-19 vaccine against XBB.1.5 During the second quarter of 2023, the COVID-19 vaccine supply agreement with the European Commission has been amended. The agreed rephasing of deliveries annually through 2026 will play an important role in the future as revenues will be recognized over the extended term. With the EC contract giving us a level of clarity in terms of revenue expectations, the demand in vaccination rates in other territories, as for example, the U.S.

market, remain uncertain regarding these metrics. Our collaboration partner, Pfizer, confirmed its plans to achieve its goals for their market. Given their detailed plans to support an increase in vaccination rates in the U.S., we expect to achieve our revenue guidance range as previously mentioned. However, substantial uncertainties underlie the demand for COVID-19 vaccines in general, as well as for our vaccine, e.g., the timing of its approval will have an impact on its demand. There have been no precedent on how COVID-19 vaccine rates will evolve after years of a pandemic where people have been vaccinated multiple times.

We expect to learn from this for future years, but we assume that 2023 will be a very special one given the mentioned circumstances. It is our aim to move our clinical programs forward as quickly and cost-efficiently as possible toward becoming a multi-product company. To do so, we have implemented further measures to increase cost consciousness which led to a companywide cost optimization and hence reduction of our expected 2023 R&D SG&A spend and capital expenditures. The increased flexibility in expenditure level will help us navigate through the just-described uncertainties while remaining focused on the development of the next wave of innovation in various fields and indications. As summarized for you on this slide, we update our R&D spending for the rest of 2023 from between 2.4 billion euros and 2.6 billion euros to between 2 billion euros and 2.2 billion euros, including the R&D development costs identified from our latest publicly announced M&A activities. We also update our SG&A expenses from between 650 million euros to 750 million euros, now to between 600 million euros and 700 million euros, and reduce our spending for growth and maintenance capex for operating activities from between 500 million euros and 600 million euros to between 350 million euros to 450 million euros. As noted before, we have updated our group estimated annual cash effective income tax rate from around 27% to around 21% excluding potential effects from share-based payment settlements in the course of 2023.

Following a reorganization of the intellectual property rights within the group, we recognize deferred tax effects in Germany and the U.S. Previously unrecognized federal and state-deferred tax assets, including unused tax losses and unused tax credits, have been evaluated and now recognized. The recognition of these deferred tax assets lead to a decrease in the effective tax rate for the fiscal year of 2023. And with that, I would now like to turn the call over to our chief strategy officer, Ryan Richardson, for an update on our strategic outlook for 2023 and concluding remarks.

Thank you.

Ryan Richardson -- Chief Strategy Officer

Thank you, Jens. I'll now provide a brief summary of the commercial outlook for our updated COVID-19 vaccine launch and provide an update on our acquisition of InstaDeep before concluding with our strategic outlook for the remainder of the year and beyond. I would like to touch on our key readiness activities that have put us in a strong position to execute on our planned launch this fall. On the back of the regulatory recommendation for an XBB.1.5-adapted monovalent vaccine, we and Pfizer have made more than 40 regulatory submissions in key geographies around the world. We are on track to begin vaccine distribution once regulatory approval is received with first shipments expected from September onwards. We believe Comirnaty is positioned to maintain its leading position in multiple key geographies.

Most of the world will continue to be supplied under existing pandemic booster contracts. This includes our contract with the European Union, our largest contract, which was recently renegotiated to extend to a period over four years. In the United States, we expect our first major commercial market opening where we will leverage Pfizer's commercial capabilities. Turning to the next slide. This week, we announced that our acquisition of InstaDeep has closed following receipt of all required approvals.

With the acquisition, we add world-class AI and machine learning technologies and research capabilities to accelerate and enhance our broader strategic vision. The acquisition will bring over 290 data scientists, ML engineers, and tech professionals to our team, positioning us to lead in this disruptive new field. In combining InstaDeep's AI and ML expertise with our own research and development capabilities, we aim to develop novel therapeutic and vaccine product candidates with increased speed and efficiency. We also see opportunities to leverage these AI and ML capabilities outside of R&D across other functions at BioNTech. This makes this a highly strategic acquisition with significant long-term transformational potential across our firm. We will operate InstaDeep as an independent technology subsidiary of BioNTech. On the next slide, we showed the three pillars of value creation that we expect from this transaction.

The first is to apply cutting-edge AI and machine learning technologies across our therapeutic and vaccine platforms. We plan to connect these AI-enabled discovery capabilities with automated lab infrastructure to enable high-throughput drug discovery. While we do expect our overall AI investments to increase in the coming years, we do expect some mid-term cost efficiencies from the acquisition by internalizing our largest AI technology and services provider. Finally, we will continue to operate InstaDeep's third-party business which delivers technology solutions and services to external customers in the technology sector and other industries. We are excited to kick off the next phase of our collaboration with the leadership and bright minds at InstaDeep and believe that, together, we can become a global leader in applying cutting-edge artificial intelligence and machine learning technologies to discover, design, and develop next-generation immunotherapies at scale. The next slide provides an overview of our expected pipeline news flow for 2023 and 2024. Some of these points have been covered, so I won't go through them all in detail here.

With the collective efforts and dedication from our teams, we've achieved remarkable progress for several of our product candidates. At this year's ASCO Congress, we presented data for three of our pipeline candidates. We're on track to share additional data updates across a range of technologies later this year. In June, we initiated our first phase 3 trial in oncology. Additionally, we started a phase 2 trial for one of our FixVac candidates in collaboration with Regeneron, focusing on first-line NSCLC. As Ozlem has elaborated, we anticipate initiating several further trials in the near future.

On the next slide, I'll summarize the strategic outlook for the remainder of the year. We are on track to roll out our new variant-adapted COVID-19 vaccine in the coming month. We also plan to initiate multiple registrational oncology clinical trials while expanding our infectious disease pipeline. With the InstaDeep acquisition now closed, we intend to rapidly scale up our activity in AI-enabled drug discovery, and we'll continue to execute transactions to expand our innovation ecosystem and execute on our corporate development strategy to in-license complementary assets. Before concluding and opening up the floor for questions, I'd like to reiterate that we will hold our Innovation Series event on November 7th.

We'll provide further details on the event in the coming weeks. With that, I would like to thank our shareholders for their continued support, and I'll conclude our prepared remarks and open the floor for questions.

Questions & Answers:

Operator

Thank you. [Operator instructions] We will now go to your first question. One moment, please. And your first question comes on the line of Daina Graybosch from Leerink Partners.

Please go ahead.

Daina Graybosch -- Leerink Partners -- AnalystAnalyst

Yeah, thank you for the question. I have one on ONC-392. The phase 3 that you have started -- I forgot what's the name of it -- is different in design from the phase 2 and some of the inclusion, exclusion criteria. And I wonder if you could talk about why the differences and why you decided to go forward now in a phase 3 with single agency 24 rather than gathering more data and doing a combination study with PD-1 or any other agents in this pretty hard-to-treat and difficult-to-do trial setting.

Uğur Şahin -- Co-Founder and Chief Executive Officer

Dina, hi. It's Ugur. Thank you for the question. So -- so, as you know, the -- the phase 1/2 study collected data in different combinations, and they have seen -- they have seen single compound activity in non-small cell lung cancer in patients who had received -- received and progressed under first-line checkpoint blockade treatment. And this were -- this were encouraging objective response rate around 35%.

We do not see an added benefit in combining in that with the current status quo, which is chemotherapy, and therefore decided -- decided in -- in the -- in -- in also with favoring a clean safety profile to go with a single compound alone. And the patient population that have been selected for the study reflects historical patient populations with regard to the -- to the inclusion and exclusion criteria.

Daina Graybosch -- Leerink Partners -- AnalystAnalyst

Perhaps a follow-up. I think the difference, and tell me if I'm wrong, was the length for which the patients could have received a prior checkpoint that it's a lot -- you're requiring a longer prior checkpoint than you -- in phase 3 than you did in the phase 2. So, some phase 2 patients wouldn't be eligible for phase 3. Do you expect any negative impact from --

Uğur Şahin -- Co-Founder and Chief Executive Officer

Yeah, Dana, the -- the protocol has also emerged based on discussion with the FDA and FDA request.

Daina Graybosch -- Leerink Partners -- AnalystAnalyst

Got it. Thank you.

Operator

Thank you. We will now go to your next question. And your next question comes from the line of Tazeen Ahmad from Bank of America. Please go ahead.

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

Hi, good morning, and thanks so much for taking my question. Just a point of clarification. As you think about the rest of the year for COVID vaccine sales, I know you talked about the difficulties involved and really getting a sense for the trends, but when you decided to maintain guidance, at least for now, what key factors are you taking into account that gives you confidence that -- that sales will be -- or revenues rather, will be at least close to, if not at, the 5-billion-euro mark? And I think that's probably the best question for Ryan to answer. Thanks.

Ryan Richardson -- Chief Strategy Officer

Yeah, I'll start, Tazeen, and Jens should -- should also chime in here. So, you know, I think the starting point here was that we are expecting the total volume of COVID vaccines in the fall to be down. You may remember that last year, we had distributed more than 500 million doses of our BA.4/BA.5 variant-adapted vaccine globally. And for the full year last year, we had -- the market in the United States was about 144 million doses. We are expecting those numbers to come down both in the United States and globally.

So, we've factored that in. However, we also expect that in the United States that we're going to see a commercial market opening. So, a higher price point, along with Pfizer have talked about a gross price in $110 to $130 range. That's our expectation. So, a higher price point in the U.S.

And much of the rest of the world, we're still expecting contracts that have already been signed to be the primary sort of contractual mode governing the second half of deliveries. But demand will still matter. So, in the rest of the world, we're still expecting, effectively, continuation of the booster contracts, and that's factored in as well.

Jens Holstein -- Chief Financial Officer

Yeah, maybe, Tazeen, just to add, I mean, Ryan basically described the situation, and I think we made some statements in our speeches as well in that respect that, of course, situation like we currently see hasn't been seen before for any product so far. No patients have received and -- the people have received multiple vaccinations in the last two years. And of course, there are some level of tiredness, so to say, on -- on getting vaccinated. And -- but we see the need, you know, for further vaccinations. And I think, specifically for the U.S., you've heard probably, you know, some of the plans that Pfizer, as well as our competitor, Moderna, has announced on how -- how the expectations will be going up for -- for the -- for the rest of the -- of the year to -- to pick up with the vaccination rates. So, in that respect, you know, the next couple of months, the next two, three months will give us a good sign, you know, how the -- how the year will end.

There is some uncertainty. We just wanted to make that clear. And, you know, we see 2023 is a very special year though too, I have to say. So, you know, from our perspective, that situation that people have received multiple vaccinations and now maybe a little bit tired has to -- to grow into a market where you have annual vaccinations. And -- and I think it gives -- '23 gives us some indication, but we also believe there will be a further increased potential from our perspective for '24 and the other years, just given the specific situation that we -- that we now have in this year, you know, with -- with two years of multiple vaccinations for people.

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

OK, thank you.

Operator

Thank you. We will now go to your next question. And your next question comes from the line of Akash Tewari from Jefferies. Please go ahead.

Unknown speaker

Hi, everyone. Thanks so much for taking our question. This is Amy on for Akash. So, Pfizer has alluded to an enterprisewide cost-cutting program, particularly around COVID if long-term vaccine demand ends up being modest.

How would Pfizer's cost cut change your long-term opex on your COVID programs and spend, more broadly? And on a related note, can you go over what's changed in your new 2023 opex and capex guide? We're seeing that BNT141 isn't on your pipeline side this quarter. Are there any other components that may be driving these cost cuts? Thanks so much.

Ryan Richardson -- Chief Strategy Officer

Yeah, thank you for the question. So, I'll speak to the opex point and then ask Jens to opine on what's driving the cost lines in our guidance. But then on the opex side, the short answer is no. Actually, one of the unique features of our -- of our economic model for COVID-19 is that our opex is very lean.

So, as you may recall, we get a -- a gross profit share on every COVID vaccine dose produced and delivered through the Pfizer partnership. And only in Germany and Turkey do we booked top-line product sales and actually have significant opex, only in those two countries. So, that does translate into a very differentiated profile across our P&L. And I think you see some of that leanness reflected in the numbers that we've disclosed today. Jens, do you want to speak to the drivers of the costs that you expect?

Jens Holstein -- Chief Financial Officer

Yeah, I mean, from -- from -- for us, we of course can only talk for us and we cannot talk about Pfizer and their -- their cost-cutting plans that they have announced in their earnings call. So, for -- from our perspective, you know, we see a little bit less spend for the collaboration with Pfizer in the course of 2023. But we also have a close look on our own spending, you know, in the areas of oncology, for example, or in building up production capacities. So, those have been specific areas where we -- where we just look at, you know, controlling our costs going forward to have more flexibility.

Unknown speaker

Great. Thanks so much.

Operator

Thank you. We will now take your next question, and the question comes from the line of Chris Shibutani from Goldman Sachs. Please go ahead.

Chris Shibutani -- Goldman Sachs -- Analyst

Yes, two questions if I can, one on the pipeline and the other more financially related. On the pipeline, BNT122 first-line metastatic melanoma seemed a bit conspicuous in terms of the absence of mention in the press release and in prepared comments. I do see it in the pipeline table. Have your expectations for this trial changed? I believe we should still be expecting updates in the balance of this year.

And then I have a follow-up on financial.

Ryan Richardson -- Chief Strategy Officer

Yeah, thanks, Chris. Let me start on the -- on the 122 and Ozlem can also chime in here. So, we've reiterated our -- our guidance for an update later this year. We still intend to provide that.

I think on -- on a previous call, we had also mentioned that the -- the full -- the PFS analysis would be triggered on an event basis. And the fact is we still haven't met that event trigger -- reached that event trigger, which does -- which does mean that we're not in a position right now to be specific about the full -- the data that we're likely to bring out later this year. So, we do intend to provide an update before year-end, but I think it's likely that there won't be a full data update. So, more to come on that.

Ozlem Tureci -- Co-Founder and Chief Medical Officer

Yeah, I can just echo what -- what Ryan -- Ryan said. Gathering these events is not entirely under our control. And therefore, we, at this point, cannot -- cannot forecast when we will be able to report the data interim analysis data point.

Chris Shibutani -- Goldman Sachs -- Analyst

Got it. And then, on the financial follow-up, very healthy cash balance, obviously, post-COVID. And we are watching the decisions you're making on the capital allocation front. The InstaDeep is an example of that.

And, Ryan, you mentioned during the call you look to intend to continue to in-license assets. Can you give us a sense for potentially any areas that you feel, either disease area modality, size, a lot of these have been smaller, and InstaDeep was a little bit more kind of adjacent as opposed to immediately obvious, just be helpful to get a sense for what this mosaic is that you're creating given your capacity.

Ryan Richardson -- Chief Strategy Officer

Yeah, absolutely, absolutely, Chris. So -- so, as you see from the deals we've announced so far this year that, you know, we've allocated a little bit less than $1 billion in terms of upfront payments across the InstaDeep transaction and then several in-licensing deals for several assets that we talked about today. So, I think, in that sense, you know, InstaDeep was a sort of strategic exception. We thought that was a very unique opportunity, wouldn't expect that that would be one that would be replicated as such. But think the licensing deals and small-scale M&A, I think, you can expect us to continue to operate along the same -- the same lines as was what you've seen so far in the first half of the year. So, relatively small deals, those are -- that's our sweet spot, under a billion is our sweet spot.

We will look at and consider larger deals, but that's -- you know, I think it has to be a very, very good strategic fit for us to make a larger move. We do see opportunities in that sub-1 billion range to further bolster the pipeline. And in terms of focus areas as -- as you've seen so far in the first half, I/O -- differentiated I/O assets are going to continue to be an area of focus.

Chris Shibutani -- Goldman Sachs -- Analyst

Great. We'll look for more insights on your Innovation Day. Thank you.

Ryan Richardson -- Chief Strategy Officer

Thank you.

Operator

Thank you. We'll now go to the next question. And your next question comes from the line of Yaron Werber from TD Cowen. Please go ahead.

Brendan Smith -- TD Cowen -- Analyst

Hi, guys. Thank you very much for taking the questions. This is Brendan for Yaron. Just really quick, we wanted to also ask maybe about the potential flu-COVID combo approach here.

First, I guess when -- when do you think we might see data from that study but also, maybe a little bit more broadly, kind of what the path forward is for this combo. And really, I guess trying to understand with each updated booster, how this would kind of play out here. Just kind of trying to get at, you know, Sanofi kind of casts some doubt a little bit on the whole mRNA approach, obviously, from their own perspective. But really, how you're kind of thinking about mRNA fitting into the whole COVID-flu combo space from what you're seeing at this point? Thanks.

Ryan Richardson -- Chief Strategy Officer

Yeah, sure, I'll start. So, as you know, Pfizer currently has an ongoing phase 1 study of a flu-COVID combo vaccine, and they also have a phase 3 study ongoing of their flu-mRNA flu vaccine, which we've licensed the technology to them. We still retain some economics on the program, but they're in control and driving that program forward, the mono program. So, we do see opportunity for a combination vaccine. I think, in terms of timelines, you know, Pfizer has guided to a potential phase 1 data update this year for the -- for the combination, and they've also guided to near-term phase 3 data on the -- on the flu mono, both of which I think will be relevant data points here to help inform the next stage of development. The last point I would add is just that Pfizer has indicated, I think just the last couple of days, that -- or they've reiterated that they see a flu -- both a flu mono and also a flu-COVID combo being starting to become relevant from 2024 onwards.

So, not -- not something to -- to look at this year, although I think positive data could be a helpful catalyst for us as well.

Operator

Thank you. We will now go to our next question. One moment, please. And your next question comes from the line of Terence Flynn from Morgan Stanley.

Please go ahead.

Terence Flynn -- Morgan Stanley -- Analyst

Great, good morning. Thanks for taking the question. Just was wondering if you could elaborate more on the rationale to advance BNT116 into the metastatic setting, while in iNeST, I know you've talked more about the potential there in the adjuvant setting. So, just wondering if you could kind of compare and contrast those two approaches.

Thank you.

Uğur Şahin -- Co-Founder and Chief Executive Officer

Yeah, thank you. The question is highly relevant. It's the six-pack approach, is -- is based on the -- on the -- off-the-shelf availability of the -- of the vaccines. That means, in the metastatic setting where the disease is -- is rapidly progressing, we would like to get -- get as -- as quickly as possible an immune response-initiated and personalized vaccine.

And FixVac vaccine approach requires around four to six weeks for preparation of the vaccine and is particularly suited for the -- for the adjuvant setting. And because in the adjuvant setting there is a longer time frame before patients' progress, so that gives us the opportunity to build an immune response that can counter a potential progression of the disease. Therefore, all this adjuvant ties will have as an endpoint relapse-free survival as an endpoint, whereas in -- in the metastatic setting, endpoints will be, for example, progression-free survival or OS.

Operator

Thank you. We will now go to our next question. And your next question comes from the line of Bill Maughan from Canaccord. Please go ahead.

Bill Maughan -- Canaccord Genuity -- Analyst

Hi. Thank you. So, I have a question on self-amplifying RNA. I know that you had been developing a few programs with your self-amplifying RNA, and it's kind of not center stage anymore.

But several other companies that are earlier in their cancer vaccine development are using self-amplifying RNA and kind of singing its praises. So, I was just wondering if we could expect self-amplifying RNA to -- to occupy some more -- more of the spotlight and maybe be advanced in -- in -- in some programs coming up in the future. Thanks.

Uğur Şahin -- Co-Founder and Chief Executive Officer

Yes, thank you for the question. As you know, we have -- we have two mRNA amplification programs. It's a self-amplifying mRNA program as well as the trans-amplification program. We have observed -- and -- and if you look closer into the data and to published data of other groups, we have observed that the self-amplifying mRNA in humans are limited, and the full -- full response on innate quick -- quick initiation of innate response are hindering the full capacity of self-amplifying mRNA. And we are working on a -- on a improved approach overcoming this innate -- innate immune response limitation on a trans-amplifying mRNA platform which comes -- which combines two -- two advantages: the advantage of safety, though it replicates itself is not amplified; it's -- it's -- it provides -- provides only trans -- trans-mRNA activity.

And the -- the target mRNAs are amplified, we thereby separate the target mRNA in the -- the replicates mRNA and have the opportunity to combine multiple targets. And this is something that we made a lot of progress in the preclinical setting, and we will report end of this year here on this platform, particularly this -- we see here suitability in the infectious disease setting, particularly in the -- in the setting of combination vaccines.

Bill Maughan -- Canaccord Genuity -- Analyst

Thank you.

Operator

Thank you. We'll now go to the next question. And your next question comes from the line of Ellie Merle from UBS. Please go ahead.

Unknown speaker

Hi, guys. This is Sara on for Ellie. Thanks so much for taking our question. I guess a quick one on 211 and the data update later this year.

I guess, what are the expectations for data there, and what are you guys hoping to see? Thanks.

Ozlem Tureci -- Co-Founder and Chief Medical Officer

Thank you for the question. So, we have an ongoing phase 1/2 trial, and we have had a couple of data updates this year and the year before. The trial is ongoing. What we expect to report end of this year is additional data, on the one hand, on -- on safety of different doses and in combination with our COVID vaccine, also data on clinical activity and additional clinical indications.

We have been very focused on testicular cancer in the previous updates. Further, we will report on durability of these responses. We have been focused on objective response rates now that the data is maturing. We will provide more insights into durability of those responses and how use of a vaccine impacts them.

Operator

Thank you. Thank you. We will now take our last question for today. And your last question comes from the line of Simon Baker from Redburn.

Please go ahead.

Simon Baker -- Redburn Partners -- Analyst

Thank you for taking my question. It relates to the PRESERVE-003 study. It's a two-stage phase 3 study. So, I just wanted to get some idea of what data you will be presenting at the conclusion of stage 1, and any timing that is indicated based on your expectations for, we're going to call them, recruitment.

And I see the clinical trial is showing a primary completion in mid-2026. Is that a reasonable estimate at this stage for the final data of stage 2? Thanks so much.

Ozlem Tureci -- Co-Founder and Chief Medical Officer

I didn't fully get that, Simon. Was this about data expectations for the ongoing ONC-392 trial?

Simon Baker -- Redburn Partners -- Analyst

Yes, it was. Because it's a -- it's a two-stage study. So, I wondered what data you will disclose when stage 1 is completed and the dose is selected.

Ozlem Tureci -- Co-Founder and Chief Medical Officer

Oh, so it will be safety data and -- and clinical activity data in different tumor indications.

Uğur Şahin -- Co-Founder and Chief Executive Officer

No, no, this is -- I think it's the lung cancer trial.

Ozlem Tureci -- Co-Founder and Chief Medical Officer

Sorry, I didn't get that.

Uğur Şahin -- Co-Founder and Chief Executive Officer

So -- so, we expect around 2025 for our ONC data and safety data. Now, we have started the clinical trial with two different doses. We will select one dose to continue. And it's a staged approach based on our -- on our data.

Initial assessment of the first clinical trial will continue for -- for -- for -- for full maturation. 

Simon Baker -- Redburn Partners -- Analyst

OK, thanks so much.

Uğur Şahin -- Co-Founder and Chief Executive Officer

Thank you.

Operator

[Operator signoff]

Uğur Şahin -- Co-Founder and Chief Executive Officer

Thank you.

Duration: 0 minutes

Call participants:

Victoria Meissner -- Vice President, Strategy and Investor Relations

Uğur Şahin -- Co-Founder and Chief Executive Officer

Ozlem Tureci -- Co-Founder and Chief Medical Officer

Jens Holstein -- Chief Financial Officer

Ryan Richardson -- Chief Strategy Officer

Daina Graybosch -- Leerink Partners -- AnalystAnalyst

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

Unknown speaker

Chris Shibutani -- Goldman Sachs -- Analyst

Brendan Smith -- TD Cowen -- Analyst

Terence Flynn -- Morgan Stanley -- Analyst

Bill Maughan -- Canaccord Genuity -- Analyst

Simon Baker -- Redburn Partners -- Analyst

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