BioNTech SE (Nasdaq: BNTX, BioNTech), one of the leading COVID-19 vaccine developers with the backing of a billionaire, went out to the private debt market to secure €100 million in debt financing for forthcoming manufacturing activities. The European Investment Bank (EIB) recently concluded the financing agreement in support of the development and manufacturing of BNT162, the German company’s COVID-19 vaccine program. With sufficient capital now available, the company can now expand manufacturing capacity in order to supply the vaccine fast worldwide in response to the pandemic. The company will do so at risk meaning they will commence production while clinical trials continue ongoing. If the program fails in trials, the manufactured goods will be for not. The company had a previous €50 million in debt making the total €150 million formidable.
A Broad Program
The Biotech BNT162 program, one of the broadest worldwide, actually includes four vaccine candidates currently under evaluation in parallel. An mRNA-based investigational product (like Moderna and Curevac), BNT162 consists of genetic material, called messenger mRNA, provides instructions for a human cell to make a target protein, or immunogen, which activates the body’s immune response against the respective virus. The goal, of course, is that this natural mechanism stimulates the immune system to generate protective, long-lasting antibody and T cell responses against SARS-CoV-2 and hence, prevent subsequent infection upon exposure to the virus.
Sierk Poetting, who serves the Company, has both Chief Financial Officer and Chief Operating Office, commented, “This funding commitment by the EIB will further support the next stage of our COVID-19 scale-up activities as we expand our production capacity to enable global supply.”
Benefits of mRNA-based Vaccines
Although this new approach hasn’t led to a regulatory agency approved vaccine as of yet, mRNA vaccines demonstrate big potential as a developmental class of vaccine with high potential due to versatility and favorable safety properties. Speed is an incredibly valuable factor: BioNTech actually brought the first vaccine candidates from concept to clinical test in less than three months. Hence safety, speed, and flexibility are of the utmost importance in reacting to the current epidemic the company conveyed in its recent press release. But will they work? Societies and markets will find out.
What follows is a brief breakdown of the financing.
How will the €100 million be distributed?
In two tranches of €50 million, each following completion of pre-defined milestones.
Who is backing this debt investment?
The European Fund for Strategic Investments, which represents “the financial heart” of the Investment Plan for Europe, in which the EIB and the European Commission partner to trigger investment for EU priority projects. Also involved is the EU Framework Programme for Research and innovation, which backs the “InnovoFin Risk Sharing” for Corporate Research supported by Horizon 2020.
What additional debt has been generated?
BioNTech already secured €50 million in venture debt under the European Growth Finance Facility for its personalized cancer immunotherapy program in December 2019. This financing was actually an element in a broader set of EIB activities in the life sciences sector.
What has been the total debt via European Fund for Strategic Investments?
Over the past four years, the European Fund for Strategic Investments has supported €1.3 billion in debt for life sciences companies in Europe in just four years.