BioNTech surprises analysts with low revenue guidance as COVID-19 vaccine demand wavers

After garnering worldwide acclaim over the past three years thanks to its pandemic response, 2023 is shaping up to be an onerous period of change for BioNTech. And during the market metamorphosis, the company is warning investors of a serious sales slowdown. 

BioNTech generated global sales of 17.3 billion euros (about $18.7 billion) last year, surpassing its own November guidance range of 16 billion euros to 17 billion euros. But when the company laid out its 2023 expectations, analysts were surprised.

The German mRNA specialist expects to deliver just 5 billion euros ($5.4 billion) in 2023 vaccine sales, “significantly below” current consensus estimates of at least 8 billion euros, according to Third Bridge analyst Lee Brown.

The lackluster revenue prophecy reflects “plummeting demand for population-wide levels of booster vaccinations,” Brown added.

Following the news, BioNTech's stock was down 6% in early trading Monday morning

One major crux of BioNTech’s sales potential this year is the renegotiation of the German biotech’s supply contract with the European Commission, which “has the potential to delay deliveries over multiple years or to cut the previously contracted volumes,” Brown said.

Those concerns were echoed by BioNTech's chief financial officer Jens Holstein on an earnings call Monday. 

“’23, from our perspective, is a little bit of a transitional year in that respect because there are still some doses with governments that we expect will be moved into the market,” Holstein told investors on the call. “Therefore, we expect further upside in the time to come thereafter,” he said.

Meanwhile, as the pandemic eases and as governments stop funding large vaccine purchases, BioNTech and other companies are awaiting a shift to a private market model.

BioNTech expects its first commercial market to open up in the U.S. sometime in the second half of 2023, according to the company’s chief strategy officer Ryan Richardson. “It will likely take a few years to fully transition from a pandemic to steady-state market as this transition occurs in the midterm,” he said.

Even still, BioNTech is eyeing growth potential for its COVID shot franchise driven by “a continued shift to private markets globally if successful in ongoing trials,” he added, singling out the company’s next-gen COVID shot being developed with Pfizer.

With that said, current COVID-19 vaccine demand has proved underwhelming. COVID-19 remained a major cause of hospitalizations and deaths last year, outpacing levels typically caused by seasonal flu. Despite the higher disease burden of COVID, however, administration of COVID shot doses lagged flu in the U.S. by approximately 27 million doses, Richardson explained.

“While overall volumes are likely to remain lower than flu in 2023, we believe that the disease burden and relatively high vaccine efficacy support increased uptake over time,” he said.

Taking a deeper dive into BioNTech's 17.3 billion euro revenue haul last year, 12.7 billion euros of that sum came from BioNTech’s share of profits in Pfizer and Fosun Pharma territories. Another 3.2 billion euros came from direct sales on BioNTech’s turf, while the remaining 1.2 billion euros came from COVID sales to BioNTech’s collaboration partners, the company explained.