BioNTech SE (NASDAQ:BNTX) Q1 2023 Earnings Call Transcript

BioNTech SE (NASDAQ:BNTX) Q1 2023 Earnings Call Transcript May 8, 2023

Operator: Welcome to the BioNTech First 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.

Dr. Victoria Meissner: Good morning and afternoon. My name is Victoria Meissner, and I’m the new Head of Investor Relations at BioNTech. I’m a medical doctor by training and have recently joined BioNTech from Healthcare Investment Banking at Jefferies. I look forward to working with you on the corporate side. Thank you for joining us today for BioNTech’s first quarter 2023 earnings call. As a brief reminder, the slides that accompany this call and the first quarter 2023 press release that was issued this morning can be found in the Investors section of our website. As outlined on Slide 2, you can see 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 called original date, and we undertake no obligation to update or revise any of the statements. On Slides 3 and 4, you can see detailed safety information regarding our COVID-19 vaccine. On Slide 5, 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, Ugur Sahin; 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 Ugur Sahin.

Ugur Sahin: Thank you, Victoria. Good morning, and good afternoon, and warm welcome to all the call participants. We appreciate your continued support. Today, I will summarize our first quarter 2023 highlights and priorities before I pass the call over to my team to provide further details. Let me reiterate our strategic goals for 2023 and highlight our first quarter and recent achievements. First, to expand and sustain our leadership in COVID-19 with Pfizer by advancing our next-generation vaccine candidate, developing combination vaccines and advancing key Comirnaty features. This quarter, we maintained our strong COVID-19 vaccine market position, supported by key label expansions in regions around the world. This month, we published preclinical data in the Journal Cell on our next-generation vaccine component in combination is coming out.

Our second goal is to accelerate our oncology pipeline and initiate multiple potentially registrational products. 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. Our third and final strategic goal is to initiate and accelerate clinical programs with high unmet medical need in infectious diseases. In the first quarter, we initiated new clinical vaccine programs namely for shingles and tuberculosis. The first quarter was a strong start to 2023. We plan to continue execution against these strategic goals to continue our development into a fully integrated global multiproduct biotechnology company and divesting medical needs worldwide.

Cancer remains one of the key unmet medical needs. Our long-term oncology strategy is to expand the treatment options available for cancer patients and become a multiproduct company in the next year. In order to best serve the needs of tumor patients, we aim to address the full continuum of cancer treatment, being novel party to market for patients with adjuvant and late-stage cancer and combining our platforms and programs to translate our science into survival. Key elements in our oncology pipeline are mRNA cancer vaccines, cell therapies, next-generation checkpoint immune modulators and antibiotic conjugate. We believe that these classes have the potential to drive improved outcomes for solid tumor patients across multiple lines of treatment and tumor types.

Our most advanced oncology assets are currently in development for a range of solid tumors at all stage of treatment. We believe that this asset has first-in-class or best-in-class potential and may enable us to drive meaningful change in the treatment of many cancers. How are we planning to achieve this? Our technology-agnostic innovation engine leverages modular technology platforms, both developed internally and accessed via collaboration partnerships, to produce novel product candidates. In the first quarter, we announced two new collaborations to give us access to assets and platforms that we believe may be important in how solid tumors are treated in the future. One of those which I’m particularly excited about is the new collaboration with Duality Biologics, the Company focused on the discovery and development of next-generation antibody drug conjugates.

In the last few years, advancements in ADC technology has resulted in a potent use for the treatment of solid tumors. We believe that ADCs have the potential to replace highly toxic chemotherapy regimens as the cytotoxic backbone to cancer treatment. ADCs consists of three main components: antibody lincoln payload, each of these components has an impact on ADC’s pharmacological and clinical properties. ADC is a precision medicine, allowing for targeted graft delivery, particularly to tumor cells with high specificity and potent in use with the benefit of reduced off-target events. When the monoclonal antibody binds to the target antigen specifically expressed on the tumor cell, the ADC is internalized, allowing for the release of the cytotoxin, which leads to cell death.

Slide 11. Under the terms of the exclusive worldwide licensing collaboration agreement with DualityBio, excluding Mainland China, Hong Kong region and Macau region, we will gain access to two programs: dB-1303 targeting HER2 and DB-1311. Driven by Duality Biotech platform and novel cleavable linker and payload technologies, this third-generation ADCs have demonstrated pharmacokinetic properties that may contribute to an increased third-party window compared to other ADC platforms. ADCs offer a bold combination potential, especially with various IO agents. A Phase 1/2 clinical trial for DB-1303 is ongoing, which we plan to expand into further tumor indications, and we aim to rapidly advance clinical development of this program. Slide 12. I want to end where I started, our vision.

With our new collaboration, we now have 27 programs. We plan to start multiple potentially registrational products in the coming years. Within the next years, we aim to become a multiproduct global biotechnology leader, aiming to contribute and address the world’s most pressing health challenges with pioneering disruptive technologies delivered at scale. 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: Thank you, Ugur. I’m delighted to speak with everyone today and provide our pipeline update. Starting on Slide 14. Not only since BioNTech’s founding, we have firmly believed in the potential for mRNA cancer vaccines to have a place in the future of cancer treatment. We have built our personalized and offer share platforms and initiated a broad clinical program to evaluate the full utility of our approaches. Today, we have a broad cancer vaccine development program with four ongoing randomized Phase 2 clinical trials in both the adjuvant and metastatic disease settings. The iNeST program includes clinical studies, the Phase 2 clinical trial with autogene cevumeran, BNT122 monotherapy in adjuvant CRC started in 2020 and is recruiting patients with CTDNA positive resected Stage 2 high-risk and Stage 3 colorectal cancer.

Data from an investigator initiated Phase 1 clinical trials evaluating BNT122, autogene cevumeran, and onetime dosing of atezolizumab in adjuvant pancreatic ductal adenocarcinoma were presented at ASCO last year. A Phase 2 clinical trial in this patient population is planned to start in 2023. A randomized Phase 2 clinical trial evaluating our agent in combination with pembrolizumab in first-line melanoma patients has finished enrollment. Analysis of PFS as primary endpoint will be triggered event-based. Data from a Phase 1 clinical trial with BNT122 autogene cevumeran, a single agent and in combination with articllezumab in patients with locally advanced disease and metastatic disease across multiple tumor types was presented previously. We are preparing a manuscript summarizing the Phase 1 data for publication.

fixed program: A randomized Phase 2 clinical trials evaluating BNT113 in combination with pembrolizumab versus pembrolizumab monotherapy as a first-line treatment in patients with PD-L1 positive unresectable recurrent or metastatic HPV-16 positive head neck squamous cell carcinoma is ongoing. A randomized Phase 2 clinical trial evaluating BNT111 in combination with cemiplimab, whereas both agents as monotherapy in patients with refractory/relapsed unresectable Stage 3 or 4 melanoma is ongoing, conducted in collaboration with Regeneron. Data from the first-in-human open-label Phase 1 clinical trial evaluating BNT111 in patients with advanced melanoma have been published and presented. A Phase 1 clinical trial evaluating BNT116 alone and in combination with cemiplimab in patients with non-small cell lung cancer in various settings is ongoing.

For example, patients who have progressed on prior PD-1 inhibitor treatment or are not eligible for chemotherapy and in combination with the docetaxel in patients who have received prior platinum-based chemotherapy. The second trial is planned to start this year to evaluate the combination of BNT116 and cemiplimab and cemiplimab alone as first-line treatment of patients with non-small cell lung cancer. Based on the data collected from these trials, we plan to continue the clinical trial advancement and expansion of both our mRNA cancer vaccine program. I’d like to put our first quarter pipeline advancements and additions into the broader context of our clinical stage pipeline, which is depicted on Slide 15. In the first quarter, we added to our pipeline the new assets Ugur already mentioned.

The HER2 targeting ADC, DB-1303 developed by our colleagues at DualityBio, which has recently started the Phase 2 portion of the ongoing Phase 1/2 clinical trial. Also in the first quarter, we added ONC-392 to our pipeline, the PH sensitive anti-CTLA4 antibody developed by our partner, OncoC4. ONC-392 is being tested in two ongoing clinical trials, the first in multiple tumors as monotherapy and in combination with pembrolizumab; and the second trial in platinum-resistant ovarian cancer patients in combination with pembrolizumab. We are excited about accelerating and broadening the clinical development for both of these programs based on the data we’ve seen in the pre-clinic and clinic. On Slide 16, I want to briefly highlight the mechanism of action and clinical data of ONC-392.

CTLA-4 recycles continuously between the sales service and the endosomes as it does not undergo the some degradation. Interruption of this process is associated with the development of autoimmunity. Autoimmunity and immune-related store events are a major limitation of approved anti-CTLA-4 antibodies, such as ipilimumab that disrupts CTLA-4 recycling by promoting lysosomal degradation of these important immune checkpoint markers. ONC-392 does not interpret with the recycling it dissociates from the CTLA4 molecule in the endosome and 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. ONC-392 is being tested in the trial that investigated dose escalation, a single agent and in combination with pembrolizumab.

Multiple indications, such as I/O naïve and resistant non-small cell lung cancer and melanoma are being treated with RP2D. Preliminary data shows that ONC-392 is well tolerated with no DLTs, and the RP2D was determined to be 10 mg per kg without MTDs being reached. Severe immune-related grade-free adverse event rate in the combo dose escalation was 23%, which is considered lower than what was reported for comparable IO/IO combination. The RP2D dose for combination is 6 mg per kg. In summary, ONC-392 dose as monotherapy or in combination was well tolerated, and the safety profile appears to allow higher dosing for a longer duration of treatment as compared to ipilimumab. Early efficacy data as monotherapy in platinum-resistant ovarian cancer patients and in combination with pembrolizumab in multiple solid tumors were promising.

Presentation of the first data from the NSCLC expansion cohort of the Phase 1/2 PRESERVE 001 study is planned at ASCO next month. Building on this data, we are planning to start a Phase 3 clinical trial in non-small cell lung cancer patients without driver mutations, who have progressed following anti-PD-1. After progressing on an anti-PD-1 treatment, non-small cell lung cancer patients have 8 to 11 months median overall survival and 3 to 4.5 months progression-free survival with a response rate of around 10% when treated with the second-line standard of care docetaxel. With ONC-392, we hope to offer a promising new second-line treatment option for these patients. The randomized open-label controlled multicenter Phase 3 PPRESERVE 003 study is planned to treat IO resistant non-small cell lung cancer patients in the dose confirmation part we and NC4 plan to assess the efficacy and safety of ONC-392 given at two dose levels in comparison to docetaxel.

In the subsequent part of the trial, we intend to assess the safety and efficacy of ONC-392 at the collective dose regimen versus docetaxel. Patients with Stage 4 non-small cell lung cancer who progressed on prior IO treatment with or without chemotherapy and ECOG status of zero or one can be enrolled. IO/IO therapy is allowed. A total of about 600 patients are planned to be enrolled and randomized 1:1 to receive either on ONC-392 or docetaxel in this two-stage study. The primary endpoint is overall survival with objective response rate, PFS and safety as secondary endpoints. The study is planned to start enrolling patients within the next few weeks. The trial in progress poster will be presented at the 2023 ASCO Annual Meeting. Moving to our collaboration with our partner, DualityBio, on Slide 18.

As part of the collaboration, we will gain access to DualityBio’s lead candidate, DB-1303, a HER2 targeting ADC comprised of the trastuzumab biosimilar covalently linked to a proprietary DNA topoisomerase I inhibitor P1003 via [indiscernible] L101. Approved ADCs have shown antitumor activity and clinical benefits and multiple types of cancer. While current generations of anti-HER2 ADCs have an improved overall therapeutic index, more efficacious and safer HER2 ADC, for example, regarding potential lung toxicity, such as the severe life-threatening or fatal interstitial lung disease, including pneumonitis may add further clinical benefit. The first data for DB-1303 were presented at the EORTC and IACR conference last October and describe the significantly improved therapeutic window of DB-1303 pre-clinically as compared to DS-8201a or TDM-1 analogs to trastuzumab, deruxtecan and trastuzumab emtansine, respectively.

In red monkey and human plasma, DB-1303 demonstrated high drug to antibody ratio and outstanding plasma stability. In HER2-positive and HER2 negative mixed cell cultures, DB-1303 inhibited the proliferation of both cell types, demonstrating its bi-standard effect. Pharmacokinetic and pharmacodynamic analysis of DB-1303 and xenograft mouse models showed targeted delivery of the toxin into tumor tissue. Further in vivo studies in monkeys showed a superior stability of DB-1303 and rapid systemic clearance of the toxin. These pharmacokinetic properties result in maintenance of efficacy and reduction of systemic toxicity in animal models, which are shown on the next slide. Slide 19, DB-1303 exhibited potent antitumor activity in both HER2-positive and HER2-low tumor models, potentially expanding the benefit population of HER2-targeted therapy.

Preclinical studies in monkeys demonstrated an improved safety profile compared to DS-8201 with the highest non-severely toxic dose of 80 mg per kg. Further, DB-1303 showed lower risk of causing lung inflammation with no ILD-like lung toxicity. The pharmacokinetic properties of DB-1303 may contribute to a superior safety profile observed in monkeys. Slide 20. The program has received Fast Track Designation from the FDA and is currently being evaluated in a Phase 1/2 clinical trial for HER2-positive advanced solid tumors. The study is enrolling pretreated patients with advanced or metastatic HER2-positive or HER2-expressing solid tumors. Data from this study will be presented at ASCO this year. After determination of the recommended Phase 2 dose, further dose expansion cohorts are planned, including tastuzumab-treated HER2 gastric or the gastric adenocarcinoma, esophageal carcinoma and CRC to over-expressing and HER2-low endometrial carcinoma, hormone receptor positive HER2 low breast cancer as well as HER2-positive breast cancer and non-small cell lung cancer with activating HER2 mutations.

Slide 21 highlights our infectious disease pipeline. In December of last year, we initiated the first clinical trials, investigating an mRNA-based vaccine for malaria prevention. Consistent with our 2023 strategic priorities, we started first in human clinical trials testing new mRNA vaccine candidates in the first quarter of 2023. One is a vaccine against tuberculosis and the other with our partner, Pfizer, a vaccine for shingles. These programs built on our validated platform of mRNA LNPs that have a backbone optimized design and our new nucleoside modified to address diseases with a significant global need. The World Health Organization estimates that about 25% of the world population is latently infected with mycobacterium tuberculosis, the bacterium responsible for the tuberculosis disease.

10.6 million people developed active tuberculosis in 2021 and a total of 1.6 million people died of tuberculosis worldwide. There are limited prophylactic treatment options for tuberculosis and cases of multidrug-resistant mycobacterium tuberculosis strains are increasing worldwide. The only licensed tuberculosis vaccine is the mycobacterium bovis derived and attenuated BCG, which was first introduced in the 1920s and is still routinely administered to newborns in most tuberculosis endemic countries. While BCG provides time protection from severe forms of tuberculosis in childhood, the high number of pulmonary tuberculosis cases that emerge every year illustrates the limited durability and protective efficacy of BCG against tuberculosis disease and transmission in adolescents and adults.

Vaccine technology advances are seen as important to ending with tuberculosis epidemic by 2030, which is the United Nations Sustainable Development Goal. Given the major global unmet medical need for tuberculosis vaccines, we and the Bill and Melinda Gates Foundation are working on multi-antigen mRNA-lipid nanoparticle vaccine candidates against tuberculosis. The target population of a BNT164 program will include gram-negative and positive BCG and vaccinated healthy adults. The clinical program in Germany and South Africa, thereby including a non-endemic and endemic country, will investigate with safety, reactogenicity and tolerability of the BNT164 vaccine candidates. The Phase 1 program is intended to have select for optimal mRNA vaccine candidate and the dose level for advancement to Phase 2.

The vaccine may prevent infection and subsequent transmission, and when applied to a large enough proportion of the target population that constitutes the infectious reservoir, could enable interruption of transmission and that bring us closer to the elimination of tuberculosis. We believe that even a vaccine that is only 50% efficacious would be a critical intervention and a success in contributing to the WHO tuberculosis elimination target by 2030. Slide 23. Dynamic evolution of COVID-19 strain requires care vaccine adaptations and innovative next-generation vaccines. We are pursuing several next-gen vaccine concepts. One of these is a T-cell string vaccine component aka BNT162b4. As shown on the left-hand side, along the evolution of and particularly pronounced in the omicron sub-lineages, there has been progressive loss of concert by protein neutralizing antibody sites.

In contrast, HLA Class 1 and 2 presented T cell epitopes of the spike protein remained mostly across the virus evolution. This is not surprising. Indeed, a fundamental difference of T cell versus B cell-mediated immunity is that owing to their very nature, T cell epitopes are less likely to be impacted by mutations. And the T cell mediated layer of immunity is more robust against immune aviation. T-cell response is likely to remain much less impacted than neutralizing antibodies by new variants of concern and may contribute to prevention or limitation of severe COVID-19 manifestation. Based on this rationale, we are developing BNT162b4, an mRNA that encodes variant conserve immunogenic segment of non-spike proteins of SARS-CoV-2, mainly of nuclear captured membrane and OFAB proteins with binding to diverse HLA alleles.

For design of this strength, we have built on our platforms and skills developed in the context of designing thematic mutation-based cancer vaccines. Our BNT162b4 T-cell string vaccine component is designed to enhance T-cell immunity and is intended to be combined with variant adapted. We believe we can improve immunity that is variant independent. Our preclinical data was recently published in cells. In a mouse animal, we demonstrated that mice immunized with BNT162b4, which is Comirnaty with our without BNT162b4, which is the T-cell string on strong polyfunctional and polyepitopic CD4 and CD8 T cell responses to the M and of O 1 AB proteins of SARS-CoV-2, thus broadening the T cell response beyond the spike protein. Data from Syrian hamsters that were immunized with BNT162b4 alone or in combination with BNT162b2 and then challenged with white type SARS-CoV-2 of the delta variants demonstrate that BNT162b4 alone and in combination protect animals from severe disease and enhances viral clearance.

The clinical study investigating this next-generation COVID-19 vaccine component can be date in combination with Comirnaty is ongoing. I look forward to providing additional program updates in the coming months. I will now pass the presentation to our CFO, Jens Holstein, who will present our financial results.

Jens Holstein: Thank you, Ozlem, and a warm welcome to everyone who dialed in today’s call. I’ll start my section with the key highlights for the first quarter of 2023, which you can find on Slide 26. The first quarter of 2023 started strong and fully to our expectations. The quarter was driven by seasonal and some carryover effects from the previous year. As an example, we generated revenues from sales in countries with late approvals of our BA.4/5 adapted by COVID-19 vaccine. For the rest of the year, we are expecting an increase in vaccine sales towards the Northern Hemisphere winter season in the countries which are our key markets. As a consequence, we expect the second quarter to be the weakest quarter in 2023. Overall, we reiterate our COVID-19 vaccine revenue guidance of around €5 billion for the full 2023 financial year.

I would now like to dive into some key financial figures that underline our successful first quarter. Our total revenues reported for the first quarter of 2023 reached €1.3 billion, mainly related to our share of gross profit from COVID-19 vaccine sales in the collaboration partner territories. These revenues represent a net figure, meaning that we generate a 100% gross margin on those. As a reminder, under our COVID-19 vaccine collaboration, territories have been allocated between us, Pfizer and Fosun Pharma based on marketing and distribution rights. Please keep in mind that Pfizer’s fiscal quarter for subsidiaries outside the United States differs from our financial reporting cycle. Hence, Pfizer’s international operations from December 2022 will be reflected in their Q1 2023 earnings, whereas we have included the respective estimate already in our Q4 2022 financial figures.

This creates a deviation between the numbers of our partner Pfizer publishers versus our numbers on a quarterly and a full year basis. With €1.3 billion in revenues, we ended the first quarter with an operating result of €654.4 million and generated earnings per share on a fully diluted basis of €2.05. With respect to the Company’s financial position, we ended the first quarter of 2023 with €12.8 billion, comprising €12.1 billion cash and cash equivalents as well as €0.7 billion security investment with a longer time horizon, which we made as part of our investment strategy. When looking at our cash burn during the first quarter of 2023, the cash movement was negatively impacted, for example, due to a onetime payment settling our wage tax liability incurred in the context of our 2022 share-based payment settlement significant tax prepayments relating to the full financial year of 2023 as well as amounts spent as part of our share repurchase program.

Subsequent to the end of the quarter, in April 2023, we have received approximately €4 billion in cash from our collaboration partner, Pfizer, settling our gross profit share for the fourth quarter of 2022. Our M&A activities and recent collaboration license agreements announced in the first quarter did not lead to cash outflows during the quarter. In connection with the planned acquisition of InstaDeep and the upfront payments of the collaboration and license agreements with OncoC4 and Duality Biologics, we expect approximately €0.8 billion to be invested in cash and by exchanging shares in the course of 2023. Please note the final institute purchase price will be determined on closing and the mentioned amount for M&A does not comprise future earnout and milestone payments.

I’ll be moving to our financial results for the first quarter of 2023, as shown on Slide 27. Having explained our revenues on the previous slide, let me move to cost of sales that amounted to €0.1 billion in the first quarter of 2023 compared to €1.3 billion for the comparative prior year period. The drop was mainly due to the decrease in COVID-19 vaccine sales. Research and development expenses reached €334 million for the first quarter of 2023 compared to €285.8 million for the comparative prior year period. The increase was mainly due to higher expenses incurred from progressing the clinical studies for pipeline candidates. The increase was further driven by an increase in wages, benefits and social security expenses resulting from an increase in headcount.

General and administrative expenses amounted to €119.4 million for the first quarter of 2023 compared to €90.8 million for the comparative prior year period. The increase in G&A was mainly due to increased expenses for IT consulting and IT services as well as an increase in wages, benefits and social security expenses, resulting mainly from an increase in headcount. Income taxes were accrued with an amount of €205.5 million for the first quarter of 2023 compared to €1.3 billion for the comparative prior year period. The derived effective income tax rate for the first quarter of 2023 was approximately 29%, which is expected to decrease over the 2023 financial year to be in line with our guidance. For the first quarter of 2023, net profit reached €502.2 million compared to €3.7 billion for the comparative prior year period.

Our diluted earnings per share for the first quarter of 2023 amounted to €2.05 compared to €14.24 for the comparative prior year period. Now turning to Slide 28, I would like to emphasize that we are reiterating the Company’s outlook for the 2023 financial year. Please note the following number reflects current base case projections and are calculated based on the constant currency rate. As stated before, we reiterate our estimated COVID-19 vesting revenues of around €5 billion for the full 2020 financial year. Our capital allocation strategy includes a strong investment in M&A transactions to the extent disclosed. They have been, as far as known, reflected in the R&D expenses and will be updated as needed. Overall, we maintain our guidance for client expenses and growth and maintenance CapEx for operating activities as well as the estimated annual effective income tax rate, which we have summarized for you on the slide.

And with that, I would 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: Thank you, Jens. To wrap up our prepared remarks, I’ll provide a brief summary of the commercial outlook for our COVID-19 vaccine franchise before concluding with a few important dates to mark on your calendars. In 2023, we aim to develop, manufacture and deploy a seasonal adapted Comirnaty vaccine. We expect a recommendation from governmental authorities regarding vaccine strain composition midyear with a potential approval for an adaptive vaccine by the end of the summer. Broad vaccination is planned to start early fall. In addition, we aim to introduce a single-dose, ready-to-use vial, and will continue to improve key Comirnaty features such as shelf stability. In addition, we plan to advance our next-generation COVID-19 vaccine candidates throughout the year.

We expect that COVID demand in 2023 will continue to come from a broad range of regions globally. Since the beginning of the first quarter, we have shipped COVID-19 vaccine doses to more than 70 countries and regions. Since the start of the year, our deliveries to middle-income and low-income countries have increased. We have also seen a greater contribution from the pediatric segment so far this year. For the full year 2023, we expect global demand to be driven by existing signed government contracts, which we anticipate will be augmented by the opening of a commercial market in the U.S. in the second half. In the midterm, we see multiple potential growth drivers for our COVID-19 vaccine franchise. These include the potential for volume growth as the seasonal market is established, particularly in high-risk population segments.

In addition, we believe continued innovation from variant adaptive vaccines, next-generation vaccines and possible respiratory combination vaccines have the potential to support future franchise growth. The transition to private markets in certain regions is likely to take several years. We believe the shift to commercial pricing will provide further midterm growth potential. We and our partner, Pfizer, believe in the value that our COVID-19 vaccines provide both to individuals and health systems, and we will continue to invest to maintain our leadership position in the market. The next slide summarizes our pipeline news flow for 2023. Some of these points have been covered, so I won’t go through them in detail again here. What is clear is that our pipeline of 27 clinical-stage programs is expected to produce several readouts throughout the year across a range of technologies.

We expect data updates for our CAR-T cell program, targeting Claudin-6, our anti-CTLA-4 program and our new HER2 antibody neoconjugate at ASCO, in addition to multiple further updates for other programs later in the year. Before concluding and opening up the floor for questions, I would like to reiterate that we will hold our AGM on May 25 and our next innovation series event on November 7. We’ll provide further details in the coming weeks on both events. With that, I’d like to thank our shareholders for their continued support, and I’ll conclude our remarks and open up the floor for questions.

Q&A Session

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Operator: Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.