After manufacturing more than 2.6 billion doses of the Comirnaty COVID-19 vaccine together, Pfizer’s partner BioNTech is reporting skyrocketing profits.
Andreas Arnold/picture alliance via Getty
After manufacturing more than 2.6 billion doses of the Comirnaty COVID-19 vaccine together, Pfizer’s partner BioNTech is reporting skyrocketing profits.
After reporting revenue from Q4 and full-year 2021, the earnings are even higher than expected. The news may be enough for BioNTech to join the ranks of the largest drugmakers in the world.
Per the Q4 revenue report, BioNTech’s stock had grown more than 1500% year-over-year. The Q4 revenue alone was €5.5 billion, bringing 2021’s total net profit for the year to €19.0 billion. The news pumped up the company’s shares to a sky-high €12.18 a share, higher than estimates of €7.44 per share.
Because of the high valuation of shares, BioNTech is introducing a special cash dividend of €2 per ordinary share. Pending approval at the Annual General Meeting coming up in June, the dividend deal would be worth about €486 million. BioNTech is also starting buybacks of ADS shares up to $1.5 billion over the next two years.
And the earnings are just getting started. BioNTech said that orders for 2022 COVID-19 vaccines are up to 2.4 billion doses. The company expects revenue from the vaccine for 2022 to be between €13 billion and €17 billion.
With a 2021 revenue of €19.0 billion - or about USD$21.14 billion - BioNTech is earning its spot among the largest drugmakers in the world. In 2020, Yahoo Finance compiled a list of the 15 largest pharmaceutical companies by sales volume, and if the data is similar this year, BioNTech would be on the list.
The 2020 list of largest pharma companies includes giants such as Eli Lilly, Johnson & Johnson, Merck and GlaxoSmithKline. Pfizer, BioNTech’s partner on the vaccine, ranked #3. The lowest company on the list, #15, was Novo Nordisk, with annual revenue of $20.26 billion. BioNTech is now proving itself to be a major player and could oust some of these companies in an updated list.
The earnings are impressive, but even more so is how quickly BioNTech grew. Previously, the company was a little-known cancer research group. BioNTech’s 2019 total revenue, mostly from collaborative agreements, was €108.6 million - roughly 0.0057% of 2021’s total revenue two years later.
BioNTech says it plans to use the money for good. The company is again partnering with Pfizer for a shingles vaccine. The company also said it plans to increase R&D spending to €1.5 billion, about a 50% increase from last year.
“We intend to build on our 2021 success and rapidly advance multiple programs, including our mRNA-based immunotherapies, cell therapies, and bi-specific antibodies. At the same time, we are investing in our second growth pillar, infectious diseases, and intend to advance our influenza and shingles vaccine candidates together with our partner Pfizer,” Ugur Sahin, co-founder and CEO of BioNTech, said.
The company, however, has some other questionable expenses. For example, BioNTech was a leading sponsor of the Oscars this year. The company didn’t say how much it spent on the ad, but estimates for a 30-second ad for this year’s Oscars range from $1.7 million to $2.2 million.
Even though BioNTech plans to increase R&D spending, there are concerns about how little that €1.5 billion is compared to earnings. In 2020, most major pharma companies spent more on sales and marketing than they did on R&D. For example, Bayer spent $18 billion on marketing and sales, compared with 8 billion for research. Johnson & Johnson spent $22 billion on sales and marketing efforts but only spent $12 billion on research.
However BioNTech decides to spend its earnings, the company promises to keep patients at the forefront.
“Our core vision remains the foundation for all our activities: harnessing the power of the immune system to improve the health and lives of billions of people worldwide,” Sahin said.
